F-4 1 tm2123657-6_f4.htm F-4 tm2123657-6_f4 - none - 120.3913881s
As filed with the Securities and Exchange Commission on November 2, 2021
Registration Statement No. 333-      
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-4
Registration Statement
Under
the Securities Act of 1933
INTER PLATFORM, INC.
(Exact Name of Registrant as Specified in its Charter)
N/A
(Translation of Registrant’s Name into English)
Cayman Islands
6029
Not Applicable
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
Av Barbacena, 1.219, 22nd Floor
Belo Horizonte, Brazil, ZIP Code 30 190-131
Telephone: +55 (31) 2138-7978
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Cogency Global, Inc.
122 East 42nd Street, 18th floor
New York, NY, 10168
United States
Telephone: +1 212 947 7239
(Name, address, including zip code, and telephone number, including area code, of agent of service)
Copies to:
Francesca L. Odell
Jonathan Mendes de Oliveira
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
(212) 225-2530
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
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 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered(1)(2)
Amount to be
registered(3)
Proposed
maximum offering
price per share
Proposed
maximum aggregate
offering price(4)
Amount of
registration fee(5)
Class A common shares, par value US$0.0000025
476,666,960
N/A
US$3,216,763,927.00
US$298,194.02
Notes:
(1)
The securities being offered hereby will be initially issued in the form of Brazilian Depositary Shares of the registrant, referred to as Inter Platform BDRs. Each Inter Platform BDR represents one Class A common shares, par value US$0.0000025 of Inter Platform, Inc., referred to as Inter Platform Class A Common Shares. The Inter Platform BDRs will be issuable upon deposit of Inter Platform Class A Common Shares with Banco Bradesco S.A., acting as the depositary.
(2)
Pursuant to Rule 416 under the Securities Act (as defined below), this Registration Statement also covers an indeterminate number of additional Inter Platform Class A Common Shares as may be issuable as a result of stock splits, stock dividends or similar transactions.
(3)
Represents the estimated maximum number of Class A common shares, US$0.0000025 par value, of the registrant issuable upon completion of the Proposed Transaction (as defined herein) described herein and is the product of (a) (i) 473,075,810 issued and outstanding shares of common stock of Banco Inter S.A. plus (ii) 919,766,682 issued and outstanding shares of preferred stock of Banco Inter, including shares of common stock and shares of preferred stock held through units consisting of one common share and two preferred shares of Banco Inter but excluding shares of Banco Inter held by HoldFin and SoftBank (as defined herein) plus (iii) 37,158,390 shares of Banco Inter issuable pursuant to stock option plans, and (b) 0.33333333333, which is the exchange ratio under the Proposed Transaction (the “Estimated Class A Shares”). The amount to be registered includes the Class A Common Shares to be held by the depositary of the Brazilian Depositary Receipts (as defined below) to be issued by the registrant as part of the consideration in the Proposed Transaction.
(4)
Pursuant to Rules 457(c), 457(f)(1) and 457(f)(3) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed aggregate maximum offering price is (a) the product of (x) US$2.20 (the average of the high and low prices of Banco Inter common stock as reported on B3 (as defined below) on October 29, 2021, calculated at the exchange rate of Brazilian reais per U.S. dollar of R$5.6430 (as reported by the Brazilian Central Bank on October 29, 2021) times (y) the number of outstanding common shares of Banco Inter (including common shares held through units) plus common stock issuable pursuant to Banco Inter’s stock option plan, plus (b) the product of (x) US$2.28 (the average of the high and low prices of Banco Inter preferred stock as reported on B3 on October 29, 2021, calculated at the exchange rate of Brazilian reais per U.S. dollar of R$5.6430 (as reported by the Brazilian Central Bank on October 29, 2021)) times (y) the number of outstanding preferred stock of Banco Inter (including preferred stock held through units) plus preferred stock issuable pursuant to Banco Inter’s stock option plan.
(5)
Computed in accordance with Rule 457(f) under the Securities Act to be US$3,216,763,927.00, which is equal to the rate of $92.70 per $1,000,000 of the proposed maximum aggregate offering price of US$298,194.02.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Information contained in this preliminary prospectus is subject to completion and may be changed. A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
SUBJECT TO AMENDMENT AND COMPLETION — DATED            , 2021
PRELIMINARY PROSPECTUS
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TRANSACTION PROPOSED
Dear Banco Inter Shareholder:
This prospectus relates to the class A common shares of Inter Platform, Inc. (“Inter Platform Class A Common Shares”), a Cayman Islands exempted company with limited liability (“Inter Platform”), including Class A Common Shares in the form of Brazilian Depositary Receipts (“Inter Platform BDRs”), to be issued to shareholders of Banco Inter S.A., a corporation (sociedade por ações) incorporated under the laws of the Federative Republic of Brazil (“Banco Inter”), pursuant to the terms of the Proposed Transaction (as defined below) and subject to the satisfaction of certain conditions described in this prospectus. References to “Inter” refer to Inter Platform and its subsidiaries (including Banco Inter), unless the context otherwise requires or otherwise indicated.
The Proposed Transaction consists of a corporate reorganization of Inter with the purpose of listing on NASDAQ shares that ultimately represent equity of Banco Inter’s business, which currently trade on the São Paulo Stock Exchange, B3 S.A. — Brasil, Bolsa, Balcão (“B3”). Following the completion of the Proposed Transaction, Banco Inter will become an indirectly wholly owned subsidiary of Inter Platform. As a result of the Proposed Transaction, Banco Inter Shareholders (as defined herein) will receive Inter Platform BDRs, which will be listed on B3, and each Inter Platform BDR will represent one Inter Platform Class A Common Share, which will be listed on NASDAQ. Subject to the Cash Redemption Threshold Condition (as defined below), as alternative to receiving Inter Platform BDRs, the Banco Inter Shareholders may opt to have their Banco Inter shares redeemed for cash, based on the Cash Redemption Price (as defined below). Holders of Banco Inter Common Shares (including Banco Inter Common Shares held through Units) that do not vote in favor of the Proposed Transaction or do not attend the Banco Inter General Meeting may also elect to exercise Withdrawal Rights (as defined below).
Banco Inter Shareholders currently hold shares of common stock of Banco Inter (“Banco Inter Common Shares”), shares of preferred stock of Banco Inter (“Banco Inter Preferred Shares”) or units representing one Banco Inter Common Share and two Banco Inter Preferred Shares (“Banco Inter Units,” and together with Banco Inter Common Shares and Banco Inter Preferred Shares, the “Banco Inter Shares”). Each of these classes of Banco Inter Shares is listed on B3. The controlling shareholders of Banco Inter and certain other Banco Inter Shareholders currently hold their interests in Banco Inter through Inter Platform and Inter Holding Financeira S.A., a corporation (sociedade por ações) incorporated under the laws of the Federative Republic of Brazil and wholly owned by Inter Platform (“HoldFin”).
The transaction proposed will consist of the two steps below (collectively, the “Proposed Transaction”), which are expected to be concluded substantially at the same time on the closing date (“Closing Date”):

Merger of Shares.   Subject to the approval of the Merger of Shares (as defined herein) at the Banco Inter General Meeting and the satisfaction or waiver of the conditions described in this prospectus (including the Cash Redemption Threshold Condition), the merger of shares will be implemented through an incorporação de ações under the Brazilian Corporation Law (“Merger of Shares”). Pursuant to the Merger of Shares, each Banco Inter Share issued and outstanding immediately prior to the completion of the Proposed Transaction will be automatically contributed for their book value into HoldFin in exchange for a certain number of newly issued mandatorily redeemable preferred shares of HoldFin, determined pursuant to the Exchange Ratios (as defined herein), and Banco Inter will become a wholly owned subsidiary of HoldFin. Each Banco Inter Shareholder will receive HoldFin shares that are mandatorily redeemable for Inter Platform BDRs (“Class A Redeemable Shares”), unless such Banco Inter Shareholder has elected to receive HoldFin shares that are mandatorily redeemable for cash (“Cash Redeemable Shares”). The Class A Redeemable Shares together with the Cash Redeemable Shares will hereinafter be referred to as the “HoldFin Redeemable Shares.”

Redemption.   Immediately after the Merger of Shares, HoldFin will redeem (i) all of its Class A Redeemable Shares and deliver to each holder thereof one Inter Platform BDR (which may be cancelled immediately thereafter, if such holder wants to receive the underlying Inter Platform Class A Common Shares) and (ii) all of its Cash Redeemable Shares and pay the applicable cash consideration to each holder thereof.
Banco Inter Shareholders have the opportunity to vote on the Proposed Transaction at an extraordinary general meeting of Banco Inter scheduled for November 25, 2021 (“Banco Inter General Meeting”). In order to approve the Merger of Shares, holders of at least the majority of the outstanding Banco Inter Common Shares and Banco Inter Preferred Shares (including holders through Banco Inter Units, but not including the Banco Inter Shares held by our

controlling shareholders or their related parties, by SoftBank or by directors or officers of Banco Inter), voting together, must vote in favor of the Proposed Transaction. The completion of the Proposed Transaction is subject to the satisfaction or waiver of certain conditions, including that the total amount to be paid when redeeming the Cash Redeemable Shares does not exceed the Cash Redemption Threshold (as defined below), as further described below.
Subject to the approval of the Merger of Shares at the Banco Inter General Meeting and the satisfaction or waiver of the conditions described in this prospectus (including the Cash Redemption Threshold Condition):
A.
Each holder of Banco Inter Common Shares or Banco Inter Preferred Shares will receive 0.33333333333 Inter Platform BDR for each Banco Inter Common Share or Banco Inter Preferred Share that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares;
B.
Each holder of Banco Inter Units will receive one Inter Platform BDR for each one Banco Inter Unit that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares; and
C.
Each Banco Inter Shareholder that has elected to receive Cash Redeemable Shares will receive 0.33333333333 Cash Redeemable Share for each Banco Inter Common Share or Banco Inter Preferred Share that it holds or one Cash Redeemable Share for each Banco Inter Unit that it holds. Each Cash Redeemable Share will be redeemed for a cash payment of R$45.84, as adjusted by the DI Rate from the date of the Banco Inter General Meeting to the Closing Date (“Cash Redemption Price” and, together with A and B, collectively, the “Exchange Ratios”).
The Exchange Ratios have been established so that each Banco Inter Shareholder will receive, upon completion of the Proposed Transaction, the same economic interest in the total capital of Inter Platform as it had in Banco Inter’s total capital immediately before completion of the Proposed Transaction, except for the effect of the cash redemption of the Cash Redeemable Shares and the exercise of Withdrawal Rights.
It is a condition to completion of the Proposed Transaction that the total amount to be disbursed by HoldFin in connection with the redemption of all Cash Redeemable Shares does not exceed R$2.0 billion (“Cash Redemption Threshold”). This condition is hereinafter referred to as the “Cash Redemption Threshold Condition.” If the Cash Redemption Threshold is exceeded, the Proposed Transaction will not be concluded, unless Banco Inter and HoldFin waive this condition, in their sole discretion, following a determination of the board of directors of Banco Inter that this waiver is reasonable and in the best interest of Banco Inter and Banco Inter Shareholders.
In connection with the Proposed Transaction, HoldFin may be required to withhold Brazilian capital gain taxes due by certain non-Brazilian Banco Inter Shareholders that hold their investment under the special tax regime of CMN Resolution No. 4,373/2014 (“4,373 Holders”). In order to determine whether any withholding will be required, each 4,373 Holder must report, through its Brazilian custodian or broker dealer, certain information relating to such 4,373 Holder’s historical cost and tax domiciliation. Such information must be provided after the Banco Inter General Meeting, in accordance with the procedures that we will publicly announced prior to the date of the Banco Inter General Meeting. If HoldFin determines based on such information that withholding will be required, or if such 4,373 Holder fails to provide such information: (a) any amount required to be withheld by HoldFin will be deducted from the Cash Redemption Price payable to such 4,373 Holder, and (b) with respect to a 4,373 Holder that elects to receive Inter Platform BDRs, a portion of the Banco Inter Shares held by such 4,373 Holder will be converted into Cash Redeemable Shares, in an amount sufficient to generate a cash redemption payment sufficient to cover any required tax withholding, and HoldFin will retain such amount. See “Material Tax Considerations — Material Brazilian Tax Considerations.”
Following the Proposed Transaction, any fractional shares will be grouped into whole numbers and sold on the open market managed by B3, as applicable. The net proceeds from the sale of the fractional shares will be distributed on a pro rata basis to the former Banco Inter Shareholders that held such shares. No additional consideration in cash or in kind will be paid by Inter Platform to Banco Inter Shareholders who opt to receive Inter Platform BDRs in connection with the Proposed Transaction. The sales price resulting from such sale may be less than the Cash Redemption Price.
On the Closing Date, each Banco Inter Shareholder will receive Inter Platform BDRs, in Brazil, against delivery of its Banco Inter Shares, based on the Exchange Ratios, unless such Banco Inter Shareholder has elected to receive Cash Redeemable Shares. A Banco Inter Shareholder that wants to receive Cash Redeemable Shares must make this election by no later than the fifth business day after the Banco Inter General Meeting (i) through the facilities of the Central Depositary of B3 (Central Depositária da B3) or (ii) for Banco Inter Shareholders holding Banco Inter Shares directly in the corporate books, through Banco Bradesco S.A., the registrar of Banco Inter Shares. A beneficial owner of Banco Inter shares must instruct its broker or custodian operating in Brazil of such election by the time indicated by such broker or custodian. Upon election to receive Cash Redeemable Shares, such Banco Inter Shareholder will no longer be permitted to trade its Banco Inter Shares and will not be able to opt to receive Inter Platform BDRs. The cash redemption of the Cash Redeemable Shares will occur on the Closing Date, which is expected to occur on or about 35 days after the Banco Inter General Meeting.
At any time, and from time to time, on or after the Closing Date, a holder of Inter Platform BDRs that wants to receive Inter Platform Class A Common Shares may request the cancellation of all or a portion of its Inter Platform BDRs by (a) instructing its broker or custodian operating in Brazil to cancel its Inter Platform BDRs with the Banco Bradesco S.A. (in the capacity of depositary of Inter Platform BDRs, the “BDR Depositary”) and (b) delivering evidence that all fees and potential

taxes due in connection with this service were duly paid, as set forth in the deposit agreement. The cancellation instruction to the broker or custodian must include an appropriate brokerage account outside of Brazil to receive the underlying Inter Platform Class A Common Shares. No fees for cancellation of Inter Platform BDRs will be charged from investors during the first 30 days after the Closing Date.
Pursuant to Articles 137 and 252 of the Brazilian Corporation Law, if the Proposed Transaction is approved at the Banco Inter General Meeting, holders of Banco Inter Common Shares (including Banco Inter Common Shares held through Units) that do not vote in favor of the approval of the Merger of Shares or do not attend the Banco Inter General Meeting and who are holders of record of Banco Inter Shares on May 24, 2021, the date on which the Proposed Transaction was first publicly announced (“Withdrawal Rights Record Date”) and hold their Banco Inter Common Shares through the Closing Date, will have the right to withdraw their Banco Inter Common Shares for their book value as of December 31, 2020 of R$3.65 per Banco Inter Common Share (“Withdrawal Rights”). According to Brazilian law, Banco Inter Preferred Shares are not eligible for Withdrawal Rights. For Banco Inter Common Shares held through Banco Inter Units, the exercise of Withdrawal Rights will require the Banco Inter Units to be cancelled by its holder. We assume that no holder of Banco Inter Common Shares will exercise Withdrawal Rights, because the cash amount payable to Banco Inter Shareholders who elect to receive Cash Redeemable Shares is significantly higher than the book value of Banco Inter Common Shares payable to those that exercise Withdrawal Rights. For more detail about the Withdrawal Rights, see “Banco Inter General Meeting” below.
Upon completion of the Proposed Transaction, trades in Inter Platform BDRs on the B3 will settle through the facilities of the Central Depositary of the B3 and trades on Inter Platform Class A Common Shares are expected to settle through the facilities of The Depository Trust Company (“DTC”).
To permit delivery of Inter Platform BDRs upon completion of the Proposed Transaction, Inter Platform has applied for the registration of its BDR Program with the Brazilian Securities Commission (Comissão de Valores Mobiliários, referred to as the “CVM”), which registration was granted on October 29, 2021. Inter Platform also expects to have its BDRs listed on B3 by the Closing Date. After the Closing Date, a holder of Inter Platform Class A Common Shares will be able to deposit its Inter Platform Class A Common Shares with a BDR depositary institution and receive Inter Platform BDRs, and a holder of Inter Platform BDRs will be able to cancel its Inter Platform BDRs and receive underlying Inter Platform Class A Common Shares (see “Description of BDRs and Deposit Agreement”).
Upon completion of the Proposed Transaction, Banco Inter will no longer have its shares listed on B3 or any other exchange and Banco Inter will become a wholly owned subsidiary of HoldFin. Banco Inter will remain registered with and subject to the disclosure requirements set by the CVM for at least 12 months. After this period, Banco Inter may be permitted to deregister from CVM and no longer be subject to disclosure requirements applicable to publicly traded corporations incorporated under the laws of the Federative Republic of Brazil.
Upon completion of the Proposed Transaction, Banco Inter controlling shareholders will own all of Inter Platform Class B Common Shares, which have 10 votes per share, and which will represent a majority of the voting power of Inter Platform’s issued share capital following the Proposed Transaction, and will control all matters requiring shareholder approval. Assuming that no former Banco Inter Shareholder elects to receive Cash Redeemable Shares, Banco Inter controlling shareholders will hold 27.1% of the then-outstanding Inter Platform shares and 78.8% of the aggregate voting power of Inter Platform. Assuming that former Banco Inter Shareholders elect to receive Cash Redeemable Shares resulting in an aggregate cash payment in the amount of the Cash Redemption Threshold, Banco Inter controlling shareholders will hold 28.6% of the then-outstanding Inter Platform shares and 80.0% of the aggregate voting power of Inter Platform.
In connection with the Proposed Transaction, SoftBank, one of Banco Inter’s largest indirect shareholders, has expressed its willingness to support the Proposed Transaction. In preparation for the Proposed Transaction, SoftBank will contribute its indirect interest in Banco Inter into Inter Platform through a preparatory corporate reorganization (“SoftBank Roll-Up”). Immediately after the Closing Date, SoftBank will hold Inter Platform Class A Shares or Inter Platform BDRs in the amount that will give it the same economic interest in the total capital of Inter Platform as it had in Banco Inter’s total capital immediately prior to the completion of the Proposed Transaction (except for the effect of the cash redemption of the Cash Redeemable Shares and the exercise of Withdrawal Rights by Banco Inter Shareholders). SoftBank will not receive any Inter Platform Class B Share and will not be a controlling shareholder. Per determination of B3, SoftBank will not be permitted to vote at the Banco Inter Shareholders’ Meeting. For more information on the SoftBank Roll-Up, see “Major Shareholders and Related Party Transactions — Shareholders’ Agreements — SoftBank Roll-Up Agreement
None of the Securities and Exchange Commission (“SEC”), the CVM, nor any securities commission of any jurisdiction has approved or disapproved any of the transactions described in this prospectus or the securities to be issued under this document or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offense. This prospectus does not constitute an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities, or a solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. For the avoidance of doubt, this prospectus does not constitute an offer to buy or sell securities or a solicitation of an offer to buy or sell any securities in the Federative Republic of Brazil or a solicitation of a proxy under the laws the Federative Republic of Brazil, and it is not intended to be, and is not, a prospectus or an offer document within the meaning of Brazilian law and the rules of the CVM. You should inform yourself about and observe any such restrictions, and none of Inter Platform, Banco Inter or their respective subsidiaries accepts any liability in relation to any such restrictions.

WE ARE NOT ASKING FOR A PROXY. The accompanying disclosure documents contain detailed information about the Proposed Transaction and the Banco Inter General Meeting. This document is a prospectus for Inter Platform BDRs that will be issued as part of the consideration upon completion of the Proposed Transaction, which Inter Platform BDRs will represent one Inter Platform Class A Common Share. You should read this prospectus carefully. In particular, please read the section “Risk Factors” beginning on page 26 for a discussion of risks that you should consider in evaluating the Proposed Transaction described in this prospectus.
This prospectus is dated           , 2021.

 
IMPORTANT DATES
Banco Inter Shareholders should take note of the following important dates in connection with the Proposed Transaction:
Date / Period
Event
November 1, 2021 Banco Inter Board of Directors Approval
November 4, 2021 Formal notice convening the Banco Inter General Meeting to November 25, 2021 expected to be published on the official gazette and a major newspaper, as required under Brazilian law
November 25, 2021 Banco Inter General Meeting
November 26 – December 2, 2021 Period for Banco Inter Shareholders to elect to receive Cash Redeemable Shares instead of Inter Platform BDRs (assuming that the Proposed Transaction is approved at the Banco Inter General Meeting).
December 3, 2021 Date on which Banco Inter expects to announce whether or not the Cash Redemption Threshold Condition was satisfied or waived.
November 26 through on or about
December 26, 2021
Period for Holder of Banco Inter Common Shares to exercise of Withdrawal Rights
December 30, 2021 Closing Date
 

 
ABOUT THIS PROSPECTUS
This document, which is part of a registration statement on Form F-4 filed with the SEC by Inter Platform, constitutes a prospectus of Inter Platform under Section 5 of the U.S. Securities Act of 1933, as amended (“Securities Act”), with respect to Inter Platform Class A Common Shares and Inter Platform BDRs to be issued to holders of Banco Inter Common Shares, Banco Inter Preferred Shares and Banco Inter Units, pursuant to the transactions described herein.
No person has been authorized to provide you with information that is different from what is contained in this prospectus, and, if given or made by any person, such information must not be relied upon as having been authorized. You should not assume that the information contained in this prospectus is accurate as of any date other than its date as specified on the cover unless otherwise specifically provided herein. Further, you should not assume that the information contained in this prospectus is accurate as of any date other than the date of the incorporated document. Any reference to a website address does not constitute incorporation by reference of the information contained at or available through such website, and you should not consider it to be a part of this prospectus.
 

 
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There is no standard definition for any of terms mentioned on the graph and our definition of these measures may differ from the definition used by other companies. For more information, see “Presentation of Financial and Other Information — Certain Performance Metrics.”
 

 
TABLE OF CONTENTS
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1
13
17
26
65
70
72
75
83
86
96
97
119
127
154
165
173
192
194
200
205
224
259
260
261
F-1
II-1
II-5
II-6
 
i

 
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains or may contain “forward-looking statements.” Forward looking terms such as “may,” “will,” “could,” “should,” “would,” “plan,” “potential,” “intend,” “anticipate,” “project,” “target,” “believe,” “estimate” or “expect” and other words, terms and phrases of similar nature are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are statements which are not historical fact and involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Such forward-looking statements may include, but are not limited to, statements related to:

the Proposed Transaction and the expected timing and satisfaction of conditions precedent for completion of the Proposed Transaction, including among others;

the future growth opportunities, expected earnings, expected capital expenditures, future financing requirements and estimated future dividends or other distributions;

our ability to expand our business into markets outside of Brazil;

the economic, financial, political and public health effects of the coronavirus (“COVID-19”) pandemic, the dissemination of other coronavirus variants, particularly in Brazil and to the extent that they continue to have severely adverse macroeconomic effects, in which case they may intensify the impact of the other risks to which we are subject;

the ongoing impact of the COVID-19 pandemic, generally, and on our operations, as well as on our results of operations, financial condition and cash flows;

the overall global and Brazilian economic environment and risks associated with the COVID-19 pandemic, including new and variant strains that have surfaced, including in Brazil;

our ability to implement, in a timely and efficient manner, any measure necessary to respond to, or reduce the impacts of the COVID-19 pandemic on our business, operations, cash flow, prospects, liquidity and financial condition;

our ability to efficiently predict, and react to, temporary or long-lasting changes in consumer behavior resulting from the COVID-19 pandemic, including after the outbreak has been sufficiently controlled;

general economic, political and business conditions both in Brazil and abroad, including, in Brazil, developments and the perception of risks in connection with ongoing investigations and increasing fractious relations among the Brazilian government, members of the Brazilian Congress and members of the Supreme Court, as well as policies and potential changes to address these matters or otherwise, including economic and fiscal reforms and in response to the ongoing effects of the COVID-19 pandemic, any of which may negatively affect growth prospects in the Brazilian economy as a whole;

the socioeconomic, political and business environment in Brazil, including, but not limited to, exchange rates, which has experienced significant volatility since the onset of the COVID-19 pandemic, employment levels, population growth and consumer confidence;

inflation as well as fluctuations in the real, as defined further below, and in interest rates;

changes in applicable rules and regulations, including those relating to taxation, employment and information technology (“IT”);

our ability to implement our growth strategies;

our ability to adequately finance our operations;

our ability to satisfactorily serve our customers;

competition;

changes in consumer preferences and consumer demand for our products and services;

difficulties in maintaining and/or improving our products or in managing customer complaints and any negative publicity that may affect our products;
 
ii

 

increases in our costs, particularly in relation to our workforce; and

other risk factors discussed under the “Risk Factors” section in this prospectus.
The list above is not intended to be exhaustive, and there may be other key risks that are not listed above that are not presently known to us or that we currently deem immaterial. Should one or more of these or other risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by the forward-looking statements made by us contained in this prospectus. As a result of the foregoing, readers should not place undue reliance on the forward-looking statements contained in this prospectus. The forward-looking statements contained in this prospectus are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon information available as of the date of this prospectus or other specified date and speak only as of such date. We disclaim any intention or obligation to update or revise any forward-looking statements in this prospectus as a result of new information or future events, except as may be required under applicable securities law.
Forward-looking statements in this prospectus are based on current expectations and assumptions made by our management. Although our management believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements. We can give no assurance that they will prove to be correct. Additionally, forward-looking statements are subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this prospectus. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements, or that could contribute to such differences, include, without limitation, the risks and uncertainties set forth under the section “Risk Factors.”
As Inter Platform is not a reporting company as of the date of this prospectus, Inter Platform may not rely on the safe harbors for forward-looking statements provided for in the Securities Act and the Securities Exchange Act of 1934, as amended (“Exchange Act”).
 
