CVM Resolution No. 151 of June 15, 2022, with amendments introduced by CVM Resolution No. 195/23

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL - CVM Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000

CVM RESOLUTION NO. 151, OF JUNE 15, 2022, WITH THE AMENDMENTS INTRODUCED BY CVM RESOLUTION NO. 195/23.
Ratifies Technical Orientation OCPC 06 of the Accounting Pronouncements Committee, which deals with the presentation of pro forma financial information.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Board, in a meeting held on May 4, 2022, based on §§ 3 and 5 of art. 177 of Law No. 6,404, of deceMBER 15, 1976, combined with items II and IV of § 1 of art. 22 of Law No. 6,385, of December 7, 1976, as well as arts. 5 and 14 of Decree No. 10,139, of November 28, 2019, APPROVED the following Resolution:

Art. 1. The obligation for open capital companies to comply with Technical Orientation OCPC 06, which deals with the presentation of pro forma financial information, issued by the Accounting Pronouncements Committee - CPC, is hereby ratified, as per Annex “A” to this Resolution.

Sole Paragraph. Pro forma financial information shall be subject to reasonable assurance by an independent auditor registered with the CVM, in accordance with the standards issued by the Federal Council of Accounting.

Sole Paragraph included by CVM Resolution No. 195, of November 30, 2023.

Art. 2. CVM Deliberation No. 709, of May 02, 2013, is hereby revoked, from the effective date of this Resolution.

Art. 3. This Resolution enters into force on July 1, 2022.

Signed electronically by
Marcelo Barbosa
President

ANNEX “A”
ACCOUNTING PRONOUNCEMENTS COMMITTEE
TECHNICAL ORIENTATION OCPC 06
Presentation of Pro Forma Financial Information

Index Item
OBJECTIVE AND SCOPE 1 - 5
CIRCUMSTANCES UNDER WHICH PRO FORMA FINANCIAL INFORMATION IS PREPARED 6 DEFINITION OF RELEVANT BUSINESS ACQUISITION, SALE, DISPOSITION, DERECOGNITION, MERGER, CONSOLIDATION OR SPIN-OFF 7 JOINT PRESENTATION OF PRO FORMA FINANCIAL INFORMATION AND FINANCIAL STATEMENTS 8 DEFINITION OF BUSINESS 9 DEFINITION, FORM AND CONTENT OF PRO FORMA FINANCIAL INFORMATION 10 FORM AND CONTENT 11 INSTRUCTIONS FOR PREPARATION 12 – 18 PERIODS TO BE PRESENTED 19 – 22 APPENDICES
Appendix I – Consolidated pro forma financial information
Appendix II – Management explanatory notes for consolidated pro forma financial information

Objective and scope

The Accounting Pronouncements Committee issues this Orientation with the purpose of establishing
criteria for the compilation, preparation, and formatting of pro forma financial information that may only be presented when so qualified and provided that the purpose is duly justified, such as in cases of corporate restructuring, acquisitions, sales, mergers, or spin-offs of businesses, as detailed in item 6 below.
In many cases, the entity has undergone or is undergoing a corporate or business restructuring process, or has executed or is executing a transaction. Thus, certain information, as discussed in this Orientation, helps users of accounting information in analyzing the entity's future prospects, as it illustrates the possible extent of the change in its historical financial position and the results of its operations caused by the transaction or corporate restructuring.
Pro forma financial information should only illustrate the effects of a specific transaction, measurable objectively (from historical values), excluding effects based on estimates and judgments about how the practices and operational decisions of management could or could not have affected the historical financial statements as a result of the transaction. Information about the possible or expected impacts of decisions taken by current management as a result of the transaction, as if they had been taken in prior periods, is considered projections and is not within the scope of this Orientation. The entity's management must include a statement with similar wording to that described in this item in the explanatory notes to the pro forma financial information, as illustrated in Appendix II of this Orientation.
The pro forma financial information provided for in this Orientation is voluntary for any entity, unless required by law or by regulatory bodies. This Orientation provides guidance on the compilation, preparation, and formatting of pro forma financial information (form, content, and circumstances under which they are presented), when adopted. This Orientation does not include concepts on the preparation of combined financial statements, whose procedures and circumstances are different. Although voluntary, the preparation and presentation of pro forma financial information must fully comply with the requirements of this Orientation.
The pro forma financial information that is the subject of this Orientation must bear this title and be presented separately from the entity's financial statements, and do not replace the need for the entity's historical financial statements and financial information required by corporate law or by normative acts of regulatory bodies.

