ITEM 3. KEY INFORMATION

Not applicable.

Not applicable.

Risk Factors Summary

An investment in our Class A common shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below and the other information in this annual report before you decide to purchase our Class A common shares. In particular, investing in the securities of issuers whose operations are located in emerging market countries such as Brazil involves a higher degree of risk than investing in the securities of issuers whose operations are located in the United States or other more developed countries. If any of the risks discussed in this annual report actually occur, alone or together with additional risks and uncertainties not currently known to us, or that we currently deem immaterial, our business, financial condition, results of operations and prospects may be materially adversely affected. If this were to occur, the value of our Class A common shares may decline and you may lose all or part of your investment.

The following is a summary of some of the principal risks we face. These risks are further described below in this annual report.

Risks Relating to Our Business and Industry

Risks Relating to Legal and Regulatory Matters

Risks Relating to Brazil

Risks Relating to Being a Foreign Private Issuer and a Controlled Company

Risks Relating to Our Class A Common Shares

Risks Relating to Our Business and Industry

A decline in the use of our payment platform or adverse developments with respect to the payment processing industry in general could have a material adverse effect on our business, financial condition and results of operations.

Our business, financial condition and results of operations may be materially adversely affected if consumers do not continue to use our platform for their payment transactions generally or if there is a change in the mix of payments between cash, credit and prepaid cards that is adverse to us. We believe future growth in the use of credit and prepaid cards and other electronic payments will be driven by the cost, ease-of-use and quality of services offered to consumers and businesses. In order to consistently increase and maintain our profitability, consumers and businesses must continue to use electronic payment methods, including credit and prepaid cards. Moreover, an adverse development in the payments industry or Brazilian market in general, such as new legislation or regulation that makes it more difficult for our consumers to do business or utilize electronic payment mechanisms or make interest-free purchase installments more beneficial to consumers, may adversely affect our business, financial condition and results of operations. For instance, Febraban filed a notice with the Brazilian National Consumer Office (Secretaria Nacional do Consumidor) and Public Prosecutor’s Office of the State of São Paulo (Ministério Público do Estado de São Paulo) challenging the legal and regulatory feasibility of some of the payments industry’s most common practices, including interest-free purchase installments businesses. According to Febraban, charging credit card fees from customers within an interest-free installment purchase could be considered a harmful practice. For more details, please see “—Risks Relating to Legal and Regulatory Matters—Funding of digital wallets via credit card is a relevant business for us, and this product is being challenged by incumbent institutions, and Brazilian authorities are conducting an inquiry of certain players, including us. If funding of digital wallets via credit card transactions is deemed incompatible with the applicable legal and regulatory framework in Brazil, we could be required to change our products to comply with new understandings of the Brazilian authorities, which could adversely affect the results of our operations.”

A decline in the use of credit or prepaid cards as a payment mechanism for consumers or adverse developments with respect to the payment processing industry in general could have a material adverse effect on our business, financial condition and results of operations.

Our business, financial condition and results of operations may be materially adversely affected if consumers do not continue to use credit or prepaid cards as a payment mechanism for their transactions generally or if there is a change in the mix of payments between cash, alternative currencies and technologies, credit and prepaid cards, or the corresponding methodologies used for each, which is adverse to us. In 2020, the Brazilian Central Bank launched Pix, which has led and may continue to lead to a decrease in the use of other payment methods, such as credit and prepaid cards, and may also increase competitive pressures within the payments industry. Therefore, any increase in the use of Pix-based payments or other alternative payment methods may adversely affect our financial results. Moreover, an adverse development in the payments industry in general, such as new legislation or regulation that makes it more difficult for our consumers to do business, may adversely affect our business, financial condition and results of operations.

We rely on payment card networks to process the majority of our transactions. If we fail to comply with the applicable requirements of the payment card networks, we could be fined, suspended or terminated from the networks, which would have a material adverse effect on our business, financial condition and results of operations.

We rely on payment card networks, primarily those managed by Visa and Mastercard, to process the majority of our payment card transactions. A significant portion of our revenue comes from processing transactions through these payment card networks. We must pay fees for these services, and from time to time, the payment card networks may increase the fees that they charge us for each transaction using one of their cards, subject to certain limitations.

We are required to comply with payment card network operating rules, including special operating rules for payment service providers to merchants. We may also be directly liable to the payment card networks for rule violations. The payment card networks could adopt new operating rules or interpret or re-interpret existing rules that we or our merchants might find difficult or even impossible to follow, or costly to implement. As a result, we could lose our ability to give consumers the option of using certain payment cards to fund their payments. If we are unable to accept certain payment cards or are limited in our ability to do so, our business would be adversely affected.

We have implemented specific business processes for merchants to comply with payment card network operating rules for providing services to merchants. Any failure to comply with these rules could result in fines. We are also subject to penalties from payment card networks if we fail to detect that merchants are engaging in activities that are illegal or considered “high risk” under their network operating rules, including the sale of certain types of digital content. We are required to either prevent “high risk” merchants from using our services or register these merchants with the payment card networks and conduct additional monitoring of them. To date, we have not identified any high risk merchants utilizing our services. Although the amount of these fines has not been material to date, we could be subject to significant additional fines in the future, which could result in a termination of our ability to accept payment cards or require changes in our process for registering new consumers, which would adversely affect our business. Payment card network rules may also increase the cost of, impose restrictions on, or otherwise negatively impact the development of, our retail point-of-sale solutions, which may negatively impact their deployment and adoption.

We are subject to monitoring by the payment card networks to ensure compliance with applicable rules and standards, and may be directly liable to the payment card networks for rule violations. If we do not comply with the payment card requirements, the payment card networks could seek to fine us or suspend or terminate our registrations that allow us to process transactions on their networks, and we could lose our ability to make payments using virtual cards or any other payment form factor enabled by the network. If we are unable to recover amounts relating to fines or pass through costs to our consumers or other associated participants, we would experience a financial loss. The termination of our registration due to failure to comply with the applicable requirements of the payment cards networks, or any changes in the networks rules that would impair our registration, could require us to stop using the payment cards networks to process the majority of our transactions, which would have a material adverse effect on our business, financial condition and results of operations.

Our systems and our third party providers’ systems may fail due to factors beyond our control, which could interrupt our provision of services, cause us to lose business, increase our costs and impair our ability to provide our services and products effectively to our consumers.

We create apps and other software that enable us to provide the majority of our services. We depend on the efficient and uninterrupted operation of numerous systems, including our computer and operating systems, software, and telecommunications networks, as well as the systems of third parties, such as credit and prepaid card transaction authorization providers, national financial system network infrastructure providers. Our systems and operations or those of our third-party providers, could be exposed to damage or interruption from, among other things, infrastructure changes, the implementation of new functionalities, human or software errors, capacity constraints due to an overwhelming number of consumers accessing our products and platform capabilities simultaneously, attacks that impact our ability to provide services or other security-related incidents, fire, natural disaster, power loss, terrorist attacks, hostilities, telecommunications failure, unauthorized entry and computer viruses. We do not maintain insurance policies specifically for property and business interruptions. Any changes in, failures of or defects in, our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures, changes in mobile networks offered by telecommunications operators and mobile devices developed by third parties or other difficulties could result in, among others:

In the event that it is difficult for our merchants to access and use our products and services, our business may be materially and adversely affected.

Our business is highly dependent on the ability of our information technology systems to accurately process a large number of highly complex transactions and products in a timely manner and at high processing speeds, and on our ability to rely on our digital technologies, computer and email services, software and networks, as well as on the secure processing, storage and transmission of confidential data and other information on our computer systems and networks. Specifically, the proper functioning of our financial control, risk management, accounting, consumer service and other data processing systems is critical to our business and our ability to compete effectively. Any failure to deliver an effective and secure service, or any performance issue that arises with a service, could result in significant processing or reporting errors or other losses.

We do not operate all of our systems on a real-time basis and cannot assure that our business activities would not be materially disrupted if there were a partial or complete failure of any of these primary information technology systems or communication networks. In particular, because most of our consumer transactions occur on our mobile app, any failure of our mobile app would cause our platform and services to be unavailable to our consumers. Such failures could be caused by, among other things, major natural catastrophes, software bugs, computer virus attacks, conversion errors due to system upgrading, security breaches caused by unauthorized access to information or systems or malfunctions, loss or corruption of data, software, hardware or other computer equipment. Any such failures would disrupt our business and impair our ability to provide our services and products effectively to our consumers, which could adversely affect our reputation as well as our business, results of operations and financial condition.

Our ability to remain competitive and achieve further growth will depend in part on our ability to upgrade our information technology systems and expand our capacity on a timely and cost-effective basis.

We must continually make significant investments and improvements in our information technology infrastructure in order to remain competitive. We cannot guarantee that in the future we will be able to maintain the level of capital expenditures necessary to support the improvement or upgrading of our information technology systems. Any substantial failure to improve or upgrade our information technology systems effectively or on a timely basis would materially and adversely affect our business, financial condition or results of operations.

In particular, we rely heavily on Amazon Web Services, or “AWS,” to provide cloud computing, storage, processing and other related services. Any disruption of or interference with our use of these services could negatively affect our operations and seriously harm our business. AWS has experienced, and may experience in the future, interruptions, delays or outages in service availability due to a variety of factors, including infrastructure changes, human or software errors, hosting disruptions and capacity constraints. Capacity constraints could arise from a number of causes such as technical failures, natural disasters, fraud or security attacks. The level of service provided by AWS, or regular or prolonged interruptions in the services provided by AWS, could also impact the use of, and our clients’ satisfaction with, our products and services and could harm our business and reputation.

Inadequacy or disruption of our disaster recovery plans and procedures in the event of a catastrophe would adversely affect our operations.

We have made a significant investment in our infrastructure, and our operations are dependent on our ability to protect the continuity of our infrastructure against damage from catastrophe or natural disaster, breach of security, cyber-attack, loss of power, telecommunications failure or other natural or man-made events. A catastrophic event could have a direct negative impact on us by adversely affecting our consumers, partners, third-party service providers, employees or facilities, or an indirect impact on us by adversely affecting the financial markets or the overall economy. If our business continuity and disaster recovery plans and procedures were disrupted, inadequate or unsuccessful in the event of a catastrophe, we could experience a material adverse interruption of our operations.

We serve our consumers using third-party data centers and cloud services. While we have electronic access to the infrastructure and components of our platform that are hosted by third parties, we do not control the operation of these facilities. Consequently, we may be subject to service disruptions as well as failures to provide adequate support for reasons that are outside of our direct control. These data centers and cloud services are vulnerable to damage or interruption from a variety of sources, including earthquakes, floods, fires, power loss, system failures, cyber-attacks, physical or electronic break-ins, human error or interference (including by employees, former employees or contractors), and other catastrophic events. Our data centers may also be subject to local administrative actions, changes to legal or permitting requirements and litigation to stop, limit or delay operations. Despite precautions taken at these facilities, such as disaster recovery and business continuity arrangements, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result in interruptions or delays in our services, impede our ability to scale our operations or have other adverse impacts upon our business.

Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation.

Our business involves the collection, storage, processing and transmission of consumers’ personal data, including names, addresses, identification numbers, credit or prepaid card numbers and expiration dates and bank account numbers. An increasing number of organizations, including large merchants and businesses, other large technology companies, financial institutions and government institutions, have disclosed breaches of their information technology systems, some of which have involved sophisticated and highly targeted attacks, including on portions of their websites or infrastructure. Although we have not experienced any significant cyber security attacks that have caused information leakage or operational losses, we could also be subject to breaches of security by hackers or human errors. Threats may derive from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Concerns about security are increased when we transmit information. Electronic transmissions can be subject to attack, interception or loss. Also, computer viruses and malware can be distributed and spread rapidly over the internet and could infiltrate our or third party systems, which can impact the confidentiality, integrity and availability of information, and the integrity and availability of our products, services and systems, among other effects. Denial of service or other attacks could be launched against us for a variety of purposes, including interfering with our services or creating a diversion for other malicious activities. These types of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liability, subject us to lawsuits, fines or sanctions, distract our management or increase our costs of doing business.

In the scope of our activities, we share information with third parties through non-disclosure agreements, including with commercial partners, third-party service providers and other agents, which we refer to collectively as “associated participants,” who collect, process, store and transmit personal data. We may be held responsible for any failure or cybersecurity breaches attributed to these third parties insofar as they relate to the information we share with them. The loss, destruction or unauthorized modification of data of our consumers or employees by us or our associated participants or through systems we provide could result in significant fines, sanctions and proceedings or actions against us by governmental bodies, third parties or the data subject itself, which could have a material adverse effect on our business, financial condition and results of operations. Any such proceeding or action, and any related indemnification obligation, could damage our reputation, force us to incur significant expenses in defense of these proceedings, distract our management, increase our costs of doing business or result in the imposition of financial liability.

Our encryption of data and other protective measures and associated costs, such as firewall, security operation center infrastructure, virtual private network and third party services, may not prevent unauthorized access or use of personal data. A breach of our system or that of one of our associated participants may subject us to material losses or liability, including assessments and claims for unauthorized purchases with misappropriated credit or prepaid card information, impersonation or other similar fraud claims. A misuse of such data or a cybersecurity breach could harm our reputation and deter merchants from using electronic payments generally and our products and services specifically, thus reducing our revenue. In addition, any such misuse or breach could cause us to incur costs to correct the breaches or failures, expose us to uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuits and result in the imposition of material penalties and fines under applicable laws or regulations.

In addition, a significant cybersecurity breach of our systems or communications could result in the loss of Brazilian Central Bank authorization to operate as a payment institution (instituição de pagamento), as a financial institution (commercial bank) or as a DTVM in Brazil, which could materially impede our ability to conduct business. We do not maintain insurance policies specifically for cyber-attacks.

We cannot guarantee that there are written agreements in place with every associated participant or that such written agreements will prevent the unauthorized use, modification, destruction or disclosure of data or enable us to obtain reimbursement from associated participants in the event we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data. In addition, many of our associated participants are small and medium-sized agents that have limited competency regarding data security and handling requirements and may thus experience data losses. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation, which could have a material adverse effect on our business, financial condition and results of operations.

Cybersecurity incidents are increasing in frequency and evolving in nature and include, but are not limited to, installation of malicious software, unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and the corruption of data. Given the unpredictability of the timing, nature and scope of information technology disruptions, there can be no assurance that the procedures and controls we employ will be sufficient to prevent security breaches from occurring, and we could be subject to manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our business, financial condition and results of operations.

Our risk management framework is still evolving and may not be fully effective in identifying, assessing, monitoring, and mitigating all types of risks to which we are exposed, including credit, liquidity, capital, operational, and third-party risks.

We operate in a rapidly changing industry and the management of risk is an integral part of our activities. We seek to monitor and manage our risk exposure through a variety of separate but complementary financial, credit, market, operational, compliance and legal policies, procedures and reporting systems, among others. We employ a broad and diversified set of risk monitoring and risk mitigation techniques, which may not be fully effective in mitigating our risk exposure in all economic market environments or against all types of risk, including risks that we may fail to identify or anticipate. Some of our risk evaluation methods depend upon information provided by others and public information regarding markets, clients or other matters that are otherwise inaccessible by us. In some cases, however, that information may not be accurate, complete or up-to-date. If our policies and procedures are not fully effective or we are not always successful in mitigating all risks to which we are or may be exposed, our business, financial condition and results of operations may be materially and adversely affected.