iii

 
CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS PROSPECTUS
In this prospectus, “Inter Platform” refers to Inter Platform, Inc. References to “Banco Inter” refers to Banco Inter S.A. References to “Inter,” “we,” “us” and “our” refer to Inter Platform and its consolidated subsidiaries (including Banco Inter), unless the context otherwise requires or otherwise indicated. References to our “controlling shareholders” are to Mr. Rubens Menin Teixeira de Souza and/or the vehicles through which he holds his equity interest in Inter Platform, Costellis International Limited and HoldFin, as applicable. All references herein to the “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “U.S. dollars,” “dollars” or “US$” are to United States dollars, the official currency of the United States.
Articles of Association” or “Inter Platform Articles of Association” mean the amended and restated Memorandum and Articles of Association of Inter Platform that will be effective immediately after the satisfaction or waiver of the Cash Redemption Threshold Condition.
B3” means B3 S.A. — Brasil, Bolsa, Balcão, or São Paulo Stock Exchange.
Banco Inter Common Shares” means shares of common stock of Banco Inter.
Banco Inter Preferred Shares” means shares of preferred stock of Banco Inter.
Banco Inter Shares” means Banco Inter Common Shares, Banco Inter Preferred Shares and Banco Inter Units.
Banco Inter Shareholders” means holders of Banco Inter Shares.
Banco Inter General Meeting” means the extraordinary general meeting of Banco Inter scheduled for November 25, 2021, in which Banco Inter Shareholders will vote on the Proposed Transaction.
Banco Inter Units” means units representing one Banco Inter Common Share and two Banco Inter Preferred Shares.
Brazilian Corporation Law” means the Brazilian Law No. 6,404/76, as amended.
Cash Redeemable Shares” means HoldFin shares that are mandatorily redeemable for cash.
Cash Redemption Financing” means the financing to be obtained by HoldFin in an amount sufficient to fund the cash redemption of the Cash Redeemable Shares up to the Cash Redemption Threshold, substantially in the terms described in “The Proposed Transaction — Cash Redemption Financing.
Cash Redemption Price” means a cash payment of R$45.84, as adjusted by the DI Rate from the date of the Banco Inter General Meeting to the Closing Date, to redeem each Cash Redeemable Share. Each Banco Inter Shareholder that has elected to receive Cash Redeemable Shares will receive 0.33333333333 Cash Redeemable Share for each Banco Inter Common Share or Banco Inter Preferred Share that it holds or one Cash Redeemable Share for each Banco Inter Unit that it holds.
Cash Redemption Threshold” means the aggregate amount of R$2.0 billion.
Cash Redemption Threshold Condition” means the condition that the total amount to be disbursed by HoldFin in connection with the redemption of all Cash Redeemable Shares does not exceed the Cash Redemption Threshold.
Class A Redeemable Shares” means HoldFin shares that are mandatorily redeemable for Inter Platform BDRs.
CDI,” “DI Rate” or the “Interbank Deposit Certificate” ​(Certificado de Depósito Interbancário), means the “over extra group” daily average rate for interbank deposits, expressed as an annual percentage, based on 252 business days, calculated daily and published by B3, or any other index as may be further used in substitution thereof.
Costellis” means Costellis International Limited, the direct controlling shareholder of Inter Platform, Inc. Rubens Menin Teixeira de Souza, our controlling shareholder and chairman of Inter Platform’s board
 
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of directors, owns 84.2% of Costellis International Limited and, as such, controls the manner in which Costellis International Limited votes and disposes of its shares in Inter Platform.
CMN” means the Conselho Monetário Nacional, or the Brazilian Monetary Council.
CVM” means the Comissão de Valores Mobiliários, or the Brazilian Securities Commission.
Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
Exchange Ratios” means the following ratios of the consideration for the Proposed Transaction:
A.
Each holder of Banco Inter Common Shares or Banco Inter Preferred Shares will receive 0.33333333333 Inter Platform BDR for each Banco Inter Common Share or Banco Inter Preferred Share that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares;
B.
Each holder of Banco Inter Units will receive one Inter Platform BDR for each one Banco Inter Unit that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares; and
C.
Each Banco Inter Shareholder that has elected to receive Cash Redeemable Shares will receive 0.33333333333 Cash Redeemable Share for each Banco Inter Common Share or Banco Inter Preferred Share that it holds or one Cash Redeemable Share for each Banco Inter Unit that it holds. Each Cash Redeemable Share will be redeemed for a cash payment of R$45.84, as adjusted by the DI Rate from the date of the Banco Inter General Meeting to the Closing Date.
HoldFin” means Inter Holding Financeira S.A., a holding company currently wholly owned by Inter Platform, incorporated under the laws of Brazil.
HoldFin Redeemable Shares” means, collectively, the Class A Redeemable Shares and the Cash Redeemable Shares.
Hottaire” means Hottaire International Limited, the wholly-owned vehicle José Felipe Diniz, member of Inter Platform’s board of directors and co-founder of Banco Inter, uses to hold his Inter Platform shares.
IFRS” means International Financial Reporting Standards as issued by IASB (International Accounting Standards Board).
Inter Platform BDRs” means Inter Platform Class A Common Shares in the form of Brazilian Depositary Receipts.
Inter Platform Class A Common Shares” or “Class A Common Shares” means class A common shares of Inter Platform.
Inter Platform Class B Common Shares” or “Class B Common Shares” means class B common shares of Inter Platform.
Merger of Shares Protocol” means the Brazilian-law document (Protocolo e Justificação de Incorporação de Ações), prepared by the management of Banco Inter and HoldFin, to be submitted for approval by their respective shareholders at their respective special meetings of shareholders and that provides the shareholders with information on the terms, conditions and reasoning for the approval of the corporate reorganization contemplated by the Proposed Transaction.
Merger of Shares” means the incorporação de ações corporate transaction through which each Banco Inter Share issued and outstanding immediately prior to the completion of the Proposed Transaction will be automatically contributed for their book value into HoldFin in exchange for a certain number of newly issued HoldFin Redeemable Shares, determined pursuant to the Exchange Ratios, resulting in Banco Inter becoming a wholly owned subsidiary of HoldFin.
Proposed Transaction” means the Merger of Shares and the redemption by HoldFin of the HoldFin Redeemable Shares, as detailed and subject to the conditions described in this prospectus.
Securities Act” means the U.S. Securities Act of 1933, as amended.
SoftBank” means LA BI Holdco LLC or any successor vehicle through which the SoftBank Latin America Fund holds its equity interests in Banco Inter or Inter Platform.
 
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“SoftBank Roll-Up” means the preparatory corporate reorganization pursuant to which SoftBank will contribute its indirect interest in Banco Inter into Inter Platform and become a shareholder of Inter Platform.
“SoftBank Roll-Up Agreement” means the agreement dated October 4, 2021 by and among the majority shareholders of Inter Platform (Rubens Menin and João Vitor Menin) and certain affiliates of SoftBank setting forth the terms and conditions of the SoftBank Roll-Up.
Withdrawal Rights” means the Brazilian-law statutory right (direito de recesso) through which holders of Banco Inter Common Shares (including Banco Inter Common Shares held through Units) that do not vote in favor of the approval of the Merger of Shares or do not attend the Banco Inter General Meeting will have the right to withdraw their Banco Inter Common Shares for their book value if the Proposed Transaction is approved. For more information, see “Banco Inter General Meeting.”
 
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PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Financial Statements
The consolidated financial statements of Banco Inter as of and for the years ended December 31, 2020, 2019 and 2018 included elsewhere in this prospectus (“Audited Financial Statements”) have been prepared in accordance with IFRS issued by the International Accounting Standards Board (IASB).
The unaudited interim condensed and consolidated financial statements for Inter Platform as of and for the nine-month period ended September 30, 2021, have been prepared in accordance with IAS 34 — Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) (“Unaudited Financial Information” and, together with the Audited Financial Statements, “Financial Information”).
Unless otherwise noted, financial information as of and for the years ended December 31, 2020, 2019 and 2018 are derived from the Audited Financial Statements and financial information as of September 30, 2021 and for the nine-month periods ended September 30, 2021 and 2020 are derived from the Unaudited Financial Information.
Financial Information
Inter Platform was incorporated on January 26, 2021, as a Cayman Islands exempted company with limited liability duly registered with the Cayman Islands Registrar of Companies. Inter Platform is currently a holding company through which the controlling shareholders and certain other Banco Inter Shareholders hold their Banco Inter Shares. As of the date of this prospectus, Inter Platform does not own any assets other than shares of HoldFin, and HoldFin does not hold any assets other than Banco Inter Shares. Neither Inter Platform nor HoldFin has any material liability or contingency.
On May 7, 2021, Inter Platform and Banco Inter completed the first step of the Inter corporate reorganization, involving (i) the creation of Inter Platform and HoldFin, which are two new holding companies, with no operations and no assets, liabilities or contingencies, and (ii) the contribution of shares of Banco Inter held by the controlling shareholder (and some of his family members) and another founding shareholder of Banco Inter into HoldFin, and then the HoldFin shares owned by these shareholders were contributed into Inter Platform. Following this first step, Inter Platform and HoldFin have become the indirect and direct controlling entities of Banco Inter, respectively. The ultimate shareholders of Banco Inter, and their voting and non-voting interests in Banco Inter, were the same before and after this reorganization.
Inter Platform has accounted for this first step of the reorganization as reorganization of entities under common and the pre-reorganization carrying amounts of Banco Inter’s consolidated assets and liabilities were reflected in Inter Platform’s consolidated financial statements with no fair value adjustments. As a result, the Unaudited Financial Information reflects:

The historical consolidated operating results, cash flows and financial position of Banco Inter (predecessor) for dates and periods prior to May 7, 2021.

The contribution of Banco Inter consolidated assets and liabilities at book value on May 7, 2021;

The recognition of non-controlling interest on May 7, 2021 relating to the Banco Inter shareholders that were not yet shareholders of Inter Platform, Inc., measured at the proportion of their economic interest in the book value of the consolidated net assets of Banco Inter.

Inter Platform and its consolidated subsidiaries (including Banco Inter) operating results, cash flows and financial position for dates and periods following May 7, 2021.

The number of common shares issued by Inter Platform, as a result of this initial reorganization is reflected retroactively to January 1, 2020, for purposes of calculating earnings per share.

As the statutory equity reserves of Banco Inter are no longer applicable to Inter Platform, these were transferred to the retained earnings account on May 7, 2021, the date of this initial reorganization.
As Inter Platform currently has no assets other than the investment in HoldFin, and HoldFin has no assets other than the investment in Banco Inter, the consolidated financial statements of Inter Platform and
 
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Banco Inter are essentially the same, except for a non-controlling interest line in the Inter Platform’s consolidated statement of income.
Unaudited Pro Forma Condensed Consolidated Financial Information
Section “Unaudited Pro Forma Condensed Consolidated Financial Information” of this prospectus includes our unaudited pro forma condensed consolidated statements of income for the nine months ended September 30, 2021 and for the year ended December 31, 2020, and the unaudited pro forma condensed balance sheet as of September 30, 2021.
The unaudited pro forma condensed balance sheet as of September 30, 2021 is based on the historical unaudited condensed consolidated interim balance sheet of Inter Platform as of September 30, 2021, which is included in this prospectus, and gives effect, on a pro forma basis, to: (i) the issuance of the notes, including the associated costs, as if this had occurred on September 30, 2021; (ii) the expected future transactions costs, and the related tax effects, as if they had been incurred on September 30, 2021; (iii) the SoftBank Roll-up as if this had occurred on September 30, 2021; and (iv) the Merger of Shares and the redemption of Class A Redeemable Shares as if these events had occurred on September 30, 2021 in two scenarios: (x) assuming that no former Banco Inter shareholder elects to receive Cash Redeemable Shares or exercises their withdrawal right, and (y) assuming that former Banco Inter shareholders elect to receive Cash Redeemable Shares resulting in an aggregate cash payment in the amount of the Cash Redemption Threshold (while no Banco Inter shareholder will elect to exercise their Withdrawal Right).
The unaudited pro forma condensed consolidated income statement for the nine months ended September 30, 2021 is based on the historical unaudited condensed consolidated interim income statement of Inter Platform for the nine months ended September 30, 2021, which is included in this prospectus, and gives effect, on a pro forma basis, to: (i) the interest expense on the notes and the related tax effects as if the notes had been issued on January 1, 2021; (ii) the expected future transactions costs, and the related tax effects, as if they had been incurred on January 1, 2021; and (iii) the reduction in the allocation of profit / (loss) to non-controlling interest in Banco Inter as a result of: (x) the SoftBank Roll-up; and (y) the Merger of Shares and the redemption of Class A Redeemable Shares, as if these events had occurred on January 1, 2021.
The unaudited pro forma condensed consolidated income statement for the year ended December 31, 2020 is based on the historical income statement of Banco Inter for the year ended December 31, 2021, which is included in this prospectus, and gives effect, on a pro forma basis, to: (i) the interest expense on the notes and the related tax effects as if the notes had been issued on January 1, 2020; (ii) the transaction costs incurred in the nine month period ended September 30, 2021 and the expected future transactions costs, and the related tax effects, as if they had been incurred on January 1, 2020; and (iii) the reduction in the allocation of profit / (loss) to non-controlling interest in Banco Inter as a result of: (x) the Migration of the controlling shareholder (and some of his family members) and another founding shareholder of Banco Inter; (y) the SoftBank Roll-up; and (z) the Merger of Shares and the redemption of Class A Redeemable Shares, as if these events had occurred on January 1, 2020.
The unaudited pro forma condensed financial information included herein are not necessarily indicative of what our combined balance sheet or statement of income, would have been if the Restructuring had been completed as of the dates indicated, nor do they purport to project the future financial position or operating results of the Group. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The pro forma financial information is presented for illustrative purposes only.
The unaudited pro forma condensed financial information included herein should be read in conjunction with: (i) the historical unaudited condensed consolidated interim financial statements of Inter Platform as of September 30, 2021 and for the nine months ended September 30, 2021; and (ii) the historical audited consolidated financial statements of Banco Inter for the year ended December 31, 2020.
Currency Information
We maintain our books and records in reais, which is the functional currency of all of our material operating entities as well as our reporting currency.
 
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All references herein to “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “U.S. dollars,” “dollars” or “US$” are to U.S. dollars, the official currency of the United States of America. Solely for the convenience of the reader (unless otherwise stated), we have translated certain amounts included in “Summary Consolidated Financial Information and Other Data,” and elsewhere in this prospectus from reais into U.S. dollars using the selling rate as reported by the Central Bank as of September  30, 2021 of R$5.4394 to US$1.00. The real/U.S. dollar exchange rate fluctuates widely, and the selling rate as of December 31, 2020 may not be indicative of future exchange rates. See “Exchange Rates” for information regarding historical exchange rates for the Brazilian currency.
The U.S. dollar equivalent information presented in this prospectus is provided solely for the convenience of investors and should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate.
Market and Other Information
This prospectus contains information, including statistical and other information relating to the industry in which we operate, obtained from reports prepared by independent consultants, governmental agencies and general publications, including the Central Bank, the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística) (“IBGE”), the Getúlio Vargas Foundation (Fundação Getúlio Vargas) (“FGV”), the B3 — Balcão B3 (“CETIP”), Focus Economics, the U.S. Census Bureau and the Brazilian Federation of Banks (Federação Brasileira de Bancos) (“FEBRABAN”).
Industry publications 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. Although we have no reason to believe any of this information or these reports are inaccurate in any material respect and believe and act as if they are reliable, neither we nor our agents have independently verified it. Governmental publications and other market sources, including those referred to above, generally state that their information was obtained from recognized and reliable sources, but the accuracy and completeness of that information is not guaranteed. In addition, the data that we compile internally and our estimates have not been verified by an independent source. None of the publications, reports or other published industry sources referred to in this prospectus were commissioned by us or prepared at our request. We have not sought or obtained the consent of any of these sources to include such market data in this prospectus.
Special Note Regarding Non-GAAP Financial Measures
The body of generally accepted accounting principles is commonly referred to as “GAAP.” We use certain non-GAAP financial measures to analyze our financial and operational performance, as well as a basis for administrative decisions, including in connection with our analysis of our operational and financial performance and our evaluation of our liquidity. To provide investors and others with additional information regarding our financial and operating performance, we have disclosed within this prospectus our (1) return on average equity (“ROAE”), (2) our Return on Average Assets (“ROAA”), and (3) our Net Interest Margin (“NIM”), each of which is a non-GAAP financial measure.
ROAE
For annual periods, we calculate ROAE as profit for the applicable period divided by average equity, which in turn is calculated as equity as of the end of the applicable period plus equity as of the end of the prior period divided by two. For September 30, 2021, ROAE is calculated as profit for the last twelve-month period (LTM) divided by average equity, which in turn is calculated as equity as of the end of the applicable period plus equity as of the date immediately prior to the beginning of the period divided by two. In practice, ROAE is a measure of profitability that represents the profit that we are able to generate using the resources of our shareholders. Our management uses ROAE to guide its actions in maximizing our returns.
ROAA
For annual periods, we calculate ROAA as profit for the applicable period divided by total average assets, which in turn is calculated as total assets as of the end of the applicable period plus total average assets as of the end of the prior period divided by two. For September 30, 2021, ROAA is calculated as profit
 
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for the last twelve-month period (LTM) divided by total average assets, which in turn is calculated as total assets as of the end of the applicable period plus total average assets as of the date immediately prior to the beginning of the period divided by two. We use ROAA to measure the extent to which our assets generate profit.
Net Interest Margin (NIM)
We calculate NIM as net interest income and interest on securities divided by average interest-earning assets. Interest-earning assets is calculated as the sum of loans and advances to customers (net of provision for expected loss), amounts due from financial institutions, reverse repurchase agreements and securities. Average interest-earning assets are based on the average of the month-end balances for amounts due from financial institutions and reverse repurchase agreements and average of quarter-end balances within the applicable period for loans and advances to customers (net of provision for expected loss) and securities. We use NIM to measure the difference between the interest we charge on our interest-earning assets and the interest we pay on our funding.
Non-GAAP financial measures have important limitations as analytical tools, and you should not consider them in isolation or as a basis for dividend distribution, a substitute for analysis of our results of operations or as an indicator of operating performance or liquidity. ROAE, ROAA, NIM and similar measures are used by different companies for differing purposes and are often calculated in ways that reflect the circumstances of those companies. You should exercise caution in comparing these measures or data as reported by us to measures reported by other companies. ROAE, ROAA and NIM are not measures of financial performance or liquidity under IFRS, and should not be considered as alternatives to other indicators of our operating performance, cash flows or any other measure of performance derived in accordance with IFRS, such as operating results and cash flows from operating, financing and investing activities. Non-GAAP financial measures should be viewed as supplemental to, and not a substitute for, the Audited Financial Statements included elsewhere in this prospectus. Because this financial information is not prepared in accordance with IFRS, investors are cautioned not to place undue reliance on this information. For a reconciliation of ROAE, ROAA and NIM, see “Summary Consolidated Financial Information and Other Data.”
Rounding
Certain percentages and other amounts included in this prospectus have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be an arithmetical aggregation of the figures that precede them.
Calculation of NPS
Net promoter score (“NPS”) is a widely known survey methodology that measures the willingness of customers to recommend a company’s products and services. NPS measures satisfaction using a scale of zero to 10 based on a customer’s response to the question of how likely that person is to recommend us to a friend or colleague. Responses of nine or ten are considered “promoters.” Responses of seven or eight are considered neutral. Responses of six or less are considered “detractors.” The NPS, a percentage expressed as a numerical value, is calculated by subtracting the percentage of respondents who are detractors from the percentage who are promoters and dividing that number by the total number of respondents. The NPS calculation gives no weight to customers who decline to answer the survey question. Our NPS calculation as of a given date reflects the answers collected between the first and the last day of the month evaluated. We believe that NPS provides us with useful insight on our customers’ subjective perception and satisfaction with our products and services. We use this metric to monitor the effect our customer-focused initiatives have on our customers’ satisfaction.
Certain Performance Metrics
In this prospectus, we present the indicators of our performance described below. There is no standard definition for any of these indicators and our definition of these measures may differ from the definition used by other companies.
 
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Active customers.   We calculate the number of active customers for our business as the number of customers that generated revenue over a given period using our products and services. We calculate the number of active customers for our insurance business unit as the number of beneficiaries of insurance policies effective as of a particular date. We calculate the number of active customers for our investment business unit as the number of individual accounts which have invested in our platform over the applicable period. We believe that active customers, as it reflects the number of customers with a certain engagement threshold, provides us useful insight on our capacity to retain the interest of previously acquired customers. We use this metric to monitor the effect our customer-focused initiatives.

AUC.   We calculate assets under custody (“AUC”) as the market value of all retail customers’ assets invested through our investment platform. We believe that AUC, as it reflects the total volume of assets invested in our investment platform without accounting for our operational efficiency, provides us useful insight on the appeal of our platform. We use this metric to monitor the size of our investment platform.

GMV.   We calculate the gross merchandise value (“GMV”) as the total value of all sales made or initiated through our shopping platform managed by Inter Shop (defined below). We believe that GMV, as it reflects the total volume of transactions in our shopping platform without accounting for our operational efficiency, provides us useful insight on the size of our shopping platform. We use this metric to monitor the effect our customer-focused initiatives have on our ability to generate revenue from Inter Shop.

Take rate.   We calculate take rate as the fee we charge on transactions performed by a third-party seller or service provider at Inter Shop’s platform (end-to-end or at an affiliate partner platform originated via Inter) as a percentage of the total transaction amount. We use take rate to monitor our overall ability to monetize our platform to third-party sellers and service providers in our shopping platform.

Card TPV.   We calculate the total payment value of our credit cards (“Card TPV”) as the total value of all payments made using our credit and debit cards, including withdrawal. We believe that Card TPV, as it reflects the total volume of transactions using our credit card without accounting for our operational efficiency, provides us useful insight on the appeal of our credit cards. We use this metric to monitor the effect our customer-focused initiatives have on our ability to generate revenue from our credit card products.
 
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WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement that we have filed with the SEC on Form F-4 under the Securities Act. This prospectus does not contain all of the information set forth in the registration statement. Statements made in this prospectus as to the contents of any contract, agreement or other document are not necessarily complete. We have filed certain of these documents as exhibits to our registration statement, and we refer you to those documents. Each statement in this prospectus relating to a document filed as an exhibit to the registration statement of which this prospectus is a part is qualified in all respects by the filed exhibit.
Inter Platform has not filed any document with the SEC or any similar government authority, other than communications related to the Proposed Transaction. After the Proposed Transaction, Inter Platform will file annual reports on Form 20-F and make submissions on Form 6-K with the SEC under the rules and regulations that apply to foreign private issuers. As a foreign private issuer, Inter Platform and its respective shareholders are exempt from some of the reporting requirements of the Exchange Act, including the proxy solicitation rules, the rules regarding the furnishing of annual reports to shareholders and Section 16 short-swing profit reporting for their respective officers, directors and holders of more than 10% of their shares. You may read and copy any materials filed by Inter Platform with, or furnished by Inter Platform to, the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C., 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at +1 (800) SEC-0330. The SEC maintains a website at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the SEC.
As of the date of this prospectus, Banco Inter is subject to the informational requirements of the CVM and B3 and files reports and other information relating to its businesses, financial condition and other matters with the CVM and B3. You may read these reports, statements and other information about Banco Inter at the public reference facilities maintained by the CVM at http://www.gov.br/cvm and the website maintained by B3 at http://www.b3.com.br. The information included on or that can be accessed through the mentioned websites is not included in this prospectus or the registration statement and is not incorporated into this prospectus or the registration statement by reference.
The public filings with the SEC and the CVM of Inter Platform and Banco Inter are also available to the public free of charge through our internet website at <https://ri.bancointer.com.br/>. The information included on our website or that might be accessed through our website is not included in this prospectus or the registration statement and is not incorporated into this prospectus or the registration statement by reference. You may also request a copy of Inter Platform’s filings at no cost by contacting Inter Platform at the following address: Av. Barbacena, 1.219, 22nd floor, Santo Agostinho — Belo Horizonte, Minas Gerais, Brazil, Zip Code 30190-131.
 
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EXCHANGE RATES
The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of reais by any person or legal entity, regardless of the amount, subject to certain regulatory procedures.
Since 1999, the Central Bank of Brazil has allowed the real/U.S. dollar exchange rate to float freely, which resulted in increasing exchange rate volatility. Until early 2003, the real declined against the U.S. dollar. Between 2006 and 2008, the real strengthened against the U.S. dollar, except in the most severe periods of the global economic crisis. Given turmoil in international markets and then-applicable Brazilian macroeconomic outlook, the real depreciated against the U.S. dollar from mid-2011 to early 2016. In particular, during 2015, due to the poor economic conditions in Brazil, including as a result of political instability, the real devalued at a rate much higher than in previous years. Overall in 2015, the real depreciated 32%, reaching R$3.905 per US$1.00 on December 31, 2015. In early 2016, the real faced continuing fluctuations, primarily as a result of Brazil’s political instability, and appreciated against the U.S. dollar from March 2016 until early 2017. For most of 2017, the real continued to fluctuate, and has depreciated against the U.S. dollar since the beginning of 2018. Such depreciation and fluctuation continued throughout 2019. With the COVID-19 pandemic in 2020, reais depreciated even further. On December 31, 2020, the exchange rate for reais into U.S. dollars was R$5.197 per US$1.00, based on the selling rate as reported by the Central Bank of Brazil. There can be no assurance that the real will not depreciate further against the U.S. dollar. The real may fluctuate against the U.S. dollar substantially in the future.
The Central Bank of Brazil has intervened occasionally to attempt to control instability in foreign exchange rates. We cannot predict whether the Central Bank of Brazil or the Brazilian federal government will continue to allow the real to float freely or will intervene in the exchange rate market by re-implementing a currency band system or otherwise. The real may depreciate or appreciate substantially against the U.S. dollar in the future.
Furthermore, Brazilian law provides that, whenever there is a serious imbalance in Brazil’s balance of payments or there are serious reasons to foresee a serious imbalance, temporary restrictions may be imposed on remittances of foreign capital abroad. We cannot assure you that such measures will not be taken by the Brazilian federal government in the future. See “Risk Factors — Risks Relating to Brazil.”
The following tables set forth the selling rate, expressed in reais per U.S. dollar (R$/US$), for the periods indicated, as reported by the Central Bank of Brazil:
Year Ended December 31
Period-end
Average(1)
Low
High
2016
3.2591 3.4833 3.1193 4.1558
2017
3.3080 3.1925 3.0510 3.3807
2018
3.8748 3.6558 3.1391 4.1879
2019
4.0307 3.9461 3.6519 4.2602
2020
5.1967 5.1552 4.0207 5.9366
Month
Period-end
Average(2)
Low
High
January 2021
5.4753 5.3556 5.1620 5.5074
February 2021
5.5296 5.4159 5.3417 5.5296
March 2021
5.6973 5.6461 5.4951 5.8397
April 2021
5.4036 5.5621 5.3662 5.7064
May 2021
5.2322 5.2911 5.2217 5.4505
June 2021
5.0022 5.0319 4.9206 5.1636
July 2021
5.1216 5.1567 5.0055 5.2587
August 2021
5.1433 5.2517 5.1379 5.4274
September 2021
5.4394 5.2797 5.1576 5.4394
October 2021 (through October 29)
5.6430 5.5400 5.3911 5.7117
 
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Sources:   Central Bank of Brazil.
(1)
Represents the average of the exchange rates on the closing of each day during the year.
(2)
Represents the average of the exchange rates on the closing of each day during the month
 
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QUESTIONS AND ANSWERS ABOUT THE PROPOSED TRANSACTION, THE BANCO INTER GENERAL MEETING AND INTER PLATFORM
The following questions and answers are intended to briefly address some commonly asked questions regarding the Proposed Transaction, the Banco Inter General Meeting, Inter Platform and other matters. These questions and answers only highlight some of the information contained in this prospectus and may not contain all of the information that is important to you, current Banco Inter Shareholder. Please further refer to “Summary” and the more detailed information contained elsewhere in this prospectus and the exhibits to this prospectus, which you should read carefully and in their entirety.
Questions and Answers for Current Banco Inter Shareholders about the Proposed Transaction
What is the Proposed Transaction on which I am being asked to vote?
The Proposed Transaction consists of a corporate reorganization of Inter with the purpose of listing shares on NASDAQ that ultimately represent equity of Banco Inter which is currently listed on B3. Upon completion of the Proposed Transaction, we expect to list Inter Platform Class A Common Shares on NASDAQ, to list Inter Platform BDRs on B3 and to delist all Banco Inter Shares and Banco Inter Units from B3.
The completion of the Proposed Transaction is expected to occur on or about 35 days after the Banco Inter General Meeting, subject to the satisfaction of certain conditions described in this prospectus. The Proposed Transaction will consist of the two steps below, which are expected to be concluded substantially at the same time on the Closing Date:

Merger of Shares.   Subject to the approval of the Merger of Shares at the Banco Inter General Meeting and the satisfaction or waiver of the conditions described in this prospectus (including the Cash Redemption Threshold Condition), the merger of shares will be implemented through an incorporação de ações under the Brazilian Corporation Law. Pursuant to the Merger of Shares, each Banco Inter Share issued and outstanding immediately prior to the completion of the Proposed Transaction will be automatically contributed for their book value into HoldFin in exchange for a certain number of newly issued mandatorily redeemable preferred shares of HoldFin, determined pursuant to the Exchange Ratios, and Banco Inter will become a wholly owned subsidiary of HoldFin. Each Banco Inter Shareholder will receive Class A Redeemable Shares, unless such Banco Inter Shareholder has elected to receive Cash Redeemable Shares.