Circumstances under which pro forma financial information is prepared
6. Pro forma financial information is compiled, prepared, formatted, and disclosed by an entity in the following circumstances:
(a) if during the most recent fiscal year or the subsequent interim period for which the balance sheet is required, a relevant business transaction has occurred, as defined in item 7; (b) if after the date of the most recent disclosed or filed balance sheet, the conclusion of a relevant business transaction as defined in item 7 has occurred or is probable to occur. For the purposes of this Orientation, a relevant business transaction is considered probable when irrevocable contractual terms have been agreed upon by the parties regarding the main aspects involved, even if subject to certain suspensive or resolutive conditions. These resolutive conditions include possible needs for approvals by regulatory bodies (Central Bank of Brazil, ANATEL, ANEEL, etc.); (c) if the debt or equity securities to be issued by the entity are to be used as a form of payment for a relevant transaction to be carried out, or if the proceeds are to be applied directly or indirectly in the specific relevant transaction; (d) if a relevant business derecognition, as defined in item 7, by sale, discontinuation, or distribution to shareholders, through capital reduction or total or partial spin-off, has occurred or is probable to occur, and if this derecognition is not fully reflected in the entity's historical financial statements; (e) if, with respect to a merger transaction involving a relevant business, as defined in item 7, one or more partners or shareholders receive partnership units or shares of the new entity; (f) if the entity was previously part of another entity and if this presentation is necessary to reflect the operations and financial position of that entity as an autonomous entity; (g) if there has been or is probable the conclusion of other events for which the disclosure of pro forma financial information is relevant for a proper understanding by users of the information.

Definition of relevant business acquisition, sale, disposition, derecognition, merger, consolidation, or spin-off
7. The acquisition, sale, disposition, derecognition, merger, consolidation, or spin-off of a business is considered relevant, for the purposes of this Orientation, when the transaction that has occurred (consummated) or is to occur (whose occurrence is probable) may significantly influence the decision-making of users of the financial statements for a specific purpose. A transaction is presumed to be relevant when:
(a) the comparison between the most recent annual financial statements of the acquired (consummated) or to-be-acquired (probable transactions) business and the most recent annual financial statements (consolidated financial statements, if prepared) of the acquirer up to the acquisition date indicate that any of the following conditions exceeds 20% of (except for probable transactions, where the percentage must be replaced by 50%):
(i) total consolidated assets of the acquired or to-be-acquired business multiplied by the percentage representing the acquired or to-be-acquired interest, relative to the total consolidated assets of the acquiring entity; (ii) total value of the entity's and its controlled entities' investment (cost paid or to be paid), plus loans or other receivables of the acquired or to-be-acquired business relative to the total consolidated assets of the acquiring entity; or (iii) consolidated net income from continuing operations, before taxes, of the acquired or to-be-acquired business multiplied by the percentage representing the acquired or to-be-acquired interest, relative to the consolidated net income from continuing operations before taxes of the acquiring entity. If the consolidated net income from continuing operations of the acquirer, before taxes, of the last fiscal year, is less than 10% or more than the average of the consolidated net income from continuing operations before taxes of the last 5 years of that same entity (acquiring entity), the denominator must be replaced by this average. For years showing a consolidated loss from continuing operations before taxes of the acquiring entity, a zero value must be considered as the consolidated result from continuing operations in those years, but the denominator must be 5 (five). For this relevance calculation, the result of the last fiscal year of continuing operations before taxes of the acquired entity must be used, regardless of whether the result is profit or loss. (b) the business to be disposed of meets the conditions of a relevant business, according to the indicators described in 7(a); or (c) acquisitions or disposals, individually not significant (less than 20% as described in item 7(a)(i), (ii) and (iii)), which collectively present one of the indicators described in 7(a)(i), (ii) and (iii) exceeding 50%. Additionally, if the entity decides to voluntarily present historical financial statements of acquired or disposed businesses that are individually not relevant, it is encouraged to present pro forma financial information.

