As filed with the Securities and Exchange Commission on March 28, 2023
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the fiscal year ended
For the transition period from to .
Date of event requiring this shell company report
Commission file number:
(Exact Name of Registrant as specified in its charter)
The Cayman Islands
(Jurisdiction of incorporation or organization)
Campinas – State of
(Address of principal executive offices)
Campinas – State of
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
The number of outstanding shares of each class of stock of CI&T Inc as of December 31, 2022 was:
113,845,201 Class B common shares, each with par value of US$0.00005
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐
Accelerated filer ☐
Emerging growth company
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
International Accounting Standards Board ☒
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Table of Content
|PRESENTATION OF FINANCIAL AND OTHER INFORMATION||4|
|ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS||8|
|A. Directors and senior management||8|
|ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE||9|
|A. Offer statistics||9|
|B. Method and expected timetable||9|
|ITEM 3. KEY INFORMATION||10|
|B. Capitalization and indebtedness||10|
|C. Reasons for the offer and use of proceeds||10|
|D. Risk factors||10|
|ITEM 4. INFORMATION ON THE COMPANY||44|
|A. History and Development of the Company||44|
|B. Business Overview||45|
|C. Organizational Structure||57|
|D. Property, Plant and Equipment||58|
|ITEM 4A. UNRESOLVED STAFF COMMENTS||58|
|ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS||59|
|A. Operating Results||59|
|B. Liquidity and Capital Resources||68|
|C. Research and Development, Patents and Licenses, etc.||71|
|D. Trend Information||71|
|E. Critical Accounting Policies and Estimates||71|
|ITEM 6. Directors, Senior Management and Employees||72|
|A. Directors and Senior Management||72|
|C. Board Practices||76|
|E. Share Ownership||78|
|F. Disclosure of a registrant’s action to recover erroneously awarded compensation||78|
|ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS||79|
|A. Major Shareholders||79|
|B. Related Party Transactions||80|
|C. Interests of Experts and Counsel||81|
|ITEM 8. FINANCIAL INFORMATION||82|
|A. Consolidated Statements and Other Financial Information||82|
|B. Significant Changes||82|
|ITEM 9. THE OFFER AND LISTING||83|
|A. Offering and Listing Details||83|
|B. Plan of Distribution||83|
|D. Selling Shareholders||83|
|F. Expenses of the Issue||83|
|ITEM 10. ADDITIONAL INFORMATION.||84|
|A. Share Capital||84|
|B. Memorandum and Articles of Association||84|
|C. Material Contracts||98|
|D. Exchange Controls||98|
|F. Dividends and Paying Agents||102|
|G. Statement by Experts||102|
|H. Documents on Display||102|
|I. Subsidiary Information||102|
|J. Annual Report to Security Holders||102|
|ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK||103|
|ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES||110|
|A. Debt Securities||110|
|B. Warrants and Rights||110|
|C. Other Securities||110|
|D. American Depositary Shares||110|
|ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES||111|
|ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS||111|
|ITEM 15. CONTROLS AND PROCEDURES||111|
|A. Disclosure Controls and Procedures||111|
|B. Management’s Annual Report on Internal Control Over Financial Reporting||111|
|C. Attestation Report of the Registered Public Accounting Firm||112|
|D. Changes in Internal Control Over Financial Reporting||112|
|ITEM 16. RESERVED||113|
|A. Audit Committee Financial Expert||113|
|B. Code of Ethics||113|
|C. Principal Accountant Fees and Services||113|
|D. Exemptions from the listing standards for audit committees||114|
|E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers||114|
|F. Change in registrant’s certifying accountant||114|
|G. Corporate governance||114|
|H. Mine Safety Disclosure||114|
|I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections||114|
|ITEM 17. FINANCIAL STATEMENTS||115|
|ITEM 18. FINANCIAL STATEMENTS||115|
|ITEM 19. EXHIBITS||115|
Unless otherwise indicated or the context otherwise requires, all references in this report to “CI&T” or the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to CI&T Inc, together with its subsidiaries.
The term “Brazil” refers to the Federative Republic of Brazil and the phrase “Brazilian government” refers to the federal government of Brazil. “Central Bank” refers to the Brazilian Central Bank (Banco Central do Brasil). References in the report to “real,” “reais” or “R$” refer to the Brazilian real, the official currency of Brazil and references to “U.S. dollar,” “U.S. dollars” or “US$” refer to U.S. dollars, the official currency of the United States.
All references to “IFRS” are to International Financial Reporting Standards, as issued by the IASB.
We are a Cayman Islands exempted company, incorporated with an indefinite term and limited liability on June 7, 2021 for purposes of carrying out our initial public offering. Until the contribution of shares of CI&T Software S.A., or CI&T Brazil, to us prior to the consummation of the initial public offering, we had not commenced operations and had only nominal assets and liabilities and no material contingent liabilities or commitments. On October 4, 2021, we established, as a sole member, our subsidiary CI&T Delaware LLC, or CI&T Delaware. On November 8, 2021, all CI&T Brazil’s shares were contributed to CI&T Delaware and, subsequently the CI&T Delaware’s shares were transferred to CI&T Inc. Until this corporate reorganization, CI&T Brazil, an operating company, was the ultimate holding of our group, and it consolidated the results of all companies until that date. We accounted for the restructuring as a business combination of entities under common control, and the pre-combination carrying amounts of CI&T Brazil are included in the CI&T’s consolidated financial statements with no fair value uplift. Thus, our consolidated financial statements reflect:
(i) The historical operating results and financial position of CI&T Brazil prior to the restructuring;
(ii) Our consolidated results following the restructuring;
(iii) The assets and liabilities of CI&T Brazil and its then subsidiaries at their historical cost;
(iv) The number of ordinary shares issued by CI&T, as a result of the restructuring is reflected retroactively to January 1, 2020, for purposes of calculating earnings per share;
(v) CI&T Brazil shares were contributed in CI&T Delaware at its book value as at November 8, 2021;
(vi) As the remaining equity reserves of CI&T Brazil are no longer applicable, they were added to our initial capital reserve balance.