Redemption.   Immediately after the Merger of Shares, HoldFin will redeem (i) all of its Class A Redeemable Shares and deliver to each holder thereof one Inter Platform BDR (which may be cancelled immediately thereafter, if such holder wants to receive the underlying Inter Platform Class A Common Shares) and (ii) all of its Cash Redeemable Shares and pay the applicable cash consideration to each holder thereof.
Immediately following the completion of the Proposed Transaction:

Banco Inter will be an indirect wholly owned subsidiary of Inter Platform.

The business conducted by Inter will be the same as prior to the Proposed Transaction.

If you did not validly exercise Withdrawal Rights or elect to receive Cash Redeemable Shares, you will become a shareholder of Inter Platform (initially, through the holding of Inter Platform BDRs, which can be cancelled to allow direct interest in Inter Platform through holding Inter Platform Class A Commons Shares).

The shareholders of Inter Platform will be essentially the same as the current shareholders of Banco Inter, except for those current Banco Inter Shareholders that have validly exercised Withdrawal Rights or elected to receive Cash Redeemable Shares.

The controlling shareholders of Inter, who currently exercise control through their ownership of a majority of Banco Inter Common Shares, will continue to control Inter’s business through the ownership of Inter Platform Class B Common Shares representing the majority of the voting power in Inter Platform.
 
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Currently, Banco Inter Common Shares, Banco Inter Preferred Shares and Banco Inter Units are listed on B3.
If the Proposed Transaction is concluded, what will I receive?
Subject to the approval of the Merger of Shares at the Banco Inter General Meeting and the satisfaction or waiver of the conditions described in this prospectus (including the Cash Redemption Threshold Condition), each Banco Inter Shareholder will receive the following consideration, based on the Exchange Ratios described below:
A.
Each holder of Banco Inter Common Shares or Banco Inter Preferred Shares will receive 0.33333333333 Inter Platform BDR for each Banco Inter Common Share or Banco Inter Preferred Share that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares;
B.
Each holder of Banco Inter Units will receive one Inter Platform BDR for each one Banco Inter Unit that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares; and
C.
Each Banco Inter Shareholder that has elected to receive Cash Redeemable Shares will receive 0.33333333333 Cash Redeemable Share for each Banco Inter Common Share or Banco Inter Preferred Share that it holds or one Cash Redeemable Share for each Banco Inter Unit that it holds. Each Cash Redeemable Share will be redeemed for the Cash Redemption Price.
The Exchange Ratios have been established so that each Banco Inter Shareholder will receive, upon completion of the Proposed Transaction, the same economic interest in the total capital of Inter Platform as it had in Banco Inter’s total capital immediately before completion of the Proposed Transaction, except for the effect of the cash redemption of the Cash Redeemable Shares and the exercise of Withdrawal Rights.
In connection with the Proposed Transaction, HoldFin may be required to withhold Brazilian capital gain taxes due by certain 4,373 Holders. In order to determine whether any withholding will be required, each 4,373 Holder must report, through its Brazilian custodian or broker dealer, certain information relating to such 4,373 Holder’s historical cost and tax domiciliation. Such information must be provided after the Banco Inter General Meeting, in accordance with the procedures that we will publicly announced prior to the date of the Banco Inter General Meeting. If HoldFin determines based on such information that withholding will be required, or if such 4,373 Holder fails to provide such information: (a) any amount required to be withheld by HoldFin will be deducted from the Cash Redemption Price payable to such 4,373 Holder, and (b) with respect to a 4,373 Holder that elects to receive Inter Platform BDRs, a portion of the Banco Inter Shares held by such 4,373 Holder will be converted into Cash Redeemable Shares, in an amount sufficient to generate a cash redemption payment sufficient to cover any required tax withholding, and HoldFin will retain such amount. See “Material Tax Considerations — Material Brazilian Tax Considerations.”
On the Closing Date, each Banco Inter Shareholder will receive Inter Platform BDRs, in Brazil, against delivery of its Banco Inter Shares, based on the Exchange Ratios, unless such Banco Inter Shareholder has elected to receive Cash Redeemable Shares. A Banco Inter Shareholder that wants to receive Cash Redeemable Shares must make this election by no later than the fifth business day after the Banco Inter General Meeting (i) through the facilities of the Central Depositary of B3 (Central Depositária da B3) or (ii) for Banco Inter Shareholders holding Banco Inter Shares directly in the corporate books, through Banco Bradesco S.A., the registrar of Banco Inter Shares. A beneficial owner of Banco Inter shares must instruct its broker or custodian operating in Brazil of such election by the time indicated by such broker or custodian. Upon election to receive Cash Redeemable Shares, such Banco Inter Shareholder will no longer be permitted to trade its Banco Inter Shares and will not be able to opt to receive Inter Platform BDRs. The cash redemption of the Cash Redeemable Shares will occur on the Closing Date, which is expected to occur on or about 35 days after the Banco Inter General Meeting.
At any time, and from time to time, on or after the Closing Date, a holder of Inter Platform BDR that wants to receive Inter Platform Class A Common Share may request the cancellation of all or a portion of its Inter Platform BDRs by (a) instructing its broker or custodian operating in Brazil to cancel its Inter
 
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Platform BDRs with the BDR Depositary and (b) delivering evidence that all fees and potential taxes due in connection with this service were duly paid, as set forth in the deposit agreement. The cancellation instruction to the broker or custodian must include an appropriate brokerage account outside of Brazil to receive the underlying Inter Platform Class A Common Shares. No fees for cancellation of Inter Platform BDRs will be charged from investors during the first 30 days after the Closing Date.
Following the Proposed Transaction, any fractional shares will be grouped into whole numbers and sold on the open market managed by B3, as applicable. The net proceeds from the sale of the fractional shares will be distributed on a pro rata basis to the former Banco Inter Shareholders that held such shares. No additional consideration in cash or in kind will be paid by Inter Platform to Banco Inter Shareholders who opt to receive Inter Platform BDRs in connection with the Proposed Transaction. The sales price resulting from such sale may be less than the Cash Redemption Price.
Will all of Banco Inter Shareholders receive the same consideration?
All non-controlling shareholders of Banco Inter (including SoftBank, pursuant to the SoftBank Roll-Up as described herein) will receive the same consideration, based on the Exchange Ratios.
On the Closing Date, the controlling shareholders will hold 233,240,444 Inter Platform Class B Common Shares, which represents the same economic interest in Inter Platform as the controlling shareholders indirectly have in Banco Inter as of the date of this prospectus. However, while each Inter Platform Class A Common Share is entitled to one vote at the shareholders’ meeting of Inter Platform, each Inter Platform Class B Common Share is entitled to ten votes at the shareholders’ meeting of Inter Platform. The controlling shareholders currently control our business through their indirect ownership of a majority of the voting capital of Banco Inter, in the form of Banco Inter Common Shares. Assuming that no former Banco Inter Shareholder elects to receive Cash Redeemable Shares, Banco Inter controlling shareholders will hold 27.1% of the then-outstanding Inter Platform shares and 78.8% of the aggregate voting power of Inter Platform. Assuming that former Banco Inter Shareholders elect to receive Cash Redeemable Shares resulting in an aggregate cash payment in the amount of the Cash Redemption Threshold, Banco Inter controlling shareholders will hold 28.6% of the then-outstanding Inter Platform shares and 80.0% of the aggregate voting power of Inter Platform.
Currently, a significant part of Banco Inter’s capital also consists of Banco Inter Preferred Shares, which do not have voting rights, except with respect to certain extraordinary matters, such as approval of mergers, spin-offs, transformation and agreements between Banco Inter and its controlling shareholders. Upon completion of the Proposed Transaction, the controlling shareholders will hold a majority of Inter Platform Class B Common Shares, which will permit the controlling shareholders to control the outcome of all decisions at all Inter Platform shareholders’ meetings, and will be able to elect a majority of the members of Inter Platform board of directors. See “Inter Platform — Share Capital and Constituent Documents.”
What is the purpose of the Proposed Transaction?
The purposes of the Proposed Transaction are (i) strengthening our position as a global technology company in the financial sector, increasing our competitiveness against other digital banking companies and e-commerce platforms, (ii) allowing access to new markets and opportunities to accelerate our internationalization plan, permitting the future increase and diversification of customers, services and products, (iii) allowing easier access to global capital markets through a more efficient capital structure, increasing our funding and growth capabilities in all of our business units, (iv) potential diversification of our investors, increasing the liquidity of our securities and making us a more attractive investment,
(v) allowing access to potential international opportunities in connection with the mergers and acquisitions or acquisitions of strategic assets.
Banco Inter is subject to regulation from the Central Bank of Brazil, which requires any financial institution to have a defined controlling shareholder. The Proposed Transaction does not result in a change of control, as defined by the applicable regulation, while ensures no dilution of economic rights to other shareholders upon conclusion of the Proposed Transaction. The increase in the voting power of our controlling shareholder, through the Class B Shares, which have 10 votes per share, will allow us to raise capital in future equity offerings without affecting our control structure, which is essential to our growth.
 
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What happens if the Proposed Transaction is not approved at the Banco Inter General Meeting?
If the Proposed Transaction is not approved at the Banco Inter General Meeting, the Proposed Transaction will not become effective. In this case, (i) you will continue to hold your Banco Inter Shares, (ii) Banco Inter Shares will remain listed on B3, (iii) Inter Platform will not have its Class A Common Shares listed on NASDAQ and you will not receive Inter Platform Class A Shares, Inter Platform BDRs or Cash Redeemable Shares, and (iv) you will not have Withdrawal Rights.
What happens if the Proposed Transaction is approved at the Banco Inter General Meeting but the Cash Redemption Threshold is exceeded?
It is a condition to completion of the Proposed Transaction that the total amount to be disbursed by HoldFin in connection with the redemption of all Cash Redeemable Shares does not exceed the Cash Redemption Threshold. If the Cash Redemption Threshold is exceeded, the Proposed Transaction will not be concluded, unless Banco Inter and HoldFin waive this condition, in their sole discretion, following a determination of the board of directors of Banco Inter that this waiver is reasonable and is in the best interest of Banco Inter and Banco Inter Shareholders. If the Cash Redemption Threshold is not waived, the Proposed Transaction will not be concluded. In this case, (i) you will continue to hold your Banco Inter Shares, (ii) Banco Inter Shares will remain listed on B3, (iii) Inter Platform will not have its Class A Common Shares listed on NASDAQ and you will not receive Inter Platform Class A Shares, Inter Platform BDRs or Cash Redeemable Shares, and (iv) you will not have Withdrawal Rights.
When do you expect the Proposed Transaction to be concluded?
We expect the Proposed Transaction to close on or about 35 days after the Banco Inter General Meeting, subject to the approval of Banco Inter shareholders at the Banco Inter General Meeting and satisfaction or waiver of certain conditions, including the Cash Redemption Threshold Condition. We cannot guarantee that the Proposed Transaction will be concluded within this timeframe.
Will the Inter Platform Class A Common Shares and the Inter Platform BDRs be traded on any stock exchange?
We expect that on or about the Closing Date of the Proposed Transaction, the Inter Platform Class A Common Shares will be listed on NASDAQ under the symbol “BIDI” and that the Inter Platform BDRs will be listed on B3 under the symbol “BIDD31.”
How do I elect to receive Inter Platform Class A Common Shares instead of Inter Platform BDRs?
At any time, and from time to time, on or after the Closing Date, a holder of Inter Platform BDR that wants to receive Inter Platform Class A Common Shares may request the cancellation of all or a portion of its Inter Platform BDRs by (a) instructing its broker or custodian operating in Brazil to cancel its Inter Platform BDRs with the BDR Depositary and (b) delivering evidence that all fees and potential taxes due in connection with this service were duly paid, as set forth in the deposit agreement. The cancellation instruction to the broker or custodian must include an appropriate brokerage account outside of Brazil to receive the underlying Inter Platform Class A Common Shares. No fees for cancellation of Inter Platform BDRs will be charged from investors during the first 30 days after the Closing Date.
Can I elect to receive cash instead of Inter Platform BDRs?
Yes. If you want to receive cash instead of Inter Platform BDRs, you must elect to receive Cash Redeemable Shares by no later than the fifth business day after the Banco Inter General Meeting (i) through the facilities of the Central Depositary of B3 (Central Depositária da B3) or (ii) for Banco Inter Shareholders holding Banco Inter Shares directly in the corporate books, through Banco Bradesco S.A., the registrar of Banco Inter Shares. A beneficial owner of Banco Inter shares must instruct its broker or custodian operating in Brazil of such election by the time indicated by such broker or custodian. Upon election to receive Cash Redeemable Shares, such Banco Inter Shareholder will no longer be permitted to trade its Banco Inter Shares and will not be able to opt to receive Inter Platform BDRs. The cash redemption of the Cash
 
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Redeemable Shares will occur on the Closing Date, which is expected to occur on or about 35 days after the Banco Inter General Meeting.
If the Cash Redemption Threshold is not exceeded and the other conditions described in this prospectus are satisfied or waived, on the Closing Date we will redeem all Cash Redeemable Shares for cash.
It is a condition to completion of the Proposed Transaction that the total amount to be disbursed by HoldFin in connection with the redemption of all Cash Redeemable Shares does not exceed the Cash Redemption Threshold. If the Cash Redemption Threshold is exceeded, the Proposed Transaction will not be concluded, unless Banco Inter and HoldFin waive this condition, in their sole discretion, following a determination of the board of directors of Banco Inter that this waiver is reasonable and is in the best interest of Banco Inter and Banco Inter Shareholders.
Additionally, you may exercise your withdrawal rights pursuant to Brazilian law. For more information on Withdrawal Rights, see “Banco Inter General Meeting.”
What is the source of funds for redemption of the Cash Redeemable Shares?
HoldFin is negotiating with Brazilian financial institutions the final terms of a debt financing to redeem Cash Redeemable Shares up to the amount of the Cash Redemption Threshold. Prior to the Banco Inter General Meeting, HoldFin shall have obtained a firm commitment, from one or more financial institutions, to provide the Cash Redemption Financing, in an amount sufficient to fund the cash redemption of the Cash Redeemable Shares up to the Cash Redemption Threshold. As the Cash Redemption Financing is under negotiation, a different funding structure may alternatively be obtained by Inter Platform. For additional detail on the expected terms of the Cash Redemption Financing, see “The Proposed Transaction — Cash Redemption Financing.”
May I continue to be a shareholder of Banco Inter?
If the Proposed Transaction is concluded, you will not be able to continue to be a direct shareholder of Banco Inter, but you will be able to continue to be an indirect shareholder of Banco Inter through the ownership of Inter Platform Class A Common Shares or Inter Platform BDRs, as the case may be. Upon completion of the Proposed Transaction, Banco Inter will no longer have its shares listed on B3 or any other exchange and Banco Inter will become a wholly owned subsidiary of HoldFin.
Can the Proposed Transaction be unwound?
If the Proposed Transaction is concluded, the Proposed Transaction will not be unwound.
What other conditions must be satisfied to complete the Proposed Transaction?
In addition to the necessary corporate approvals and the condition that the Cash Redemption Threshold is not exceeded, completion of the Proposed Transaction is subject to certain additional conditions, including:

Inter Platform’s registration statement filed with the SEC on Form F-4 to effect the registration under the Securities Act of the Inter Platform Class A Common Shares to be issued to Banco Inter Shareholders shall have become effective prior to the Banco Inter Shareholders Meeting, no stop order suspending the effectiveness of the Form F-4 shall have been issued, and no proceedings for that purpose shall have been initiated or be threatened, by the SEC;

The Cash Redemption Price shall be approved by Banco Inter Shareholders at the Banco Inter General Meeting;

Approval of the minutes of the Banco Inter General Meeting by the Brazilian Central Bank;

Inter Platform Class A Common Shares shall be approved for listing on NASDAQ; and

Prior to the Banco Inter General Meeting, HoldFin shall have obtained, from one or more financial institutions, a firm commitment to provide the Cash Redemption Financing, in an amount sufficient to fund the cash redemption of the Cash Redeemable Shares up to the Cash Redemption Threshold.
 
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For further details on closing conditions, see “The Proposed Transaction.”
Are any of the conditions precedent for the Proposed Transaction subject to waiver?
Banco Inter and Inter Platform may waive the Cash Redemption Threshold Condition, following a determination of the board of directors of Banco Inter that this waiver is reasonable and is in the best interest of Banco Inter and Banco Inter Shareholders.
Do I have withdrawal rights (direito de recesso) in connection with the Proposed Transaction?
Pursuant to Articles 137 and 252 of the Brazilian Corporation Law, if the Proposed Transaction is approved at the Banco Inter General Meeting, holders of Banco Inter Common Shares (including Common Shares held through Units) that do not vote in favor of the approval of the Merger of Shares or do not attend the Banco Inter General Meeting and who are holders of record of Banco Inter Common Shares on the Withdrawal Rights Record Date and hold their Banco Inter Common Shares through the Closing Date will have the right to withdraw their Banco Inter Common Shares for their book value, as of December 31, 2020, of R$3.65 per Banco Inter Common Share. For Banco Inter Common Shares held through Banco Inter Units, the exercise of Withdrawal Rights will require the Banco Inter Units to be cancelled by its holder. For more detail about the Withdrawal Rights, see “Banco Inter General Meeting” below.
If you exercise Withdrawal Rights, you will receive a cash payment in the amount described in the prior paragraph and will not receive Inter Platform Class A Shares, Inter Platform BDRs or Cash Redeemable Shares.
You must hold Banco Inter Common Shares on the Withdrawal Rights Record Date and hold your Banco Inter Common Shares through the Closing Date of the Merger of Shares in order to validly exercise Withdrawal Rights. If you sell your Banco Inter Common Shares at any time after the date on which the Proposed Transaction was first announced and prior to the Closing Date, you will not be permitted to exercise Withdrawal Rights. An investor who acquires Banco Inter Common Shares after the date on which the Proposed Transaction was first announced will not be able to exercise Withdrawal Rights.
What is the difference between Withdrawal Rights and the right to receive Cash Redeemable Shares?
Cash Redeemable Shares are one of the possible considerations for the contribution of Banco Inter Shares into HoldFin, as part of the Merger of Shares. Subject to the approval of the Merger of Shares at the Banco Inter General Meeting and the satisfaction or waiver of the conditions described in this prospectus (including the Cash Redemption Threshold Condition), each Banco Inter Shareholder that opted to receive Cash Redeemable Shares will receive, on the Closing Date, 0.33333333333 Cash Redeemable Share for each Banco Inter Common Share or Banco Inter Preferred Share that it holds or one Cash Redeemable Share for each Banco Inter Unit that it holds. On the Closing Date, HoldFin will pay R$45.84, as adjusted by the DI Rate from the date of the Banco Inter General Meeting to the Closing Date, to redeem each Cash Redeemable Share.
Withdrawal Rights (direito de recesso) are a statutory right provided by the Brazilian Corporation Law to shareholders that (i) do not vote in favor of the approval of the Merger of Shares, or do not attend the meeting, and (ii) exercise the Withdrawal Rights within 30 days as from the date on which the minutes of the Banco Inter General Meeting are published. A Banco Inter Shareholder that exercises Withdrawal Rights will receive a cash payment based the book value of Banco Inter Common Shares as of December 31, 2020, which was R$3.65 per Banco Inter Common Share The consideration payable in connection with the exercise of Withdrawal Rights is expected to be significantly less than the amounts payable in connection with the redemption of Cash Redeemable Shares.
We assume that no holder of Banco Inter Common Shares will exercise Withdrawal Rights, because the cash amount payable to Banco Inter Shareholders who elect to receive Cash Redeemable Shares is significantly higher than the book value of Banco Inter Common Shares payable to those that exercise Withdrawal Rights.
 
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Questions and Answers About the Banco Inter General Meeting
What corporate approvals are needed for the Proposed Transaction?
The Proposed Transaction was approved by the directors of Banco Inter on November 1, 2021. The Proposed Transaction is subject to the approval of Banco Inter Shareholders at the Banco Inter General Meeting. In order to approve the Merger of Shares, holders of at least the majority of the outstanding Banco Inter Common Shares and Banco Inter Preferred Shares (including holders through Banco Inter Units, but not including the Banco Inter Shares held by our controlling shareholders or their related parties, by SoftBank or by directors or officers of Banco Inter), voting together, must vote in favor of the Proposed Transaction.
The Proposed Transaction was approved by the directors of Inter Platform, Inc. on October 25, 2021. The Merger of Shares and other steps for the Proposed Transaction are also subject to the approval of the shareholders’ meeting of HoldFin and board of directors of Inter Platform, as the shareholder of HoldFin. We expect these approvals to be obtained prior to, or concurrently with, the Banco Inter General Meeting.
Where and when will the Banco Inter General Meeting be held?
TIME AND DATE: November 25, 2021, 10:00 a.m. (Belo Horizonte time)
PLACE: Banco Inter General Meeting will occur virtually, through an electronic platform. There is no physical location for the Banco Inter General Meeting.
AGENDA: Consider and vote on the Merger of Shares, a corporate transaction through which each Banco Inter Share issued and outstanding immediately prior to the completion of the Proposed Transaction will be automatically contributed for their book value into HoldFin in exchange for a certain number of newly issued HoldFin Redeemable Shares, determined pursuant to the Exchange Ratios, pursuant to the Merger of Shares Protocol. The agenda for the meeting will also include other related items required for delisting Banco Inter Shares from B3, including the approval of the Cash Redemption Price.
For additional information about the Banco Inter General Meeting, see “Banco Inter General Meeting.”
What is the quorum for installation of the Banco Inter General Meeting?
The Banco Inter General Meeting will be installed on first call if attended by shareholders representing collectively: (i) 20% of the outstanding Banco Inter Common Shares and Banco Inter Preferred Shares (including holders through Banco Inter Units, but not including the Banco Inter Shares held by our controlling shareholders or their related parties, by SoftBank or by directors or officers of Banco Inter) and (ii) 2/3 of Banco Inter total share capital (including shares held by our controlling shareholders, by their related parties, by SoftBank and by directors or officers of Banco Inter). If the attendance requirement is not met for the Banco Inter General Meeting on first call, the Banco Inter General Meeting will be reconvened at a date and time at least eight calendar days after the date and time scheduled for the Banco Inter General Meeting on first call. The Banco Inter General Meeting will be installed on second call with any percentage of holders present at the meeting following second call.
Will the controlling shareholders of Banco Inter be permitted to vote at the Banco Inter General Meeting?
Controlling shareholders, through HoldFin, will not be permitted to vote at the Banco Inter General Meeting, as per determination of B3 pursuant to Ofício 141/2021-DIE, dated April 12, 2021, issued by B3 in connection with the Proposed Transaction.
Will any other Banco Inter Shareholders not be permitted to vote at the Banco Inter General Meeting?
SoftBank will not be permitted to vote at the Banco Inter General Meeting, as per determination of B3 pursuant to Ofício 141/2021-DIE, dated April 12, 2021, issued by B3 in connection with the Proposed Transaction.
 