Joint presentation of pro forma financial information and financial statements
8. When pro forma financial information of acquired or to-be-acquired businesses is presented, it is necessary to also present the historical financial statements of the acquired or to-be-acquired businesses for the same periods in which pro forma financial information is being presented, with the annual or interim historical financial statements being presented comparatively with the respective prior years/periods. The annual and interim historical financial statements must be audited and reviewed, respectively, by independent auditors, whenever required by management, by law, or by regulatory bodies, and this condition must be explicitly mentioned if not met.

Definition of business
9. For the purposes of this Orientation, the term "business" must be evaluated, as defined in CPC 15 – Business Combinations, considering the facts and circumstances involved, and it must be verified whether there is sufficient continuity of the acquired (sold) entity's operations before and after the transactions, such that the disclosure of prior financial information is relevant for understanding future operations. It is assumed that an independent entity, a subsidiary, or a division constitutes a business. However, a smaller component of an entity may also constitute a business. When evaluating whether the acquisition of a smaller component of an entity constitutes a business, the entity must consider the following facts and circumstances:
(a) if the nature of the revenue-generating activities of the component remains basically the same as before the transaction; or (b) if some of the following attributes remain with the component after the transaction: (i) physical facilities; (ii) employee base; (iii) market distribution system; (iv) sales force; (v) customer base; (vi) operating rights; (vii) production techniques; or (viii) trade names.

Definition, form and content of pro forma financial information
10. Pro forma financial information must provide investors, creditors, and other users with information about the impact, on a recurring basis, of a particular transaction, demonstrating how the historical financial statements of an entity could have been affected had this transaction been concluded at an earlier date. Pro forma financial information must be compiled, prepared, and formatted from the entity's historical consolidated financial statements whenever consolidation is applicable to the entity, and in this case, it is not necessary to present pro forma financial information on the entity's historical individual financial statements.

Form and content
11. Pro forma financial information differs from historical financial statements and, therefore, must contain identification that clearly differentiates them. Considering their objective and usefulness, this information may be presented in specific disclosures about the entity's data or through other methods, as provided for in this Orientation, observing the following guidelines:
(a) pro forma financial information must consist of:
(i) pro forma balance sheet, if the transaction has not yet been consolidated (when necessary) in the historical balance sheet presented; that is, if the most recent balance sheet already includes the effect of the transaction, the presentation of a pro forma balance sheet is not applicable, subject to the description in item 19; (ii) pro forma income statement; and (iii) accompanied by their own explanatory notes; These pro forma financial information must follow the format of the entity's corresponding historical financial statements. (b) pro forma adjustments must be referenced to the explanatory notes of the pro forma financial information that clearly describe the assumptions involved. Thus, they must contain a description:
(i) of the transaction or event reflected in the pro forma financial information; (ii) of the entities involved; (iii) of the origin of the historical financial information used for its compilation, preparation, and formatting (example: “obtained from the audited historical financial statements, whose independent auditors' report, dated //__, contains no qualification”); (iv) of the main assumptions used to determine the pro forma adjustments; (v) of any uncertainty regarding the assumptions used; and (vi) of the periods for which the pro forma information is presented; In addition, explanations regarding the purpose of presenting the pro forma financial information must be included, which must be read together with the historical financial statements of the entities involved, as well as a description stating that said pro forma information may not be indicative that the results would be exactly those had the transaction occurred at an earlier date. (c) pro forma financial information will normally be arranged in column form, containing the historical financial statements of each entity involved, the adjustments represented by the transactions or events, and the pro forma financial information itself. Appendix I of this Orientation illustrates this presentation; (d) pro forma adjustments related to the pro forma income statement are calculated assuming that the transaction had been concluded at the beginning of the last fiscal year ended, and must include adjustments that reflect events that: (i) are directly attributable to the transaction; (ii) are expected to have a recurring impact on the entity; and (iii) are based on and/or factually supportable; Pro forma adjustments related to the balance sheet must be computed assuming that the transaction had been concluded on the most recent balance sheet date for which the balance sheet is required by standards dealing with the presentation of historical financial statements, and must include adjustments that reflect events directly attributable to the transaction and that are realistically supportable, regardless of whether they have a continuous impact or are non-recurring. All adjustments must be referenced to the explanatory notes that clearly explain the hypotheses and assumptions involved. On the other hand, examples of adjustments that are not appropriate in the preparation of pro forma financial information are: (i) financial revenue originating from the proceeds of an offering or sale of assets; and (ii) effects of management decisions taken after the business combination, including employee dismissals, factory closures, and other restructuring expenses. (e) if the transaction is structured in such a way that its results may be significantly different, in addition to presenting the most likely scenario, which must follow the tabular presentation format described in this Orientation, additional pro forma analyses reflecting the various possible outcomes of the transaction must be presented
in an explanatory note, for example:
determination of acquisition cost and its respective impacts, in a probable business combination, when this cost is being negotiated; (f) both the pro forma balance sheet and the pro forma income statement must be compiled, prepared, and formatted considering accounting practices consistent with the historical financial statements of the acquiring entity.