In addition to credit-related risks, we also face a range of risks associated with the payments services and other products we provide to a large number of clients. We are responsible for vetting and monitoring these clients and ensuring that the transactions we process for them are lawful and legitimate.

When our products and services are used to process illicit or otherwise improper transactions, and the resulting funds are settled with merchants, account holders, or consumer accounts at other financial institutions without recovery, we may incur significant losses and become exposed to legal liability. These transactions can also expose us to governmental and regulatory sanctions.

The highly automated nature of, and liquidity offered by, our payments services make our operations an attractive target for misuse, including fraudulent or illegal sales of goods or services, money laundering, and terrorist financing. Identity theft and fraud involving stolen or fabricated credit card or bank account numbers, and other deceptive or malicious practices, can also lead to substantial financial harm for businesses like ours.

In configuring our payments services, we must constantly balance security and client convenience. Our risk management policies, procedures and tools may be insufficient to identify all risks to which we are exposed, to mitigate the risks we have identified, or to anticipate new risks that may emerge over time. As a greater number of larger merchants use our services, we expect our exposure to material losses from a single merchant, or from a small number of merchants, to increase. In addition, when we introduce new services, focus on new business types, or expand into markets where we have limited historical experience with fraud losses, our ability to forecast and appropriately reserve for such losses may be reduced. If our risk management policies and processes contain errors or prove ineffective, we may experience substantial financial losses, face civil and criminal liability, and suffer material adverse effects on our business.

Our risk management policies and procedures may not be fully effective in mitigating our credit risk and risk exposure in all market environments, which could expose us to losses and otherwise have a material adverse effect on our business.

Our business may be materially adversely affected if we fail to effectively identify, assess and mitigate credit risk. An important feature of our credit risk management system is our internal credit score system that assesses the particular risk profile of a consumer. We utilize quantitative and qualitative data to define a credit score that reflects the creditworthiness of our consumers as we seek to appropriately balance risk and return and mitigate our risks, including credit risks attributable to our consumers. We have established policies and procedures intended to regularly identify and assess each consumer’s creditworthiness, including analyzing the behavioral and transactional information that we collect from our consumers and with information provided by third parties and public sources.

Our credit risk assessment depends, in part, upon the quality and availability of information about our consumers, which is subject to error and may be ineffective and our internal “credit scoring” models may be inadequate and lead us to take risks that are inconsistent with our credit risk appetite policies. Our credit risk model is predicated upon a credit portfolio and credit and collection processes that are relatively new and untested in periods of economic or financial crisis. Consequently, the limited operating history of our model may impair our ability to adequately identify, measure, and mitigate emerging risks, particularly under adverse market conditions. Moreover, our credit risk model also incorporates assumptions from recently adopted regulations issued by BACEN. The adoption of these new regulatory standards may introduce transitional risks and uncertainties, which could adversely affect the efficacy of our credit risk management practices. There can be no assurance that BACEN’s interpretation of these new standards will fully coincide with ours or that BACEN’s interpretation will not change over time, which may adversely impact our capital ratios and our business in general. Additionally, our allowance for expected credit losses is based on complex models, estimates and our management’s judgment that rely on limited historical data and macroeconomic assumptions, and as a result our actual credit losses may differ materially from our estimates. There can be no assurance also that our current credit risk management processes will fully and adequately address all risks arising from the implementation of these standards. The credit quality of our consumers may also be adversely impacted for reasons beyond our control. Additionally, there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated.

Our credit risk management processes comprise our credit concession and portfolio management activities as well our credit recovery activities. If our processes fail in accurately assessing customer creditworthiness, in establishing adequate product offerings and limits, in setting pricing, or in portfolio management or credit recovery, we could suffer unexpected losses, which could have a material adverse effect on our business.

Our historical loan losses may not be indicative of future loan losses, and changes in our business may materially adversely affect the quality of our loan portfolio.

As of December 31, 2025, our loan portfolio was R$24.1 billion, compared to R$10.6 billion as of December 31, 2024. Our allowance for loan losses was R$3.2 billion, representing 13.1% of our total loan portfolio, as of December 31, 2025, compared to R$864.2 million, representing 8.2% of our total loan portfolio, as of December 31, 2024.

Our historical loan loss experience may not be indicative of our future loan losses. It is important to note that our expected loss model and related projections are based on methodologies and assumptions that do not have a significant history of use or validation due to the relatively short age of our portfolio. This data history limitation is more significant for newer products that we offer, such as private payroll loans (Crédito do Trabalhador) as well as for installment products with longer maturities, such as public payroll loans and products offered following renegotiation. The limited historical data supporting these approaches could impair our ability to reliably assess future losses and may result in unforeseen deviations from projected outcomes.

The quality of our loan portfolio is associated with the default risk of our customers. A default by or a significant downgrade in the credit scores of a borrower or other counterparty, or a decline in the credit quality, exposes us to credit risk. Additionally, despite our credit risk management policies, various macroeconomic, geopolitical, market and other factors, among other things, can increase our credit risk and credit costs.

Changes in the Brazilian economic and political conditions may have a significant impact on our customers as they are highly exposed to adverse macroeconomic conditions, such as economic downturns, recessions, and higher prevailing debt levels. Also, an increase in market competition, changes in regulation and in the tax regimes applicable to the sectors in which we operate, as well as other related changes in Brazil, may also materially adversely affect the quality of our loan portfolio.

A decrease in the performance of our credit portfolio or other liabilities, including inadequate provisions for non-performing accounts, could have a material adverse effect on our business, financial condition, and results of operations.

Our results of operations and financial condition depend on our ability to evaluate losses associated with the risks to which we are exposed. We recognize an allowance for loan losses based on our current assessment and expectations regarding various factors that affect the quality of our loan portfolio. We cannot guarantee that our assessment will result in fully sufficient provisions for the risks we are exposed to.

In addition, our loan loss model depends on important assumptions and the veracity of financial information available from our customers. Accordingly, any fraud or misstatement in this information may lead us to not record adequate provisions.

Our business has generated losses in the past and we intend to continue to make significant investments in our business. Thus, our results of operations and operating metrics may fluctuate and materially and adversely affect our financial condition and results of operations, which may cause the market price of our Class A common shares to decline.

We generated profit for the year of R$1,142 million in the year ended December 31, 2025, as compared to profit for the year of R$251.8 million in the year ended December 31, 2024, and R$37.4 million in the year ended December 31, 2023. However, prior to that we generated a loss for the year of R$692.9 million in the year ended December 31, 2022. We intend to continue to make significant investments in our business, including expenses relating to: (1) the development of new products, services and features; (2) marketing and advertising to increase our brand awareness; (3) general administration, including legal, finance and other compliance expenses related to being a public company; and (4) marketing and growth expenses related to new customers. However, these improvements, which require us to incur significant up-front costs, may not result in the long-term benefits that we expect, which is to increase our revenue by increasing our base of quarterly active clients. In addition, increases in our consumer base could cause us to incur losses, because costs associated with new consumers are generally incurred up front, while revenue is recognized thereafter as consumers utilize our services. If we are unable to generate adequate revenue growth and manage our expenses, our results of operations and operating metrics may fluctuate and we may incur losses, which could cause the market price of our Class A common shares to decline.

Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

Our quarterly results, including revenue, expenses, total payment volume, consumer metrics, and other key metrics, have fluctuated significantly in the past and may do so in the future. Accordingly, the results for any one quarter are not necessarily an indication of future performance. Our quarterly results may fluctuate due to a variety of factors, some of which are outside of our control, and as a result, may not fully reflect the underlying performance of our business. Fluctuations in quarterly results may adversely affect the price of our Class A common shares. In addition, many of the factors that affect our quarterly results are difficult for us to predict. If our revenue, expenses, or key metrics in future quarters fall short of the expectations of our investors and financial analysts, the price of our Class A common shares will be adversely affected.

We have experienced rapid growth, which may be difficult to sustain and which may place significant demands on our operational, administrative, and financial resources.

We have experienced and expect in the near term to continue to experience rapid growth. As a result of our growth, we have faced, and will continue to face, significant challenges in:

We may not be able to manage our expanding operations effectively, and any failure to do so could adversely affect our ability to generate revenue and control our expenses, and would materially and adversely affect our business, results of operations, financial condition, and future prospects. Any evaluation of our business and prospects should be considered in light of the limited history of our growth, and the risks and uncertainties inherent in investing in early-stage companies.

If we are unable to grow our client base and maintain quarterly active clients or otherwise implement our growth strategy, our business, results of operations, financial condition and future prospects would be materially and adversely affected.

We generate revenue primarily from our electronic payment and financial intermediation services, in particular by: (1) charging fees in connection with certain payment transactions and fund transfers carried out by our consumers through our platform; (2) fees from the use of the PicPay Card; (3) offering a range of financial products to our consumers, including loans and credit cards; and (4) earning commissions from the sale of third-party goods on the PicPay Shop, as well as earning interest income. Our success depends on our ability to generate repeat use and increase transaction volume from existing consumers and to attract new consumers to our platform. If we are not able to continue to grow our consumer base and maintain quarterly active clients, we will not be able to continue to grow our business.

The attractiveness of our platform to consumers depends upon, among other things, the mix of products and services available to consumers through our platform, our brand and reputation, consumer experience and satisfaction, consumer trust and perception of our solutions, technological innovation and products and services offered by competitors. In order to grow effectively, we must continue to offer new products and services, strengthen our existing platform, develop and improve our internal controls, create and improve our reporting systems and timely address issues as they arise. These efforts may require substantial financial expenditures, commitment of resources, development of our processes and other investments and innovations.

Our ability to maintain and expand our consumer base depends on a number of factors, including our ability to provide relevant and timely services and products to meet our consumers’ changing needs at a reasonable cost. We have invested and will continue to invest in improving our platform and our suite of products and services. For example, in February 2023 we acquired BX Blue, a digital marketplace focused on public payroll loans, enabling PicPay to enter a new industry vertical for collateralized products and helping to further diversify our credit portfolio. However, if new or improved features, products and services fail to meet shifting consumer demands and fail to attract new consumers or encourage existing consumers to expand their engagement with our products and services, the pace of our growth may decline. Further, these and other new products and services must achieve high levels of market acceptance before we are able to recoup our up-front investment costs, which may never occur if such products and services fail to attract new consumers and/or retain existing consumers.

Our existing and new products and services, including our payments, investments, insurance, and credit solutions, could fail to attract new consumers and/or retain existing consumers for many reasons, including the following:

If we fail to retain our relationship with existing consumers, if we do not attract new consumers to our platform and products or if we do not continually expand usage and volume from consumers on our platform, our business, results of operations, financial condition and prospects would be materially and adversely affected.

If we cannot keep pace with rapid developments and change in our industry, the use of our products and services could decline, reducing our revenues.

The technology-enabled industry in which we operate is subject to rapid and significant changes, new product and service introductions, evolving industry standards, changing client needs and increased competition from new competitors, including nontraditional competitors. These changes include those relating to:

In order to remain competitive, we are continually involved in a number of projects to develop new products and services or compete with these new competitors, and other new offerings emerging in our industry. These projects carry risks, such as cost overruns, delays in delivery, performance problems and lack of consumer adoption. Any delay in the delivery of new products or services, performance problems or the failure to differentiate our products and services or to accurately predict and address market demand could render our products and services less desirable, or even obsolete, to our consumers. Furthermore, even though the market for our products and services is evolving, it may not continue to develop rapidly enough for us to recover the costs we have incurred in developing new products and services targeted at this market.

While we take precautions to prevent consumer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect our business.

There is risk of fraudulent activity associated with our platform and third parties handling consumer information. Our resources, technologies, and fraud prevention tools may be insufficient to accurately detect and prevent fraud.

We bear the risk of consumer fraud in a transaction involving us, a consumer, and a merchant, and we generally have limited recourse to the merchant to collect the amount owed by the consumer. In the event that a billing dispute between a cardholder and a merchant is not resolved in favor of the merchant, including in situations in which the merchant is engaged in fraud, the transaction is typically “charged back” to the merchant and the purchase price is credited or otherwise refunded to the cardholder. If we are unable to collect chargeback or refunds from the merchant’s account, or if the merchant refuses to or is unable to reimburse us for a chargeback or refunds due to closure, bankruptcy, or other reasons, we may bear the loss for the amounts paid to the cardholder. Our financial results would be adversely affected to the extent these merchants do not fully reimburse us for the related chargebacks. Historically, chargebacks occur more frequently in online transactions than in in-person transactions, and more frequently for goods than for services. In addition, the risk of chargebacks is typically greater with those of our merchants that promise future delivery of goods and services, which we allow on our service. Significant amounts of fraudulent cancellations or chargebacks could adversely affect our business or financial condition.

In addition, changes in the payment card network rules regarding chargebacks may affect our ability to dispute chargebacks and the amount of losses we incur from chargebacks. If we fail to make such changes or otherwise resolve the issue with the payment card networks, the networks could disqualify us from processing transactions if satisfactory controls are not maintained, which would have a material adverse effect on our business, financial condition and results of operations.

High profile fraudulent activity or significant increases in fraudulent activity could also lead to regulatory intervention, negative publicity, and the erosion of trust from our consumers and merchants, and could materially and adversely affect our business, results of operations, financial condition, future prospects, and cash flows.

Fraud by merchants or others could have a material adverse effect on our business, financial condition, and results of operations.

We may be subject to potential liability for fraudulent electronic payment transactions or credits initiated by merchants or others. Examples of merchant fraud include when a merchant or other party knowingly uses a stolen or counterfeit credit or prepaid card, card number, or other credentials to record a false sales transaction, processes an invalid card, or intentionally fails to deliver the merchandise or services sold in an otherwise valid transaction. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and fraud. It is possible that incidents of fraud could increase in the future. Failure to effectively manage risk and prevent fraud would increase our chargeback liability or other liability. Increases in chargebacks or other liability could have a material adverse effect on our business, financial condition, and results of operations.

Real or perceived inaccuracies in our key business metrics may harm our reputation and negatively affect our business.

We track certain key business metrics, such as total payment volume and quarterly active consumers and businesses, with internal systems and tools that are not independently verified by any third party. While the metrics presented in this annual report are based on what we believe to be reasonable assumptions and estimates, our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics may change over time. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies. If the internal systems and tools we use to track these metrics understate or overstate performance or contain algorithmic or other technical errors, the key operating metrics we report may not be accurate. If investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our results of operations and financial condition could be adversely affected.

Real or perceived software errors, failures, bugs, defects, or outages could adversely affect our business, results of operations, financial condition, and future prospects.

Our platform and our internal systems rely on software that is highly technical and complex. In addition, our platform and our internal systems depend on the ability of such software to store, retrieve, process, and manage large amounts of data. As a result, undetected errors, failures, bugs, or defects may be present in such software or occur in the future in such software, including open source software and other software we license in from third parties, especially when updates or new products or services are released.

Any real or perceived errors, failures, bugs, or defects in the software may not be found until our consumers use our platform and could result in outages or degraded quality of service on our platform that could adversely impact our business (including through causing us not to meet contractually required service levels), as well as negative publicity, loss of or delay in market acceptance of our products and services, and harm to our brand or weakening of our competitive position. In such an event, we may be required, or may choose, to expend significant additional resources in order to correct the problem. Any real or perceived errors, failures, bugs, or defects in the software we rely on could also subject us to liability claims, impair our ability to attract new consumers, retain existing consumers, or expand their use of our products and services, which would adversely affect our business, results of operations, financial condition, and future prospects.