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Are any Banco Inter Shareholders already committed to vote in favor of the proposal to approve the Proposed Transaction?
We have not received any formal commitments to vote in favor of the Proposed Transaction yet. SoftBank, one of our major shareholders, has expressed its willingness to support the transaction, but SoftBank will not be permitted to vote at the Banco Inter General Meeting.
May I attend the Banco Inter General Meeting?
All shareholders of Banco Inter are welcome to attend the Banco Inter General Meeting. The Banco Inter General Meeting will be a completely virtual meeting of shareholders, which will be conducted exclusively by webcast. You will only be entitled to participate in the Banco Inter General Meeting if you are a shareholder of Banco Inter as of the date of the Banco Inter General Meeting, or if you hold a valid proxy for the Banco Inter General Meeting. No physical meeting will be held.
To participate in the Banco Inter General Meeting you will need to review the information included on the notice of the Banco Inter General Meeting and in the documents relating thereto and register to attend the Banco Inter General Meeting in up to two days before the date of the Banco Inter General Meeting. The instructions for registration will be available in the notice of the Banco Inter General Meeting and/or in the documents relating thereto. Banco Inter Shareholders that timely register to attend the Banco Inter General Meeting will receive further instructions from Banco Inter by e-mail to access the Banco Inter General Meeting webcast.
You will be able to attend the Banco Inter General Meeting online and submit your questions during the meeting. You also will be able to vote your shares online by attending the Banco Inter General Meeting webcast.
The documents and instructions for attendance of the Banco Inter General Meeting may be found at Banco Inter’s and CVM’s website.
May I vote at the Banco Inter General Meeting?
If you hold Banco Inter Common Shares, Banco Inter Preferred Shares or Banco Inter Units, you may vote at the Banco Inter General Meeting, provided that you properly register to attend the Banco Inter General Meeting. For more information, see “―May I attend the Banco Inter General Meeting?,” above.
How can I attend and vote on the Banco Inter General Meeting?
Banco Inter will convene the Banco Inter General Meeting by publishing a notice in two Brazilian newspapers (the State official gazette and a major newspaper). The first call notice must be published not less than three times, beginning at least 21 calendar days prior to the Banco Inter General Meeting date. On the second call, the notice must be published not less than three times, beginning at least eight calendar days prior to the Banco Inter General Meeting date.
Shareholders may attend the Banco Inter General Meeting: (i) in person, if an individual; (ii) by its legal representatives, if a legal entity (company or investment fund); or (iii) by proxy, provided the shareholder complies with the applicable rules (for more information, see “Banco Inter General Meeting”). The documents necessary for participating in the Banco Inter General Meeting may be sent to Banco Inter prior to the date for which the meeting was called in order for the company to evaluate the request and grant access to the Banco Inter General Meeting to the shareholder, if that is the case. The documents necessary for participating in the Banco Inter General Meeting are available at Banco Inter’s Investor Relations website (ri@bancointer.com.br) and have been disclosed to the market on November 2, 2021.
With respect to the approval of the Merger of Shares, each Banco Inter Common Share and each Banco Inter Preferred Share is entitled to one vote at the Banco Inter General Meeting.
What happens if I do not vote?
If you are a Banco Inter Shareholder and you do not vote, you will receive the same treatment as the other Banco Inter Shareholders. If the Proposed Transaction is not approved at the Banco Inter General
 
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Meeting or if it is approved but Cash Redemption Threshold is exceeded, you will continue to hold your Banco Inter Shares. If the Proposed Transaction is approved at the Banco Inter General Meeting, you may elect to receive Cash Redeemable Shares by no later than the fifth business day after the Banco Inter General Meeting. If you hold Banco Inter Common Shares, you will have the option to exercise Withdrawal Rights (as long as you held your Banco Inter Common Shares on the date on which the Proposed Transaction was first announced, and continued to hold your Banco Inter Common Shares through the Closing Date). If you do not exercise your Withdrawal Rights or opt to receive Cash Redeemable Shares, and the Cash Redemption Threshold is not exceeded, you will automatically receive the applicable number of Inter Platform BDRs, based on the number of Banco Inter Shares that you own. See “The Proposed Transaction.
Does the board of directors of Banco Inter recommend the Proposed Transaction?
On November 1, 2021, after careful consideration, and following the recommendation of the independent directors, the board of directors of Banco Inter unanimously (i) approved, adopted and declared advisable the Proposed Transaction, including the Exchange Ratio, (ii) determined that it is fair to and in the best interests of Banco Inter and its shareholders that Banco Inter consummate the Proposed Transaction considering the potential benefits of the Proposed Transaction, described in “Questions and Answers about the Proposed Transaction, the Banco Inter General Meeting and Inter Platform — Questions and Answers for Current Banco Inter Shareholders about the Proposed Transaction — What is the purpose of the Proposed Transaction?” ​(iii) directed that the Proposed Transaction be submitted to the approval of Banco Inter Shareholders and (iv) recommended that Banco Inter Shareholders vote their Banco Inter Shares in favor of the approval of the Proposed Transaction at the Banco Inter General Meeting.
What is this document and why am I receiving it?
This document is a prospectus of Inter Platform relating to the Inter Platform BDRs that will be issued as the consideration upon completion of the Proposed Transaction, which Inter Platform BDRs will represent one Inter Platform Class A Common Share, which will be listed on NASDAQ. It also informs Banco Inter Shareholders of the upcoming Banco Inter General Meeting at which Banco Inter Shareholders will vote on, among other things, the Merger of Shares Protocol, and provides details of the consideration Banco Inter Shareholders will receive upon completion of the Proposed Transaction. You should carefully review this prospectus, because, as a holder of Banco Inter Shares, you will be entitled to vote at the Banco Inter General Meeting that has been called in order for Banco Inter Shareholders to approve the Merger of Shares.
Questions and Answers About Inter Platform
Who is Inter Platform?
Inter Platform is incorporated as an exempted company with limited liability in the Cayman Islands. Inter Platform is currently a holding company through which the controlling shareholder (and some of his family members) and another founding shareholder of Banco Inter hold their Banco Inter Shares. As of the date of this prospectus, Inter Platform does not own any assets other than shares of HoldFin, and HoldFin does not hold any assets other than Banco Inter Shares. Neither Inter Platform nor HoldFin has any material liability or contingency. Immediately prior to the Closing Date, Inter Platform will not own any assets other than any proceeds raised for redemption of Cash Redeemable Shares and shares of an intermediary holding company organized under the laws of Delaware (“New LLC”), which will not own any assets other than shares of HoldFin, and HoldFin will not own any assets other than Banco Inter Shares. Therefore, the business of Inter Platform and its consolidated subsidiaries is the same as the business of Banco Inter and will remain the same immediately following the Proposed Transaction.
Who will be the shareholders of Inter Platform after completion of the Proposed Transaction?
If the Proposed Transaction is concluded, the same shareholders of Banco Inter will be shareholders of Inter Platform, except for the shareholders that exercise Withdrawal Rights or elect to receive Cash Redeemable Shares. Upon conclusion of the Proposed Transaction, Inter Platform will have up to 859,534,547 common shares issued and outstanding or issuable upon the cancellation of the Inter Platform BDRs to which they relate. Those common shares will be divided into:
 
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626,294,103 Class A Common Shares and 233,240,444 Class B Common Shares, assuming that no former Banco Inter Shareholder elects to receive Cash Redeemable Shares; or

582,664,086 Class A Common Shares and 233,240,444 Class B Common Shares, assuming that former Banco Inter Shareholders elect to receive Cash Redeemable Shares resulting in an aggregate cash payment in the amount of the Cash Redemption Threshold.
Inter Platform Class B Common Shares will be held by Banco Inter controlling shareholders.
Will I have voting rights as a holder of Inter Platform Class A Common Shares or Inter Platform BDRs?
Yes, each Inter Platform Class A Common Share (including Inter Platform Class A Common Shares held as Inter Platform BDRs) is entitled to one vote. The controlling shareholders will own Inter Platform Class B Common Shares, and each Inter Platform Class B Common Share is entitled to ten votes. See “Inter Platform — Share Capital and Constituent Documents.” The procedure for voting if you hold Inter Platform BDRs may be different. For more information, see “Description of BDRs and Deposit Agreement.”
Will I have the right to receive dividends, as a holder of Inter Platform Class A Common Shares or Inter Platform BDRs?
Yes. Each Inter Platform Class A Common Share (including Inter Platform Class A Common Shares held as Inter Platform BDRs) and Inter Platform Class B Common Share is entitled to receive dividends, if and when approved by the board of directors of Inter Platform and subject to the existence of distributable reserves of Inter Platform. A holder of an Inter Platform Class A Common Share (including Inter Platform Class A Common Shares held as Inter Platform BDRs) is entitled to receive the same amount of dividends per share as a holder of an Inter Platform Class B Common Share. For further information on dividends, see “The Proposed Transaction — Dividend Information.”
What are the differences between Inter Platform Class A Common Shares and Inter Platform Class B Common Shares?
Each Inter Platform Class A Common Shares is entitled to one vote per share and each Inter Platform Class B Common Shares is entitled to 10 votes per share.
Holders of Inter Platform Class A Common Shares do not have preemptive rights. Holders of Inter Platform Class B Common Shares are entitled to maintain a proportional ownership and voting interest in the event that additional Inter Platform Class A Common Shares are issued. As such, except for certain exceptions, if Inter Platform increases its share capital or issue Inter Platform Class A Common Shares, it must first make an offer to each holder of Inter Platform Class B Common Shares to issue to such holder on the same economic terms such number of Inter Platform Class A Common Shares and Inter Platform Class B Common Shares, as applicable, as would ensure such holder may maintain a proportional ownership and voting interest. This right to maintain a proportional ownership interest may be waived by the holders of two-thirds of the Class B Common Shares pursuant to an SEC-registered public offering of Class A Common Shares. Pursuant to Inter Platform’s Articles of Association, preemptive rights will be deemed waived to the extent a holder of Class B Common Shares does not exercise them within 30 days of the offer to such holder of Class B Common Shares.
Inter Platform has applied to list Inter Platform Class A Common Shares on NASDAQ. Inter Platform Class B Common Shares will not be listed on any exchange and, pursuant to the Inter Platform Articles of Association, each Class B Common Share may be converted into one Class A Common Share (i) upon delivery of notice to Inter Platform, at its registered office, in the form described in our Articles of Association, or (ii) automatically upon any transfer of such Class B Common Share, whether or not for value, except for certain limited transfers described in our Articles of Association. Class B Common Shares may also be converted into Class A Common Shares in other circumstances. Only the controlling shareholders will hold Inter Platform Class B Common Shares.
The rights of the two classes of common shares are otherwise identical. See “Inter Platform — Share Capital and Constituent Documents.”
 
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Can I convert my Inter Platform Class A Common Shares into Inter Platform Class B Common Shares?
No. Inter Platform Class A Common Shares are not convertible into Inter Platform Class B Common Shares.
What are the differences between the rights of Banco Inter Shareholders and holders of Inter Platform Shares?
Rights of shareholders of Inter Platform and rights of Banco Inter Shareholders may be significantly different. While Banco Inter is a Brazilian corporation is listed on B3, and subject to Brazilian Corporation Law, CVM and Central Bank regulation and B3 Nível 2 listing rules, Inter Platform is a Cayman exempt corporation, subject to Cayman Companies Act, SEC regulation and NASDAQ listing rules. For a summary of the material differences between the rights of Banco Inter Shareholders and Inter Platform shareholders, see “Comparison of the Rights of Holders of Inter Platform Shares and Banco Inter Shares.”
Questions and Answers About Other Issues
Can I sell my Banco Inter Shares after the Banco Inter General Meeting?
Subject to the observance of applicable legal requirements, Banco Inter Shares will continue to be listed on B3 and be eligible for trading over B3 under their existing ticker symbol until the Closing Date. However, if you exercise your Withdrawal Rights or elect to receive Cash Redeemable Shares, you will not be allowed to trade your Banco Inter Shares.
Will I have to pay any brokerage commission in connection with the Proposed Transaction?
You will not have to pay brokerage commissions if your Banco Inter Shares are registered in your name. If your Banco Inter Shares are held through a bank or broker or a custodian linked to a stock exchange, you should consult with them as to whether or not they charge any transaction fee or service charges in connection with the Merger of Shares or the other elements of the Proposed Transaction.
What are the U.S. federal income tax consequences of the Proposed Transaction to Banco Inter Shareholders?
We expect that the exchange of Banco Inter Shares for the consideration in the Proposed Transaction will be a taxable transaction for U.S. federal income tax purposes. Gain or loss realized by a U.S. Holder (as defined herein) on the exchange generally will be capital gain or loss and generally will be long-term capital gain or loss if the U.S. Holder has held the Banco Inter Shares for more than one year.
You should read the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations” for more information on the U.S. federal income tax consequences of the Proposed Transaction and you should consult your own tax advisors regarding the tax consequences of the Proposed Transaction in your particular circumstances.
What are the Brazilian income tax consequences of the Proposed Transaction to Banco Inter Shareholders?
The Merger of Shares (incorporação de ações) of Banco Inter Shares into HoldFin and the subsequent redemption of HoldFin Redeemable Shares may trigger the recognition of gains subject to taxation in Brazil. The tax rates applicable to these gains would depend on the type, domicile and regime of the corresponding holder. You should read the section entitled “Material Tax Considerations — Material Brazil Income Tax Considerations” for more information on the Brazil income tax consequences of the Proposed Transaction. This section also describes the income tax treatment applicable to dividends or other similar income arising from Class A Common Shares and BDRs earned by Brazilian holders, which may be subject to income tax in accordance with the applicable regime for investments held outside Brazil. Such rules are different from the rules applicable to direct investments in a Brazilian company (such as Banco Inter) and do not provide for certain benefits such as the tax exemption on the distribution of dividends.
If the bill of Tax Reform is approved and sanctioned prior to the end of 2021 and the Proposed Transaction is concluded on or after January 1, 2022, new income tax rules may require that the redemption of HoldFin Redeemable Shares be performed based on the market value of Inter Platform BDRs, rather than its book value, potentially triggering the recognition of taxable capital gains in Brazil.
 
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The terms of the Tax Reform and their impact on Inter Platform and current Banco Inter Shareholders will not be known until the final version of the Tax Reform be approved by Congress and sanctioned by the Brazilian President, if that ever happens.
You should consult your own tax advisors regarding the tax consequences of the Proposed Transaction in your particular circumstances.
What will be the accounting treatment of the Proposed Transaction?
Under IFRS as issued by the IASB, the Proposed Transaction will be a reorganization under common control accounted for by Inter Platform on a book value basis.
Are there risks associated with the Proposed Transaction?
Yes. There are a number of risks related to the Proposed Transaction that are discussed in this prospectus. In evaluating the Proposed Transaction, before making any decision on whether and how to vote, you are urged to read carefully and in its entirety this prospectus, in particular the section entitled “Risk Factors.”
Who can help answer my questions?
The information provided above in the question-and-answer format is for your convenience only and is merely a summary of some of the information contained elsewhere in this prospectus. You should read carefully the entire prospectus, including the information in the exhibits to the registration statement of which this prospectus is a part. See “Where You Can Find More Information.”
If you have any questions about the Proposed Transaction, Banco Inter and Inter Platform’s investor relations office can be reached at: phone: + 55 (31) 2138-7974, email: ri@bancointer.com.br.
 
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SUMMARY OF INTER
The following is a summary that highlights information contained in this prospectus. This summary may not contain all the information that is important to you. For a more complete description of the Proposed Transaction and the Merger of Shares, we encourage you to read carefully this entire prospectus, including the Exhibits to the registration statement of which this prospectus is a part.
The Parties
Inter Platform
Inter Platform, Inc. is currently a holding company through which the controlling shareholders and certain other Banco Inter Shareholders hold their Banco Inter Shares. As of the date of this prospectus, Inter Platform does not own any assets other than its shares of HoldFin, and HoldFin does not hold any assets other than Banco Inter Shares. Neither Inter Platform nor HoldFin has any material liability or contingency. Therefore, the business of Inter Platform and its consolidated subsidiaries is the same as the business of Banco Inter and will remain the same immediately following the Proposed Transaction. Inter Platform was incorporated on January 26, 2021 as an exempted company with limited liability in the Cayman Islands. Inter Platform’s principal executive office is located at Avenida Barbacena, No. 1.219, 22nd floor, Belo Horizonte, Brazil 30190-131.
If the Proposed Transaction is concluded, the same shareholders of Banco Inter will become shareholders of Inter Platform, except for the shareholders that exercise Withdrawal Rights or elect to receive Cash Redeemable Shares. Upon conclusion of the Proposed Transaction, Inter Platform will have up to 859,534,547 common shares issued and outstanding or issuable upon the cancellation of the Inter Platform BDRs to which they relate. Those common shares will be divided into:

626,294,103 Class A Common Shares and 233,240,444 Class B Common Shares, assuming that no former Banco Inter Shareholder elects to receive Cash Redeemable Shares; or

582,664,086 Class A Common Shares and 233,240,444 Class B Common Shares, assuming that former Banco Inter Shareholders elect to receive Cash Redeemable Shares resulting in an aggregate cash payment in the amount of the Cash Redemption Threshold.
Banco Inter
Banco Inter is a digital platform offering solutions to its customers. Through Banco Inter, we offer a wide range of financial and non-financial products and solutions to our customers with the goal of becoming a one-stop shop that fulfills the different needs of different types of customers. Our products and solutions are offered through an app and are split into five interconnected and interdependent business units: (i) day-to-day banking, (ii) credit, (iii) insurance, (iv) investments, and (v) shopping.
Banco Inter S.A. was incorporated as a corporation (sociedade por ações) in the Federative Republic of Brazil on September 16, 1994. Banco Inter’s common shares, preferred shares and units (comprising two preferred shares and one common share) are listed on B3’s Nível 2 segment under the symbols “BIDI3,” “BIDI4” and “BIDI11,” respectively. Banco Inter’s shares and units have not been subject to any significant trading suspensions in the prior three years. Its principal executive office is located at Avenida Barbacena, No. 1.219, 22nd floor, Belo Horizonte — MG, Brazil 30190-131. Its investor relations office can be reached at ri@bancointer.com.br and its website address is ri.bancointer.com.br. The information contained on, or accessible through, such website is not incorporated by reference into this prospectus and should not be considered a part of this prospectus. See “Summary of Consolidated Financial Information and Other Data,” and “Information About Banco Inter.”
Our Business Model
Our Vision
We aspire to build and scale a comprehensive digital ecosystem with a fulsome set of new age products & services, transcending pure play financial services, into different aspects of daily life, via a mobile application, which democratizes digital inclusion, transforms the ways our users interact with technology and makes their daily lives increasingly easier.
 
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[MISSING IMAGE: tm2123657d1-pc_custm4clr.jpg]
Inter Ecosystem Overview
We are a digital platform offering solutions to our customers’ daily needs. The genesis of our mobile solution seeks to provide customers with a fully digital day-to-day banking mobile app. When we conceived our foundational product, millions of customers in Brazil were overcharged and poorly served by legacy financial institutions. This is still the case, but we believe we have been an agent for change and one of the key contributors to the democratization of transparent financial services in Brazil over the last 5 years. Our digital solution provides customers, with a tech enabled digital account for individuals and small businesses, empowering them to access a wide range of products in use cases including payments, transfers, withdrawals, cards, PIX. Our customer-centric culture allows us to deliver these services with a differentiated user experience, as outlined by our NPS of 84 points in September 2021.
The success of our foundational product allowed us to experience a rapid growth in our client base, from approximately 1.5 million users as of December 31, 2018, to approximately 14 million as of September 30, 2021. Dating back to our early days, our strategy has always been to provide customers with a differentiated value proposition, via a scalable technology stack, in which we would be able to add additional functionalities over time. Today we think of our app ecosystem as helping our customers in five synergistic core verticals: (i) day-to-day banking, (ii) credit, (iii) insurance, (iv) investments, and (v) shopping.
We believe we have delivered on the strategy of launching and scaling adjacent products & services, as outlined by the milestones we have achieved thus far. Following the success of our day-to-day banking solution we integrated a comprehensive offering of credit products, focused mainly on secured loans, which we believe offer better risk-return to our shareholders. Our product lines within this vertical include mortgage and home equity loans, payroll loans, loans for small and medium enterprises and a growing credit card portfolio.
In addition to our core digital banking offerings, we also offer an in-app insurance product suite, including, among others, life and health insurance underwritten by insurance companies with which we have a commercial partnership. In fact, we have experienced an increased penetration of cross-sell within this product line, which has allowed us to continue to grow our customer lifetime value, while benefiting from increased cost scaling across our platform.
We also offer customers with and investment platform. In addition to offering customers a wide range of investment alternatives, in a transparent and low-cost format, this vertical can stimulate cross-selling and cement our position as a relevant financial hub for our customers, leading to more frequency, higher retention and lower churn over time. One example of the synergistic aspects of this vertical can be seen in how we incentivize customers to build their investment portfolios within our ecosystem, by providing active customers within this vertical with differentiated credit card products, which have led to better engagements and average revenue per user (“ARPU”) across cohorts. Having launched the Investment vertical at the end of 2018, we have reached the mark of more than 1.7 million users in the platform, which represents over 12% of our customer base, holding nearly R$60 billion in aggregate AUC as of September 30, 2021.
 
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In November 2019, we updated our mobile application to offer, in addition to our financial products, non-financial products. Today this “Super App” has offerings such as e-commerce, gift cards for gaming, mobility, entertainment, food delivery, among others, as well as an mobile virtual network operator, Intercel, all powered by cashback feature. We are currently in the process of discussing potential integrations between our app and Stone’s (as defined below) merchant ecosystem, which, as of the date of this prospectus, is not yet integrated with our app. For more information about these business opportunities, see “ — Recent Strategic Developments,” below.
In the first nine months of 2021, we had a GMV of approximately R$2.4 billion on Inter Shop, an increase of 345% compared to the same period of 2020. On September 30, 2021, we reached a total of 2.4 million distinct customers who made purchases in our shopping platform in the last twelve months (i.e. without taking into account multiple purchases by the same person). We also experienced an increase in our take rate, which surpassed 6.6% in the first nine months of 2021, a 1.9 percentage point increase from our take rate of 4.7% in the same period of 2020.
[MISSING IMAGE: tm2123657d6-fc_day4clr.jpg]
We will continue to deliver on our strategy of adding functionalities and new verticals over time with the objective of fulfilling our vision of becoming a digital hub for new age products & services, while transforming the way our users interact with technology and making their daily lives easier.
[MISSING IMAGE: tm2123657d6-fc_local4clr.jpg]
Recent Strategic Developments:
Stone
In May 2021 we entered into an investment agreement with StoneCo Ltd. (StoneCo Ltd, “Stone” and the agreement with Stone, the “Stone Investment Agreement”), a NASDAQ-listed technology company, through which Stone agreed to make an investment of up to R$2.5 billion in us, representing up to 4.99% of our shares. This investment was consummated in the context of our follow-on offering concluded in June 2021. In the context of the Stone Investment Agreement, we and Stone expect to begin discussions about potential business opportunities that we can develop together, by means of operational agreements to be negotiated by us and Stone, with the purpose to boost our platform, connecting buyers and sellers, enhancing stock keeping unit (“SKU”) offering by leveraging technology, distribution and user experience from both companies. These potential opportunities include, as examples: (i) connecting Stone’s customers to
 
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Inter Shop, promoting the digitalization of their customer-base and providing our customers with a broader omni-channel experience; (ii) digitalize the payment process experience for our customers and Stone’s customers; (iii) explore cross-selling opportunities of credit and payment products; and (iv) leverage our funding capacity to enhance Stone’s working capital loan products, as well as offer our customers other fixed-rate investment opportunities.
Potential Acquisition of USEND
On August 26, 2021, we submitted a proposal to acquire 100% of the share capital Pronto Money Transfer Inc., a California corporation (“USEND”). Banco Inter is currently negotiating the share purchase agreement to acquire USEND. This potential acquisition is subject to a number of conditions, including entering into the definitive documents of the transaction and obtaining regulatory approvals by the Brazilian Central Bank and U.S. regulatory entities such as state agencies that granted USEND Money Transmitter licenses and antitrust authorities. USEND is a U.S. based financial technology company, with operations in the U.S., Brazil and Canada, which provides foreign exchange and payment services, offering, among other products, a digital account solution for both international money transfers and domestic use. USEND has licenses to act as a money transmitter in more than 40 states in the United States, and can offer U.S. residents services such as digital wallet, debit card, bill payment, among others. With the acquisition of USEND, if and when completed, we currently plan to expand our offering of financial and non-financial products to USEND’s customers and integrate USEND’s solutions to our platform upon completion of the acquisition. We cannot estimate the exact timing for completion of the acquisition.
Our Growth Avenues:
We believe that our wide range of financial services creates multiple growth opportunities, which we can divide in three main groups: (i) expansion of our current portfolio of services; (ii) expansion of our total addressable market; and (iii) new strategic partnerships and strategic acquisitions.
Our value proposition is to offer customers a platform of financial and non-financial services which complement themselves and, consequently benefit from network effects. We continue to expand our services and functionalities across our existing verticals, leveraging on data analytics to increase cross-selling. We believe data intelligence can help us deliver better solutions to our customers, enhancing user experience, product penetration and client retention, while the use of technology enables scalability and standardization.
Over the past years, we frequently increased our addressable market by launching different products and services in different segments. On our shopping platform, we recently launched a food delivery service and a mobile virtual network Moreover, we seek to expand our non-financial services to customers who do not hold accounts with us, as well as potentially implement a “buy now, pay later” system, and offer online-to-offline solutions. This strategy is expected to increase our existing customers’ ARPU.
In addition to new products and services, we plan to start operating in new markets. With the potential acquisition of USEND, if completed, we plan to expand our offering of financial and non-financial products to USEND’s customers and integrate USEND’s solutions to our platform upon completion of the acquisition.
With respect to strategic partnerships and M&A, we have established a number of deals to expand our product offering, scale CAC and increase customer life time value. We will continue to seek opportunities to enter into new partnerships or acquire new companies which are synergic to our business in the future.
We have established several commercial partnerships with, for instance, Liberty Seguros, Icatu Seguros and Sompo for the sale of insurance and capitalization bonds, with Bamaq Consórcio, for the sale of cars, motorcycles and real estate consortia, Epay for the sale of mobile phone recharges, GreenPass for parking fees and highway toll tags, through our app and Vtex for building the Inter Shop’s end-to-end platform. We are also celebrating agreements with Stone, our shareholder, to explore potential synergies between us. We expect to continue to build on these and new partnerships going forward. For more information, see “Information About Banco Inter — Suppliers and Strategic Partners.
 
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SUMMARY OF THE PROPOSED TRANSACTION
The following is a summary that highlights information contained in this prospectus. This summary may not contain all the information that is important to you. For a more complete description of the Proposed Transaction and the Merger of Shares, we encourage you to read carefully this entire prospectus, including the Exhibits to the registration statement of which this prospectus is a part.
The Proposed Transaction
Purpose
The Proposed Transaction consists of a corporate reorganization of Inter with the purpose of listing shares on NASDAQ that ultimately represent equity of Inter’s and are currently listed on B3.
The purposes of the Proposed Transaction are (i) strengthening our position as a global technology company in the financial sector, increasing our competitiveness against other digital banking companies and e-commerce platforms, (ii) allowing access to new markets and opportunities to accelerate our internationalization plan, permitting the future increase and diversification of customers, services and products, (iii) allowing easier access to global capital markets through a more efficient capital structure, increasing our funding and growth capabilities in all of our business units, (iv) potential diversification of our investors, increasing the liquidity of our securities and making us a more attractive investment, (v) allowing access to potential international opportunities in connection with the mergers and acquisitions or acquisitions of strategic assets.
Banco Inter is subject to regulation from the Central Bank of Brazil, which requires any financial institution to have a defined controlling shareholder. The Proposed Transaction does not result in a change of control, as defined by the applicable regulation, while ensures no dilution of economic rights to other shareholders upon conclusion of the Proposed Transaction. The increase in the voting power of our controlling shareholder, through the Class B Shares, which have 10 votes per share, will allow us to raise capital in future equity offerings without affecting our control structure, which is essential to our growth.
The Proposed Transaction
The completion of the Proposed Transaction is expected to occur on or about 35 days after the Banco Inter General Meeting, subject to the satisfaction of certain conditions described in this prospectus. The Proposed Transaction will consist of the two steps below, which are expected to be concluded substantially at the same time on the Closing Date:

Merger of Shares.   Subject to the approval of the Merger of Shares at the Banco Inter General Meeting and the satisfaction or waiver of the conditions described in this prospectus (including the Cash Redemption Threshold Condition), the merger of shares will be implemented through an incorporação de ações under the Brazilian Corporation Law. Pursuant to the Merger of Shares, each Banco Inter Share issued and outstanding immediately prior to the completion of the Proposed Transaction will be automatically contributed for their book value into HoldFin in exchange for a certain number of newly issued mandatorily redeemable preferred shares of HoldFin, determined pursuant to the Exchange Ratios, and Banco Inter will become a wholly owned subsidiary of HoldFin. Each Banco Inter Shareholder will receive Class A Redeemable Shares, unless such Banco Inter Shareholder has elected to receive Cash Redeemable Shares.

Redemption.   Immediately after the Merger of Shares, HoldFin will redeem (i) all of its Class A Redeemable Shares and deliver to each holder thereof one Inter Platform BDR (which may be cancelled immediately thereafter, if such holder wants to receive the underlying Inter Platform Class A Common Shares) and (ii) all of its Cash Redeemable Shares and pay the applicable cash consideration to each holder thereof.
 