Instructions for preparation
12. The historical income statement used in the preparation of pro forma financial information must not include discontinued operations. In this case, only the part of the income statement up to the line “profit for the year/period from continuing operations” should be used in the preparation of the pro forma income statement.

For an acquisition transaction, pro forma adjustments for the income statement must include depreciation and other adjustments based on the allocation that has been made of the acquisition cost of the acquired net assets and, when applicable, the financial cost of debt obtained to finance the operation. In some transactions, such as, for example, in acquisitions of financial institutions, purchase adjustments may include significant discounts of acquired assets, from their historical cost to their fair value at the acquisition date. When these adjustments result in a significant effect on profits (losses) in periods immediately subsequent to the acquisition, which will be progressively eliminated over a relatively short period, the effect of acquisition adjustments on the results of operations to be reported for each of the next five fiscal years must be disclosed in an explanatory note.

COMMISSÃO DE VALORES MOBILIÁRIOS
Rua Sete de Setembro, 111/2-5º e 23-34º Andares, Centro, Rio de Janeiro/RJ – CEP: 20050-901 – Brasil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2º, 3º e 4º Andares, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brasil - Tel.: (11) 2146-2000

For a sale or write-down transaction, pro forma financial information must begin with the historical accounting statements of the existing entity and demonstrate the elimination of the businesses to be sold or written down, along with the necessary pro forma adjustments to arrive at the recurring operations that will remain in the entity. For example, pro forma adjustments would include interest expense adjustments resulting from changes in debt structures and expenses that have been or will be incurred, on behalf of the business to be sold or written down, such as advertising expenses, executive salaries, among others.
For entities that previously belonged to another entity, pro forma adjustments must include adjustments of a similar nature to those mentioned in item 14. Furthermore, adjustments may be necessary when corporate overhead, interest, and income tax are allocated to the entity on a basis not considered reasonable by management.
When, during the fiscal year, the conclusion of more than one transaction has occurred or is likely to occur, pro forma financial information may be presented in an aggregated manner. Aggregated presentation is understood as the presentation of a single set of pro forma information which individually (columns) demonstrates the effects of the various transactions. However, in some circumstances (for example, depending on the acquisition of probable and completed transactions and the nature of the registration) it may be more useful to present pro forma financial information in a disaggregated manner, even if some or all of the transactions do not meet the relevance tests individually. For aggregated presentations, a note must explain the various transactions and disclose the details of the variables in the pro forma financial information that would occur for any possible acquisition. If pro forma financial information is being presented with the objective of obtaining shareholder approval for one of the transactions, the effects of that transaction must be clearly presented, i.e., with values not aggregated with other transactions.
The tax effects, if any, of pro forma adjustments should normally be calculated at the rate in force during the periods for which the pro forma income statements are presented, and should be reflected as a pro forma adjustment presented in a specific line.
Pro forma financial information must reflect the transaction presented following the accounting practices that must be applied by the entity to prepare its historical financial statements. For example, in the case of an entity acquisition, it must be presented on a consolidated basis, or with the recognition of interests in assets, liabilities, revenues, and expenses (jointly controlled operations) or evaluated by the equity method, according to the accounting practice adopted in the financial statements to be presented.