Degradation of the quality of the products and services we offer, including support services, could adversely impact our ability to attract and retain merchants and partners.

Our clients expect a consistent level of quality in the provision of our products and services through our platform. The support services that we provide are also a key element of the value proposition to our clients. If the reliability or functionality of our products and services is compromised or the quality of those products or services is otherwise degraded, or if we fail to continue to provide a high level of support, we could lose existing clients and find it harder to attract new merchants and partners. If we are unable to scale our support functions to address the growth of our merchant and partner network, the quality of our support may decrease, which could adversely affect our ability to attract and retain merchants and partners.

We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs.

We have funded our operations primarily through equity financings. Although we currently fund part of our operations through time deposits, we may need additional capital to fund our operations. In addition, we may require additional capital to respond to business opportunities, refinancing needs, challenges, acquisitions, to comply with regulatory capital adequacy requirements or unforeseen circumstances and may decide to raise equity or debt financings, and we may not be able to secure any such additional debt or equity financing or refinancing on favorable terms, in a timely manner, or at all. For example, disruptions in the credit markets or other factors could adversely affect the availability, diversity, cost, and terms of our funding arrangements. In addition, our funding sources may reassess their exposure to our industry and either curtail access to uncommitted financing capacity, fail to renew or extend facilities, or impose higher costs to access our funding.

Any debt financing obtained by us in the future could also include restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

In the future, we may also seek to further access the capital markets to obtain capital to finance growth and/or to comply with regulatory capital requirements and adequacy to meet regulatory obligations and to maintain our ability to continue to offer products that are subject to Brazilian regulatory oversight and restrictions.

Nonetheless, our future access to the capital markets could be restricted due to a variety of factors, including a deterioration of our earnings, cash flows, balance sheet quality, or overall business or industry prospects, adverse regulatory changes, a disruption to or volatility or deterioration in the state of the capital markets, or a negative bias toward our industry by market participants. Future prevailing capital market conditions and potential disruptions in the capital markets may adversely affect our efforts to arrange additional financing on terms that are satisfactory to us, if at all. If adequate funds are not available, or are not available on acceptable terms, we may not have sufficient liquidity to fund our operations, make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges and this, in turn, could adversely affect our ability to advance our strategic plans. In addition, if the capital and credit markets experience volatility, and the availability of funds is limited, third parties with whom we do business may incur increased costs or business disruption and this could adversely affect our business relationships with such third parties, which in turn could have a material adverse effect on our business, results of operations, financial condition, cash flows, and future prospects.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our Class A common shares and our trading volume could decline.

The trading market for our Class A common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no or too few securities or industry analysts commence coverage of our company, the trading price for our Class A common shares would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our Class A common shares or publish inaccurate or unfavorable research about our business, the price of our Class A common shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our Class A common shares could decrease, which might cause the price of our Class A common shares and trading volume to decline.

We use open source software in our platform, which may subject us to litigation or other actions that could harm our business.

We use open source software in our platform, and we may use more open source software in the future. In the past, companies that have incorporated open source software into their products have faced claims challenging the ownership of open source software or compliance with open source license terms. Accordingly, we could be subject to suits by parties claiming ownership of open source software with restrictive licenses or claiming noncompliance with open source licensing terms. Some open source software licenses require consumers who use, distribute or make available across a network software or services that include open source software to publicly disclose all or part of the source code to such software or make available any derivative works of the open source code on terms unfavorable to the developer or at no cost. Additionally, if a third-party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose any of our source code that incorporates or is a modification of our licensed software. If we were to use open source software subject to such licenses, we could be required to release our proprietary source code, pay damages, re-engineer our platform or solutions, discontinue sales, or take other remedial action, any of which could harm our business. In addition, if the license terms for updated or enhanced versions of the open source software we utilize change, we may be forced to expend substantial time and resources to re-engineer our components of our platform.

In addition, the use of third-party open source software typically exposes us to greater risks than the use of third-party commercial software because open source licensors generally do not provide warranties or controls on the functionality or origin of the software. Use of open source software may also present additional security risks because the public availability of such software may make it easier for hackers and other third parties to determine how to compromise our platform. Any of the foregoing could harm our business and could help our competitors develop products and services that are similar to or better than ours.

Our business depends on our ability to attract and retain highly skilled employees.

Our future success depends on our ability to identify, hire, develop, motivate, and retain highly qualified personnel for all areas of our organization, in particular, a highly experienced sales force, data scientists, and engineers. Competition for these types of highly skilled employees in Brazil is extremely intense. Trained and experienced personnel are in high demand and may be in short supply. Many of the companies with which we compete for experienced employees have greater resources than we do and may be able to offer more attractive terms of employment. In addition, we invest significant time and expense in training our employees, which increases their value to competitors that may seek to recruit them. We may not be able to attract, develop, and maintain the skilled workforce necessary to operate our business, and labor expenses may increase as a result of a shortage in the supply of qualified personnel. If we are unable to continue to attract or retain highly skilled employees, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.

If we lose key personnel our business, financial condition and results of operations may be adversely affected.

We are dependent upon the ability and experience of a number of key personnel who have substantial experience with our operations, the rapidly changing payment processing industry and the markets in which we offer our services. Many of our key personnel have worked for us for a significant amount of time or were recruited by us specifically due to their industry experience. It is possible that the loss of the services of one or a combination of our senior executives or key managers could have a material adverse effect on our business, financial condition and results of operations.

Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our results of operations.

A change in accounting standards or practices may have a significant effect on our results of operations and may even affect our reporting of transactions completed before the change is effective. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and may occur in the future. Changes to existing rules or the questioning of current practices may adversely affect our reported results of operations or the way we conduct our business.

Our adoption of changes in accounting standards or practices and any difficulties we experience in the implementation of such changes, including any resulting modifications to our accounting systems, could cause us to fail to meet our financial reporting obligations, potentially resulting in regulatory action and weakening investors’ confidence in us.

We have entered, or may enter in the future, into significant transactions with related parties.

We are dependent on, and expect from time to time in the future to engage in, commercial and financial transactions with our shareholders and other related parties. During the period covered by the financial statements included in this annual report, we have engaged in transactions with related parties that have had a material impact on our results of operations and financial position, such as certain agreements with Banco Original, which is controlled by our ultimate controlling shareholders.

In 2023, J&F Participações announced its plan to integrate Banco Original’s retail operations with PicPay, and on November 16, 2023, PicPay Brazil entered into a Cost Sharing Agreement (Contrato de Compartilhamento de Despesas) with Banco Original to regulate the terms and conditions governing the sharing of support areas between PicPay Brazil and Banco Original, as well as the reimbursement by Banco Original of certain costs incurred by PicPay Brazil in the contracting of suppliers who provide products and/or services that are also shared between PicPay Brazil and Banco Original. Such agreement is retroactively effective as of January 1, 2023, and will remain valid for an undetermined period. Either party may terminate this agreement for any reason and without penalty at any time, provided that 30 days’ prior written notice is sent to the other party.

Moreover, on January 10, 2024, PicPay Bank entered into a Cost Sharing Agreement (Contrato de Compartilhamento de Despesas) with Banco Original to regulate the terms and conditions governing the sharing of support areas between PicPay Bank and Banco Original, as well as the reimbursement by Banco Original of certain costs incurred by PicPay Bank in the contracting of suppliers who provide products and services that are also shared between PicPay Bank and Banco Original. Such agreement will remain valid for an undetermined period. Either party may terminate this agreement for any reason and without penalty at any time, provided that 30 days’ prior written notice is sent to the other party.

These agreements involve the sharing of certain expenses, such as technology and administrative expenses. We may be adversely affected if Banco Original fails to reimburse us for any such shared costs in the future.

The integration of Banco Original’s retail operations began with the transfer of its personal checking accounts and associated assets to the PicPay platform in July 2023. We also began originating personal loans in October 2023, and the PicPay credit card portfolio was transferred to PicPay from Banco Original in January 2024, fully internalizing our credit card operations at the start of 2024. We may not be successful in capturing the expected synergies related to the integration of Banco Original’s retail operations and we may be subject to the following risks, among others:

The risks described above may adversely affect our expectations and intended results with the integration, as well as our business. All of those issues prevent our achievement of potential synergies, benefits derived from the integration or the expected cost reduction, adversely affecting our results.

For more information about our related party transactions, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions,” “Item 4. Information on the Company—History and Development—Recent Acquisitions, Corporate Transactions and Other Developments” and “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Acquisitions and New Lines of Business and Other Developments.”

In addition, our ultimate controlling shareholders will have the ability to exercise overall control over us and may have interests that are different from ours. We cannot assure you that we will be able to address these potential conflicts of interests or others in an impartial manner. For more information, see “—Our ultimate controlling shareholders are expected to have influence over the conduct of our business and may have interests that are different from yours.”

Moreover, we may engage in the future in additional related party transactions that are not part of our ordinary financial products offerings, including with entities owned or controlled by our ultimate controlling shareholders, or with other officers, directors or significant shareholders. For more information, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Related Party Transaction Policy.”

During 2024 and 2025, PicPay Bank engaged in certain financial transactions with entities of the J&F group, our ultimate controlling shareholders and their affiliates. For example, in September 2024, PicPay Bank originated a transaction to J&F in the total amount of R$300 million, with a maturity of 30 days, at an interest rate of 1.76%. J&F assigned credit rights that J&F had against our affiliate JBS S.A. derived from the right to receive interim dividends from JBS S.A. as a collateral. Such transaction was settled on October 7, 2024. For more information, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Banco Original—Prepayment of Receivables (PicPay Bank).”

During 2025, PicPay Bank entered into additional transactions with subsidiaries and affiliates of our ultimate controlling shareholders, including receivables assignment agreements with certain subsidiaries of J&F Participações and supplier financing arrangements with JBS S.A. These transactions were conducted in the ordinary course of PicPay Bank’s financial operations and in accordance with prevailing market terms. The aggregate volume of such transactions totaled R$947 million in 2025, and the outstanding balance as of December 31, 2025, was R$997 million. For further details, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”

All of our transactions with related parties, including those described above, are subject to the following safeguards: (i) compliance with the single-client exposure limits (Limite de Exposição a Clientes, or “LEC”) established by the CMN and the Brazilian Central Bank, which limits our aggregate credit exposure to any single economic group at 25% of our Tier 1 Capital; (ii) compliance with the Brazilian Central Bank’s regulations on transactions with related parties applicable to financial institutions; (iii) prior review and approval by our board of directors when applicable, in accordance with our Related Party Transactions Policy; and (iv) pricing in accordance with prevailing market conditions, consistently with the terms offered to unrelated third parties for similar transactions.

Notwithstanding the regulatory and governance safeguards described above, we cannot assure that all future related party transactions will be conducted on terms as favorable to us as those available from unaffiliated third parties, or that conflicts of interest will be resolved in a manner that protects the interests of our minority shareholders.

PicPay Bank is also developing the acquisition of future receivables as one of its product offerings, actively seeking to strengthen its corporate governance framework and exploring the adoption of the best practices in this area, and, as a result, all of its products are priced in accordance with the prevailing market conditions.

If any entity under the direct or indirect control of our ultimate controlling shareholders or their affiliates require any temporary financing, PicPay Bank may offer its financial products to such entities as a financial institution, provided that such arrangements are conducted and agreed at arms-length conditions and according to fair market terms.

If we enter into transactions with our shareholders and other related parties other than on an arms’ length basis, our results of operations and financial condition may be adversely impacted. Future conflicts of interests may arise between us and any of our related parties, or among our related parties, which may not be resolved in our favor.

Our insurance policies may not be sufficient to cover all claims.

Our insurance policies may not adequately cover all risks to which we are exposed, especially due to certain risks that are not usually covered by insurance policies. A significant claim not covered by our insurance, in full or in part, may result in significant expenditures by us. Moreover, we may not be able to purchase, maintain or renew insurance policies in the future at reasonable costs or on acceptable terms, which may adversely affect our business, financial condition and the trading price of our Class A common shares.

If we are unable to attract, maintain and expand our merchant relationships, our businesses may be adversely affected.

Our growth is derived in part from acquiring new merchant relationships, developing new and enhanced product and service offerings, and cross-selling or up-selling our products and services through existing merchant relationships. We rely on the continuing growth of our merchant relationships and our distribution channels in order to expand our revenues. There can be no guarantee that this growth will continue. Similarly, our growth also will depend on our ability to retain and maintain existing relationships with merchants that use our services. Furthermore, merchants with which we have relationships may experience bankruptcy, financial distress, or otherwise be forced to contract their operations. The loss of existing merchant relationships, any failure in maintaining such relationships on similarly attractive economic terms, the contraction of our existing merchants’ operations or any inability to acquire new merchant relationships could adversely affect our revenue and our business and results of operations.

Any acquisitions, partnerships, joint ventures or divestitures that we consummate, such as the Guiabolso acquisition, the BX acquisition and the Kovr acquisition, could disrupt our business and harm our financial condition.

Acquisitions, partnerships and joint ventures are part of our growth strategy. We evaluate, and expect in the future to evaluate, potential strategic acquisitions of, and partnerships or joint ventures with, complementary businesses, services or technologies. We may not be successful in identifying acquisition, partnership and joint venture targets.

Moreover, new acquisitions may involve several risks that could have a material adverse effect on our business such as (1) our investments in acquisitions may not generate the expected returns, and we may mismanage administrative and financial resources as part of the integration process, or be required to invest additional capital, (2) a future acquisition or divestment may be subject to approval by the Brazilian Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica) or other regulatory authorities, which may deny the necessary approvals for, or impose conditions or restrictions on, the transaction, (3) we may face contingent and/or successor liabilities (either currently known or unknown to us) in connection with, among other things, (i) judicial and/or administrative proceedings of the acquired institutions, including but not limited to, regulatory, tax, labor, social security, environmental and intellectual property proceedings, and (ii) financial, reputational and technical issues, including with respect to accounting practices, financial statement disclosures and internal controls, as well as other regulatory matters, all of which may not be sufficiently indemnifiable under the relevant acquisition agreement, (4) we may not be able to integrate efficiently and successfully the operations of the institutions we acquire, including their personnel, corporate cultures, financial systems, distribution or operating procedures and (5) the acquisition and divestiture process may require additional funds and/or may be time-consuming, and past and future acquisitions or divestments and the subsequent integration or separation of new assets and businesses require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have a material adverse effect on our business operations.

We may not be successful in capturing the expected synergies related to acquired companies or companies in the process of being acquired. Our inorganic growth, which is increasing, especially considering the Kovr acquisition, may subject us to risks related to the integration processes of the assets acquired by us, as described below:

The acquisition of Kovr is subject to certain conditions precedent, including regulatory approval. Furthermore, the sellers of Kovr are executives of Kovr and acquired the majority of their interest in Kovr from a subsidiary of Banco Master a short time before we entered into the agreement to acquire Kovr. Banco Master is currently undergoing extrajudicial liquidation and is subject to fraud investigations. See “—Risks Relating to Our Business and Industry—Any acquisitions, partnerships, joint ventures or divestitures that we consummate, such as the Guiabolso acquisition, the BX acquisition and the acquisition of Kovr, could disrupt our business and harm our financial condition.”

The Kovr acquisition might be subject to heightened scrutiny by interested third-party creditors in light of the extrajudicial liquidation of Banco Master and certain of its subsidiaries decreed by BACEN. Should any investigation determine that the Kovr acquisition constitutes a fraud against creditors of Banco Master or entities within its economic group, a court may issue an order to prevent the closing of the Kovr acquisition or to unwind the transaction.