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Immediately prior to the Closing Date (after effecting the SoftBank Roll-Up), our corporate structure will be the following:
[MISSING IMAGE: tm2123657d6-fc_inter4clr.jpg]
Immediately after completion of the Proposed Transaction, our corporate structure will be the following:
[MISSING IMAGE: tm2123657d2-fc_float4clr.jpg]
Immediately following the completion of the Proposed Transaction:
 
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Banco Inter will be an indirect wholly owned subsidiary of Inter Platform.

The business conducted by Inter will be the same as prior to the Proposed Transaction.

If you did not validly exercise Withdrawal Rights or elect to receive Cash Redeemable Shares, you will become a shareholder of Inter Platform (initially, through the holding of Inter Platform BDRs, which can be cancelled to allow direct interest in Inter Platform through holding Inter Platform Class A Commons Shares).

The shareholders of Inter Platform will be essentially the same as the current shareholders of Banco Inter, except for those current Banco Inter Shareholders that have validly exercised Withdrawal Rights or elected to receive Cash Redeemable Shares.

The controlling shareholders of Inter, who currently exercise control through indirect ownership of a majority of Banco Inter Common Shares, will continue to control Inter’s business through the ownership of Inter Platform Class B Common Shares representing the majority of the voting power in Inter Platform.
On or prior to the Closing Date, Inter Platform will subscribe for HoldFin shares with Inter Platform Class A Common Shares. Inter Platform will deliver enough Inter Platform Class A Common Shares to HoldFin so that all Banco Inter Shareholders that did not exercise Withdrawal Rights or elect to receive Cash Redeemable Shares may receive Inter Platform BDRs based on the Exchange Ratios, as applicable. The graphs above do not illustrate any direct equity interest Inter Platform may acquire in HoldFin as a result of the delivery of Inter Platform Class A Shares.
Currently, Banco Inter Common Shares, Banco Inter Preferred Shares and Banco Inter Units are listed on B3. Upon completion of the Proposed Transaction, we expect to list Inter Platform Class A Common Shares on NASDAQ, to list Inter Platform BDRs on B3 and to delist all Banco Inter Shares and Banco Inter Units from B3. Banco Inter will remain registered with and subject to the disclosure requirements set by the CVM for at least 12 months. After this period, Banco Inter may be permitted to deregister from CVM and no longer be subject to disclosure requirements applicable to publicly traded corporations incorporated under the laws of the Federative Republic of Brazil.
For more charts detailing each step of the Proposed Transaction, see “The Proposed Transaction.” The charts above do not contain Banco Inter’s subsidiaries. For a complete chart containing Banco Inter’s subsidiaries, see “Information about Banco Inter — Corporate Structure.”
The Merger of Shares Protocol
The Merger of Shares Protocol (Protocolo e Justificação de Incorporação de Ações) is a document prepared pursuant to Articles 224, 225 and 252 of the Brazilian Corporation Law, which the management of Banco Inter and HoldFin will each submit for approval at their respective special meetings of shareholders and which provides the shareholders with information on the terms, conditions and reasoning for the approval of the corporate reorganization contemplated by the Proposed Transaction. The terms and conditions of the Proposed Transaction are contained in the Merger of Shares Protocol are described in this prospectus, and an English translation of the Merger of Shares Protocol is included as an Exhibit to the registration statement of which this prospectus forms a part. You are encouraged to read the Merger of Shares Protocol carefully. All descriptions in this summary and in this prospectus of the terms and conditions of the Proposed Transaction are qualified in their entirety by reference to the Merger of Shares Protocol.
The Banco Inter General Meeting
Date, Time and Place of the Banco Inter General Meeting for the Approval of the Transaction
Time and Date: November 25, 2021, 10:00 a.m. (Belo Horizonte time)
Place:   Banco Inter General Meeting will occur virtually, through an electronic platform. There is no physical location for the Banco Inter General Meeting.
 
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Record Date; Shares Entitled to Vote:   Only holders of record of outstanding Banco Inter Shares are entitled to vote at the Banco Inter General Meeting. There is no record date for purposes of determining direct Banco Inter Shareholders entitled to attend the Banco Inter General Meeting or to vote.
At the close of business on October 22, 2021, there were approximately 469,075,808 Banco Inter Common Shares outstanding and entitled to vote and 911,766,678 Banco Inter Preferred Shares outstanding and entitled to vote. Each Banco Inter Common Share (including Banco Inter Common Shares held through Units) and each Banco Inter Preferred Share (including Banco Inter Preferred Shares held through Units) is entitled to 1 vote. Banco Inter Shareholders will vote together as a single class on all matters being presented in this prospectus for an aggregate of, as of the close of business on October 22, 2021, approximately 1,380,842,486 votes.
Purpose
The Banco Inter General Meeting will consider and vote on the Merger of Shares, a corporate transaction through which each Banco Inter Share issued and outstanding immediately prior to the completion of the Proposed Transaction will be automatically contributed for their book value into HoldFin in exchange for a certain number of newly issued HoldFin Redeemable Shares, determined pursuant to the Exchange Ratios, pursuant to the Merger of Shares Protocol. The agenda for the meeting will also include other related items required for delisting Banco Inter Shares from B3, including the approval of the Cash Redemption Price. See “Banco Inter General Meeting.”
Quorum
The Banco Inter General Meeting will be installed on first call if attended by shareholders representing collectively: (i) 20% of the outstanding Banco Inter Common Shares and Banco Inter Preferred Shares (including holders through Banco Inter Units, but not including the Banco Inter Shares held by our controlling shareholders or their related parties, by SoftBank or by directors or officers of Banco Inter) and (ii) 2/3 of Banco Inter total share capital (including shares held by our controlling shareholders, by their related parties, by SoftBank and by directors or officers of Banco Inter). If the attendance requirement is not met for the Banco Inter General Meeting on first call, the Banco Inter General Meeting will be reconvened at a date and time at least eight calendar days after the date and time scheduled for the Banco Inter General Meeting on first call. The Banco Inter General Meeting will be installed on second call with any percentage of holders present at the meeting following second call.
Required Vote
In order to approve the Merger of Shares, holders of at least the majority of the outstanding Banco Inter Common Shares and Banco Inter Preferred Shares (including holders through Banco Inter Units, but not including the Banco Inter Shares held by our controlling shareholders or their related parties, by SoftBank or by directors or officers of Banco Inter), voting together, must vote in favor of the Proposed Transaction. The Proposed Transaction is subject to the satisfaction or waiver of certain conditions, including a condition that the total amount to be paid as a result of the election to receive Cash Redeemable Shares by Banco Inter Shareholders does not exceed the Cash Redemption Threshold, as described elsewhere in this prospectus.
Proposed Transaction Consideration
If the Proposed Transaction is concluded, former Banco Inter Shareholders (not opting for Withdrawal Rights or Cash Redeemable Shares) will become holders of Inter Platform BDRs, and each Inter Platform BDR will represent one Inter Platform Class A Common Share, which will be listed on NASDAQ. In lieu of receiving Inter Platform BDRs, Banco Inter Shareholders may elect to receive Cash Redeemable Shares and holders of Banco Inter Common Shares that do not vote in favor of the Proposed Transaction or do not attend the Banco Inter General Meeting may elect to exercise Withdrawal Rights.
Subject to the approval of the Merger of Shares at the Banco Inter General Meeting and the satisfaction or waiver of the conditions described in this prospectus (including the Cash Redemption Threshold
 
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Condition), each Banco Inter Shareholder will receive the following consideration, based on the Exchange Ratios described below:
A.
Each holder of Banco Inter Common Shares or Banco Inter Preferred Shares will receive 0.33333333333 Inter Platform BDR for each Banco Inter Common Share or Banco Inter Preferred Share that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares;
B.
Each holder of Banco Inter Units will receive one Inter Platform BDR for each one Banco Inter Unit that it holds, unless such shareholder has elected to receive Cash Redeemable Shares or to exercise Withdrawal Rights for its Banco Inter Common Shares; and
C.
Each Banco Inter Shareholder that has elected to receive Cash Redeemable Shares will receive 0.33333333333 Cash Redeemable Share for each Banco Inter Common Share or Banco Inter Preferred Share that it holds or one Cash Redeemable Share for each Banco Inter Unit that it holds. Each Cash Redeemable Share will be redeemed for the Cash Redemption Price.
The Exchange Ratios have been established so that each Banco Inter Shareholder will receive, upon completion of the Proposed Transaction, the same economic interest in the total capital of Inter Platform as it had in Banco Inter’s total capital immediately before completion of the Proposed Transaction, except for the effect of the cash redemption of the Cash Redeemable Shares and the exercise of Withdrawal Rights.
On the Closing Date, each Banco Inter Shareholder will receive Inter Platform BDRs, in Brazil, against delivery of its Banco Inter Shares, based on the Exchange Ratios, unless such Banco Inter Shareholder has elected to receive Cash Redeemable Shares. A Banco Inter Shareholder that wants to receive Cash Redeemable Shares must make this election by no later than the fifth business day after the Banco Inter General Meeting (i) through the facilities of the Central Depositary of B3 (Central Depositária da B3) or (ii) for Banco Inter Shareholders holding Banco Inter Shares directly in the corporate books, through Banco Bradesco S.A., the registrar of Banco Inter Shares. A beneficial owner of Banco Inter shares must instruct its broker or custodian operating in Brazil of such election by the time indicated by such broker or custodian. Upon election to receive Cash Redeemable Shares, such Banco Inter Shareholder will no longer be permitted to trade its Banco Inter Shares and will not be able to opt to receive Inter Platform BDRs. The cash redemption of the Cash Redeemable Shares will occur on the Closing Date, which is expected to occur on or about 35 days after the Banco Inter General Meeting.
At any time, and from time to time, on or after the Closing Date, a holder of Inter Platform BDRs that wants to receive Inter Platform Class A Common Shares may request the cancellation of all or a portion of its Inter Platform BDRs by (a) instructing its broker or custodian operating in Brazil to cancel its Inter Platform BDRs with the BDR Depositary and (b) delivering evidence that all fees and potential taxes due in connection with this service were duly paid, as set forth in the deposit agreement. The cancellation instruction to the broker or custodian must include an appropriate brokerage account outside of Brazil to receive the underlying Inter Platform Class A Common Shares. No fees for cancellation of Inter Platform BDRs will be charged from investors during the first 30 days after the Closing Date.
It is a condition to completion of the Proposed Transaction that the total amount to be paid when redeeming the Cash Redeemable Shares does not exceed the Cash Redemption Threshold. If the Cash Redemption Threshold is exceeded, the Proposed Transaction will not be concluded, unless Banco Inter and HoldFin waive this condition, in their sole discretion, following a determination of the board of directors of Banco Inter that this waiver is reasonable and is in the best interest of Banco Inter and Banco Inter Shareholders.
Following the Proposed Transaction, any fractional shares will be grouped into whole numbers and sold on the open market managed by B3, as applicable. The net proceeds from the sale of the fractional shares will be distributed on a pro rata basis to the former Banco Inter Shareholders that held such shares. No additional consideration in cash or in kind will be paid by Inter Platform to Banco Inter Shareholders who opt to receive Inter Platform BDRs in connection with the Proposed Transaction. The sales price resulting from such sale may be less than the Cash Redemption Price.
 
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Approval of the Proposed Transaction by Banco Inter Board of Directors
On November 1, 2021, after careful consideration, and following the recommendation of the independent directors, the board of directors of Banco Inter unanimously (i) approved, adopted and declared advisable the Proposed Transaction, including the Exchange Ratio, (ii) determined that it is fair to and in the best interests of Banco Inter and its shareholders that Banco Inter consummate the Proposed Transaction considering the potential benefits of the Proposed Transaction, described in “Questions and Answers about the Proposed Transaction, the Banco Inter General Meeting and Inter Platform ― Questions and Answers for Current Banco Inter Shareholders about the Proposed Transaction ― What is the purpose of the Proposed Transaction?” (iii) directed that the Proposed Transaction be submitted to the approval of Banco Inter Shareholders and (iv) recommended that Banco Inter Shareholders vote their Banco Inter Shares in favor of the approval of the Proposed Transaction at the Banco Inter General Meeting.
Corporate Approval of Inter Platform and HoldFin
The Proposed Transaction was approved by the directors of Inter Platform, Inc. on October 25, 2021. The Merger of Shares and other steps for the Proposed Transaction are also subject to the approval of the shareholders’ meeting of HoldFin and board of directors of Inter Platform, as the shareholder of HoldFin. We expect these approvals to be obtained prior to, or concurrently with, the Banco Inter General Meeting.
Withdrawal Rights for Banco Inter Shareholders
If the Proposed Transaction is approved at the Banco Inter General Meeting, holders of record of Banco Inter Common Shares on the Withdrawal Rights Record Date (the date on which the Proposed Transaction was first announced) that (i) did not vote in favor of the approval of the Merger of Shares or do not attend the Banco Inter General Meeting and (ii) held their Banco Inter Common Shares through the Closing Date will have the right to withdraw their Banco Inter Common Shares for their book value as of December 31, 2020, which was R$3.65 per Banco Inter Common Share.
Holders entitled to exercise Withdrawal Right may exercise their Withdrawal Rights during the 30-day period following the publication of the minutes of the Banco Inter General Meeting that approved the Merger of Shares Protocol. A Banco Inter Shareholder that validly exercises its Withdrawal Right will receive a cash payment in the amount described in the prior paragraph and will not receive Inter Platform Class A Shares, Inter Platform BDRs or Cash Redeemable Shares.
A Banco Inter Shareholder that sells its Banco Inter Common Shares at any time after the Withdrawal Rights Record Date (the date on which the Proposed Transaction was first announced) will not be permitted to exercise Withdrawal Right. An investor who acquires Banco Inter Common Shares after the date on which the Proposed Transaction was first announced will not be able to exercise Withdrawal Right.
Conditions Precedent That Must Be Satisfied or Waived for the Proposed Transaction to Occur
It is a condition to completion of the Proposed Transaction that the total amount to be paid when redeeming the Cash Redeemable Shares does not exceed the Cash Redemption Threshold. If the Cash Redemption Threshold is exceeded, the Proposed Transaction will not be concluded, unless Banco Inter and HoldFin waive this condition, in their sole discretion, following a determination of the board of directors of Banco Inter that this waiver is reasonable and is in the best interest of Banco Inter and Banco Inter Shareholders.
In addition to the necessary corporate approvals and the Cash Redemption Threshold Condition, completion of the Proposed Transaction is subject to certain additional conditions, including:

Inter Platform’s registration statement filed with the SEC on Form F-4 to effect the registration under the Securities Act of the Inter Platform Class A Common Shares to be issued to Banco Inter Shareholders shall have become effective prior to the Banco Inter Shareholders Meeting, no stop order suspending the effectiveness of the Form F-4 shall have been issued, and no proceedings for that purpose shall have been initiated or be threatened, by the SEC;

The Cash Redemption Price shall be approved by Banco Inter Shareholders at the Banco Inter General Meeting;
 
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Approval of the minutes of the Banco Inter General Meeting by the Brazilian Central Bank;

Inter Platform Class A Common Shares shall be approved for listing on NASDAQ; and

Prior to the Banco Inter General Meeting, HoldFin shall have obtained, from one or more financial institutions, a firm commitment to provide the Cash Redemption Financing, in an amount sufficient to fund the cash redemption of the Cash Redeemable Shares up to the Cash Redemption Threshold.
Cash Redemption Financing
HoldFin is negotiating with Brazilian financial institutions the final terms of a debt financing to redeem Cash Redeemable Shares up to the amount of the Cash Redemption Threshold. Prior to the Banco Inter General Meeting, HoldFin shall have obtained, from one or more financial institutions, a firm commitment to provide the Cash Redemption Financing, in an amount sufficient to fund the cash redemption of the Cash Redeemable Shares up to the Cash Redemption Threshold. We expect HoldFin to pay a commitment fee not exceeding 0.2% per year of the commitment amount and a structuring fee not exceeding 0.75% of the commitment amount.
The expected key terms of the Cash Redemption Financing are summarized below:
Maximum Amount R$2.0 billion
Issuer HoldFin
Debt Instrument Debentures or other debt instrument to be issued by HoldFin
Maturity 15 months from funding
Mandatory Early Redemption (cash sweep) Liquidity events, including from equity contribution on HoldFin or Inter Platform, or capital reduction of other distributions from Banco Inter
Interest Rate DI Rate + 1.97%
Principal and Interest payments Bullet on the maturity date
The Cash Redemption Financing will be unsecured obligations of HoldFin. We expect to repay the Cash Redemption Financing with the proceeds of potential offering of securities of Inter Platform (including, subject to market conditions, potential offerings of Class A Common Shares), dividends paid by Banco Inter or capital reduction of Banco Inter, which is subject to regulatory approvals.
Risk Factors
The Proposed Transaction involves risks, some of which are related to such transaction itself and others of which are related to the respective businesses of Banco Inter and Inter Platform investing in and ownership of Inter Platform Shares following the completion of the Proposed Transaction, assuming it is concluded. You should carefully consider the information about these risks set forth under “Risk Factors” together with the other information included in this prospectus.
Material U.S. Tax Considerations
We expect that the exchange of Banco Inter Shares for the consideration in the Proposed Transaction will be a taxable transaction for U.S. federal income tax purposes. Gain or loss realized by a U.S. Holder (as defined herein) on the exchange generally will be capital gain or loss and generally will be long-term capital gain or loss if the U.S. Holder has held the Banco Inter Shares for more than one year.
You should read the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations” for more information on the U.S. federal income tax consequences of the Proposed Transaction and you should consult your own tax advisors regarding the tax consequences of the Proposed Transaction in your particular circumstances.
 
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Brazilian Taxation
The contribution (incorporação de ações) of Banco Inter Common Shares into HoldFin and the subsequent redemption of HoldFin Redeemable Shares may trigger the recognition of gains subject to taxation in Brazil. The applicable tax rates would depend on the type, domicile and regime of the corresponding holder. You should read the section entitled “Material Tax Considerations — Material Brazil Income Tax Considerations” for more information on the Brazil income tax consequences of the Proposed Transaction and you should consult your own tax advisors regarding the tax consequences of the Proposed Transaction in your particular circumstances.
The Brazilian House of Representatives approved in September 2021 a first bill of Tax Reform. This bill of law is subject to approval by the Brazilian Senate and sanction of the Brazilian President. If the bill of Tax Reform is approved and sanctioned prior to the end of 2021 and the Proposed Transaction is concluded on or after January 1, 2022, new income tax rules to be in force as of 2022 may require that the redemption of HoldFin Redeemable Shares to be performed based on the market value of Inter Platform BDRs rather than its book value, potentially triggering the recognition of taxable capital gains in Brazil.
The terms of the Tax Reform and their impact on Inter Platform and current Banco Inter Shareholders will not be known until the final version of the Tax Reform is approved by Congress and sanctioned by the Brazilian President, if that ever happens.
Accounting Treatment of the Proposed Transaction
Under IFRS as issued by the IASB, the Proposed Transaction will be a reorganization under common control accounted for by Inter Platform on a book value basis.
Interests of Banco Inter’s controlling shareholders in the Proposed Transaction
Banco Inter Shareholders should be aware that Banco Inter’s controlling shareholders have interests in the Proposed Transaction that are different from, or in addition to, the interests of Banco Inter Shareholders generally. The material interests of Banco Inter controlling shareholders that shareholders should be aware of are described in “Risk factors — Risks Relating to the Proposed Transaction and Inter Platform Common Shares―Our controlling shareholders will own all of Inter Platform Class B Common Shares, which will represent a majority of the voting power of Inter Platform’s issued share capital following the Proposed Transaction, and will control all matters requiring shareholder approval” and “Risk factors — Risks Relating to the Proposed Transaction and Inter Platform Common Shares―Holders of Inter Platform Class B Common Shares have preemptive rights to acquire shares that we may sell in the future, which may impair our ability to raise funds.” Banco Inter Shareholders should take these interests into account in deciding whether to vote in favor of the Proposed Transaction. See “Major Shareholders and Related Party Transactions―Interests of Certain persons in the Proposed Transaction.
Banco Inter’s board of directors was aware of these potentially differing interests and considered them, among other matters, in reaching its decision to adopt the Merger of Shares Protocol, and to recommend that you vote in favor of the Proposed Transaction.
Board of Directors and Management of Inter Platform Following Completion of the Proposed Transaction
Upon the completion of the Proposed Transaction, Inter Platform’s management will be as described in “Inter Platform — Management.”
Banco Inter Shareholders should be aware that Banco Inter’s directors and executive officers as well as the individuals to be designated by Inter Platform and Banco Inter to serve on the Inter Platform board of directors and as executive officers of Inter Platform have interests in the Transaction that are different from, or in addition to, the interests of Banco Inter shareholders generally. Banco Inter’s board of directors was aware of these potentially differing interests and considered them, among other matters, in reaching its decision to approve the rationale behind the Proposed Transaction and instructing management to further assess its adoption and implementation. Banco Inter’s shareholders should take these interests into account in deciding whether to vote in favor of the Proposed Transaction.
 
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Listing of Inter Platform Shares
Upon completion of the Proposed Transaction, we expect that Inter Platform Class A Common Shares will be listed on NASDAQ.
Inter Platform Class B Common Shares will not be listed on any exchange. Each Class B Common Share may be converted into one Class A Common Share (i) upon delivery of notice to Inter Platform, at its registered office, in the form described in our Articles of Association, or (ii) automatically upon any transfer of such Class B Common Share, whether or not for value, except for certain limited transfers described in our Articles of Association. Class B Common Shares may also be converted into Class A Common Shares in other circumstances.
Listing of Inter Platform BDRs
As of the date of completion of the Proposed Transaction, we expect that Inter Platform BDRs will be listed on B3. For more information on the Inter Platform BDRs, see “Description of BDRS and Deposit Agreement.
Comparison of the Rights of Holders of Inter Platform Shares and Banco Inter Shares
As a result of the Proposed Transaction, Banco Inter Shareholders will become shareholders of Inter Platform Shares, and their rights will be governed by Cayman Islands Law and the Inter Platform Articles of Association. Rights of Banco Inter Shareholders and rights of shareholders of Inter Platform may differ significantly. While Banco Inter is a Brazilian corporation is listed on B3, and subject to Brazilian Corporation Law, CVM and Brazilian Central Bank regulation and B3 Nível 2 listing rules, Inter Platform is a Cayman exempt corporation, subject to Cayman Companies Act, SEC regulation and NASDAQ listing rules. For a summary of the material differences between the rights of Banco Inter Shareholders and Inter Platform shareholders, see “Comparison of the Rights of Holders of Inter Platform Shares and Banco Inter Shares.”
Selected Financial Data of Banco Inter
For information on selected financial data of Banco Inter, see “Banco Inter — Selected Financial Data.”
 
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RISK FACTORS
You should carefully consider the risks described below before making an investment decision regarding the Proposed Transaction. Our business, reputation, financial condition, results of operations, cash flows and/or prospects could be adversely affected by any of these risks, among others. The market price of Inter Platform Class A Common Shares could decline due to the occurrence of any of these risks or other factors, and you may lose all or part of your investment.
The risks described below are not the only ones we face or to which investments in issuers whose operations are located Brazil are subject. Additional risks and uncertainties that are not currently known to us, or those that we currently deem to be immaterial, may also materially and adversely affect our business, reputation, financial condition, results of operations, cash flow and/or prospects, and/or the price of Inter Platform Class A Common Shares. This prospectus also contains estimates and other disclosures that involve risks and uncertainties. Our results may differ significantly from those previously projected as a result of certain factors, including the risks faced by us, as described below and in other sections of this prospectus. When determining whether to invest, you should also refer to the other information contained in this prospectus, including our financial statements and the related notes thereto. You should also carefully review the cautionary statements referred to under “Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in this prospectus.
For purposes of this section, when we state that a risk, uncertainty or problem may, could or will have an “adverse effect” on us or “adversely affect” us, we mean that the risk, uncertainty or problem could have an adverse effect on our business, reputation, financial condition, results of operations, cash flow, prospects, and/or the price of Inter Platform Class A Common Shares, except as otherwise indicated. You should view similar expressions in this section as having similar meaning.
Investing in Inter Platform Class A Common Shares involves a high degree of risk. These risks are discussed in more detail below, and you should carefully consider these risks before making a decision to invest in our common shares. The following is a summary of some of the principal risks we believe we face:

Our controlling shareholders will own all of Inter Platform Class B Common Shares, which will represent a majority of the voting power of Inter Platform’s issued share capital following the Proposed Transaction, and will control all matters requiring shareholder approval;

There is no existing market for Inter Platform Class A Common Shares, and we do not know whether one will develop to provide you with adequate liquidity. If the trading price of Inter Platform Class A Common Shares fluctuates after completion of the Proposed Transaction, you could lose a significant part of your investment;

HoldFin may incur debt to make the cash payment to Banco Inter Shareholders that elect to receive Cash Redeemable Shares. Repayment of this debt may be made with distributions received from Banco Inter (including dividends or capital reduction) or with proceeds of future equity offerings of Inter Platform, which may adversely impact the value of Inter Platform Class A Common Shares. Failure to conclude the Proposed Transaction after approval at Banco Inter Shareholders’ Meeting may adversely affect the market price of Banco Inter Shares.

The Coronavirus pandemic (COVID-19), as well as any potential economic effects, together with slowdown and volatility in the Brazilian and global financial and capital markets have had and may continue to have adverse effects on our business, financial condition, liquidity and operating results, and may increase other risks described in this section “Risk Factors”;

The digital banking segment in Brazil is in the development phase and is highly competitive, and we may be unable to maintain our market positioning;

Failures or breaches in critical processes or systems may interrupt our business, increasing costs and resulting in losses, which could materially adversely affect us.

Failure to protect against risks related to cybersecurity may result in a loss of revenue and materially adversely affect us, including hampering our operations or resulting in the unauthorized disclosure of information;
 
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Models, policies, procedures and methodologies that we have adopted to manage risks (including market, liquidity, credit, operational and environmental risks) may not be sufficient to prevent exposure to unforeseen risks or the occurrence of known risks, which may materially adversely affect us;

We are subject to risks associated with noncompliance with data protection laws and may be materially adversely affected in the event we are subject to fines and other sanctions under these laws;

Any failure to improve our operational IT systems or to make the necessary investments to keep pace with technological developments in the banking and financial industry may materially adversely affect us;

Adverse decisions in legal, administrative proceedings and investigations to which we, our subsidiaries or our directors and officers are or become a party may materially adversely affect us;

We are subject to laws and regulations relating to money laundering, terrorist financing, corruption and other illegal activities in the jurisdictions in which we operate and may be materially adversely affected by violations of these laws and regulations;

Models, policies, procedures and methodologies that we have adopted to manage risks (including market, liquidity, credit, operational and environmental risks) may not be sufficient to prevent exposure to unforeseen risks or the occurrence of known risks, which may materially adversely affect us;

Changes made by the Central Bank in the basic interest rate may materially adversely affect our operating results and financial condition;

The increasingly competitive environment of the Brazilian banking sector may materially adversely affect us;

We have identified material weaknesses in our internal control over financial reporting. If we are unable to remedy these material weaknesses or fail to establish and maintain a proper and effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements, our results of operations and our ability to operate our business or comply with applicable regulations may be adversely affected; and

The Brazilian government exercises significant influence over the Brazilian economy and government actions may materially adversely affect the Brazilian market and us.
Risks Relating to the Proposed Transaction and Inter Platform Common Shares
Our controlling shareholders will own all of Inter Platform Class B Common Shares, which will represent a majority of the voting power of Inter Platform’s issued share capital following the Proposed Transaction, and will control all matters requiring shareholder approval.
Following the Proposed Transaction, our controlling shareholders will control Inter Platform through the ownership of a majority of Inter Platform Class B Common Shares and, therefore, a majority of Inter Platform’s voting capital. Inter Platform Class B Common Shares are entitled to ten votes per share and Inter Platform Class A Common Shares are entitled to one vote per share. As a result, our controlling shareholders will control the outcome of all decisions at Inter Platform shareholders’ meetings, and will be able to elect a majority of the members of Inter Platform board of directors. They will also be able to direct our actions in areas such as business strategy, financing, distributions, acquisitions and dispositions of assets or businesses. For example, our controlling shareholders may cause us to make acquisitions that increase the amount of our indebtedness or outstanding Inter Platform Class A Common Shares, sell revenue-generating assets or inhibit change of control transactions that may benefit other shareholders. The decisions of our controlling shareholders on these matters may be contrary to your expectations or preferences, and they may take actions that could be contrary to your interests. For further information regarding shareholdings in Inter Platform, see “Major Shareholders and Related Party Transactions.” So long as our controlling shareholders beneficially own a sufficient number of Inter Platform Class B Common Shares, even if they beneficially own significantly less than 50% of our outstanding share capital, they will be able to effectively control our decisions.
 