Periods to be presented

The pro forma balance sheet must be presented at the end of the most recent period for which the entity's consolidated balance sheet is required, unless the transaction is already reflected in that historical consolidated balance sheet. For example, for an acquisition occurring in June of X5, in which the entity will present its financial statements for September of X5, the pro forma balance sheet should not be presented, since for the date of September of X5 the acquired business will already be included. On the other hand, if this acquisition had occurred in October of X5, there would be a pro forma balance sheet for September of X5 including the acquisition.
Pro forma income statements must be presented only for the fiscal year of the previous year and for the interim period of the current fiscal year. Presentation for the interim period of the previous year for comparison purposes is optional. For example, for an acquisition occurring in June of X5, in which the entity will present its financial statements for September of X5, the pro forma income statements will include the pro forma income statement of 12 months of the year ending in X4 and the pro forma income statement of 9 months of X5, optionally compared with the 9 months of X4. Pro forma statements or information for periods prior to X4 should not be presented. The pro forma income statement should not be presented when the historical income statement reflects the transaction for the entire period.
Pro forma income statements must be presented using the end of the entity's fiscal year. If the end of the most recent fiscal year of any other entity involved in the transaction differs from the most recent fiscal year of the entity by more than 60 days, the other entity's income statement must be updated to, at most, 60 days after the end of the most recent fiscal year of the other entity. This update may be effected by adding results of the subsequent interim period to the information from the end of the most recent fiscal year, deducting results of comparable interim periods of the previous year.
Whenever unusual events significantly affect the determination of the results shown for the most recently completed fiscal year, the effects of these unusual events must be disclosed in explanatory notes to the pro forma financial information. In these cases, in addition to the disclosures required in items 19 to 21, the entity may consider presenting the pro forma income statement for the 12-month period ending on the date of the most recent balance sheet presented, if this 12-month period is more representative of normal operations.

Appendix I - Consolidated Pro Forma Financial Information
Company ABC
Consolidated pro forma financial information for the three-month periods ended March 31, 20X1 and 20X0, and for the year ended December 31, 20X0 (In thousands of $)

Consolidated pro forma balance sheet as of March 31, 20X1 (a)

	Company	Acquired Company	Pro forma Adjustments	Total Pro forma
ASSETS
CURRENT
Cash and cash equivalents	3,587	1,828	5,415
Accounts receivable	213	334	547
Related parties	59	-	59
Inventories	2,045	1,028	200 2(a)	3,273
Recoverable taxes	1,693	1,470	3,163
Dividends receivable	303	-	303
Prepaid expenses	375	70	445
Total Current	8,275	4,730	200	13,205
NON-CURRENT
Realizable long term
Related parties	3,748	1,510	5,258
Judicial deposits	320	90	410
Investments	31	-	31
Fixed assets	18,807	9,350	5,000 2(a)	33,157
Intangible	73	25	4,506 2(a)	4,604
Total Non-Current	22,979	10,975	9,506	43,460
TOTAL ASSETS	31,254	15,705	9,706	56,665

	Company	Acquired Company	Pro forma Adjustments	Total Pro forma
LIABILITIES AND EQUITY
CURRENT
Loans and financing	908	315	1,223
Suppliers and freight payable	1,723	456	2,179
Related parties	3,603	2,930	6,533
Taxes payable	978	670	1,648
Tax installment	233	-	233
Salaries and social security	1,533	590	2,123
Income tax and social contribution	340	270	610
Other accounts payable	358	245	603
Total Current	9,676	5,476	15,152
NON-CURRENT
Long term liabilities
Loans and financing	3,227	1,800	15,000 2(a)	20,027
Provisions for contingencies and others	4,612	2,350	6,962
Notes payable	1,190	785	1,975
Total Non-Current	9,029	4,935	15,000	28,964
EQUITY
Share capital	4,702	2,220	-2,220 2(b)	4,702
Capital reserve	498	145	-145 2(b)	498
Retained earnings reserves	7,349	2,929	-2,929 2(b)	7,349
Total Equity	12,549	5,294	-5,294 2(b)	12,549
TOTAL LIABILITIES AND EQUITY	31,254	15,705	9,706	56,665

The explanatory notes are an integral part of these pro forma financial information.

Consolidated pro forma income statement for the year ended December 31, 20X0 (a)

	Company	Acquired Company	Pro forma Adjustments	Total Pro forma
NET REVENUE FROM SALES AND SERVICES	4,000	2,250		6,250
Cost of products and services sold	-960	-430	-650 2(c)	-2,040
GROSS PROFIT	3,040	1,820	-650	4,210
OPERATING EXPENSES (REVENUE)
Selling expenses	-170	-96	-266
General and administrative	-220	-105	-50 2(c)	-375
Management fees	-80	-45	-125
Other operating expenses, net	-150	-42	-192
OPERATING PROFIT BEFORE FINANCIAL RESULT	2,420	1,532	-700	3,252
Financial expenses	-1,300	-586	-1,500 2(d)	-3,386
Financial revenue	750		750
PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION	1,870	946	-2,200	616
Income tax and social contribution	-715	-370	748 2(e)	-337
PROFIT FROM CONTINUED OPERATIONS OF THE PERIOD	1,155	576	-1,452 2(b)	279

The explanatory notes are an integral part of these pro forma financial information.