In addition, we may not be able to successfully finance or integrate any businesses, services or technologies that we acquire or with which we form a partnership or joint venture, and we may lose merchants as a result of any acquisition, partnership or joint venture. Furthermore, the integration of any acquisition, partnership or joint venture may divert management’s time and resources from our core business and disrupt our operations.

For example, we are exposed to these and other risks by virtue of our Guiabolso acquisition, the BX acquisition and the Kovr acquisition. These and future acquisitions may expose us to successor liability relating to actions involving the acquired entities, their respective management or contingent liabilities incurred before the acquisition. The due diligence we conducted in connection with these acquisitions may not be sufficient to protect us from, or compensate us for, actual liabilities. A material liability associated with these acquisitions, or our failure to successfully integrate them into our business, could adversely affect our reputation and have a material adverse effect on us.

In addition, non-compete arrangements which we may enter into in connection with acquisitions, partnerships and joint ventures may prevent us from competing for certain clients or in certain lines of business, and may lead to a loss of clients. We may spend time and money on projects that do not increase our revenue. To the extent we pay the purchase price of any acquisition in cash, it would reduce our cash reserves, and to the extent the purchase price is paid with our common shares, it could be dilutive to our shareholders. To the extent we pay the purchase price with proceeds from the incurrence of debt, it would increase our level of indebtedness and could negatively affect our liquidity and restrict our operations. Our competitors may be willing or able to pay more than us for acquisitions, which may cause us to lose certain acquisitions that we would otherwise desire to complete. We cannot ensure that any acquisition, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.

We may from time to time assess divestment opportunities and conduct divestments where we believe such transactions would be beneficial to our business strategy. Divestments may require us to expend significant time, funds and other resources, and may not always be completed within the expected time frame or on the terms and conditions that we expect. We may also be unable to reap the benefits of any divestments we undertake. Our asset base, total revenue, cash flows and profit may also be reduced significantly following a divestment, which could adversely affect our business, financial condition, results of operations, our ability to make distributions to our shareholders and result in a decrease in the price of our Class A common shares. Any divestiture, irrespective of whether it is consummated, may involve a number of risks, including diverting our management’s attention, adverse effects on our consumer relationships, costs associated with maintaining the business of the targeted divestiture during the disposition process, and other costs associated with winding down and divesting the affected business or transferring remaining portions of the operations of the business to other facilities. Furthermore, to the extent that we are not successful in completing desired divestitures, as such may be determined by future strategic plans and business performance, we may have to expend substantial amounts of cash, incur debt, or continue to absorb the costs of any loss-making or under-performing assets.

Historical financial statements or related financial information of Kovr have not been disclosed to investors and will not be made available.

We have not included historical financial statements or related financial information of Kovr in this annual report and investors will not have the benefit of such historical financial statements or related financial information in making their investment decision. Based on the insignificance of the acquisition, we are not required to include Kovr’s financial statements or related pro forma financial information in this annual report. Once we have consummated the Kovr acquisition and the financial results of Kovr have been consolidated in our financial results, our future financial statements will differ from our historical financial statements included elsewhere in this annual report.

Our holding company structure makes us dependent on the operations of our subsidiaries.

We are a Dutch public limited liability company. Our material assets are our direct and indirect equity interests in our subsidiaries. We are, therefore, dependent upon payments, dividends and distributions from our subsidiaries for funds to pay our holding company’s operating and other expenses and to pay future cash dividends or distributions, if any, to holders of our Class A common shares, and we may have tax costs in connection with any dividend or distribution. Furthermore, exchange rate fluctuation will affect the U.S. dollar value of any distributions our subsidiaries make with respect to our equity interests in those subsidiaries. See “—Risks Relating to Brazil—Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our Class A common shares” and “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividends and Dividend Policy.”

Our ultimate controlling shareholders are expected to have influence over the conduct of our business and may have interests that are different from yours.

J&F Participações, which is jointly controlled, pursuant to a shareholders’ agreement, by Messrs. Joesley Mendonça Batista and Wesley Mendonça Batista, our ultimate controlling shareholders, beneficially owns 23.5% of our Class A common shares and 100% of our Class B common shares. Accordingly, our ultimate controlling shareholders control approximately 96.4% of the voting power in our general meeting. As a result, our ultimate controlling shareholders will have the ability to control matters submitted to a vote of shareholders; appoint a substantial majority of the members of our board of directors; and exercise overall control over us. For more information about our ultimate controlling shareholders, see “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders.”

Our ultimate controlling shareholders may have an interest in causing us to pursue transactions that may enhance the value of their equity investments in us, even though such transactions may involve increased risks to us or the holders of our common shares. Furthermore, our ultimate controlling shareholders own, through J&F Participações or other entities, equity investments in other businesses and may have an interest in causing us to pursue transactions that may enhance the value of those other equity investments, even though such transactions may not benefit us. Our ultimate controlling shareholders may also pursue new business opportunities through other entities that they control that would otherwise be available to us. We cannot assure you that we will be able to address these potential conflicts of interests or others in an impartial manner.

In addition, there is no restriction on our shareholders or board of directors that would prevent the appointment of our ultimate controlling shareholders as a member of the board of directors or executive officer of PicPay Netherlands or PicPay Brazil (subject to the prior approval of the Brazilian Central Bank, in the case of PicPay Brazil). However, Messrs. Joesley Mendonça Batista and Wesley Mendonça Batista do not currently intend to have a management position in or serve as a member of the board of directors of PicPay Netherlands or any of its subsidiaries, including PicPay Brazil. See “—We are subject to reputational risk in connection with U.S. and Brazilian civil and criminal actions and investigations involving our ultimate controlling shareholders, which may materially adversely impact our business and prospects and damage our reputation and image.”

Given the degree of control over our company held by our ultimate controlling shareholders, there can be no assurance that the future actions or decisions of our ultimate controlling shareholders will not impact our company, our prospects or the value of our Class A common shares in ways that differ from your interests.

We are subject to reputational risk in connection with U.S. and Brazilian civil and criminal actions and investigations involving our ultimate controlling shareholders, which may materially adversely impact our business and prospects and damage our reputation and image.

Our ultimate controlling shareholders and our affiliate J&F S.A., or “J&F,” which is controlled by our ultimate controlling shareholders, are subject to ongoing obligations under agreements entered into in 2017 to settle proceedings initiated by enforcement authorities in Brazil involving matters unrelated to our company.

As further described elsewhere in this annual report (see “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders—Civil and Criminal Actions and Investigations involving our Ultimate Controlling Shareholders”), in 2017, our ultimate controlling shareholders, among others, entered into collaboration agreements (acordos de colaboração premiada), or the “Collaboration Agreements,” with the Brazilian Attorney General’s Office (Procuradoria-Geral da República), and J&F on behalf of itself and its subsidiaries, entered into a leniency agreement, or the “Leniency Agreement,” with the Brazilian Federal Prosecution Office (Ministério Público Federal) following disclosure of illicit payments made to Brazilian politicians from 2009 to 2015. Pursuant to the Leniency Agreement, J&F agreed to pay a fine of R$8.0 billion and contribute an additional R$2.3 billion to social projects in Brazil, each adjusted for inflation, over a 25-year period. The total fine was subsequently reduced to R$3.5 billion (equivalent to approximately US$636 million, converted using the foreign exchange rate as of December 31, 2025). In December 2023, the Brazilian Supreme Court (Supremo Tribunal Federal) justice overseeing the case suspended J&F’s obligation to make any additional installment payments under the Leniency Agreement based upon potential misconduct by enforcement authorities in connection with entering into the Leniency Agreement, which otherwise remains in effect. Although the Leniency Agreement involved matters unrelated to our company, we acceded to it as an affiliated company of J&F, as a result of which an annual independent audit of our compliance program is conducted. For more information about our compliance program, see “Business—Compliance Program.” Our management and leadership teams are strongly committed to operating our business in full compliance with anti-corruption principles and applicable law. However, no assurance can be given that our policies, practices and personnel will be effective to detect or prevent illicit activities in all cases.

In 2020, J&F, our affiliate JBS S.A., which is controlled by our ultimate controlling shareholders, and our ultimate controlling shareholders, or collectively the “Respondents,” entered into a settlement with the SEC relating to the circumstances and payments that were the subject of the Collaboration Agreements and Leniency Agreement. Pursuant to the SEC settlement and related order, the Respondents undertook, among other things, to enhance anti-bribery and anti-corruption compliance programs, make progress reports to the SEC over a three-year period, and pay disgorgement and civil penalties. JBS S.A. was ordered to pay disgorgement to the SEC in the amount of US$26.9 million, and each of our ultimate controlling shareholders was ordered to pay a civil penalty of US$550,000, each of which payments has been made in full. Also in 2020, J&F reached a plea agreement with the U.S. Department of Justice, or “DOJ,” in which J&F pled guilty to one count of conspiracy to violate the U.S. Foreign Corrupt Practices Act, or the FCPA, in relation to the circumstances and payments that were the subject of the Collaboration Agreements and Leniency Agreement and agreed to pay a criminal penalty of US$256.5 million, payable in two installments of approximately US$128.2 million each. J&F paid a single installment of US$128.2 million to the U.S. government, with the remaining balance deemed to have been offset by payments made by J&F to Brazilian authorities under the Leniency Agreement. The DOJ plea agreement also required J&F to implement a compliance program and improve its internal policies and to make progress and other reports to the DOJ over a three-year period.

In addition, our ultimate controlling shareholders and J&F were under investigation by the CVM in Brazil for alleged violations of Brazilian securities and corporate law, including possible violations of insider trading law involving shares of controlled companies, and foreign exchange futures contracts. These investigations have been concluded, with full or partial exonerations of the investigated parties or settlement agreements, as the case may be. Our ultimate controlling shareholders are also subject to ongoing criminal proceedings by the Brazilian Federal Prosecution Office based on similar allegations. For more information about these investigations and proceedings, see “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders—Civil and Criminal Actions and Investigations involving our Ultimate Controlling Shareholders—Other Investigations and Proceedings.”

Our ultimate controlling shareholders’ and their affiliates’ reputation suffered as a consequence of these agreements and proceedings and related negative publicity. Although, to our knowledge, our ultimate controlling shareholders and their affiliates are currently in compliance with our and their respective obligations under the Brazilian Collaboration Agreements and Leniency Agreement, the SEC order and the DOJ plea agreement, and while we understand that these agreements resolved all related Brazilian criminal exposure of our ultimate controlling shareholders and J&F in relation to the illicit conduct that was the subject of these agreements, any breach of the obligations under these legacy agreements could result in additional negative publicity that could have a material adverse effect on our reputation and the reputation of our ultimate controlling shareholders. In addition, if future events or actions were to give rise to new investigations, allegations or proceedings involving our ultimate controlling shareholders or affiliates, our reputation and our ability to implement our business strategies, enter into beneficial transactions, partnerships or acquisitions, and the value of our Class A common shares may be materially adversely affected.

Negative publicity about us, our directors, our employees, our ultimate controlling shareholders or our industry and damage to our reputation and image or the reputation of our directors, our employees and ultimate controlling shareholder could adversely affect our business, financial condition, results of operations and future prospects.

Our credibility with the market is of great importance to enable us to conduct our business, and to attract and retain our customers, employees and investors. We can be subject to negative publicity based on a number of factors, including, without limitation, allegations or complaints, even if inaccurate, relating to our governance, our customer service, our relationships with suppliers or other third parties, our non-compliance with legal and regulatory obligations, our risk management practices, our financial results, health or work safety, social and environmental events, or unethical or corrupt behavior by our employees, directors, officers, our ultimate controlling shareholders, affiliates or suppliers. Any negative impact on our reputation and image may have a material adverse effect on our business, results of operations, financial condition and prospects. See, for example, “—We are subject to reputational risk in connection with U.S. and Brazilian civil and criminal actions and investigations involving our ultimate controlling shareholders, which may materially adversely impact our business and prospects and damage our reputation and image” above.

Furthermore, we cannot guarantee that our company, our ultimate controlling shareholders or our affiliates will not be the subject of future negative publicity, even if inaccurate. We also cannot be certain that any actions we take in response to a reputational crisis will be effective or sufficient to mitigate any harm arising out of any such crisis. Actions or allegations (whether grounded or unfounded) regarding actions taken by our ultimate controlling shareholders or our affiliates, or by our suppliers or other third parties, including, but not limited to, illegal acts or corruption, actions contrary to health or worker safety, or actions contrary to socio-environmental regulations, may materially adversely impact our reputation and image with our customers, suppliers and the market, which may have a material adverse effect on our business, results of operations, financial condition and future prospects and the value of our Class A common shares.

We rely on third parties maintaining open marketplaces to distribute our mobile device app. If such third parties interfere with the distribution of our platform, our business would be adversely affected.

We rely on third parties maintaining open marketplaces, including the Apple App Store and Google Play, which make our mobile device app available for download. We cannot assure you that the marketplaces through which we distribute our mobile device app will maintain their current structures or that such marketplaces will not charge us fees to list our app for download. We are also dependent on these third-party marketplaces to enable us and our consumers to timely update our mobile device app, and to incorporate new features, integrations, and capabilities.

In addition, Apple Inc. and Google, among others, for competitive or other reasons, could stop allowing or supporting access to our mobile device app through their products, could allow access for us only at an unsustainable cost, or could make changes to the terms of access in order to make our mobile app less desirable or harder to access.

If we are unable to integrate our products with a variety of operating systems, software apps, platforms and hardware that are developed by others, our solutions may not operate effectively, our products may become less marketable, less competitive or obsolete and our business, financial condition and results of operations may be harmed.

Our products must integrate with a variety of network, hardware and software platforms, and we need to continuously modify and enhance our products to adapt to changes in hardware, software, networking, browser and database technologies. In particular, we have developed our technology platform to easily integrate with third-party apps through the interaction of application programming interfaces, or “APIs.” Our business could be harmed if any provider of such software or other technologies or systems:

Although we actively monitor our partners and multi-source venders, we cannot prevent our providers of software or other technologies from changing the features of their APIs, discontinuing their support of such APIs, restricting our access to their APIs or altering the terms governing their use in a manner that is adverse to our business. If our partners or multi-source vendors were to take such actions, our capabilities that depend on such APIs would be impaired until we are able to find a replacement partner or develop an in-house solution, which could significantly diminish the value of our platform and harm our business, operating results and financial condition. In addition, third-party services and products are constantly evolving, and we may not be able to modify our platform to maintain its compatibility with such services and products as they continue to develop, or we may not be able to make such modifications in a timely and cost-effective manner, any of which could adversely affect our business, operating results and financial condition.

We have identified material weaknesses in our internal control over financial reporting for the years ended December 31, 2025, 2024 and 2023, and if we fail to establish and maintain effective internal controls over financial reporting we may be unable to timely and accurately report our results of operations, meet our reporting obligations and/or prevent fraud. In addition, our accounting and other management systems and resources may not be immediately prepared to meet the reporting requirements applicable to U.S. public reporting companies, which may strain our resources.

Our accounting resources and internal control framework were originally put into place to meet Brazilian regulatory and private-company reporting requirements and have not yet been fully scaled to address the internal control over financial reporting requirements applicable to U.S. public companies under the Sarbanes-Oxley Act. Management is conducting, but has not yet completed, an assessment of the effectiveness of our internal controls over financial reporting under the Sarbanes-Oxley Act of 2002. Moreover, our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting.