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Currently, our controlling shareholders beneficially own 31% of the issued share capital of Banco Inter through their indirect ownership of 53% of Banco Inter Common Shares and 9% of Banco Inter Preferred Shares, and consequently, 53% of the voting power of Banco Inter’s issued share capital. Assuming that no former Banco Inter Shareholder elects to receive Cash Redeemable Shares, Banco Inter controlling shareholders will hold 27.1% of the then-outstanding Inter Platform shares and 78.8% of the aggregate voting power of Inter Platform. Assuming that former Banco Inter Shareholders elect to receive Cash Redeemable Shares resulting in an aggregate cash payment in the amount of the Cash Redemption Threshold, Banco Inter controlling shareholders will hold 28.6% of the then-outstanding Inter Platform shares and 80.0% of the aggregate voting power of Inter Platform.
Holders of Banco Inter Preferred Shares do not have voting rights, except in exceptional cases such as in connection with corporate transformation, merger, consolidation or spin-off involving Banco Inter; approval of certain transactions between Banco Inter and its controlling shareholder, acting directly or through any third party, approval of the valuation of assets contributed to our capital stock in a capital increase, among others. Particularly in connection with these matters, the Proposed Transaction will result in additional voting power to the controlling shareholders.
Our major shareholders are not subject to lock-up restrictions and may sell Inter Platform Class A Shares at any time, subject to applicable law. Holders of Inter Platform Class B Common Shares have preemptive rights to acquire shares that we may sell in the future, which may impair our ability to raise funds.
Our controlling shareholders, other affiliates and other major shareholders (such as SoftBank and Hottaire) will not be subject to any lock-up obligation. If our controlling shareholders or other major shareholders sell a large number of their Inter Platform Class A Common Shares, the market price of Inter Platform Class A Common Shares may decline significantly. These sales, or the possibility that these sales may occur, might also make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. Our controlling shareholders and SoftBank will benefit from registration rights pursuant to a Shareholders’ Agreement that will become effective on the Closing Date and may demand that Inter Platform file a resale registration statement at any time after the Closing Date.
Under Inter Platform’s Articles of Association, the holders of Inter Platform Class B Common Shares are entitled to preemptive rights to purchase, at the same economic terms and at the same price, additional common shares if there is an increase in our share capital and additional common shares are issued, in order to maintain their proportional ownership interests. The exercise by holders of Inter Platform Class B Common Shares of their preemptive rights may impair our ability to raise funds, or adversely affect the terms on which we would otherwise be able to raise funds, as we may not be able to offer to new investors the quantity of our shares that they may desire to purchase. For more information, see “Description of Share Capital — Preemptive or Similar Rights.”
Each Class B Common Share may be converted into one Class A Common Share (i) upon delivery of notice to Inter Platform, at its registered office, in the form described in our Articles of Association, or (ii) automatically upon any transfer of such Class B Common Share, whether or not for value, except for certain limited transfers described in our Articles of Association. Class B Common Shares may also be converted into Class A Common Shares in other circumstances.
If holders of Inter Platform Class B Common Shares exercise the right to convert their Inter Platform Class B Common Shares into Inter Platform Class A Common Shares and sell a large number of their Inter Platform Class A Common Shares, the market price of Inter Platform Class A Common Shares may decline significantly.
There is no existing market for Inter Platform Class A Common Shares, and we do not know whether one will develop to provide you with adequate liquidity. If the trading price of Inter Platform Class A Common Shares fluctuates after completion of the Proposed Transaction, you could lose a significant part of your investment.
Prior to the Proposed Transaction, there has not been a public market for Inter Platform Class A Common Shares. Following the completion of the Proposed Transaction, a significant number of Inter Platform Class A Common Shares will be held through Inter Platform BDRs, in Brazil, which may impact the liquidity and trading price of our Inter Platform Class A Common Shares. If an active trading market
 
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does not develop, you may have difficulty selling any of the Inter Platform Class A Common Shares that you receive as part of the Proposed Transaction. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market on NASDAQ or otherwise or how liquid that market might become.
As settlement of the Proposed Transaction will occur on B3, a holder of Inter Platform BDRs that wants to receive Inter Platform Class A Common Shares must cancel Inter Platform BDRs so that the underlying Inter Platform Class A Common Shares can be delivered to its indicated brokerage account. It is expected that a majority of Inter Platform Class A Common Shares be held through Inter Platform BDRs, which may affect the liquidity and price of Inter Platform Class A Common Shares.
We cannot assure you that the price for Inter Platform Class A Common Shares will reflect the price of Banco Inter Shares on B3 or that these prices will prevail in the market following the Proposed Transaction. The price of Banco Inter Shares on B3 has been subject to volatility; the trading price of Banco Inter Units was R$31.55 on January 4, 2021, reached R$80.00 in the third quarter of 2021 and was R$40.10 on October 22, 2021. The market price of the Class A common shares may be influenced by many factors, some of which are beyond our control, including:

announcements by us or our competitors of significant contracts or acquisitions;

technological innovations by us or competitors;

the failure of financial analysts to cover Inter Platform Class A Common Shares after the Proposed Transaction or changes in financial estimates by analysts;

actual or anticipated variations in our results of operations;

changes in financial estimates by financial analysts, or any failure by us to meet or exceed any of these estimates, or changes in the recommendations of any financial analysts that elect to follow Inter Platform Class A Common Shares or the shares of our competitors;

announcements by us or our competitors of significant contracts or acquisitions;

fake news relating to us and our business, our executives and material partners or suppliers;

future sales of our shares; and

investor perceptions of us and the industries in which we operate.
In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of Inter Platform Class A Common Shares. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations. If a market does not develop or is not maintained, the liquidity and price of Inter Platform Class A Common Shares could be seriously harmed.
HoldFin may incur debt to make the cash payment to Banco Inter Shareholders that elect to receive Cash Redeemable Shares. Repayment of this debt may be made with distributions received from Banco Inter (including dividends or capital reduction) or with proceeds of future equity offerings of Inter Platform, which may adversely impact the value of Inter Platform Class A Common Shares.
HoldFin is negotiating with Brazilian financial institutions the final terms of a debt financing to redeem Cash Redeemable Shares up to the amount of the Cash Redemption Threshold. Prior to the Banco Inter General Meeting, HoldFin shall have obtained a firm commitment, from one or more financial institutions, to provide the Cash Redemption Financing, in an amount sufficient to fund the cash redemption of the Cash Redeemable Shares up to the Cash Redemption Threshold. As the Cash Redemption Financing is under negotiation, a different funding structure may alternatively be obtained by Inter Platform. For additional detail on the expected terms of the Cash Redemption Financing, see “The Proposed Transaction — Cash Redemption Financing.”
 
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We cannot assure you that we will be able to obtain the Cash Redemption Financing or that we will be able to obtain debt at favorable conditions. We cannot assure you that the Cash Redemption Financing will be as described in “The Proposed Transaction — Cash Redemption Financing.”

The incurrence of debt by HoldFin in connection with or in advance of completion of the Proposed Transaction will not result in adjustments to the Exchange Ratios, and may impact the value of Inter Platform Class A Shares that you receive on the Closing Date.

After the Closing Date, Banco Inter will be a wholly owned subsidiary directly of HoldFin, and HoldFin may use funds received from Banco Inter (as dividend, interest on shareholders’ equity or capital reduction) to repay debt. This may prevent distributions or reduce cash available for distributions to shareholders of Inter Platform.

Obtaining funds from Banco Inter through a capital reduction requires regulatory approval from the Brazilian Central Bank, which approval may take time or not be granted. Our inability to use funds from Banco Inter, in this case, may adversely affect our ability to timely repay the Cash Redemption Financing.

Using funds from Banco Inter or incurring debt may adversely affect our financial condition and our ability to implement our business plan after the completion of the Proposed Transaction.

We may issue equity securities in the future and use the proceeds to repay debt incurred. Future equity issuances or conversion of outstanding debt securities into Inter Platform Class A Common Shares may result in your dilution and impact the value of Inter Platform Class A Common Shares. We cannot assure you that we will be able to sell Inter Platform Class A Common Shares at a price that is greater than the price per share paid to Banco Inter Shareholders that elect to receive Cash Redeemable Shares.

Although it is a condition to completion of the Proposed Transaction that the total amount to be paid when redeeming the Cash Redeemable Shares does not exceed the Cash Redemption Threshold, Banco Inter and Inter Platform may waive this condition, in their sole discretion, following a determination of the board of directors of Banco Inter that this waiver is reasonable and is in the best interest of Banco Inter and Banco Inter Shareholders.
For additional detail on the expected terms of the Cash Redemption Financing, see “The Proposed Transaction — Cash Redemption Financing.”
Failure to conclude the Proposed Transaction after approval at Banco Inter Shareholders’ Meeting may adversely affect the market price of Banco Inter Shares.
Failure to conclude the Proposed Transaction after approval at Banco Inter Shareholders’ Meeting may adversely affect the market price of Banco Inter Shares.

If the Cash Redemption Threshold is exceeded, we are not required to conclude the Proposed Transaction. The perception that many of Banco Inter shareholders are electing to receive Cash Redeemable Shares, even if the value to be paid does not exceed the Cash Redemption Threshold, may also adversely affect the market price of Banco Inter Shares.

The completion of the Proposed Transaction is subject HoldFin obtaining the Cash Redemption Financing. Even if HoldFin successfully receives the a commitment letter for Cash Redemption Financing, we expect the commitment to be subject to certain conditions. If these conditions are not satisfied, we may not have sufficient funds to redeem the Cash Redeemable Shares, and will be permitted not to conclude the Proposed Transaction.

The completion of the Proposed Transaction is subject to approval of Inter Platform Class A Common Shares for listing on NASDAQ. We have not received yet approval for listing, and we cannot assure you that approval will be obtained on a timely manner.
We may incur additional debt or issue equity securities to complete the acquisition of USEND.
In addition to the Cash Redemption Financing, we may incur debt or issue additional Inter Platform Class A Shares (or securities convertible into Inter Platform Class A Shares) to pay for the potential
 
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acquisition of USEND. Future equity issuances or conversion of outstanding debt securities into Inter Platform Class A Common Shares may result in your dilution and impact the value of Inter Platform Common Shares. Incurring debt may adversely affect our financial condition and our ability to implement our business plan after the completion of the Proposed Transaction.
Our Articles of Association contain anti-takeover provisions that may discourage a third-party from acquiring us and adversely affect the rights of holders of Inter Platform Shares.
Our Articles of Association contain certain provisions that could limit the ability of others to acquire our control, including a provision that grants authority to our board of directors to establish and issue from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series. These provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain our control in a tender offer or similar transactions.
Likewise, the Shareholders’ Agreement between our controlling shareholder, Stone and other parties provides that Stone has a right of first refusal on certain transfers that would result in the change of Banco Inter control. Stone’s current shareholders’ agreement provides that, upon conclusion of a corporate reorganization (including corporate reorganizations such as the Proposed Transaction), it will remain valid and binding and that the parties shall take all the measures required in such a way that the shareholders’ agreement will become binding on the company resulting from the corporate reorganization. For more information, see “Major Shareholders and Related Party Transactions — Shareholders’ Agreements — Shareholders’ Agreement with Stone.”
Requirements associated with being a public company in the United States will require significant company resources and management attention.
After the completion of the Proposed Transaction, we will become subject to certain reporting requirements of the Exchange Act, and the other rules and regulations of the SEC and NASDAQ. We will also be subject to various other regulatory requirements, including the Sarbanes-Oxley Act. 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, NASDAQ 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 no experience managing a publicly traded company in the United States 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 results of operations.
If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of Inter Platform Class A Common Shares and their trading volume could decline.
The trading market for Inter Platform 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 Inter Platform. If no or too few securities or industry analysts commence coverage of Inter Platform, the trading price for Inter Platform Class A Common Shares would likely be negatively affected. In the event securities or industry analysts initiate coverage, if
 
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one or more of the analysts who cover us downgrade Inter Platform Class A Common Shares or publish inaccurate or unfavorable research about our business, the price of Inter Platform Class A Common Shares would likely decline. If one or more of these analysts ceases coverage of Inter Platform or fail to publish reports on us regularly, demand for Inter Platform Class A Common Shares could decrease, which might cause the price of Inter Platform Class A Common Shares and trading volume to decline.
Our holding company structure makes us dependent on the operations of our subsidiaries, one of which we derive a significant portion of our revenues from, and we may not pay any cash dividends in the foreseeable future.
Inter Platform is a Cayman Islands exempted company with limited liability. As a holding company, Inter Platform’s corporate purpose is to invest, as a partner or shareholder, in other companies, consortia or joint ventures in Brazil, where most of our operations are located, and outside Brazil. Accordingly, our material assets are our direct and indirect equity interests in our subsidiaries, and we are therefore dependent upon the results of operations and, in turn, the 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 Inter Platform Class A Common Shares, and we may have tax costs in connection with any dividend or distribution. In addition, the payments, dividends and distributions from our subsidiaries to us for funds to pay future cash dividends or distributions, if any, to holders of Inter Platform Class A Common Shares, could be restricted under financing arrangements that we or our subsidiaries may enter into in the future and we and such subsidiaries may be required to obtain the approval of lenders to make such payments to us in the event they are in default of their repayment obligations. Furthermore, we may be adversely affected if the Brazilian government imposes legal restrictions on dividend distributions by our Brazilian subsidiaries and exchange rate fluctuations will affect the U.S. dollar value of any distributions our subsidiaries make with respect to our equity interests in those subsidiaries.
Currently, all of our revenues are expected to be derived from Banco Inter. We expect that we will continue to depend on Banco Inter for a significant portion of our revenues for the foreseeable future, and any decrease in the revenue of Banco Inter or any other event significantly affecting Banco Inter may have a material adverse effect on our financial condition and results of operations.
The declaration, payment and amount of any future dividends will be made at the discretion of Inter Platform’s board of directors and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as Inter Platform’s board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. See “Dividends and Dividend Policy” and “Description of Share Capital — Dividends and Capitalization of Profits.”
Our dual class capital structure means our shares will not be included in certain indices. We cannot predict the impact this may have on the trading price of Inter Platform Class A Common Shares.
In 2017, FTSE Russell, S&P Dow Jones and MSCI announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices to exclude companies with multiple classes of shares of common stock from being added to such indices. FTSE Russell announced plans to require new constituents of its indices to have at least five percent of their voting rights in the hands of public stockholders, whereas S&P Dow Jones announced that companies with multiple share classes, such as ours, will not be eligible for inclusion in the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. MSCI also opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from its ACWI Investable Market Index and U.S. Investable Market 2500 Index; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. We cannot assure you that other stock indices will not take a similar approach to FTSE Russell, S&P Dow Jones and MSCI in the future. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in any of these indices and, as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not invest in our stock. It continues to be somewhat unclear what effect, if any, these policies will have on the valuations of publicly traded companies excluded from the indices, but in certain situations they may depress these valuations compared to those of other similar companies that are included.
 
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Exclusion from indices could make Inter Platform Class A Common Shares less attractive to investors and, as a result, the market price of Inter Platform Class A Common Shares could be adversely affected.
Inter Platform is a Cayman Islands exempted company with limited liability. The rights of Inter Platform shareholders, including with respect to fiduciary duties and corporate opportunities, may be different from the rights of shareholders governed by the laws of U.S. jurisdictions.
Inter Platform is a Cayman Islands exempted company with limited liability. Inter Platform corporate affairs are governed by its Articles of Association and by the laws of the Cayman Islands. The rights of Inter Platform shareholders and the responsibilities of members of Inter Platform’s board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and separately a duty of care, diligence and skill to the company. Under Cayman Islands law, directors and officers owe the following fiduciary duties: (1) duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (2) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (3) directors should not properly fetter the exercise of future discretion; (4) duty to exercise powers fairly as between different sections of shareholders; (5) duty to exercise independent judgment; and (6) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. Inter Platform’s Articles of Association have varied this last obligation by providing that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or NASDAQ listing rules, and unless disqualified by the chairman of the relevant meeting, such director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting. Conversely, under Delaware corporate law, a director has a fiduciary duty to the corporation and its stockholders (made up of two components) and the director’s duties prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. See “Description of Share Capital — Principal Differences between Cayman Islands and U.S. Corporate Law.”
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 Inter Platform’s share capital and affect the trading price of Inter Platform 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, Inter Platform shares, which may dilute your interest in Inter Platform’s share capital or result in a decrease in the market price of Inter Platform shares. In addition, we may also enter into mergers or other similar transactions in the future, which may dilute your interest in Inter Platform’s share capital or result in a decrease in the market price of Inter Platform shares. Any fundraising through the issuance of shares or securities convertible into or exchangeable for shares or the participation in corporate transactions with an effect similar to a merger, may dilute your interest in Inter Platform’s share capital or result in a decrease in the market price of Inter Platform Class A Common Shares.
As a foreign private issuer and an “emerging growth company” ​(as defined in the JOBS Act), Inter Platform will have different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies.
As a foreign private issuer and emerging growth company, Inter Platform will be subject to different disclosure and other requirements than domestic U.S. registrants and non-emerging growth companies. For example, as a foreign private issuer, in the United States, Inter Platform is not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we intend to rely on exemptions from certain U.S. rules
 
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which will permit Inter Platform to follow Cayman Islands legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.
We will follow Cayman Islands laws and regulations that are applicable to Cayman Islands companies. However, Cayman Islands laws and regulations applicable to Cayman Islands companies do not contain any provisions comparable to the U.S. proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time, as referred to above.
Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information, although Inter Platform will be subject to Cayman Islands laws and regulations having, in some respects, a similar effect as Regulation Fair Disclosure. As a result of the above, even though Inter Platform is required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Cayman Islands law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company.
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for emerging growth companies. Under this act, as an emerging growth company, Inter Platform will not be subject to the same disclosure and financial reporting requirements as non-emerging growth companies. For example, as an emerging growth company Inter Platform is permitted to, and intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Also, Inter Platform will not have to comply with future audit rules promulgated by the U.S. Public Company Accounting Oversight Board (“PCAOB”), (unless the SEC determines otherwise) and Inter Platform’s auditors will not need to attest to Inter Platform’s internal controls under Section 404(b) of the Sarbanes-Oxley Act. We may follow these reporting exemptions until Inter Platform is no longer an emerging growth company. As a result, Inter Platform shareholders may not have access to certain information that they deem important. Inter Platform will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the Proposed Transaction, (b) in which we have total annual revenues of at least US$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of Inter Platform common shares that is held by non-affiliates exceeds US$700.0 million as of the prior June 30th, and (2) the date on which Inter Platform has issued more than US$1.0 billion in non-convertible debt during the prior three-year period. Accordingly, the information about us available to you will not be the same as, and may be more limited than, the information available to shareholders of a non-emerging growth company. Inter Platform could be an “emerging growth company” for up to five years, although circumstances could cause Inter Platform to lose that status earlier, including if the market value of Inter Platform common shares held by non-affiliates exceeds $700 million as of any June 30 (the end of our second fiscal quarter) before that time, in which case Inter Platform would no longer be an “emerging growth company” as of the following December 31 (our fiscal year end). We cannot predict if investors will find Inter Platform common shares less attractive because we may rely on these exemptions. If some investors find Inter Platform common shares less attractive as a result, there may be a less active trading market for our common shares and the price of our common shares may be more volatile.
Upon the listing of our common shares on NASDAQ, we will be a “controlled company” within the meaning of the rules of NASDAQ corporate governance rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of companies that are subject to such requirements.
Immediately after the completion of the Proposed Transaction, our controlling shareholders will beneficially own all of Inter Platform Class B Common Shares, representing a majority of the voting power of Inter Platform’s outstanding share capital. As a result, Inter Platform will be a “controlled company” within the meaning of the corporate governance standards of NASDAQ corporate governance rules. Under these rules, a company of which more than 50% of the voting power in the election of directors is held by
 
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an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. For example, controlled companies, within one year of the date of the listing of their common shares:

are not required to have a board that is composed of a majority of “independent directors,” as defined under the rules of such exchange;

are not required to have a compensation committee that is composed entirely of independent directors; and

are not required to have a nominating and corporate governance committee that is composed entirely of independent directors.
Following the Proposed Transaction, we intend to utilize these exemptions. As a result, we do not expect a majority of the directors on Inter Platform board will be independent upon the closing of the Proposed Transaction. In addition, we do not expect that any of the committees of the board will consist entirely of independent directors upon the closing of the Proposed Transaction. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of NASDAQ.
As a foreign private issuer, Inter Platform is permitted to, and will, rely on exemptions from certain NASDAQ corporate governance standards applicable to U.S. issuers, including the requirement that a majority of an issuer’s directors consist of independent directors. This may afford less protection to holders of Inter Platform Class A Common Shares.
Section 5605 of NASDAQ equity rules requires listed companies to have, among other things, a majority of their board members be independent, and to have independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer, however, Inter Platform permitted to, and will, follow home country practice in lieu of the above requirements. See “Description of Share Capital — Principal Differences between Cayman Islands and U.S. Corporate Law.”
Inter Platform may lose its foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.
In order to maintain Inter Platform current status as a foreign private issuer, either (a) more than 50% of Inter Platform Class A Common Shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of Inter Platform executive officers or (b)(ii) directors may not be U.S. citizens or residents; (2) more than 50% of our assets cannot be located in the United States; and (3) our business must be administered principally outside the United States. If Inter Platform loses this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in Inter Platform corporate governance practices in accordance with various SEC and NASDAQ rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer.
Inter Platform shareholders may face difficulties in protecting their interests because Inter Platform is a Cayman Islands exempted company.
Inter Platform corporate affairs are governed by our Articles of Association, by the Companies Act (As Revised) of the Cayman Islands (“Companies Act”) and the common law of the Cayman Islands. The rights of shareholders to take action against Inter Platform directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as that from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of Inter Platform shareholders and the fiduciary responsibilities of Inter Platform directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less exhaustive body of securities laws than the
 
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United States. In addition, some U.S. states, such as Delaware, have more fulsome and judicially interpreted bodies of corporate law than the Cayman Islands.
While Cayman Islands law allows a dissenting shareholder to express the shareholder’s view that a court sanctioned reorganization of a Cayman Islands company would not provide fair value for the shareholder’s shares, Cayman Islands statutory law does not specifically provide for shareholder appraisal rights in connection with a merger or consolidation of a company that takes place (by way of a scheme of arrangement). This may make it more difficult for you to assess the value of any consideration you may receive in a merger or consolidation (by way of a scheme of arrangement) or to require that the acquirer gives you additional consideration if you believe the consideration offered is insufficient. However, Cayman Islands statutory law provides a mechanism for a dissenting shareholder in a merger or consolidation that does not take place by way of a scheme of arrangement to apply to the Grand Court of the Cayman Islands for a determination of the fair value of the dissenter’s shares if it is not possible for the company and the dissenter to agree on a fair price within the time limits prescribed.
Shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders. Inter Platform directors have discretion under Inter Platform Articles of Association to determine whether or not, and under what conditions, Inter Platform corporate records may be inspected by Inter Platform shareholders, but are not obliged to make them available. This may make it more difficult for you to obtain information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
United States civil liabilities and certain judgments obtained against Inter Platform by Inter Platform shareholders may not be enforceable.
Inter Platform is a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. In addition, the majority of Inter Platform directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside of the United States. As a result, it may be difficult to effect service of process within the United States upon these persons. It may also be difficult to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and Inter Platform officers and directors who are not resident in the United States and the substantial majority of whose assets are located outside of the United States.
Further, it is unclear if original actions predicated on civil liabilities based solely upon U.S. federal securities laws are enforceable in courts outside the United States, including in the Cayman Islands and Brazil. Courts of the Cayman Islands may not, in an original action in the Cayman Islands, recognize or enforce judgments of U.S. courts predicated upon the civil liability provisions of the securities laws of the United States or any state of the United States on the grounds that such provisions are penal in nature. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, courts of the Cayman Islands will recognize and enforce a foreign judgment of a court of competent jurisdiction if such judgment is final, for a liquidated sum, provided it is not in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands’ judgment in respect of the same matters, and was not obtained in a manner which is contrary to the public policy of the Cayman Islands. In addition, a Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere.
Judgments of Brazilian courts to enforce our obligations with respect to Inter Platform Class A Common Shares may be payable only in Reais.
Most of our assets are located in Brazil. If proceedings are brought in the courts of Brazil seeking to enforce our obligations in respect of Inter Platform Class A Common Shares, we may not be required to discharge our obligations in a currency other than the real. Under Brazilian exchange control laws, an obligation in Brazil to pay amounts denominated in a currency other than the real may only be satisfied in Brazilian currency at the exchange rate, typically as determined by the Central Bank, in effect on the date the judgment is obtained, and such amounts are then typically adjusted to reflect exchange rate variations and monetary restatements through the effective payment date. The then-prevailing exchange rate may not afford
 