Consolidated pro forma income statement for the quarter ended March 31, 20X1 (a)

	Company	Acquired Company	Pro forma Adjustments	Total Pro forma
NET REVENUE FROM SALES AND SERVICES	1,000	563		1,563
Cost of products and services sold	-270	-104	-312 2(c)	-686
GROSS PROFIT	730	459	-312	877
OPERATING EXPENSES (REVENUE)
Selling expenses	-46	-28	-74
General and administrative	-58	-26	-13 2(c)	-97
Management fees	-17	-11	-28
Other operating expenses, net	-38	-11	-49
OPERATING PROFIT BEFORE FINANCIAL RESULT	571	383	-325	629
Financial expenses	-326	-146	-375 2(d)	-847
Financial revenue	188		188
PROFIT (LOSS) BEFORE INCOME TAX AND SOCIAL CONTRIBUTION	433	237	-700	-30
Income tax and social contribution	-233	-111	238 2(e)	-106
NET PROFIT (LOSS) FROM CONTINUED OPERATIONS OF THE PERIOD	200	126	-462	-136

The explanatory notes are an integral part of these pro forma financial information.

Consolidated pro forma income statement for the quarter ended March 31, 20X0 (a)

	Company	Acquired Company	Pro forma Adjustments	Total Pro forma
NET REVENUE FROM SALES AND SERVICES	1,333	750		2,083
Cost of products and services sold	-320	-143	-112 2(c)	-575
GROSS PROFIT	1,013	607	-112	1,508
OPERATING EXPENSES (REVENUE)
Selling expenses	-57	-32	-89
General and administrative	-73	-35	-13 2(c)	-121
Management fees	-27	-15	-42
Other operating expenses, net	-50	-14	-64
OPERATING PROFIT BEFORE FINANCIAL RESULT	806	511	-125	1,192
Financial expenses	-434	-196	-375 2(d)	-1,005
Financial revenue	250		250
PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION	622	315	-500	437
Income tax and social contribution	-310	-148	170 2(e)	-288
NET PROFIT FROM CONTINUED OPERATIONS OF THE PERIOD	312	167	-330	149

The explanatory notes are an integral part of these pro forma financial information.

The above example is for illustrative purposes only. The presentation of the balance sheet and income statement must be in compliance with CPC 26 – Presentation of Financial Statements.

Appendix II – Management explanatory notes for pro forma consolidated financial information
Company ABC
Management explanatory notes for pro forma consolidated financial information for the three-month periods ended March 31, 20X1 and 20X0, and for the year ended December 31, 20X0 (In thousands of reais, unless otherwise indicated)

Description of transactions and basis for preparation of pro forma consolidated financial information
(a) Description of transactions
The unaudited consolidated pro forma balance sheet as of March 31, 20X1 of Company ABC (Company) and the consolidated pro forma income statements for the three-month periods ended March 31, 20X1 and 20X0 and for the year ended December 31, 20X0 reflect the transactions detailed below. Acquisition of Acquired Company - direct acquisition on April 27, 20X1 - of 100% of the shares issued by Acquired Company. (b) Basis for preparation of pro forma consolidated financial information The historical accounting information regarding the Company used in the preparation of these pro forma consolidated financial information was obtained from the historical financial statements for the year ended December 31, 20X0 and the quarterly information for the three-month periods ended March 31, 20X1 and 20X0, audited and reviewed, whose audit and review reports from independent auditors, dated March 25, 20X1 and May 8, 20X1, respectively, contain no reservations. These pro forma financial information must be read together with the historical financial statements of the companies involved. The historical accounting information regarding Acquired Company used in the preparation of these pro forma consolidated financial information was obtained from the historical financial statements for the year ended December 31, 20X0 and for the three-month periods ended March 31, 20X1 and 20X0, audited and reviewed, whose audit and review reports from independent auditors, dated April 9, 20X1 and May 12, 20X1, respectively, contain no reservations.