We have identified material weaknesses in internal control over financial reporting, which relate to: (a) change management; (b) access management; and (c) financial reporting related to the financial reporting close process. A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. These deficiencies could result in additional material misstatements to our consolidated financial statements that could not be prevented or detected on a timely basis.

As of December 31, 2025, 2024 and 2023, our management identified a material weakness in our internal control over financial reporting related to controls related to the “change management” to our IT systems. All planned investments and actions to address the risk related to “change management” were executed, and the process is now more robust. The design tests concluded that the process is functional and addresses the risks initially identified. However, the effectiveness tests could not be conducted due to the timing of the implementations. Therefore, this material weakness has not yet been remediated and will continue until we can carry out an assessment of the maturity of the implemented controls with a broader data set.

As of December 31, 2025 and 2024, our management identified a material weakness in our internal control over financial reporting related to the effectiveness tests on “access management controls” for specific systems in the periodic review process of some users. To address this, we are conducting periodic reviews at shorter intervals, which has resulted in a large number of cancellations of access rights, as well as enhancing the segregation of duties matrices of our most critical systems. This material weakness has not yet been remediated and will continue until we can carry out an assessment of the effectiveness of the controls.

In addition, during 2025, our management identified a material weakness in our internal control over financial reporting related to the financial reporting closing process. Specifically, deficiencies were noted in the timely and accurate completion of period-end financial closing procedures, which could result in errors in the preparation of our financial statements. This material weakness has not yet been remediated, and our management is actively implementing corrective actions to strengthen the controls and procedures over the financial closing processes. To remediate this material weakness, management has developed and is implementing a comprehensive remediation plan. Key actions include:

These actions are intended to promote more rigorous oversight of complex and non-routine transactions and to improve consistency in the application of our financial reporting processes.

As a result of our initial public offering, completed on January 30, 2026, we became subject to certain reporting requirements of the Exchange Act and the other rules and regulations of the SEC and Nasdaq. We are also subject to various other regulatory requirements, including the Sarbanes-Oxley Act of 2002, or the “Sarbanes-Oxley Act.” Section 404 of the Sarbanes-Oxley Act requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F subject to phase-in accommodations for newly-listed companies. Under Section 404 of the Sarbanes-Oxley Act of 2002, our management is not required to assess or report on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F for the year ended December 31, 2025. We are only required to provide such a report for the year ending December 31, 2026. At that time, our management may conclude that our internal control over financial reporting is not effective. Moreover, since we are no longer classified as an emerging growth company, in our annual report on Form 20-F for the year ending December 31, 2026 our independent registered public accounting firm is required to attest to and report on the effectiveness of our internal control over financial reporting. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as a result of our initial public offering, we became a public reporting company in the United States, subject to reporting, disclosure control and other applicable obligations under the Exchange Act, SOX, and the Dodd-Frank Act, as well as rules adopted, and to be adopted, by the SEC and the NASDAQ. We may be unable to timely complete our evaluation testing and any required remediation.

As of December 31, 2025, the three material weaknesses described above remained unremediated. Although we initiated remediation actions with respect to each of these material weaknesses during 2025, including the redesign of our IT change management procedures, enhancements to our access management controls, and implementation of a structured financial closing remediation plan, not all remediation actions were implemented during 2025 and we were unable to conclude that these material weaknesses have been fully remediated as of that date. A conclusion of the remediation under applicable Committee of Sponsoring Organizations of the Treadway Commission (COSO) and Public Company Accounting Oversight Board (PCAOB) standards requires evidence that redesigned controls have operated effectively over a sufficient period to allow an objective assessment of their sustained effectiveness.

In most cases, the redesigned controls have not operated for a sufficient period of time to allow such an assessment. We expect to complete our remediation efforts and conduct a full cycle of operational testing during the fiscal year ending December 31, 2026, at which point we expect our management to be in a position to make a definitive assessment of whether these material weaknesses have been remediated.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, we may identify weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could, in turn, limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our Class A common shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.

In addition, we expect these rules and regulations to increase our legal, accounting and financial compliance costs and to make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to maintain the same or similar coverage. New rules and regulations relating to information disclosure, financial reporting and controls and corporate governance, which could be adopted by the SEC or other regulatory bodies or exchange entities from time to time, could result in a significant increase in legal, accounting and other compliance costs and make certain corporate activities more time-consuming and costly, which could materially affect our business, financial condition and results of operations. These rules and regulations may also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers.

These new obligations will also require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business. Given that most of the individuals who now constitute our management team have limited experience managing a publicly traded company and complying with the increasingly complex laws pertaining to public companies, initially, these new obligations could demand even greater attention. These cost increases and the diversion of management’s attention could materially and adversely affect our business, financial condition and operation results.

Disclosure controls and procedures over financial reporting may not prevent or detect all errors or acts of fraud.

Disclosure controls and procedures, including internal controls over financial reporting, are designed to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is prepared and communicated to our management, and recorded, processed, summarized and reported in accordance with the applicable rules and regulations, including, but not limited to, SEC rules and forms.

These disclosure controls and procedures are subject to inherent limitations, including the risk that decision-making judgments may be flawed, resulting in errors or mistakes. Controls may also be bypassed through unauthorized overrides. As a result, our business remains exposed to risks such as potential non-compliance with policies, employee misconduct, negligence, or fraud, any of which could lead to regulatory sanctions, civil claims, and significant reputational or financial harm. We may not be able to prevent all instances of employee misconduct, and the measures we implement to detect or deter such activity may not always be effective. Therefore, due to these inherent limitations, misstatements arising from error or fraud may occur and go undetected.

Our chief executive officer and chief financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective. This conclusion follows directly from the material weaknesses in our internal control over financial reporting described in the risk factor above. Because internal controls over financial reporting constitute a component of our broader disclosure controls and procedures, the existence of un-remediated material weaknesses in our internal controls affects our ability to provide the reasonable assurance that disclosure controls and procedures are designed to provide. As mentioned above, we expect to complete our remediation efforts and conduct a full cycle of operational testing during the fiscal year ending December 31, 2026, at which point we expect our management to be in a position to make a definitive assessment of whether these material weaknesses have been remediated.

For further information regarding our internal controls over financial reporting, see the risk factor above “We have identified material weaknesses in our internal control over financial reporting for the years ended December 31, 2025, 2024 and 2023 and if we fail to establish and maintain effective internal controls over financial reporting we may be unable to timely and accurately report our results of operations, meet our reporting obligations and/or prevent fraud. In addition, our accounting and other management systems and resources may not be immediately prepared to meet the reporting requirements applicable to U.S. public reporting companies, which may strain our resources.”

We may need to raise additional capital in the future by issuing securities or may enter into corporate transactions with an effect similar to a merger, which may dilute your interest in our share capital and affect the trading price of our Class A common shares.

We may need to raise additional funds to grow our business and implement our growth strategy through public or private issuances of common shares or securities convertible into, or exchangeable for, our common shares, which may dilute your interest in our share capital or result in a decrease in the market price of our common shares. In addition, we may also enter into mergers or other similar transactions in the future, which may dilute your interest in our share capital or result in a decrease in the market price of our Class A common shares.

We may however require additional capital to respond to business opportunities, refinancing needs, challenges, acquisitions, as well as to comply with regulatory capital adequacy requirements or unforeseen circumstances.

Any fundraising through the issuance of shares or securities convertible into or exchangeable for shares, including potential fundraising from J&F International or other entities controlled by our ultimate controlling shareholders, or the participation in corporate transactions with an effect similar to a merger, may dilute your interest in our capital stock or result in a decrease in the market price of our Class A common shares.

An occurrence of a natural disaster, widespread health epidemic or pandemic or other outbreaks could have a material adverse effect on our business, financial condition and results of operations.

Our business could be materially and adversely affected by natural disasters, such as fires or floods, the outbreak of a widespread health epidemic or pandemic, or other events, such as wars, acts of terrorism, environmental accidents, power shortages or communication interruptions. The occurrence of a disaster or similar event could materially disrupt our business and operations. These events could also cause us to close our operating facilities temporarily, which would severely disrupt our operations and have a material adverse effect on our business, financial condition and results of operations. In addition, our revenues could be materially reduced to the extent that a natural disaster, health epidemic or other major event harms the economy of Brazil. Our operations could also be severely disrupted if our consumers, suppliers, vendors and other business partners were affected by natural disasters, health epidemics or other major events.

The outbreak of a widespread health epidemic or pandemic, such as COVID-19, would likely adversely affect the operations of our consumers, suppliers, vendors and other business partners, and may adversely impact our results of operations in the future. For example, commerce in Brazil may be adversely affected by measures that are intended to contain and limit the outbreak’s spread. Such measures could, in turn, adversely affect our business, financial condition and results of operations.

We may be subject to liability with respect to environmental crimes (defined by the Brazilian Federal Constitution and Federal Law No. 9,605/98). In such cases, liability may apply both to legal entities and to our directors, potentially resulting not only in large fines, but also reputational damage.

We operate across a range of highly competitive and rapidly evolving industries, and any inability to compete successfully would materially and adversely affect our business, results of operations, financial condition, and future prospects.

We operate across a range of highly competitive and rapidly evolving industries. As a dual-sided financial services platform, we face competition from a variety of participants in Brazil, including financial institutions and payment companies. Our primary competitors for each of our strategic pillars are:

We expect competition to intensify in the future, both as emerging technologies continue to enter the marketplace and as large traditional banks increasingly seek to innovate the services that they offer to compete with our platform. Technological advances and the continued growth of e-commerce activities have increased consumers’ accessibility to products and services and led to the expansion of competition in digital payment options such as BNPL solutions. We face competition in areas such as: flexibility on payment options; duration, simplicity and transparency of payment terms; reliability and speed in processing payments; compliance and security; promotional offerings; fees; approval rates; ease-of-use; marketing expertise; service levels; products and services; technological capabilities and integration; consumer service; brand and reputation; and consumer and merchant satisfaction.

Some of our competitors are substantially larger than we are, which gives those competitors advantages we do not have, such as more diversified products, a broader consumer and merchant base, the ability to reach more consumers, an increased ability to cross-sell their products, operational efficiencies, the ability to cross-subsidize their offerings through their other business lines, more versatile technology platforms, broad-based local distribution capabilities and lower-cost funding. Our potential competitors may also have longer operating histories, more extensive and broader consumer and merchant relationships, and greater brand recognition and brand loyalty than we have. For example, more established companies that possess large, existing consumer and merchant bases, substantial financial resources and established distribution channels could enter the market.

Increased competition could result in the need for us to alter the pricing and services we offer to businesses or consumers. If we are unable to successfully compete, the demand for our platform and products could stagnate or substantially decline, and we could fail to retain or grow the number of consumers or businesses using our platform, which would reduce the attractiveness of our platform to other consumers and businesses, and which would materially and adversely affect our business, results of operations, financial condition and future prospects.

In addition, certain of our competitors in certain product areas and markets may not be subject to the same regulatory requirements that we are. For example, we are required to comply with a set of regulations that is not applicable to non-regulated payment institutions, including capital ratios, among others. We are currently subject to minimum capital ratios of 7% for the common equity capital ratio, 8.5% for the Tier I capital ratio and 10.5% for the total capital ratio (all including the conservation capital buffer requirement of 2.5%), in line with the capital ratios applicable to most financial institutions operating in Brazil. As a result, our competitors who are not subject to similar regulatory requirements may be able to offer products and services at lower costs, which could put pressure on the pricing and terms that we offer and, as a result, our profit margins.

If we fail to promote, protect, and maintain our brand in a cost-effective manner, we may lose market share and our revenue may decrease.

We believe that developing, protecting and maintaining awareness of our “PicPay” brand (trademark) in a cost-effective manner is critical to attracting new and maintaining quarterly active clients to our platform. Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and the experience of our consumers. Our efforts to build our brand have involved significant expenses, and we expect to increase our marketing spend in the near term. These brand promotion activities may not result in increased revenue and, even if they do, any increases may not offset the expenses incurred. Additionally, the successful protection and maintenance of our brand will depend on our ability to obtain, maintain, protect and enforce trademarks and other forms of intellectual property protection for our brand. If we fail to successfully promote, protect and maintain our brand or if we incur substantial expenses in an unsuccessful attempt to promote, protect and maintain our brand, we may lose our existing consumers to our competitors or be unable to attract new consumers. Any such loss of existing consumers, or inability to attract new consumers, would have an adverse effect on our business and results of operations.

Recent interventions and liquidations of financial institutions and payment entities in Brazil may increase regulatory scrutiny, reduce market confidence and adversely affect our business, financial condition and results of operations.

The Brazilian financial and payments sectors have recently experienced a series of supervisory actions by the Brazilian Central Bank, including interventions, temporary special administration regimes and extrajudicial liquidations involving financial institutions and payment entities, such as Banco Master, Will, Reag and Entrepay, among others. These measures have generally been associated with deficiencies in governance, liquidity management, regulatory compliance, capital adequacy, operational controls or business practices, and have heightened regulatory attention on participants operating in similar segments.

These developments may lead to increased regulatory scrutiny over financial institutions, payment institutions and other participants in the ecosystem in which we operate. As a result, the Brazilian Central Bank and other authorities may intensify supervisory activities, adopt a more conservative or restrictive approach in interpreting and enforcing existing regulations, or introduce new rules and requirements applicable to our operations, including in relation to capital adequacy, liquidity, governance, risk management, related party transactions, funding structures and the offering of certain products and services. Any such changes could increase our compliance and operational costs, require adjustments to our business practices or limit our ability to expand certain activities.

In addition, these events may adversely affect overall market confidence in financial institutions and payment entities, particularly those operating with digital platforms, innovative business models or significant exposure to credit or receivables-based products. Reduced confidence among consumers, merchants, funding providers, institutional investors or other counterparties may result in lower demand for our products and services, reduced transaction volumes, more limited access to funding or higher funding costs.

The liquidation or financial distress of other market participants may have indirect effects on us, including through disruptions in commercial relationships, increased counterparty risk, contagion effects within the financial system or adverse developments in the markets in which we operate. For example, counterparties may reassess their exposure to the sector as a whole, including to us, regardless of our individual financial condition and risk profile.

If we are unable to effectively manage the impacts of increased regulatory scrutiny, changes in the regulatory environment, reduced market confidence or broader systemic effects arising from these developments, our business, financial condition and results of operations could be materially and adversely affected.

Our growing use of artificial intelligence and machine learning technologies, including generative AI and autonomous AI agents, exposes us to operational, security, privacy, regulatory and reputational risks that could materially and adversely affect our business.

We use, and intend to expand our use of, artificial intelligence (“AI”) and machine learning (“ML”) technologies — including generative AI, large language models and autonomous AI agents — across various areas of our business, including anti-money laundering monitoring, customer service, marketing personalization, software development and administrative process automation. While we believe these technologies are important to our competitiveness and operational efficiency, their adoption introduces a series of risks that could have a material adverse effect on our business, financial condition and results of operations. AI systems may produce inaccurate, biased or otherwise flawed outputs, and errors in automated decisions affecting our consumers, credit underwriting or fraud detection could expose us to financial losses and regulatory scrutiny. Furthermore, the same AI and ML capabilities we deploy to protect our platform are also being employed by malicious actors to conduct more sophisticated attacks, including AI-generated phishing campaigns, deepfake-based social engineering, synthetic identity fraud and the rapid replication of fraudulent applications impersonating our brand. A significant portion of our AI capabilities also relies on third-party vendors, which exposes us to risks associated with the confidentiality of consumer data and our limited ability to audit their outputs, particularly in contexts governed by the Brazilian Central Bank or the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados), or the “LGPD.”