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non-Brazilian investors with full compensation for any claim arising out of or related to our obligations under the Class A common shares.
If the Proposed Transaction is not completed prior to the end of 2021 and a Brazilian tax reform is approved prior to the end of 2021, the tax consequences of the Proposed Transaction in Brazil will be highly uncertain and may be materially adverse to current Banco Inter Shareholders and us.
Brazilian Congress is currently analyzing a bill of law providing for changes in the Brazilian income tax system (the “Tax Reform”). If approved and sanctioned by Brazilian President at any time before the end of 2021, changes relating to income tax and assessment of capital gains in the Tax Reform will become effective as of January 1, 2022. The terms of the Tax Reform and their impact on Inter Platform and current Banco Inter Shareholders will not be known until the final version of the Tax Reform is approved by Congress and sanctioned by the Brazilian President. If the Tax Reform is approved and sanctioned prior to the end of 2021 and the Proposed Transaction is concluded on or after January 1, 2022, the tax treatment of the Proposed Transaction will be uncertain and may result in adverse tax consequence to Banco Inter Shareholders and to us.
The Brazilian House of Representatives approved in September 2021 a first bill of Tax Reform. This bill of law is subject to approval by the Brazilian Senate and sanction of the Brazilian President. If the Brazilian Senate introduces changes to the bill of law approved by the House of Representatives, the bill is subject to a second approval by the Brazilian House of Representatives. The bill of Tax Reform approved by the House of Representatives modifies the legal provision in force that allows the in-kind return of capital to shareholders to be implemented at book value. The new proposed legislation requires that any such capital return be carried out based on the returned asset or right’s market value. The positive difference between the returned asset or right’s market value and its book value/tax basis, if any, would be treated as a capital gain by the entity returning the capital.
If the bill of Tax Reform is approved and sanctioned prior to the end of 2021 and the Proposed Transaction is concluded on or after January 1, 2022, there are uncertainties as to the tax treatment of the redemption of HoldFin Redeemable Shares, which may require this transaction to be performed based on the market value of the returned Inter Platform BDR, potentially triggering the recognition of taxable capital gains in Brazil.
Due to the complexity of the Brazilian tax system, even before any Tax Reform is approved, any transaction, including the Proposed Transaction, may be subject to scrutiny and challenges by the Brazilian tax authorities, what may result in the issuance of tax assessments added by penalties.
The receipt of the consideration pursuant to the Proposed Transaction is expected to be a taxable transaction for U.S. federal income tax purposes.
We expect that the exchange of Banco Inter Shares for the consideration in the Proposed Transaction will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. Holder (as defined herein) will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between (i) the fair market value of any Inter Platform Class A Common Shares or Inter Platform BDRs, as the case may be, received on the date of the exchange and/or the cash received with respect to the Banco Inter Shares exchanged and (ii) the U.S. Holder’s adjusted tax basis in the Banco Inter Shares. A U.S. Holder will have a tax basis in any Inter Platform Class A Common Shares or Inter Platform BDRs received, as the case may be, equal to their fair market value on the date of the exchange, and the U.S. Holder’s holding period for such Inter Platform Class A Common Shares or Inter Platform BDRs will begin on the day after the date of the exchange. The tax consequences of the Proposed Transaction and of holding Inter Platform Class A Common Shares or Inter Platform BDRs are discussed in more detail below under “Material Tax Considerations — U.S. Federal Income Tax Consequences.”
There could be adverse U.S. tax consequences to former Banco Inter Shareholders that hold Inter Platform Class A Common Shares or Inter Platform BDRs following the Proposed Transaction if we are a passive foreign investment company.
U.S. shareholders of passive foreign investment companies are subject to potentially adverse U.S. federal income tax consequences. In general, a non-U.S. corporation is a passive foreign investment
 
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company, or PFIC, for any taxable year in which (i) 75% or more of its gross income consists of passive income; or (ii) 50% or more of the average value of its assets (generally determined on the basis of a quarterly average) consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that owns, directly or indirectly, at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation.
Based on our financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our current taxable year or in the reasonably foreseeable future.
However, since the determination whether we are a PFIC must be made annually after the close of each taxable year and based on the facts and circumstances at that time, such as the valuation of our assets (including, following the Proposed Transaction, the assets of Banco Inter), including goodwill and other intangible assets, which may depend on the value of our Inter Platform Class A Common Shares which can vary from time to time, there can be no assurance that we will not be a PFIC for any taxable year. In particular, although we consider ourselves to be actively engaged in an active business, certain of our income may be treated as passive income, unless it is eligible for an exception for certain income derived in the active conduct of a banking business (the “Active Banking Exception”), and related assets may be considered passive assets unless the Active Banking Exception applies. We believe that the Active Banking Exception, as interpreted by Treasury regulations, including recently proposed Treasury regulations (the “Proposed Regulations”), should apply to treat such income and related assets as active, but such treatment is not certain. Moreover, while the Proposed Regulations permit taxpayers to rely on them, it is possible that the U.S. Department of the Treasury (“Treasury Department”) will not follow the approach of the Proposed Regulations when issuing final regulations, in which case the Active Banking Exception might not apply to our income and it is possible that we could be treated as a PFIC. If we are a PFIC, U.S. shareholders would be subject to certain adverse U.S. federal income tax consequences as discussed under “Material Tax Considerations — U.S. Federal Income Tax Considerations.”
If we are required to register under the Investment Company Act, our ability to conduct our business could be materially adversely affected, and you could suffer losses.
Inter Platform is not registered, and does not intend to register, as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The Investment Company Act contains substantive legal requirements that regulate the manner in which investment companies are permitted to conduct their business activities. Inter Platform’s assets are primarily its indirect equity stake in Banco Inter, which we believe is not an investment company pursuant to the exemption set forth in Rule 3a-6 under the Investment Company Act (which covers foreign banks).
We expect that Inter Platform’s operations will be conducted through wholly or majority-owned operating subsidiaries so that Inter Platform and each of its subsidiaries is not an investment company under the Investment Company Act. As a consequence of seeking to avoid the need to register under the Investment Company Act on an ongoing basis, we may be restricted from holding certain securities or may structure operations in a manner that would be less advantageous than would be the case in the absence of such requirements.
Additionally, if we were to be deemed an investment company, restrictions imposed by the Investment Company Act, including limitations on our capital structure and our ability to transact with our affiliates, could make it impractical for us to continue our business as currently conducted and could have a material adverse effect on our financial performance and operations.
Risks Relating to Our Business
The coronavirus pandemic (COVID-19), as well as any potential economic effects, together with slowdown and volatility in the Brazilian and global financial and capital markets have had and may continue to have adverse effects on our business, financial condition, liquidity and operating results, and may increase other risks described in this section “Risk Factors.”
In March 2020, the World Health Organization decreed the outbreak of COVID-19 with global pandemic status, and since then, authorities around the world have implemented measures to reduce its
 
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spread. Government and anti-COVID-19 pandemic measures have had and are likely to continue to have a strong impact on global and Brazilian macroeconomic and financial conditions, including disruption of supply chains and the closure of several companies, leading to loss of revenue, increased unemployment, stagnation and economic contraction.
The COVID-19 pandemic also resulted in an increase in volatility in the Brazilian and international financial markets and in economic indicators, including interest rates, foreign exchange and credit spreads. As an example, as a result of greater volatility, the B3 circuit breaker was triggered several times in March 2020 and the value of assets was negatively impacted on those occasions. Any unexpected shocks or movements in these market factors or conditions may result in financial losses associated with our positions and exposures, which may deteriorate our financial condition. Measures taken by government authorities worldwide, including Brazil, in order to stabilize markets and support economic growth may not be sufficient to control high volatility or prevent serious and prolonged reductions in economic activities.
In addition, the social distance measures imposed by government authorities to contain the COVID-19 pandemic have been resulting in a sharp drop or even a halt in the activities of companies in various sectors. Such policies and measures influenced the behavior of consumers and the population in general, the demand for services, products and credit. Current macroeconomic fundamentals, such as unemployment, inflation and growth have had and can continue to have a negative impact on our business, mainly in the form of:
(i)
liquidity restrictions and reduced access to financing and funding;
(ii)
reduction in the volume traded on debit and/or credit cards;
(iii)
a relevant increase in the risks associated with the corporate debt market, including those resulting from increased default, renegotiations of existing debt contracts and possible claims of force majeure, which may increase the provisions for losses, causing loan losses to exceed the provisioned amounts, and impact the proportion of loans in arrears in relation to total loans granted by us, with particular impact on corporate loan business;
(iv)
reductions in assets under custody as a result of lower customer appetite for risk;
(v)
restrictions on certain business activities that may impact us as well as our employees, suppliers, customers, counterparty customers and other business partners, thus affecting our operations and our customers’ ability to conduct business and fulfill their obligations to us; and
(vi)
an increase in our investments and expenses in cyber security and information security and in measures to control and manage operating risks.
Our market, liquidity, credit and operational risk management policies, procedures and methods may not be fully effective.
The extent of COVID-19’s pandemic impacts on our business, financial condition, liquidity and results will depend on several market and political factors beyond our control, including the possibility of additional outbreaks and the intensity of the economic downturn resulting from actions taken, or to be taken, by government authorities. Consumers affected by the COVID-19 pandemic may continue to exhibit downturns behavior even after the crisis ends, maintaining low levels of discretionary spending over the long term.
We have identified material weaknesses in our internal control over financial reporting. If we are unable to remedy these material weaknesses or fail to establish and maintain a proper and effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements, our results of operations and our ability to operate our business or comply with applicable regulations may be adversely affected.
In connection with the audit of the consolidated financial statements for the year ended December 31, 2020, our external auditors obtained an understanding of the internal control relevant to their audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of our internal control in accordance with the provisions of the Sarbanes-Oxley Act of 2002. During this process, material weaknesses in our internal controls over financial reporting as
 
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of December 31, 2020 were identified, which were communicated to management. A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified relate to (i) IT user identity and access management processes, including segregation of duties, and (ii) financial reporting closing processes, including reconciliation process and significant number of journal entries. We plan to adopt measures that will improve our internal control over financial reporting, but we cannot assure you that our efforts will be effective.
Our management has not completed an assessment of the effectiveness of our internal control over financial reporting and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting.
After conclusion of the Proposed Transaction, we will be subject to the Sarbanes-Oxley Act, which requires, among other things, that we establish and maintain effective internal controls over financial reporting and disclosure controls and procedures. Under the current rules of the SEC we will be required to perform system and process evaluation and testing of our internal controls over financial reporting to allow management to assess the effectiveness of our internal controls. Our testing may reveal other material weaknesses or significant deficiencies and result in the conclusion that our internal control over financial reporting is ineffective. We expect to incur additional accounting and auditing expenses and to spend significant management time in complying with these requirements. If we are not able to comply with these requirements in a timely manner, or if we or our management identifies other deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses, the market price of our shares may decline and we may be subject to investigations or sanctions by the SEC and other regulatory authorities.
In addition, 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. These cost increases and the diversion of management’s attention could materially and adversely affect our business, financial condition and operation results.
The digital banking segment in Brazil is in its early years and is highly competitive, and we may be unable to maintain our market positioning.
The Brazilian digital banking sector is in its early years and is highly competitive. As such, large financial institutions, considered to be “traditional” have adopted strategies that focus on digital banking and therefore compete with us in: (1) consolidating position in the digital accounts market; (2) developing benefits programs to attract and retain account holders; and (3) expanding the portfolio of digital products.
In addition, other financial institutions (including fintechs with digital credit platforms), have begun to actively operate in the digital banking segment in Brazil, further increasing competition. The fintech business model differentiates itself by the use of technology to reduce the bureaucracy related to financial services and products, focusing on efficiency and productivity to reduce costs and processes when compared to traditional financial institutions. These advantages, which are created by the fintech ecosystem itself, pose challenges to the traditional banking business model, requiring constant adaptation to the industry’s innovations and thus allowing for new players to enter the industry very fast and in such a way that cannot be anticipated or immediately copied by its competitors.
Increased competition in the digital banking segment, particularly with the entry of larger financial institutions, which have more established and robust structure, an extensive customer base and various distribution channels, may materially adversely affect us.
Failures or breaches in critical processes or systems may interrupt our business, increasing costs and resulting in losses, which could materially adversely affect us.
As a financial institution, we are exposed to various operational risks, including risks of interruption of our business, failure of our systems or operations and fraud by our employees or third parties, such as failures to properly record transactions, equipment failures or mechanical employee errors. There can be no
 
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assurance that our systems or processes will not fail or that fraud, errors, or operating problems will not materially adversely us.
Moreover, we may be subject to significant operational process interruptions, including events that are entirely or to some measure beyond our control, which may materially adversely affect our operations, including but not limited to:

the total or partial unavailability of systems that support back office services;

failures of our critical automated or non-automated systems; and

interruptions in the supply of outsourced services on which our critical processes depend, such as processing interbank wire transfers, payment of public or private securities, settlement of purchase orders and/or sale of securities, among other processes.
Operational failures, including those resulting from human error or fraud, increase costs, and may result in losses, disputes with customers, damage to our image, lawsuits, regulatory fines, sanctions, intervention, the obligation to issue refunds or other damages. These impacts may also be long lasting and have irreversible impacts to the long term prospects of the business. Any such operational failure may materially adversely affect us.
Failure to protect against risks related to cybersecurity may result in a loss of revenue and materially adversely affect us, including hampering our operations or resulting in the unauthorized disclosure of information.
Our security structure is subject to cybersecurity failures, including cyber-attacks, which may include invasion of platforms and IT systems by malicious third parties, malware infiltration (such as computer viruses), contamination (whether intentional or accidental) of networks and systems by third parties with whom we exchange data, cyber-attacks designed to access, change, corrupt or destroy systems, computer networks, stored information or transmitted information, as well as unauthorized access to or breach of sensitive and or private data of customers by our employees, third parties or others. For example, in 2018, certain information relating to our customers in the period was published without our authorization. The unauthorized publication of this information resulted in certain legal proceedings against us. For additional information, see “Legal and Administrative Proceedings — Civil Proceedings.”
Successful cyber-attacks may paralyze or make our services or systems unavailable for uncertain periods of time, resulting in losses, contamination, corruption or loss of customer data and other sensitive stored information, a breach of secured data, the dissemination of unauthorized information or the loss of significant levels of liquid assets (including cash).
Additionally, due to the remote working strategy we adopted during the pandemic, there is the possibility of an increase in cyber-attack attempts through employees’ computers because the cyber security of networks used by employees outside our offices may not provide the same level of security as that of our work environment, which may impair our ability to manage our business.
As cyber-attacks continue to evolve in size and sophistication, we may incur significant costs in attempting to modify or improve protective measures. Moreover, cyber-attacks are constantly changing and being reinvented. We may not be able to upgrade our systems quickly enough to keep up with these changes, or we may be required to allocate additional funds above the amounts originally earmarked to stop such attacks. We may be exposed to the risk of being held jointly and severally liable for possible causes of these third parties.
We may also incur significant costs in investigating or remedying any vulnerabilities or breaches or in communicating cyber-attacks to our customers. Any inability to effectively protect our systems and platforms against cyber-attacks may result in losses, disputes with customers, damage to our reputation, lawsuits, regulatory fines, sanctions, regulatory intervention and other damages, each of which could materially adversely affect us. We may not be able to upgrade our systems at a sufficient pace to keep up with these changes, or we may be required to allocate additional funds above the amounts originally allocated to prevent such attacks.
Our regulators are increasingly aware of the need for cyber risk management and, among the current regulations, we are subject to the Central Bank Resolution No. 4,893, whose requirements are related to the
 
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readiness to report attacks in response to cyber incidents and the adequacy of our control environment and Information Security policies. Failure to manage cybernetic risks or to comply with these regulatory requirements may adversely affect us in relation to the regulator.
We have strategic partners in infrastructure and systems, which also process information and operate critical services. These suppliers are subject to risks similar to those described above and may have a direct impact on us and our customers. Additionally, under Brazil’s data protection law, data processors may be jointly and severally liable for any damage caused to the data subjects. As such, we may be jointly and severally liable for any damage caused by third-party service providers involved directly in our data-processing operations. Any undue use of customer information, or the perception of such misuse, may subject us to legal and administrative proceedings and fines, which may adversely affect our reputation and financial condition.
We are subject to risks associated with noncompliance with data protection laws and may be materially adversely affected in the event we are subject to fines and other sanctions under these laws.
In 2018, the Data Protection Law (Lei Geral da Proteção de Dados), under Law No. 13,709, of August 14, 2018 (“Data Protection Law”), was approved and has been in force since September, 2020, transforming the manner in which personal data protection in Brazil is regulated. The Data Protection Law is a new legal milestone regulating the processing of personal data, establishing the rights of the owners of personal data, the applicable legal basis for the protection of personal data, the requirements for obtaining consent, obligations and requirements following the occurrence of security incidents and data leaks as well as the creation of the Brazilian National Authority for the Protection of Data (Autoridade Nacional de Proteção de Dados) (“ANPD”).
The process of remaining compliant with the data protection statutes and regulation in Brazil requires us to continuously improve our practices, which may require additional investments and additional cyber-security expenses, both of which may adversely affect our financial condition and results of operation.
Failure to comply with any of the dispositions of the Data Protection Law may subject us to: (i) legal proceedings (including class actions) seeking indemnification for any breach of the Data Protection Law or other similar statutes regulating data privacy; and (ii) penalties provided for in the Data Protection Law and other similar statutes regulating data privacy to be imposed by certain consumer protection entities (which have been imposing such fines since before the Data Protection Law).
In the event that we fail to comply with the Data Protection Law, we may be subject to fines (on an individual or cumulative basis), warnings, disclosure obligations, temporary suspensions, an obligation to delete personal data and a fine of up to 2.0% of our Company’s, economic group’s or conglomerate’s revenue (excluding taxes) in Brazil in the year proceeding the breach up to an aggregate R$50.0 million per infraction. In addition, we may be held liable for civil, moral, individual or collective damages caused by us or our subsidiaries in the event of a failure to comply with the Data Protection Law.
Accordingly, any failure to protect personal data processed by us or our subsidiaries to comply with applicable data protection laws, may result in significant fines, an obligation to disclose the incident to the market, an obligation to delete personal data from our records or the suspension of our operations and may materially adversely affect our reputation and results of operations.
Interruptions or failures in our technology systems or any lack of integration or redundancy of these systems may materially adversely affect us.
Our operations depend on the efficient and uninterrupted operation of our IT systems. For example, these systems are required to process a significant constant growing number of transactions efficiently and accurately, as well as enable the processing, storage and secure transfer of confidential data and other sensitive information. The software that we use to process these transactions is required to interact with third party software or operating systems. Accordingly, any incompatibilities or the unavailability of such software or operating systems, or any errors or limitations as to their use, may prevent proper processing of transactions made by our customers resulting in losses, disputes with customers, lawsuits, regulatory fines, sanctions, regulatory intervention, an obligation to issue refunds or other damages, each of which could materially adversely affect us.
 
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In addition, the hardware and software that we use may be damaged or be subject to complete or partial interruptions as a result of internal failure, natural disasters, failures in telecommunications services, computer viruses, physical intrusion, electronic intrusion, and other events or similar occurrences. Any of these events may result in disruptions, delays and/or losses in the transmission of essential data, which may materially adversely affect us.
The lack of monitoring and the non-improvement of our IT systems linked to our operation or our inability to make the necessary investments to keep up with the technological evolution of the banking market could adversely affect our operations.
Any failure to improve our operational IT systems or to make the necessary investments to keep pace with technological developments in the banking and financial industry may materially adversely affect us.
Considering that our core business is intrinsically linked to the digital environment in which new technologies are developed daily, our ability to maintain our competitiveness and expand our business depends on our ability to improve IT systems and efficiently increase our operational capacity. As a result, we must continuously make investments in significant improvements in our IT infrastructure in order to remain competitive. There can be no assurance that we will have the funds available to maintain the levels of investment required to support improvements or upgrades to our IT infrastructure, which may result in a significant loss of competitiveness against our main competitors, and an inability to keep pace with the evolution of the sector and customer needs, materially adversely affecting us.
Moreover, we are unable to foresee the effect of technological changes on our operations. In addition to our own initiatives, we depend in part on third parties for the development of, and access to, new technologies. New services and technologies applicable to our industry may arise and make the current technology used in our products and services obsolete. The development of new technologies and their integration into our products and services may require significant investment and considerable time and may ultimately prove unsuccessful. In addition, our ability to adopt new products and services and to develop new technologies may be limited by industry standards, changes in rules and regulations, customer resistance, intellectual property rights held by third parties and other factors. Our success will depend on our ability to develop and incorporate new technologies, to meet the challenges of a rapidly evolving market for financial services that are provided electronic means and to adapt to changing technologies. If we are unable to do so in a timely or profitable manner, our business and results of operations may be materially adversely affected. We have systems, programs and routines that were and are coded by Inter employees and third-party professionals. We cannot guarantee that these codes do not have unmapped failures or breaches.
Models, policies, procedures and methodologies that we have adopted to manage risks (including market, liquidity, credit, operational and environmental risks) may not be sufficient to prevent exposure to unforeseen risks or the occurrence of known risks, which may materially adversely affect us.
The models, policies, procedures and methodologies that we use to monitor, measure and manage risks may not be sufficient to prevent our exposure to unforeseen risks or the occurrence of known risks, which may materially adversely affect us. Moreover, potential measures or changes instituted by regulators, including changes in laws, may materially adversely affect us.
For example, statistical models and management tools used to estimate our exposure within a given time period may prove inaccurate in estimating the capital, controls or safeguards required to cover, control or mitigate unpredictable, unforeseen or erroneously quantified factors. Furthermore, stress tests and sensitivity analyses based on predefined scenarios may not identify all of the possible impacts on our results of operations.
We may incur losses resulting from failures, inadequacies or deficiencies in internal processes, systems, or human error. In addition, we may incur losses resulting from external events such as natural disasters, terrorism, theft and vandalism, as well as events that are not properly identified and addressed by our models. The incurrence of any of these risks may materially adversely affect us.
Our systems, methods, analysis, management and risk controls relating to our customer base may not be sufficient to prevent losses.
Part of our portfolio comprises treasury and loan operations, and as a result, fluctuations in interest rates, the prices of securities, exchange rates and other floating market indices may materially adversely
 
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affect our results of operations. The success of these banking operations depends, among other factors, on the balance between the risks assumed and the returns obtained from these operations.
Before performing any of these banking operations, we carry out an analysis of the credit profile of each of our customers in order to evaluate the risk that each operation poses. There can be no assurance that our risk management and credit analysis systems, methods or policies and control systems will be sufficient to prevent losses due to any failure to identify all applicable risks. There can also be no assurance that our risk management systems will be sufficient to prevent losses stemming from analysis of the risks identified, or that our risk identification will be adequate, correct or timely, which may materially adversely affect us.
We are subject to laws and regulations relating to money laundering, terrorist financing, corruption and other illegal activities in the jurisdictions in which we operate and may be materially adversely affected by violations of these laws and regulations.
We are subject to laws and regulations related to the prevention and combating of money laundering, terrorist financing, corruption and other illegal activities. These laws and regulations require, among other measures, that we adopt and apply “Know-your-Supplier” ​(including politically exposed person (“PEP”) assessments), “Know-your-Partner” and “Know-your-Employee” policies and procedures. We must also provide training for employees in the prevention of money laundering, terrorist financing and other related illegal activities, as well as report suspicious transactions to the appropriate authorities.
These standards have become more detailed and complex, requiring that we continuously improve already sophisticated systems and use specialized personnel for compliance and monitoring purposes. Policies and procedures to detect and prevent the use of our framework for money laundering, terrorist financing, corruption and related illicit activities as well as those designed to prevent bribery and other illegal practices may not prove effective in preventing the unauthorized use of our systems by our directors, officers, collaborators, controlling shareholder, affiliates or third-party agents for illegal or improper activities.
In the event that we are unable to fully comply with applicable laws and regulations to prevent and combat money laundering and the financing of terrorism, combating corruption or other related illegal activities, we may be subject to (i) administrative, criminal and civil fines and penalties; (ii) loss of our operating licenses; (iii) prohibition or suspension of our activities; and (iv) being prohibited to enter into contracts with Brazil’s public administration and becoming ineligible for certain tax benefits or other programs which involve public funds. Any such consequences may materially adversely affect our reputation, financial condition and results of operation.
Our controlling shareholder, affiliates, directors, officers, collaborators, third-party agents and us may be materially adversely affected to the extent we are involved, or accused of being associated with, money laundering, terrorist financing, corruption or other related illegal activities, or in the event that our operations, accounts or systems are used, with or without our knowledge, to further money laundering, terrorist financing, corruption or other illegal or improper purposes.
We may be materially adversely affected by damage to our reputation.
We depend on our image and credibility in the market to operate our business and attract and retain customers, investors and employees. Several factors may damage our reputation and result in a negative perception of us by our customers, counterparties, shareholders, investors, government agencies, the community and regulators. These factors include, among others, non-compliance with legal obligations, conducting illicit operations with customers, contracting suppliers that do not ethically conduct their business, unauthorized disclosure of customer information, misconduct by our employees and failures in risk management. In addition, negative publicity relating to us may damage our business, while actions taken by third parties, including suppliers, such as engaging in child labor, slave labor, discriminatory practices, unlawful acts and corruption, activities contrary to health, work safety or environmental regulations, may indirectly tarnish our reputation in the market.
Any failure to establish or preserve a favorable reputation among customers and within the banking industry may materially adversely affect us.
 
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We may have insufficient capital to meet the capital requirements established by the CMN and the Central Bank.
Brazilian financial institutions must comply with the guidelines imposed by the CMN and the Central Bank which are similar to the guidelines of Basel II, related to capital adequacy, including minimum capital requirements. We cannot guarantee that in the future we will have sufficient funds or resources available to ensure adequate capitalization, and therefore we may be unable to meet the capital adequacy requirements imposed by the CMN and the Central Bank.
CMN Resolution No. 4,192, of March 1, 2013, as amended by CMN Resolution No. 4,278, of October 31, 2013 (“CMN Resolution No. 4,192”), establishes a calculation method for regulatory capital held by financial institutions and other institutions authorized to operate by the Central Bank. On January 3, 2022, CMN Resolution 4,192 will be replaced by CMN Resolution No. 4,955, of October 21, 2021.
This resolution establishes the beginning of the transition to new standards established by Basel III, and its main purposes are: (1) to improve the capacity of financial institution to absorb shocks arising from the financial system and other economic sectors; (2) to reduce the risk of contagion spreading from the financial sector to the real economic sector (systemic risk); (3) to maintain financial stability; and (4) to promote sustainable economic growth.
Moreover, financial institutions may only distribute profits in an amount higher than may be required by law or regulation if this distribution does not jeopardize compliance with capital and equity requirements. Accordingly, any failure to meet minimum capital requirements may negatively affect our ability to distribute dividends and interest on capital to shareholders, in addition to adversely affecting our operating and lending capacity. As a result, we may have to sell assets or take other measures that may materially adversely affect us.
In addition, Brazilian regulators may apply sanctions due to capital inadequacy, including administrative proceedings, fines, disqualification of management and even the cancellation of our operating license, which may materially adversely affect us.
Mismatches between interest rates, indexes, exchange rates, the maturities of our credit portfolio and our sources of funds may negatively affect our credit operations and us.
We are exposed to mismatches of interest rates and maturities between our assets and liabilities. A portion of our credit portfolio comprises loans at fixed or floating interest rates and the profitability of credit transactions depends on our capacity obtain funding at competitive rates. An increase in market interest rates in Brazil could increase our cost of funding, particularly the cost of term deposits, thus reducing the spread earned on our credit portfolio, materially adversely affecting us.
Any mismatch between the maturity of credit transactions and sources of funds, which in general are for shorter terms, may exacerbate the effect of any imbalance in interest rates, and pose a liquidity risk in the event that we do not have adequate funding. An increase in the total cost of funding may result in an increase in interest rates that we charge on lending, which may consequently affect our ability to attract new customers. A decrease in the growth of our credit portfolio, or illiquidity arising from the lack of permanent funding, may materially adversely affect us.
See also, “Management’s Discussion and Analysis of Results of Operations and Financial Condition — Quantitative and Qualitative Disclosure about Market Risk.”
Deterioration in our credit rating may increase our funding costs, which may materially adversely affect us.
Funding costs are influenced by numerous factors, such as macroeconomic conditions, the regulatory environment for Brazilian banks, insufficiency of capital, failure to timely comply with our obligations to customers and suppliers, the continuous availability of term deposits in the local market, increased difficulty in raising new funds and failure to enlarge our credit portfolio. Any unfavorable change in these factors may give rise to a negative impact on our credit rating, which may restrict our borrowing capability, capacity to assign credit portfolios or ability to issue securities on acceptable terms, thereby increasing the cost of funding and materially adversely affecting us.
 