We maintain our books and records in Brazilian reais, the functional currency of our operations in Brazil and the presentation currency for our financial statements. Our annual consolidated financial statements were prepared in accordance with IFRS, as issued by the IASB. Unless otherwise noted, the financial information presented herein has been derived from our audited consolidated financial statements as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020, together with the accompanying notes thereto. All references herein to “our financial statements” and “our audited consolidated financial statements” are to our consolidated financial statements included elsewhere in this annual report.
This financial information should be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and our consolidated financial statements, including the notes thereto, included elsewhere in this annual report.
Solely for the convenience of the reader, we have translated some of the real amounts included in this report from reais into U.S. dollars. You should not construe these translations as representations by us that the amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Unless otherwise indicated, we have translated real amounts into U.S. dollars using a rate of R$5.2177 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2022, as reported by the Brazilian Central Bank.
Special Note Regarding Non-IFRS Financial Measures
This report presents our Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Profit, Adjusted Net Profit Margin, Net Revenue at Constant Currency and Net Revenue Increase at Constant Currency, which are non-IFRS financial measures used by management in the evaluation of our performance. A non-IFRS financial measure is generally defined as one that purports to measure financial performance but excludes or includes amounts that would not be so adjusted in the most comparable IFRS measure.
We calculate Adjusted Gross Profit as Gross Profit, adjusted to exclude costs and expenses that do not relate to the direct management of our services (depreciation and amortization related to costs of services provided and stock-based compensation expenses). We calculate Adjusted Gross Profit Margin by dividing Adjusted Gross Profit by the Net Revenue of the same period.
We calculate Adjusted EBITDA as Net Profit, plus net finance costs, income tax expense, depreciation and amortization and (i) stock-based compensation expenses; (ii) consulting expenses related to the initial public offering and corporate reorganization; (iii) government grants related to tax reimbursement in the Chinese subsidiary; (iv) non-cash expenses related to the impairment associated with the discontinuation of certain investments made by Dextra on intangible assets related to digital platforms; and (v) acquisition-related expenses: fair value adjustment on accounts payable for business combination, consulting expenses, and retention packages. We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA by the Net Revenue of the same period. We make these adjustments to isolate our operating results in a given period, in order to verify whether we are being efficient in generating operating profits, or how much of our Net profit is being consumed by operating costs, and how much is reverting to operating profitability.
We calculate Adjusted Net Profit as Net Profit, adjusted to exclude (i) consulting expenses related to the initial public offering and corporate reorganization; (ii) non-cash expenses related to the impairment associated with the discontinuation of certain investments made by Dextra on intangible assets related to digital platforms; and (iii) acquisition-related expenses: amortization of intangible assets from acquired companies, fair value adjustment on accounts payable for business combination, consulting expenses, and retention packages. We calculate Adjusted Net Profit Margin by dividing it by Net Revenue for the same period.
We calculate Net Revenue at Constant Currency and Net Revenue Growth at Constant Currency by translating Net revenue from entities reporting in foreign currencies into Brazilian reais using the comparable foreign currency exchange rates from the prior period. For example, the comparable rates in effect for the fiscal year ended December 31, 2021 were used to convert revenue for the fiscal year ended December 31, 2022, rather than the actual exchange rates in effect during the respective period.
We present Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Profit, Adjusted Net Profit Margin, Net Revenue at Constant Currency and Net Revenue Increase at Constant Currency because management uses them in evaluating our performance and we believe these measures provide investors with a supplemental measure of the financial performance of our core operations that facilitates period-to-period comparisons on a consistent basis.
The non-IFRS financial measures described in this report are not a substitute for the IFRS measures of earnings. Additionally, our calculations of Adjusted Gross Profit, Adjusted EBITDA and Adjusted Net Profit may be different from the calculations used by other companies, including our competitors, and therefore, our measures may not be comparable to those of other companies. For a reconciliation of Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Profit, Adjusted Net Profit Margin, Net Revenue at Constant Currency and Net Revenue Increase at Constant Currency, each to its most directly comparable IFRS measure, see “Item 5. Operating and Financial Review and Prospects — Non-IFRS Measures.”
This report contains data related to economic conditions in the market in which we operate. The information contained in this report concerning economic conditions is based on publicly available information from third-party sources that we believe to be reasonable. Market data and certain industry forecast data used in this report were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information (including information available from the United States Securities and Exchange Commission (“SEC”) website) and industry publications, including industry research reports we commissioned from International Data Corporation (“IDC”).
Industry publications, governmental publications and other market sources generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. While we are not aware of any misstatements regarding the market and industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed in the section entitled “Risk Factors.”
Except as disclosed in this report, none of the publications, reports or other published industry sources referred to in this report were commissioned by us or prepared at our request. Except as disclosed in this report, we have not sought or obtained the consent of any of these sources to include such market data in this report.
We have made rounding adjustments to some of the figures included in this report for ease of presentation. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.