The regulatory landscape governing the use of AI in financial services is rapidly evolving and remains uncertain in Brazil and internationally. Brazilian authorities, including the Brazilian Central Bank, the ANPD and the CVM, may adopt new requirements relating to the transparency, auditability and accountability of AI systems used in regulated activities, and compliance with such requirements may necessitate substantial changes to our systems, processes and governance frameworks. Failure to comply with applicable AI-related regulations, or the perception that our AI systems operate in an opaque or discriminatory manner, could result in regulatory action, fines, reputational harm and loss of consumer trust, any of which could have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to Legal and Regulatory Matters

Our business is subject to extensive government regulation and oversight in Brazil, and we have in the past failed to fully comply with the capital conservation buffer. Any failure to comply with current or future regulations could result in significant costs, expose us to substantial liability, or require adjustments to our business practices.

As a payment institution (instituição de pagamento) and as a multi-service bank (banco múltiplo) in Brazil, our business is subject to Brazilian laws and regulations relating to electronic payments in Brazil, comprised respectively of Brazilian Federal Law Nos. 12,865, of October 9, 2013 and 4,595 of December 31, 1964, as well as to related rules and regulations, including capital and liquidity requirements.

The Brazilian Central Bank recently introduced a new framework establishing prudential requirements for payment institutions, increasing the capital and prudential obligations to which we are subject. This framework includes Brazilian Central Bank Resolutions No. 198, 199, 200, 201 and 202, all dated March 11, 2022, as well as Resolution No. 436, dated November 28, 2024, which came fully into effect on January 1, 2025. Regulations applicable to type 3 conglomerates (the regulatory classification under which the PicPay-led conglomerate falls) impose stringent capital requirements that affect our business, financial condition, and results of operations.

The nature of our services also renders us as gatekeepers for the purposes of Brazilian Federal Law No. 9,613/1998 (Brazilian Anti-Money Laundering Law), imposing obligations to prevent, monitor, and combat money laundering, including detailed transactions, specific internal policies, and communication of suspicious operations. Any failures in our internal controls may result in fines, administrative sanctions or criminal liability.

During the year ended December 31, 2024, we became subject to minimum total capital ratio of 10.5%, minimum Tier I capital ratio of 8.5% and a minimum common equity capital ratio of 7% of risk-weighted assets (RWA), all including the required capital conservation buffer of 2.5%. While for simplicity we refer to the minimum required capital ratios as the sum of minimum requirements plus the capital conservation buffer (for example, minimum total capital requirement of 8% plus the 2.5% capital conservation buffer), non-fulfillment of the capital conservation buffer and a breach of the minimum requirement have different regulatory consequences. Non-fulfillment of the capital conservation buffer subjects the bank to limitations on the distribution of bonuses to executives and dividends to shareholders proportional to degree of non-fulfillment, while breaches of the minimum capital requirements would subject the bank to more drastic regulatory action, such as a requirement to increase capital or reduce risk weighted assets in a short period of time.

The new capital requirement framework resulted in our failure to fully comply with the capital conservation buffer, but not with the minimum capital requirements. In response, we received capital injections of R$230.0 million in 2024 (R$100.0 million on June 28, 2024 and R$130.0 million on September 19, 2024), and a total of R$1,183.4 million in 2025 across eight installments. Additionally, in November 2025, we issued R$501.6 million in Tier II subordinated debt.

On June 28, 2024, we recorded a capital increase of R$230.0 million, with a capital injection of R$100.0 million on June 28, 2024 and an additional injection of R$130.0 million on September 19, 2024. For more information, see note 20 – Equity of our consolidated financial statements included elsewhere in this annual report.

Additionally, in 2025, we received a total capital injection of R$803.5 million, divided into eight installments: the first on February 26, 2025, in the amount of R$321.8 million; the second on March 25, 2025, in the amount of R$50.0 million; the third on April 28, 2025, in the amount of R$125.5 million; the fourth on May 27, 2025, in the amount of R$50.0 million; the fifth on July 21, 2025, in the amount of R$108.4 million; the sixth on September 23, 2025, in the amount of R$149.4 million; the seventh on November 25, 2025 in the amount of R$360.0 million and the eighth on December 24, 2025, in the amount of R$20.0 million.

As of December 31, 2025, our total capital ratio was 11.74%, 1.24 percentage points above the minimum regulatory requirement of 10.5%, including the conservation buffer of 2.5%, compared to 0.81% below the minimum regulatory requirement including the conservation buffer as of December 31, 2024. On January 30, 2026, we completed our initial public offering of Class A common shares on NASDAQ, generating net proceeds of R$2.1 billion (US$403.9 million).

On February 18, 2026, R$1.5 billion was invested in PicPay Bank, with the purpose to support the bank’s growth and capital compliance.

At the beginning of 2025, new Brazilian Central Bank rules incorporating IFRS 9 measurement requirements for financial assets came into effect with more stringent expected credit loss calculation standards than those of IFRS Accounting Standards. As a result, credit provisions are higher under BACEN standards than under IFRS Accounting Standards increasing both provisioning charges and capital requirements of the conglomerate.

Furthermore, we are exposed to the risk that the capital requirements applicable to us may increase overtime. Failure to continuously maintain conservative capital levels could require us to raise additional capital, which may not be available on acceptable terms, or to modify our business. Non-compliance could also subject us to fines, sanctions, or even the suspension or revocation of licenses or authorizations to operate.

For more information, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources and Uses of Funding” and “Item 4. Information on the Company—B. Business Overview—Regulation—Other Rules—Prudential Framework and Limits of Exposure.”

Changes in the regulatory framework governing FGTS-backed loans may reduce our ability to originate new credit products and adversely affect our loan business.

The Brazilian government materially changed the rules governing loans secured by the FGTS (Fundo de Garantia do Tempo de Serviço) “annual birthday withdrawal” (saque aniversário), a program allowing workers to withdraw part of their FGTS funds every year on their annual birthday.

These new rules include: (i) a cap on the number of annual withdrawals that can be pledged as collateral of up to five annual withdrawals until October 2026 and three annual withdrawals from November 2026 onwards; (ii) a per-installment amount range of R$100 to R$500, with a maximum total advance of R$2,500 in the first year; (iii) a restriction to a single advance transaction per year, where multiple simultaneous operations were previously permitted; and (iv) a mandatory 90-day waiting period after a worker opts into the birthday withdrawal before an advance can be requested.

These changes are expected to reduce eligible collateral, lower average ticket sizes, limit repeat borrowing, and increase customer friction, all of which may adversely affect our origination volumes, revenue growth and overall loan economics, which could have an adverse effect on our business, financial condition and results of operations.

Proposed regulations on interest-free installments (parcelamento sem juros) and credit card interest rates could reduce our revenues and adversely affect our business.

On October 3, 2023, Law No. 14,690 was published, establishing that credit card issuers must submit self-regulations to the CMN, limiting interest and financial fees charged on the outstanding credit cards balance in revolving credit (crédito rotativo) and invoice installment credit (parcelamento de fatura de cartão de crédito), which can be reviewed on an annual basis. Such self-regulations were not submitted to the CMN, thus total interest became capped at the original debt amount, following CMN regulations.

In connection with these discussions, certain market participants have proposed regulations restricting interest-free installments purchases by Brazilian merchants (parcelamento sem juros or “PSJ”), which are widely adopted in Brazil. Proposals under discussion include establishing a cap to the interchange fees in credit transactions and a limit of 12 installments for PSJ transactions. If adopted, these measures could significantly reduce revenue associated with fees charged in installment transactions.

Additionally, as part of broader regulatory discussions regarding non-financial companies providing financial services, current regulations may evolve to create additional rules and obligations applicable to payment institutions, payment scheme settlors and to the market in general. Any such developments could adversely affect our business, financial condition and results of operations.

Moreover, our acquisition of Kovr Seguradora subjects us to insurance industry regulation by the SUSEP and the CNSP, creating additional compliance obligations and regulatory risks. Upon closing of the acquisition of Kovr Seguradora, our operations, activities and ownership associated with that company will be subject to oversight by SUSEP and to regulations issued by SUSEP and CNSP. Insurance companies in Brazil are subject to comprehensive regulations covering risk underwriting, solvency and capitalization requirements, service levels, product registrations, business practices, restrictions on the origin of capital and on related-party transactions, among others, with associated penalties for non-compliance.

On December 11, 2025, Law No. 15,040 entered into force, significantly changing the legal framework for the insurance companies operating in Brazil. This law introduces strong client-protection provisions and resets certain practices and precedents, creating challenges for insurers and reinsurers, including Kovr Seguradora. The oversight of SUSEP and the regulatory changes introduced by Law No. 15,040 may restrict the activities of Kovr Seguradora, expose us to additional compliance costs and subject us to the risk of fines and other penalties, any of which could adversely affect our business, financial condition and results of operations.

For further information regarding these regulatory matters, see “Item 4. Information on the Company—B. Business Overview—Regulation.”

Funding of digital wallets via credit card is a relevant business for us, and this product is being challenged by incumbent institutions, and Brazilian authorities are conducting an inquiry of certain players, including us. If funding of digital wallets via credit card transactions is deemed incompatible with the applicable legal and regulatory framework in Brazil, we could be required to change our products to comply with new understandings of the Brazilian authorities, which could adversely affect the results of our operations.

Our customers can fund their digital wallets choosing a wide range of options, such as electronic funds transfers from accounts held with other financial or payment institutions (wire transfers or Pix), boleto (bank slip), P2P payments, loan financing, or via credit card (thirty party or our own) transactions. Moreover, we enable customers to make Pix transactions to other users with their credit cards, in our Pix Credit product. When a customer chooses to fund their digital wallet or make Pix transactions with their credit cards, we charge the applicable fees.

Even though we believe this is a common product in the Brazilian payment industry, accepted by payment schemes networks and reviewed by the General Attorney Office of the Brazilian Central Bank, incumbent banks have been challenging this product. In this regard, Febraban recently filed a notice with the Brazilian National Consumer Office (Secretaria Nacional do Consumidor, or the “SENACON”) and a complaint with the Public Prosecutor’s Office of the State of São Paulo (Ministério Público do Estado de São Paulo), alleging that we would be granting loans to customers and that the fees charged in connection with installment transactions would be “compensating interest” (juros remuneratórios). Our business was specifically challenged in such notice.

After Febraban’s notice, SENACON issued, on January 12, 2024, a provisional measure (an injunction) against us and other industry players, and we promptly presented our response, clarifying that our business model is aligned with the best market practices, complies with the applicable legal and regulatory framework in Brazil. Following such a response, on January 19, 2024, SENACON suspended the provisional measure required by Febraban, which has appealed against such suspension and requested the Brazilian Central Bank’s further analysis on the matter. Moreover, ABRANET – Brazilian Internet Association (Associação Brasileira de Internet) filed a complaint with the Federal Attorney-General’s Office (Procuradoria Geral da República) seeking an investigation against Febraban and incumbent banks on alleged anti-competitive practices against fintechs and other players. Currently, the matter is still under the investigation of Brazilian authorities. In June 2024, Febraban submitted to SENACON, the Brazilian Central Bank and the Public Prosecutor’s Office of the State of the São Paulo a request for withdrawal regarding the representations previously filed. In October 2024, following investigations within the scope of Abranet’s representation, the Federal Attorney-General’s Office sent to the CADE’s Superintendent-General a representation for investigation of a possible antitrust violation in the Brazilian Payments Systems Market (SPB). In January 2025, CADE informed that it had initiated an Administrative Procedure to investigate anticompetitive practices by incumbent banks. The procedure is ongoing with no scheduled completion date.

If Brazilian authorities deem that funding of digital wallets via credit card transactions is incompatible with the applicable legal and regulatory framework in Brazil, we could be required to change some of our products to comply with new understandings of the Brazilian authorities, which could adversely affect our above mentioned products and results of our operations.

We are subject to costs and risks associated with increased or changing laws and regulations affecting our business, including those relating to the sale of consumer products. Specifically, developments in data protection and privacy laws could harm our business, financial condition or results or operations.

We operate in a complex regulatory and legal environment that exposes us to compliance and litigation risks that could materially affect our results of operations. These laws may change, sometimes significantly, as a result of political, economic or social events. Some of the federal, state or local laws and regulations in Brazil that affect us include: those relating to consumer products, product liability or consumer protection; those relating to the manner in which we advertise, market or sell products; labor and employment laws, including wage and hour laws; tax laws or interpretations thereof; bank secrecy laws, data protection and privacy laws and regulations; and securities and exchange laws and regulations. For instance, data protection and privacy laws are developing to take into account the changes in cultural and consumer attitudes towards the protection of personal data. There can be no guarantee that we will have sufficient financial resources to comply with any new regulations or successfully compete in the context of a shifting regulatory environment.

In September 2020, Brazilian Federal Law No. 13.709/2018, called the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados), or the “LGPD,” came into effect establishing general principles, obligations and detailed rules for the collection, use, processing and storage of personal data that affects all economic sectors, including the relationship between consumers and suppliers of goods and services, employees and employers and other relationships in which personal data is collected, whether in a digital or physical environment. All legal entities are required to adapt their data processing activities to these new rules. The application of penalties provided in the LGPD became effective on August 1, 2021, and such penalties depend on the severity of the offense, according to certain criteria established by the Brazilian National Data Protection Authority (Autoridade Nacional de Proteção de Dados), or the “ANPD” under ANPD’s Resolution No. 4 of February 24, 2023. Any additional privacy laws or regulations enacted or approved in Brazil could seriously harm our business, financial condition, or results of operations. Accordingly, our personal data processing activities and digital advertising practices may change significantly, which could result in additional costs for us due to the requirements to conform our practices to the provisions set forth in the LGPD.

In particular, as we seek to build a trusted and secure platform for commerce, and as we expand our network of sellers and buyers and facilitate their transactions and interactions with one another, we will increasingly be subject to laws and regulations relating to the collection, use, retention, security, and transfer of information, including the personally identifiable information of our employees and our merchants and their consumers. As with the other laws and regulations noted above, these laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible they will be interpreted and applied in ways that will materially and adversely affect our business. Any failure, real or perceived, by us to comply with our posted privacy policies or with any regulatory requirements or orders or other local, state, federal, or international privacy or consumer protection-related laws and regulations could cause sellers or their consumers to reduce their use of our products and services and could materially and adversely affect our business.

Changes in tax laws, tax incentives, benefits or differing interpretations of tax laws may adversely affect our results of operations.

Changes in tax laws, regulations, related interpretations and tax accounting standards in Brazil, the Netherlands or the United States may result in a higher tax rate on our earnings, which may significantly reduce our profits and cash flows from operations.

The Brazilian government may propose changes to the tax regime applicable to different sectors of the economy, including changes that represent an increase in our tax burden and the tax burden of our consumers and suppliers, which can negatively impact our business. These changes include changes in tax rates, tax base, tax deductibility and, occasionally, the creation of taxes (temporary or non-temporary). If these changes directly or indirectly increase our tax burden, we may have our gross margin reduced, adversely affecting our business and results of operations.