The consolidated pro forma income statements reflect the effects of the acquisition of 100% of the share capital of Acquired Company in our results as if said acquisition had occurred on January 1, 20X0.
The consolidated pro forma balance sheet reflects the effects of the acquisition of 100% of the share capital of Acquired Company as if said acquisition had occurred on March 31, 20X1.
The pro forma consolidated financial information was prepared and presented exclusively for informational purposes assuming that the acquisition of Acquired Company occurred on January 1, 20X0, for the purposes of the income statements, or on March 31, 20X1, for the purposes of the balance sheet, and should not be used as an indication of future consolidated financial statements or interpreted as the actual income statements and/or equity and financial position of the Company. The unaudited consolidated pro forma balance sheet and the consolidated pro forma income statements must be read together with the historical consolidated balance sheet as of March 31, 20X1 and with the historical income statements for the three-month periods ended March 31, 20X1 and 20X0 and for the year ended December 31, 20X0, of the Company.

Pro forma adjustments
The pro forma consolidated financial information was prepared and presented from the historical financial statements of each entity and the pro forma adjustments were determined based on assumptions and estimates, which we believe are reasonable, and include the following adjustments:

Pro forma balance sheet
(a) Goodwill on acquisition
Reflects the allocation of acquisition cost to assets and liabilities, as if the acquisition of Acquired Company had occurred on March 31, 20X1.
The acquisition cost was $15,000, with the acquisition fully financed through long-term financing, with a grace period of 2 years for the payment of principal and interest. The interest rate of this financing was fixed at 10% p.a.
The value of acquired assets and liabilities was measured at fair value on the date of the acquisition of the participation, in accordance with Technical Pronouncement CPC 15; the valuation techniques applied and a brief statement of fair value calculation are shown below:

$			:---	:---
Acquisition cost	15,000
i. Appreciation of acquired fixed assets, represented by the difference between its fair value and book value, based on estimates prepared by independent appraisers, approved by the Company's Management (5,000)
ii. Appreciation of inventories, represented by the difference between its estimated market value of inventories less taxes, distribution cost and expected profit and its book value (200)
iii. Book value of acquired assets, net of assumed liabilities (net assets) (1) (5,294)
Goodwill	4,506

(1) Except for fixed assets and inventories, we identified no differences between market value and book value for the other acquired assets and assumed liabilities.

(b) Elimination of Acquired Company's equity
Reflects the elimination of the book value of the Company's equity in Acquired Company in exchange for the allocation of acquired assets and liabilities.

Pro forma income statements
(c) Cost of products and services sold and general and administrative expenses Reflects the realization of the adjustment to the market value of inventories in the amount of $200 for the year ended December 31, 20X0 and the quarter ended March 31, 20X0, based on the assumption that inventory turnover is 2 months. For the quarter ended March 31, 20X1, it is assumed that the inventories, which generated the difference, had already been sold in 20X0 and, therefore, there is no pro forma adjustment to be considered. Additionally, it reflects the portion of depreciation related to the appreciation allocated to fixed assets in the amount of $450 for the year ended December 31, 20X0 and $112 for the quarters ended March 31, 20X0 and 20X1, allocated to the cost of products and services sold. Depreciation was calculated based on the estimated useful life of the fixed asset items considering the estimated remaining useful life of 10 years. The remaining portion of depreciation was allocated to general and administrative expenses, in the amount of $50 for the year ended December 31, 20X0 and $13 for the quarters ended March 31, 20X1 and 20X0.

(d) Financial expenses
Reflects the pro forma adjustment of financial expenses in the amount of $1,500 for the year ended December 31, 20X0, and $375 for the quarters ended March 31, 20X1 and 20X0, resulting from financial charges related to the debt contracted to finance the acquisition. The financial charges were calculated considering the fixed contractual rates of 10% p.a.

(e) Income tax and social contribution expense Corresponds to the recognition of the impacts of income tax and social contribution calculated at the rates provided by current tax legislation of 25% and 9% (34% combined rate), respectively, on the pro forma adjustments of (c) and (d) previously described.

CVM Resolution No. 151 of June 15, 2022, with amendments introduced by CVM Resolution No. 195/23

Lineage: Amended

Timeline