On December 20, 2023, the Brazilian Congress enacted Constitutional Amendment No. 132, or “EC 132,” which provided a broad reform of the Brazilian tax system, with the extinction of a variety of taxes currently applicable to goods and services, including social contributions, federal tax on industrialized products, the Municipal tax on services and the tax on the circulation of goods and services (the “indirect taxes”), for the creation of three new taxes on operations with goods and services: a Goods and Services Tax, or the IBS, a Federal Contribution on Goods and Services, or CBS, and an Excise Tax, or IS.

EC 132 will not be immediately effective, since there is a seven-year transition period, from 2026 to 2032, for the full implementation of the tax reform. The current indirect taxes (ICMS, IPI, ISS and PIS/Cofins) will coexist and will be gradually replaced by IBS, CBS and IS until completion of the tax reform by 2033.

In the beginning of 2025, the President of Brazil sanctioned Supplementary Law No. 214/2025, which regulates the consumption tax reform and creates the IBS and CBS, establishing a transition period prior to their effectiveness.

As a result of certain presidential vetoes, the enacted text of Supplementary Law No. 214/25 stated that investment funds were “taxpayers” for IBS and the CBS purposes. However, in June 2025, the Brazilian Congress revoked such vetoes to ensure that investments funds will not be subject to this taxation.

In December 2024, we raised funds through a securitization of receivables from our FGTS loan portfolio through a FIDC FGTS offering. Considering that the FIDC FGTS is an investment fund and it is not regarded as a “taxpayer” neither for corporate tax nor for CBS and IBS purposes, the taxation is only applied to the holders over the yields when the quotas are amortised or redeemed by them and such yields are not subject to the semiannual withholding tax (commonly known as come cotas). All of the subordinated quotas of the FIDC FGTS are held by PicPay Bank and the holders of subordinated quotas are subject to taxation on a cash basis. Moreover, the referred FIDC FGTS was incorporated with the specific purpose to raise funding to support the structure of our business. Also, the tax rates that are applicable to the FIDC FGTS are equivalent to all other FIDCs with collateral in credit rights. As of December 31, 2025, our obligations to FIDC quota holders totaled R$815.6 million.

The Brazilian Congress has enacted Law No. 15,270, which imposed a 10% withholding income tax on dividends paid, credited, distributed, allocated or remitted abroad by Brazilian companies, subject to limited grandfathering rules for profits ascertained before December 31, 2025 and specific exemptions, including for certain sovereign investors and qualifying foreign pension entities. The law also established a mechanism under which the Executive Branch may grant a tax credit where the sum of the paying company’s effective corporate tax rate (calculated as the ratio between current income tax expense and accounting profits) and the 10% withholding exceeds the applicable nominal benchmark rate. While these measures may increase the effective tax cost of cross-border dividend payments and introduce new administrative requirements for non-resident recipients, including a deadline to claim any such credit. In addition, key elements of implementation, such as how non-residents would recover credits (by refund or by offset) and how effective rates are to be computed in complex structures, are subject to further regulation and may create uncertainty, potential timing mismatches and cash flow frictions for foreign investors.

The interaction of the new withholding regime with corporate income taxes, tax treaties, and any credit or refund mechanisms could result in incremental tax leakage or double taxation exposure for non-resident shareholders, particularly if regulatory guidance is delayed or differs from market expectations. Any increase in the tax cost or administrative burden associated with distributions to non-residents could adversely affect the after-tax returns of our investors, reduce our flexibility in capital allocation and funding, and, consequently, adversely affect the trading price of our Class A common shares.

Moreover, an attempt to reform income taxation was submitted through Bill No. 2,337/2021. Although the Brazilian House of Representatives approved this bill on September 2, 2021, it has since stalled in the Brazilian Senate, which will vote on it next. This initiative proposes significant changes to the income tax legislation, such as (i) repealing the exemption from income tax on the distribution of dividends by Brazilian companies (and imposing a general 15% income tax rate), (ii) the gradual decrease of the combined Brazilian corporate income tax rates, and (iii) extinguishing the possibility of deducting expenses from the payment of interest on shareholder’s equity (juros sobre o capital próprio – JCP). The income and payroll taxation reform resulting from EC 132 are expected to include similar provisions as those attempted by Bill No. 2,337/2021.

We are still unable to quantify the effects of the changes introduced by EC 132 or any other additional reforms, if approved, as certain proposed amendments to the Constitution provide for the enactment of regulations regarding these new taxes, which regulations have not been presented yet. These changes may result in impacts for us that cannot be assessed yet. Accordingly, any increase in tax rates in Brazil, the creation of new taxes or the recognition of taxes that affect our operations may adversely affect us.

Our results of operations and financial condition may decline if certain tax incentives are not retained or renewed. For example, Brazilian Federal Law No. 11,196 currently grants tax benefits to companies that invest in research and development, provided that some requirements are met, which significantly reduces our annual income tax expense. If the taxes applicable to our business increase or any tax benefits are revoked and we cannot alter our cost structure to pass our tax increases on to clients, our financial condition, results of operations and cash flows could be seriously harmed. Our payment processing activities are also subject to a Municipal Tax on Services (Imposto Sobre Serviços), or “ISS.” Any increases in ISS rates would also harm our profitability.

In addition, Brazilian government authorities at the federal, state and local levels are considering changes in tax laws in order to cover budgetary shortfalls resulting from the recent economic downturn in Brazil. If these proposals are enacted they may harm our profitability by increasing our tax burden, increasing our tax compliance costs, or otherwise affecting our financial condition, results of operations and cash flows. Certain tax rules in Brazil, particularly at the local level, may change without notice. We may not always be aware of all such changes that affect our business and we may therefore fail to pay the applicable taxes or otherwise comply with tax regulations and other obligations related to disclosure of certain information, which may result in additional tax assessments and penalties for our company.

Furthermore, we are subject to tax laws and regulations that may be interpreted differently by tax authorities and us. Significant judgment is required to evaluate applicable tax obligations. In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes apply to our business. One or more states or municipalities, the federal government or other countries may seek to challenge the taxation or procedures applied to our transactions imposing the charge of taxes or additional reporting, record-keeping or indirect tax collection obligations on businesses like ours. New taxes could also require us to incur substantial costs to capture data and collect and remit taxes. If such obligations were imposed, the additional costs associated with tax collection, remittance and monitoring could have a material adverse effect on our business and financial results.

We are also subject to review of the interpretation of certain laws by the Brazilian Judiciary, which may have adverse tax consequences. For instance, in February 2023, the STF, by unanimous vote, concluded that favorable judicial decisions to taxpayers (res judicata) must be automatically annulled if, after such decisions were issued, the STF reaches a different understanding on the subject matter.

For example, as a result of the decision, if previously a company obtained authorization from any Court of Justice that certain activity is not subject to tax, such permission would automatically be annulled if and when the STF makes a contrary ruling that the activity is in fact subject to tax (no retroactive effects should apply to taxable events prior to the new ruling). Hence, if there is any type of reversal of pro-taxpayer decisions and case law in the Brazilian courts that affects our business, our financial and operating results could be adversely affected.

We are subject to anti-corruption, anti-bribery, anti-terrorism and anti-money laundering laws and regulations, and any failure to comply with these regulations may lead to criminal liability, administrative and civil lawsuits, significant fines and penalties, loss of key banking and other relationships, forfeiture of significant assets, as well as reputational harm.

We operate in a jurisdiction that has a high risk of corruption and we are subject to anti-corruption, anti-bribery, anti-terrorism and anti-money laundering laws and regulations, as provided under the Applicable Anticorruption Laws, including, without limitation, the Brazilian Federal Law No. 12,846/2013 (the Brazilian Clean Companies Act), as regulated by Federal Decree No. 11,129/2022, Law No. 14,230/2021 (the Administrative Misconduct Law), Law 14,133/2021 (the Brazilian Public Procurement Law), Law 9,613/1998 (the Brazilian Anti-Money Laundering Law) and the United States Foreign Corrupt Practices Act of 1977, as amended, or the “FCPA.” Both the Clean Company Act and the FCPA impose liability against companies who engage in bribery of government officials, either directly or through intermediaries. We have a compliance program that is designed to manage the risks of doing business in light of these new and existing legal and regulatory requirements. Monitoring compliance with anti-money laundering, anti-terrorism, and anti-corruption law and sanctions rules can impose a significant burden on banks and other financial institutions, and on us, and requires significant technical capabilities. Violations of the anti-corruption, anti-bribery, anti-terrorism and anti-money laundering laws and regulations could result in criminal liability, administrative and civil lawsuits, significant fines and penalties, loss of key banking and other relationships, forfeiture of significant assets, as well as reputational harm.

Applicable Anticorruption Laws provide for the strict liability of companies and their legal successors that engage in corruption. Furthermore, Applicable Anticorruption Laws provide for the joint and several liability of companies belonging to the same business conglomerate. Companies may also be held liable for corruption related offenses committed by third parties, especially if they benefited from the transactions. There is no intent or knowledge requirement for strict liability offences and therefore we could be held liable for wrongful acts even if we were not aware of them.

Liability arising from violations of Applicable Anticorruption Laws may result in severe penalties, both in the administrative and judicial spheres, including large fines, disgorgement of profits and the publication of the conviction in large scale media outlets. In addition, individuals involved in wrongful conduct may be exposed to civil, administrative, and criminal liability. In this regard, we must constantly update and enforce our internal controls to prevent, monitor and combat fraud, corruption, money laundering, and other related irregularities to prevent or mitigate judicial and administrative liability.

Regulators may increase enforcement of these obligations, which may require us to make adjustments to our compliance program, including the procedures we use to verify the identity of our consumers and to monitor our transactions. Regulators regularly reexamine the transaction volume thresholds at which we must obtain and keep applicable records or verify identities of consumers and any change in such thresholds could result in greater costs for compliance. Costs associated with fines or enforcement actions, changes in compliance requirements, or limitations on our ability to grow could harm our business, and any new requirements or changes to existing requirements could impose significant costs, result in delays to planned product improvements, make it more difficult for new consumers to join our network and reduce the attractiveness of our products and services.

Combating money laundering and fraud is a significant challenge in the online payment services industry because transactions are conducted between parties who are not physically present, which in turn creates opportunities for misrepresentation and abuse. Criminals are using increasingly sophisticated methods to engage in illegal activities such as identity theft, fraud and paper instrument counterfeiting. Online payments companies are especially vulnerable because of the convenience, immediacy and in some cases anonymity of transferring funds from one account to another and subsequently withdrawing them, including through the use of cryptocurrencies. Our payments services may be a target for illegal or improper uses, including fraudulent or illegal sales of goods or services, money laundering and terrorist financing. Allegations of fraud may result in fines, settlements, litigation expenses, loss of key banking and other relationships, financial and reputational damage.

Misconduct of our directors, officers, employees, consultants or third-party service providers could harm us by impairing our ability to attract and retain consumers and subjecting us to legal liability and reputational harm.

Our directors, officers, employees, consultants and third-party service providers could engage in misconduct that adversely affects our business. We are subject to a number of obligations and standards arising from our business and the violation of these obligations and standards by any of our directors, officers, employees, consultants or third-party service providers could adversely affect our consumers and us. If our directors, officers, employees, consultants or third-party service providers were to improperly use or disclose confidential information, we could suffer serious harm to our reputation, financial condition or business relationships. Detecting or deterring employee misconduct is not always possible, and the precautions we take to detect and prevent this activity may not be effective in all cases. If one of our employees or consultants were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be adversely affected.

In recent years, regulatory authorities across various jurisdictions, including Brazil and the United States, have increasingly focused on enhancing and enforcing anti-bribery laws, such as the Clean Company Act and the FCPA. While we have developed and implemented policies and procedures designed to ensure compliance by us and our personnel with such laws, such policies and procedures may not be effective in all instances. Any determination that we have violated the Brazilian Clean Company Act (which establishes the strict administrative and civil liability of legal entities for the practice of harmful acts committed in their interest or benefit against the government, domestic or foreign), the FCPA, or other applicable anti-corruption laws could subject us to, among other consequences, civil and criminal penalties or material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business, financial condition, results of operations or the market value of our Class A ordinary shares.

Increases in reserve, compulsory deposit, minimum capital and contributions to deposit insurance requirements may have a material adverse effect on us.

The Brazilian Central Bank has periodically changed the level of regulatory reserves and compulsory deposits that payment institutions and financial institutions in Brazil are required to maintain, and has adjusted compulsory allocation requirements to finance government programs and mandated contributions to the deposit insurance program maintained by the Brazilian Credit Guarantee Fund, or the “FGC.” Recent regulatory changes to the FGC framework are expected to increase our contribution obligations and impose new capital allocation requirements beginning in 2026.

Resolution CMN No. 5,238/2025, enacted on August 1, 2025 and effective June 1, 2026, introduced two new obligations for FGC member institutions whose guaranteed deposit balance exceeds defined multiples of their adjusted net equity and reference funding base: (i) a monthly additional contribution on top of the existing ordinary contribution rate, and (ii) a mandatory allocation of Brazilian federal government securities (Montante Alocado em Títulos Públicos Federais, or “MATPF”). Based on our current financial profile, we expect to be subject to the additional monthly contribution from June 2026, with the MATPF obligation potentially applying in subsequent periods as our deposit base grows. Both obligations are expected to have a monthly financial impact of less than one million reais, which, on an aggregate basis, may affect our liquidity and net interest margin.

We are evaluating mitigating measures, which may include increasing our non-guaranteed funding base, such as through institutional investor instruments or restructuring the allocation of equity within our economic conglomerate, including the transfer of capital from our payment institution to our banking subsidiary, which holds the FGC-guaranteed deposit franchise. A combination of both approaches may also be considered. There can be no assurance that any such measures will be implemented on favorable terms or at all.

Additionally, in February 2026, the board of directors of the FGC resolved that all member institutions advance a significant number of months of ordinary contributions, with the purpose of replenishing the FGC’s liquidity following substantial guarantee payments made to depositors of financial institutions placed under extrajudicial liquidation. The Brazilian Central Bank enacted Resolution BCB No. 551/2026 to partially offset the liquidity impact of this advance by permitting its deduction from compulsory deposit requirements over a corresponding period. While this mechanism substantially mitigates the near-term cash impact, it does not eliminate the residual cost differential between FGC deposits and alternative investment returns.

These changes, together with the risk of future adjustments to reserve and compulsory deposit requirements, may increase our costs and reduce our liquidity. Compulsory deposits and allocations generally do not yield the same return as other investments and deposits because a portion of compulsory deposits and allocations must be held in Brazilian government securities or return-yielding balances at the Brazilian Central Bank.

The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position and results of operations.

We may be in the future, party to significant legal, arbitration and administrative investigations, inspections and proceedings arising in the ordinary course of our business or from extraordinary corporate, tax or regulatory events, involving our clients, suppliers, consumers, as well as environmental, competition, government agencies and tax authorities, particularly with respect to civil, tax and labor claims. Our indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or similar matters under various laws. Should the ultimate judgments or settlements in any pending litigation or future litigation or investigation significantly exceed our indemnity rights, they could have a material adverse effect on our business, financial condition and results of operations and the price of our Class A common shares. Further, even if we adequately address issues raised by an inspection conducted by an agency or successfully defend our case in an administrative proceeding or court action, we may have to set aside significant financial and management resources to settle issues raised by such proceedings or to those lawsuits or claims, which could adversely affect our business. See “Business—Legal Proceedings.”

We may not be able to successfully manage our intellectual property and may be subject to infringement claims.

We rely on a combination of contractual rights, copyrights, trademarks and trade secrets to establish and protect our proprietary technology. Third parties may challenge, invalidate, circumvent, infringe or misappropriate our intellectual property, or such intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain service offerings or other competitive harm. Others, including our competitors, may independently develop similar technology, duplicate our services or design around our intellectual property, and in such cases, we could not assert our intellectual property rights against such parties. Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which is expensive, could cause a diversion of resources and may not prove successful. Also, because of the rapid pace of technological change in our industry, aspects of our business and our services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms or at all. The loss of intellectual property protection, the inability to obtain third-party intellectual property or delay or refusal by relevant regulatory authorities to approve pending intellectual property registration applications could harm our business and ability to compete.

We may also be subject to costly litigation in the event our services and technology infringe upon or otherwise violate a third party’s proprietary rights. Third parties may have, or may eventually be issued, patents or other assets protected by intellectual property rights that could be infringed by our services or technology. Any of these third parties could make a claim of infringement against us with respect to our services or technology. We may also be subject to claims by third parties for breach of copyright, trademark, license usage or other intellectual property rights. Any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims or could prevent us from registering our brands as trademarks. Additionally, in recent years, individuals and groups have been purchasing intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies like ours. Even if we believe that intellectual property related claims are without merit, defending against such claims is time-consuming and expensive and could result in the diversion of the time and attention of our management and employees. Claims of intellectual property infringement also might require us to redesign affected services, enter into costly settlement or license agreements, pay costly damage awards, change our brands, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our services or using certain of our brands. Even if we have an agreement for indemnification against such costs, the indemnifying party, if any in such circumstances, may be unable to uphold its contractual obligations. If we cannot or do not license the infringed technology on reasonable terms or substitute similar technology from another source, our revenue and earnings could be adversely impacted.

Moreover, we believe our brand has contributed significantly to the historical success of our business. Maintaining, protecting and enhancing our brand is critical to expanding our consumer base, our loan portfolio and our third-party partnerships, as well as increasing engagement with our products and services. Our success in this regard will depend largely on our ability to remain – or, in markets into which we expand, become – widely known, gain and maintain our consumers’ trust, be a technology leader and provide reliable, high-quality and secure products and services that continue to meet the needs of our consumers at competitive prices, as well as the effectiveness of our marketing efforts and our ability to differentiate our services and platform capabilities from competitors’ products and services.

We believe that maintaining and promoting our brand in a cost-effective manner is critical to achieving widespread acceptance of our products and services and to expand our consumer base. Maintaining and promoting our brand will depend largely on our ability to continue to provide useful, reliable and innovative products and services, which we may not do successfully. Our brand promotion activities may not generate consumer awareness or increase revenue, and even if they do, any increase in revenue may not offset the expenses we incur in promoting our brand. If we fail to successfully promote and maintain our brand or if we incur excessive expenses in this effort, we would lose significant market share and our business would be materially and adversely affected. Further, our success in the introduction and promotion of new products and services, as well as the promotion of existing products and services, may be partly dependent on our visibility on third-party advertising platforms. Changes in the way these platforms operate or changes in their advertising prices or other terms could make the introduction and promotion of our products and services and our brand more expensive or more difficult. If we are unable to market and promote our brand on third-party platforms effectively, our ability to acquire new consumers would be materially harmed, which would adversely affect our business, financial condition and results of operations.

We are subject to regulatory activity and antitrust litigation under competition laws.

We are subject to scrutiny from governmental agencies under competition laws in the countries in which we operate. Some jurisdictions also provide private rights of action for competitors or consumers to assert claims of anticompetitive conduct. Other companies or governmental agencies may allege that our actions violate antitrust or competition laws, or otherwise constitute unfair competition. Contractual agreements with buyers, sellers, or other companies could give rise to regulatory action or antitrust investigations or litigation. Also, our unilateral business practices could give rise to regulatory action or antitrust investigations or litigation. Some regulators may perceive our business to have such significant market power that otherwise uncontroversial business practices could be deemed anticompetitive. Any such claims and investigations, even if they are unfounded, may be expensive to defend, involve negative publicity and substantial diversion of management time and effort, and could result in significant judgments against us.

Recent regulatory changes to the risk management framework applicable to payment arrangements in Brazil may increase operational and capital requirements and adversely affect our business, financial condition and results of operations.

In response to identified deficiencies in the risk management practices of payment arrangements and following recent disruptions involving small and mid-sized market participants that resulted in significant losses across the industry, the Brazilian Central Bank has enhanced the regulatory framework applicable to payment arrangements within the Brazilian Payment System. On November 10, 2025, the Brazilian Central Bank issued BCB Resolution No. 522, which introduced changes to the rules governing centralized risk management in payment arrangements, with the objective of increasing the robustness, transparency and effectiveness of mechanisms designed to ensure the proper settlement of payment transactions.

These regulatory developments place greater emphasis on the responsibility of arrangement participants and, in particular, on the obligation to ensure the full settlement of transactions, including in stress scenarios involving participant default or operational failure. As part of this enhanced framework, participants may be required to adopt more stringent risk management practices, implement more robust monitoring and control systems, and contribute to enhanced protection mechanisms, including through the provision of additional guarantees, liquidity resources or other financial safeguards.

In particular, the new framework may result in an increase in the volume, frequency or complexity of guarantees and other financial resources that participants are required to post or maintain in connection with their activities in payment arrangements. These requirements may be determined based on transaction volumes, risk exposure, stress testing methodologies or other criteria established by arrangement rules or regulatory guidance, and may be subject to ongoing review and adjustment. As a result, we may be required to allocate additional capital or liquidity resources to meet these requirements, which could increase our cost of operations and reduce the capital available for other business purposes.

The enhanced regulatory expectations regarding centralized risk management, transparency, governance and allocation of responsibilities among participants may require us to modify our operational processes, contractual arrangements and systems, and may expose us to increased supervisory scrutiny and enforcement risk. The implementation of these changes may involve significant costs, require substantial management attention and create operational challenges, particularly during the transition period.

Furthermore, the adoption of more stringent and uniform risk management requirements across payment arrangements may affect competitive dynamics within the industry, including by reducing cost differentials among participants, increasing barriers to entry for smaller players or altering the economics of certain products and services, including those related to credit card transactions and receivables.

If we are unable to comply with these new requirements in a timely and cost-effective manner, or if these regulatory changes materially increase our capital, liquidity or operational burden, our business, financial condition and results of operations could be materially and adversely affected.

Developments and uncertainties in the regulatory and legal framework applicable to the assignment of card receivables (cessão de recebíveis) may adversely affect our business, financial condition and results of operations.

Our business includes, and may increasingly rely on, the assignment and acquisition of credit card receivables, including through transactions with financial institutions, investment funds and other market participants. The Brazilian market for the assignment of receivables, particularly those arising from payment arrangements involving card issuers, acquirers and sub-acquirers, has been subject to evolving legal and regulatory interpretations, including with respect to the rights and obligations of the parties involved in such transactions.

Recent market developments, particularly those arising from the liquidation of Entrepay, a payment institution that engaged in the assignment of card receivables to multiple counterparties while allegedly failing to transfer the corresponding proceeds to merchants, have triggered broader discussions and disputes in the market. In this context, assignees that acquired receivables in good faith and for value and underlying creditors, such as merchants that originated the receivables but did not receive payment, have asserted competing claims over the same cash flows generated by card issuers. These developments have raised questions regarding whether, and under what circumstances, assignees may be required to ensure that the purchase price paid in connection with a receivables assignment is effectively transferred to the original creditor of the assigned obligation, as well as whether such assignees could be subject to additional obligations or liabilities.

As a result of these and other developments, Brazilian courts, regulators and market participants may adopt interpretations or implement measures that modify the current legal and operational framework applicable to assignments of receivables. Such changes could include, among others, (i) the imposition of additional diligence, monitoring or verification obligations on assignees, (ii) limitations on the enforceability of assignments vis-à-vis third parties, including merchants, (iii) requirements to segregate or track the flow of funds between assignors and underlying creditors, or (iv) the reallocation of credit risk among participants in the payments chain.

Any such developments could increase the legal, operational and compliance risks associated with our receivables-related activities, result in higher transaction costs, reduce the attractiveness or availability of receivables as a funding or investment instrument, or expose us to litigation, regulatory scrutiny or financial losses. In addition, uncertainty regarding the enforceability of receivables assignments or the priority of claims over related cash flows could adversely affect market liquidity and pricing for these assets, which could in turn have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to Brazil

The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement, as well as Brazil’s political and economic conditions, could harm us and the price of our Class A common shares.

The Brazilian government frequently exercises significant influence over the Brazilian economy and occasionally makes significant changes in policy and regulations. The Brazilian government’s actions to control inflation and other policies and regulations have often involved, among other measures, increases or decreases in interest rates, changes in fiscal policies, wage and price controls, foreign exchange rate controls, blocking access to bank accounts, currency devaluations, capital controls and import restrictions. We have no control over and cannot predict what measures or policies the Brazilian government may take in the future. We and the market price of our securities may be harmed by changes in Brazilian government policies, as well as general economic factors, including, without limitation:

Uncertainty over whether the Brazilian government will implement changes in policy or regulation affecting these or other factors in the future may affect economic performance and contribute to economic uncertainty in Brazil, which may have an adverse effect on us and our Class A common shares. We cannot predict what measures the Brazilian government will take in the face of mounting macroeconomic pressures or otherwise.

The President of Brazil has the power to determine policies and issue governmental decrees related to the conduct of the Brazilian economy and, consequently, affect the operations and financial performance of companies, including ours. It is not possible to predict which policies the President will adopt, nor whether such policies or changes in current policies could have an adverse effect on us or the Brazilian economy.

These and other future developments in the Brazilian economy and governmental policies could have a material adverse effect on us. We have no control over and cannot predict the measures and policies the Brazilian government may adopt in the future.

Political instability in Brazil may harm us and the price of our Class A common shares.

Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities issued by Brazilian companies.

Brazilian markets experienced heightened volatility in the last decade due to uncertainties related to a number of ongoing investigations of accusations of money laundering and corruption conducted by the Brazilian Federal Police and the Federal Prosecutor’s Office, including the largest investigation, known as Lava Jato. These investigations adversely affected the Brazilian economy and political scenario. Numerous members of the Brazilian government and of the legislative branch, as well as senior officers of large state-owned and private companies have been convicted of corruption, including by offering or accepting bribes or kickbacks on contracts granted by the government to several infrastructure, oil and gas and construction companies.

The ultimate outcome of these investigations is uncertain, but they have so far had an adverse impact on the image and reputation of the implicated companies, and on the general market perception of the Brazilian economy. The development of those unethical conduct cases has and may continue to adversely affect us.

In October 2022, former President Luiz Inácio Lula da Silva won the 2022 presidential elections and took office on January 1, 2023. After the results of the presidential election were announced, certain groups formed by extreme supporters of the defeated candidate organized public protests against the use of electronic ballot boxes and alleged certain electoral conspiracies. Any deterioration of the political environment in Brazil could affect the confidence of investors and the general public.

The president of Brazil has the power to determine policies and issue governmental acts related to the Brazilian economy that affect the operations and financial performance of companies, including us. For example, through the CMN and the Brazilian Central Bank, the Brazilian government introduces measures to control inflation that affect liquidity, financing strategy, loan growth or even our profitability, as well as the solvency of our clients and end consumers. We cannot predict which policies the incumbent president will adopt or if these policies or changes in current policies may have an adverse effect on us or the Brazilian economy.

In the beginning of February 2025, new presidents were elected both for the House of Representatives (Câmara dos Deputados) and the Senate (Senado) in Brazil. The new congressional leadership may influence legislative priorities and the regulatory environment, potentially leading to shifts in policy that could affect our business activities.

The term of office of Mr. Roberto Campos Neto as the president of the Brazilian Central Bank concluded at the end of the 2024 fiscal year. Within the scope of his responsibilities as president of Brazil, President Lula has appointed Gabriel Galípolo as the new president of the Brazilian Central Bank for a four-year term, starting in January 2025. As this position holds significant influence over monetary policy and economic regulation within the country, changes in leadership can result in shifts in policy direction. We cannot predict which policies the new president will adopt or if these policies or changes in current policies may have an adverse effect on us or the Brazilian economy and regulatory landscape.

Uncertainty regarding political developments and the policies the Brazilian government may adopt or alter may have material adverse effects on the macroeconomic environment in Brazil, as well as on the operations and financial performance of businesses operating in Brazil, including ours. Any of the factors above may create political instability that could harm the Brazilian economy and, consequently, adversely affect our business.

Inflation and certain measures by the Brazilian government to curb inflation have historically harmed the Brazilian economy and Brazilian capital markets, and high levels of inflation in the future could harm our business and the price of our Class A common shares.

In the past, Brazil has experienced extremely high rates of inflation. Inflation and some of the measures taken by the Brazilian government in an attempt to curb inflation have had significant negative effects on the Brazilian economy generally. Inflation policies adopted to curb inflationary pressures and uncertainties regarding possible future government intervention have contributed to economic uncertainty and heightened volatility in the Brazilian economy and capital markets.

Brazil experienced inflation of 23.1%, 17.8%, 5.5%, (3.2)%, 6.5% and 4.26% in the years ended December 31, 2020, 2021, 2022, 2023, 2024 and 2025, respectively, as measured by the General Market Price Index (Índice Geral de Preços – Mercado), or “IGP-M,” compiled by the Getulio Vargas educational foundation (Fundação Getulio Vargas), or “FGV.” Inflation expectations for 2026 and 2027, as measured by the Focus Bulletin of March 20, 2026, are around 3.45% and 4.00%, respectively. Brazil may experience high levels of inflation in the future and inflationary pressures may lead to the Brazilian government’s intervening in the economy and introducing policies that could harm our business and the price of our Class A common shares. In the past, the Brazilian government’s interventions included the maintenance of a restrictive monetary policy with high interest rates that restricted credit availability and reduced economic growth, causing volatility in interest rates. For example, the CDI was unstable during the past three years, reaching 11.75%, 12.15% and 14.32% per annum, as of December 31, 2023, 2024 and 2025, respectively. However, future measures taken by the Brazilian government to control inflation could include higher interest rates. Conversely, more lenient government and Brazilian Central Bank policies and interest rate decreases have triggered and may continue to trigger increases in inflation, and, consequently, growth volatility and the need for sudden and significant interest rate increases, which could negatively affect us and increase our indebtedness.

Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our Class A common shares.

The Brazilian currency has been historically volatile and has been devalued frequently over the past three decades. Throughout this period, the Brazilian government has implemented various economic plans and used various exchange rate policies, including sudden devaluations, periodic mini-devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating exchange rate system. Although long-term depreciation of the real is generally linked to the rate of inflation in Brazil, depreciation of the real occurring over shorter periods of time has resulted in significant variations in the exchange rate between the real, the U.S. dollar and other currencies. In the year ended December 31, 2023, the real appreciated 7.2% against the U.S. dollar to an exchange rate of R$4.8413 per US$1.00. In the year ended December 31, 2024, the real depreciated 27.9% against the U.S. dollar to an exchange rate of R$6.1923 per US$1.00. Finally, in the year ended December 31, 2025, the real appreciated 11.0% against the U.S. dollar to an exchange rate of R$5.5024 per US$1.00. There can be no assurance that the real will not further appreciate or depreciate against the U.S. dollar or other currencies in the future.