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The growth of our credit portfolio, including credit card portfolio, may result in an increase in defaults.
Our management has adopted a strategy of expanding our credit portfolio increasing origination and approving new loans, in particular non-collateralized loans (which defaults are more likely). This strategy may result in an increase in our financial leverage and, potentially, lead to an increase in default levels and provisioned expenses, which may materially adversely affect us.
Modifications to the rules and regulations governing the origination of real estate loans by financial institutions in Brazil may materially adversely affect us.
The origination of real estate loans by financial institutions in Brazil is subject to rules and regulations that may adversely affect the volume and terms of real estate loans in the Brazilian market. From time to time, the Brazilian government modifies these rules, including for the purpose of advancing public housing policy. There can be no assurance that modifications to rules and regulations governing the origination of real estate loans will not be enacted or that, if enacted, such rules and regulations will be favorable. We derive a significant portion of our operating income from our real estate lending operations. As a result, the suspension of, or significant modifications to, the rules and regulations governing the origination of real estate loans may affect our real estate lending, and as a result, may materially adversely affect us.
Our capacity to receive payments due on personal loans paid directly from the payroll or from social security benefits (“payroll loans”) depends on the effectiveness and validity of the agreements we entered into with Brazilian Institute of Social Security (Instituto Nacional da Seguridade Social) (“INSS”) and employers of the public and/or private sector, as well as on the continued employment or beneficiary status of the borrowers”.
Part of our loans are derived from lending through loans deducted directly from payroll, including the payroll card model, a credit card the invoices of which are deducted from payroll. Repayments are deducted directly from the borrowers’ pensions, annuities or salaries, and may be interrupted if the borrower (a retired person, pensioner, employee or official of the private or public sector) loses his or her job, if other deductions, such as alimony, take priority over the loan, or if the borrower dies.
In the event of a borrower’s dismissal or leave of absence, the payment of the loan may depend exclusively on the borrower’s financial capacity. There can be no assurance that we will be able to recover loan amounts in these circumstances.
Rules and regulations governing payroll loans establish a maximum percentage of income that may be deducted by financial institutions for payment of debts resulting from payroll loans. If a borrower divorces or legally separates from his or her spouse, under Brazilian law, the alimony due by the borrower may be deducted directly from payroll under certain circumstances and have priority over other debts, such as our payroll loans, which may accordingly not be repaid.
Our payroll loans are also subject to risks relating to the employer or payee. Any events that affect payments to employees, such as an employer’s financial condition, failures or changes in the internal controls, may delay, reduce or prevent deductions from the employees’ earnings, and therefore, result in losses on our payroll loans portfolio, which may materially adversely affect us.
Any of these risks may result in increased portfolio defaults, provisions for expenses and other expenditures related to collection of amounts due, which may materially adversely affect us.
Provisional Measure No. 936/2020, which was converted to Law No. 14,020, of June 6, 2020, established the Emergency Program for the Maintenance of Employment and Income, applied during the state of public calamity recognized by Legislative Decree No. 6, dated March 20, 2020, which includes the possibility of proportional reductions of working hours and wages, as well as the temporary suspension of the employment contract. Due to the extended duration of the COVID-19 pandemic in Brazil, the Provisional Measure No. 1,045, of April 27, 2021, re-implemented the aforementioned program for an additional 120 days. In this scenario, a percentage of our payroll loan agreements may be affected because the borrower’s income or salary that may be collateral to payroll loans (“consignable income”) may be decreased in relation to the income or salary that was consigned to us, requiring us to refinance or otherwise extend the term of the agreements and consequently the receipt of these amounts by us. For instance, this program, in 2020, reduced our borrowers’ consignable income by 30%.
 
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We may sustain substantial losses as a result of our securities and derivatives transactions.
We trade securities and acquire debt and equity securities. These investments may result in substantial losses in the future given that securities are subject to significant price variations.
We also trade derivatives. These transactions are subject to market, credit and operating risks, including credit or default risk and basis risk (risk of loss associated with the variation of the difference between the asset’s return and our funding cost/hedging cost) and default risk from our counterparties.
Derivatives transactions may cause significant volatility in our equity or lead to results of operations that are better than those that we would have achieved had we not entered into these transactions. There can be no assurance that our securities and derivatives transactions will not materially adversely affect us.
The uncertainties caused by the COVID-19 pandemic has had an adverse impact on the global economy and capital markets, including in Brazil, causing eight circuit-breakers that stopped B3’s trading during the month of March 2020. The price of most of the assets traded in B3 was and has been adversely affected due to the COVID-19 pandemic. Impacts similar to those described above may occur again, causing the assets traded on B3 to fluctuate, including securities held by us.
We may be materially adversely affected if key members of our management resign, or if we are unable to attract and retain specialized management.
Our ability to remain competitive and reach our growth target is dependent upon the success of our management and we may be unable able to successfully attract and retain specialized management. We may be materially adversely affected in the event our key management personnel resign or if we are unable to continue to attract and retain specialized management.
We may be unable to fully implement our management strategies, which may materially adversely affect us.
We intend to expand our share of the domestic financial market, particularly by expanding our participation in the retail segment (including personal loans) and by diversifying and expending our portfolio of products and services. Our actual productivity, investments, operating costs and business strategies may be substantially less favorable than originally projected. Difficulties may arise particularly in the form of financial, demographic, competition-related and/or technology issues, among others. There can be no assurance that we will be successful in implementing our management strategies, or that our concentration of activities in specific segments will not materially adversely affect us.
We may not be able to recover amounts resulting from loans in default by borrowers or seize assets pledged as collateral under these agreements, and such collateral, when seized, may not be sufficient to cover defaulted loan balances.
When borrowers default on loan and financing agreements, we take judicial or extrajudicial measures to collect the amounts due. There can be no assurance that our collection procedures and foreclosure of guarantees linked to these loans and/or financing activities will be the most appropriate or that they will result in the actual recovery of the amounts due. We may be materially adversely affected to the extent that we are unable to substantially recover unpaid balances.
Due to the COVID-19 pandemic, a significant increase in the risks associated with the debt market, including those resulting from increased default, renegotiations of existing debt contracts and possible claims of force majeure, may increase our loss provisions, as well as our actual losses, causing loan losses to exceed the provisioned amounts, and impact the proportion of loans in arrears in relation to total loans granted by us, materially and adversely affecting our financial results.
Upon borrower default, we may be unable to obtain marketable title to properties secured through fiduciary assignment (or mortgage), which may materially adversely affect us.
All of our real estate loans are guaranteed by fiduciary assignments of property or mortgages. In the event the borrower defaults, and following the termination of any applicable cure period established in the
 
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loan agreement, we may seek to enforce the fiduciary assignment and transfer title to the property to our name for subsequent sale at an auction.
We are not subject to a deadline to foreclose upon property and the timing of any such foreclosure may vary depending on the circumstances of out-of-court proceedings, such as notary requirements, difficulty in locating the debtor, the requirement to publish notices calling on the debtor to settle the debt and judicial measures available to the debtor, among other circumstances. In addition to the possibility of delays in the proceedings, there is also the possibility of challenges by the debtor, which may give rise to judicial decisions invalidating recovery or annulling the transfer of title, property auction or payment of auction proceeds, which may materially adversely affect us.
In addition, particularly with respect to the collateral, there can be no assurance that the amounts we recover through auctions for the sale of repossessed property will be sufficient to cover customer balances outstanding.
In the event that we are not able to collect a debt or seize the collateral, or if we are unsuccessful in auctioning repossessed property, we may be materially adversely affected.
Adverse decisions in legal, administrative proceedings and investigations to which we, our subsidiaries or our directors and officers are a party may materially adversely affect us.
We, our subsidiaries and members of our management are a party to lawsuits and administrative proceedings related to civil (including, in particular, proceedings relating to consumer relationships), tax, labor, antitrust, regulatory claims and investigations arising in the ordinary course of business. Certain of these lawsuits and proceedings involve sizeable amounts and indemnification obligations. We cannot assure that the outcomes of these lawsuits will be favorable or that we have sufficiently anticipated the risks inherent to each claim. Provisions that we have recognized, or may recognize in the future, may be insufficient to cover the total cost of these lawsuits and proceedings. In addition, there can be no assurance that material legal, arbitral and administrative proceedings will not arise in the future in relation to contingencies that oblige us to expend significant resources.
We may also incur costs with such proceedings, including attorney fees. We may also have some of our assets frozen or otherwise subject to liens, which may affect our liquidity. We may also not have the funds to secure certain proceedings via judicial deposit or by offering some other form of collateral. Our failure to provide collateral on such legal proceedings will result in the values we are required to pay due to these proceedings not being suspended (that is, will be due). Such failure to provide collateral may also subject us to seizure of our assets and garnishment of our income, as well as make it difficult for us to obtain certain statements of fiscal regularity. Any such consequence may adversely affect our financial conditions and results of operations.
We may be materially adversely affected in the event of unfavorable rulings, particularly in lawsuits or proceedings involving material amounts or that impose restrictions that prevent us from carrying out our business as initially planned. See also “Business — Legal and Administrative Proceedings.” In addition, unfavorable decisions in proceedings involving our management may prevent them from continuing to serve as our officers or directors and/or materially adversely affect our reputation and business.
We have entered into settlement agreements (termos de ajustamento de conduta) with the Public Prosecutor’s Office and consumer protection governmental authorities. Non-compliance with such agreements may adversely affect our reputation, brands and financial results.
The Public Prosecutor’s Office and consumer protection governmental authorities may inspect and initiate administrative proceedings related to regulatory compliance. In such cases, we may enter into settlement agreements (termos de ajustamento de conduta) with these authorities, through which we will agree to perform (or abstain from performing) certain actions.
As of the date of this prospectus, we have entered into four settlement agreements with the Public Prosecutor’s Office and consumer protection governmental authorities in which we agreed to certain obligations related to the facts of each proceeding. These settlement agreements are further described in
 
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Business―Legal and Administrative Proceedings.” Non-compliance with such agreements may subject us to agreed-upon fines and legal proceedings, both of which may adversely affect our reputation, brands and financial results.
Our insurance policies may be insufficient to cover possible claims and losses.
There can be no assurance that our insurance policies will be sufficient in all circumstances to cover all of the risks to which we, and our assets, are subject. The occurrence of a significant uninsured claim or loss, or a claim or loss not subject to indemnification, either in whole or in part, or any failure by our third-party service providers to meet their obligations to us, or to contract insurance, materially adversely affect us.
Certain risks are not covered by insurers, such as war, acts of God, cyberattacks, data-breaches by our customers and third-party service providers, interruption of certain of our activities and human error. Additionally, natural disasters, meteorological phenomena, electricity shortage and other similar events may cause physical harm and loss of life, as well as interrupt our operations, damage our equipment and the environment, among others.
Our insurance coverage is also subject to timely payment of the premiums. Additionally, there can be no assurance that we will be able to maintain coverage under our insurance policies at reasonable rates or on otherwise acceptable terms. Any failure to so maintain coverage may materially adversely affect us.
Third parties may prevent us from using the technology necessary to provide our services or subject us to intellectual property litigation.
We depend on intellectual property developed by third parties, including open-source libraries, to conduct our business, such as patents, computer programs and use licenses, among others. If our use of third-party intellectual property is considered illegal or irregular, we may be prevented, including judicially, from continuing to use such assets.
Additionally, our inability to negotiate a license to use intellectual property owned by third parties that is essential for our business on acceptable terms could obligate us to stop using the intellectual property in question or to stop offering services that incorporate such intellectual property. In these cases, we could be required to indemnify the third party or become involved in costly and complex litigation, which, regardless of the outcome, could materially adversely affect our business and results of operations.
We may be materially adversely affected in the event we are unable to protect our intellectual property rights.
Our and our subsidiaries’ intellectual property rights, including rights to our trademarks and domain names, are important to our operations. As of the date of this prospectus, we have obtained, or are in the process of obtaining, registration of our trademarks with the National Institute of Intellectual Property (Instituto Nacional de Propriedade Industrial), or the INPI. Additionally, we do not currently own the trademark “Inter,” which is the common identifier between our different products. There can be no assurance that our intellectually property rights will not be violated or that the registration of any of our intellectual property will not be opposed by third parties, either judicially or administratively. Similarly, there can be no assurance that registration applications currently in progress will be granted by the INPI, particularly given opposition motions that have already been filed against certain of our intellectual property. In addition, in the event our intellectual property rights are successfully challenged, we may be prohibited from continuing to use such intellectual property. Accordingly, any failure to protect our intellectual property rights may materially adversely affect us. See also, “Business — Intellectual Property.”
A decline in our credit ratings, may materially adversely affect our liquidity and competitiveness as well as increase our capital raising costs.
Our capital raising costs and access to the debt capital markets are significantly dependent on our credit risk ratings. These ratings are provided by private ratings agencies that may at any time lower or withdraw our credit ratings or place us on a negative “credit watch.”
A decline in our ratings may increase our lending costs and limit our access to the capital markets, which may, in turn, result in a decrease in our revenues and materially adversely affect our liquidity. There
 
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can be no assurance that ratings agencies will not lower our credit ratings or the ratings of securities issued by us or place us on a negative credit watch. Changes in circumstances, whether real or perceived, may significantly alter our credit ratings, which may, in turn, materially adversely affect our results of operations and liquidity.
We may be unable to identify, complete, integrate or obtain the benefits of past and future acquisitions.
We have engaged in mergers and acquisitions in the past and may pursue acquisitions in the future as part of our growth strategy.
There can be no assurance that we will be able to identify and execute future acquisition opportunities. In addition, our ability to successfully execute acquisitions may be limited by the number of acquisition targets available, internal demand for resources, our ability to obtain financing (to the extent necessary and on satisfactory terms) for larger acquisitions and our ability to obtain the required corporate, regulatory or governmental approvals. In addition, even if we are able to identify acquisition targets, third parties with which we have a commercial relationship may be unwilling to enter into agreements on commercially balanced terms in respect of a particular transaction. We may experience significant delays in completing acquisitions, which may not come to fruition for a number of reasons, including failure to meet specified conditions or to obtain the required regulatory approvals. Unanticipated additional conditions for approval may also be imposed. The negotiation and completion of potential acquisitions, whether or not consummated, may potentially affect our current operations or divert substantial resources. As a result, our business, growth prospects, results of operations and financial conditions may be materially adversely affected.
In addition, acquisitions may expose us to unknown obligations or contingencies incurred prior to the acquisition of the target or its assets. The diligence performed to assess the legal and financial condition of the target, as well as any contractual guarantees or indemnities received from the target sellers may be insufficient to protect or indemnify us for any contingencies that may arise. Any significant contingencies arising from acquisitions may materially adversely affect our business and results of operations. In addition, we may acquire companies that are not subject to independent external audits, which may increase the risks related to the acquisition.
As a result of a number of factors, we may be unable to benefit from completed acquisitions, including as a result of our inability to (1) implement our culture in the acquired companies, (2) integrate our operating and accounting policies and procedures, (3) expedite the consolidation of subsidiaries, (4) retain existing management to the extent necessary or adapt the acquired companies’ operations, (5) prevent the loss of customers of the acquired companies or our existing customers, or (6) otherwise generate sufficient revenue to offset the costs and expenses of acquisitions.
Moreover, the closing and success of any transaction are, at least in part, subject to a number of economic and external factors that are beyond our control. Any combination of the factors mentioned above may result in our inability to integrate acquired companies or assets or achieve the expected growth or synergies of a particular transaction, which may materially adversely affect our business, results of operations and financial condition.
Currently, our operations are all concentrated in Brazil, but we plan to expand our operations internationally. As part of this strategy, in August 2021 we submitted a proposal for the acquisition of 100% of the share capital of USEND. See “Summary of Inter — Our Business Model — Recent Strategic Developments — Potential Acquisition of USEND.” Expanding internationally is complex and we may face strategic and operational challenges, we cannot guarantee that our international expansion will be successful and we cannot accurately predict which new factors will begin to impact our results of operations and financial condition.
A significant increase in the number of our digital accounts in a short period of time may negatively impact our business, results of operations and reputation.
A significant increase in the number of digital accounts opened in a short period of time may result in a number of operating risks, including failures in our ability to register banking transactions as well as the unavailability of systems for (1) our business operations, (2) the processing of gains and losses on public and
 
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private securities, (3) detecting fraud and (4) the settlement of purchase and sale orders in the capital markets, among other operating processes that may be negatively impacted. The realization of one or more of these risks may materially adversely affect our results of operations, financial condition and reputation. In addition, there can be no assurance that we will be able to sustain the significant increase in our digital accounts over the long-term.
We and our subsidiary, Inter Shop, may not be able to maintain our strategies for the development and maintenance of the multiple Shopping platform.
We and Inter Marketplace Intermediação de Negócios e Serviços Ltda. (“Inter Shop”), our subsidiary that operates our shopping platform, perform e-commerce transactions through our digital application. Should we and/or Inter Shop be unable to maintain our strategies for the development and maintenance of our shopping platform, including maintaining our contracts with certain suppliers on whom we depend to maintain our e-commerce operations, transactions performed in this environment may reduce and adversely impact us.
Additionally, companies who sell their products on Inter Shop are free to leave the platform and are not bound by non-competition or similar agreements. If we are unable to retain enough companies selling their products on our platform, our e-commerce activities may halt, which could materially adversely affect us.
We may be materially adversely affected by the operations of our subsidiaries and investees.
We carry out certain of our activities through our subsidiaries Inter Digital Corretora e Consultoria de Seguros Ltda. (“Inter Seguros”), Inter Distribuidora de Títulos e Valores Mobiliários Ltda. (“Inter DTVM”), Inter Shop, Inter Asset Holding S.A. (“Asset Holding”), which controls Inter Asset Gestão de Recursos Ltda (“Inter Asset”), NG Consultoria em Eventos e Comércio de Catálogos e Publicações Ltda. (“Duo Gourmet”) and Acerto Cobrança e Informações Cadastrais S.A. (“Meu Acerto”), and through our investee Granito Soluções em Pagamento S.A. (“Granito”). The income earned by these companies contributes to our results of operations. Accordingly, in the event our subsidiaries and investees incur losses, we may not receive dividends or other distributions from these companies.
We have partners in Inter Seguros, Inter Asset, Granito, Duo Gourmet and Meu Acerto, with whom we maintain voting agreements according to which certain decisions that impact the business require the consent of the partner, who may have economic interests different from our partners and may act in a manner contrary to our strategy or objectives. If we are unable to obtain the partners’ consent to approve the decisions we deem appropriate, we may not be able to implement, in whole or in part, the business strategy for Inter Seguros, Granito, Meu Acerto or Inter Asset that we believe to be the best suited to our interests.
Additionally, failures by our subsidiaries to provide certain services may result in financial losses and damage to their reputations and to our reputation given that these subsidiaries provide services directly to our customers.
The retail sector in Brazil is highly competitive, which may adversely affect the participation of our subsidiary, Inter Shop, in the market, consequently affecting the net revenue of our operations
Inter Shop faces intense competition from various retailers who may benefit from the tax collection system in Brazil. In addition, it competes with a large number of multinational merchandise retail chains in general, as well as with hypermarkets that offer their customers durable goods. Some of these international competitors may have access to larger sources of finance at lower costs than Inter Shop.
Moreover, consumers’ purchasing decisions are affected by factors such as brand recognition, product quality and performance, credit availability, price and habits and preferences of each consumer. Some of our competitors may make marketing investments substantially larger than ours. If our advertising, promotional or marketing strategies are unsuccessful, or if we are unable to offer new products (and services) that meet market demands or changes in consumer habits, or if we are unable to successfully manage introduce new products or the profitability of these efforts or, if for other reasons, our end consumers believe that our competitors’ products and services are more attractive, then Inter Shop sales, profitability and operating results may be affected, which can have negative impacts on our results.
 
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Competition in e-commerce can also intensify. Other retail and e-commerce companies may enter into alliances or commercial agreements that will strengthen their competitive position. As the customer portfolio grows and increases their loyalty in the various segments of the Internet market, participants in these segments will be able to seek to expand their business to the market segments in which we operate. In addition, new technologies can further intensify the competitive nature of online retailing. We believe that the nature of the Internet as an electronic shopping facilitates the entry of competitors and allows for purchases through price comparison. This increase in competition may reduce Inter Shop sales, profitability and operating results may be affected, which may have a negative impact on our results. Competitors may come to provide more resources for technology and marketing development than we do. Additionally, as the use of the Internet and other online services increases, retailers operating in this market may be acquired, receive investments, or enter into other business relationships with larger, more established companies with financial resources.
We control Inter Seguros. Potential changes in the insurance brokerage regulatory environment could have a material adverse effect on our business, financial condition, operating results and prospects for expansion.
The activities of Inter Seguros are subject to supervision, especially by the Superintendence of Private Insurance (“SUSEP”), and the National Council of Private Insurance (“CNSP”). Changes in the laws and regulations applicable to the insurance and reinsurance market could have a material adverse effect on the business of insurance companies. There is no guarantee that the Brazilian government, whether through SUSEP or any other autarchy/government agency, will not change these laws and regulations, which may prevent or restrict the operations of Inter Seguros, adversely affecting our business, financial situation, operating results and prospects for expansion.
We contract for the storage of data and information produced in our operations through “cloud” storage. Any interruptions or failures in IT systems by those responsible for storing this data or information may result in the loss or disclosure of material information, the temporary interruption of our operations, and liability to third parties that may be, directly or indirectly affected by such occurrences.
Our operations depend on the efficient and uninterrupted operation of our IT systems. Data and information generated from our operations are processed and stored on virtual servers directly on the internet through cloud storage. If cloud servers are interrupted by internal failures, failures in the provision of services by contracted suppliers (whether resulting from computer virus, physical or electronic invasion) or any inability to meet contractual obligations, our operations may be temporarily interrupted and we may be liable to third-parties that are affected directly or indirectly by such occurrences, which may materially adversely affect us.
We outsource the storage of data and information produced in our operations directly on the worldwide web by using relevant cloud providers. Any interruptions or faults in the information technology systems responsible for storing such data and information may result in the loss or disclosure of relevant Information, temporary interruption of our operations, as well as our liability before third parties, which come to be directly or indirectly affected by such events, which may adversely impact our operations.”
Our operations depend on the efficient and uninterrupted operation of our information technology systems. The data and information generated in our operations are processed and stored on virtual servers directly on the World Wide Web, by using relevant cloud computing providers. If these servers are interrupted due to their own failures, failures in the provision of services by the contracted suppliers, whether due to virus infection on the computers, physical or electronic invasion, or due to the inability to comply with the applicable contractual provisions, there may be a temporary interruption of our operations, as well as our accountability to third parties that may be directly or indirectly affected by such occurrences, which may adversely affect our operations and, consequently, our results.
We cannot guarantee that our suppliers, business partners, and shopping sellers will not engage in improper practices. We may be held responsible for the default and marketing of inadequate products by the sellers partners registered on our shopping platform, and may cause damage to our reputation, brands and financial results.
We and our subsidiary Inter Shop cannot guarantee that some of our suppliers and business partners of our shopping platform will not present irregularities in their operations due to non-compliance with tax,
 
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labor, social and environmental legislation and anti-corruption. It is possible that partners use outsourcing of the production chain, known as “quarteirização”, or even that these potential irregularities are used to lower the cost of their products.
Through our shopping platform, Inter Shop allows sales partners to register and offer their products within their e-commerce channels. Through this model, Inter Shop acts as an intermediary in sales transactions, and it is not under our control that partners fulfill their obligations and responsibilities to their customers. If any of these partners do not meet their obligations to customers, we and/or Inter Shop may have our indicators of customer service negatively impacted, suffer sanctions from regulatory agencies and verify an increase in the number of civil and tax proceedings, among others, and be required to bear costs to customers who purchased their products through the shopping platform. We and Inter Shop may still be held responsible for partners trading, or even register and offer on our platform, counterfeit, illicit and/or illegal products. These aspects may adversely affect our financial results, image and reputation.
If this risk materializes, we may face reputational losses, consequently, loss of attractiveness to our customers, which could adversely impact our net income and operating income, and we may be subject to fines and/or sanctions to be applied by competent bodies. Any such events could adversely impact the market value of our securities.
Additionally, we and Inter Shop may be jointly or severally liable if our suppliers and/or business partners demonstrate problems already described, in addition to default, by our shopping platform partners and customers of Inter Shop.
Increased delinquency by credit borrowers could materially adversely affect us.
The ability of our borrowers to pay their obligations on time is directly related to economic conditions in Brazil. Economic crises, such as the crisis caused by the COVID-19 pandemic, and poor economic performance, may result in an increase in credit defaults. The effects of the most recent economic crisis in Brazil are still evident and future default rates may differ from our current projections.
An increase in the default rates of our credit portfolio may result in increased losses within our lending operations or increased loss provisions, and materially adversely affect us.
We may experience difficulty in foreclosing upon security for unpaid loans and financing.
We may experience difficulty in foreclosing upon security for unpaid loans and financing given that foreclosure depends on external variables, such as developments in extrajudicial and judicial collection proceedings, and most of these proceedings are challenged in court by the debtors to postpone recovery.
Where the debtor is in bankruptcy or judicial or extrajudicial reorganization, we compete with other preferred and privileged creditors to enforce our guarantees. Judicial proceedings may lead to the renegotiation of the borrower’s debts.
We may not be able to recover our delinquent credits on favorable conditions, which may materially adversely affect us, including as a result of increases in our provision for impairment losses.
Due to the COVID-19 pandemic and Brazil’s current macroeconomic condition, we may encounter difficulties in foreclosing upon security for unpaid loans and financing, especially in view of unfavorable court rulings aimed at protecting customers who enter with judicial measures. For additional information on possible impacts related to the COVID-19 pandemic, see “―The coronavirus pandemic (COVID-19), as well as any potential economic effects, together with slowdown and volatility in the Brazilian and global financial and capital markets have had and may continue to have adverse effects on our business, financial condition, liquidity and operating results, and may increase other risks described in this section “Risk Factors.”
The foreclosure of real estate as a result of customer defaults may result in an increase in “assets not for own use” ​(or “BNDUs”)
Due to the increase of our portfolio, the volume of foreclosures as a result of customer defaults may increase significantly, which would indicate an increased risk of our credit portfolio. Because of depreciation
 
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and other maintenance costs impacting the collateral, we seek to sell BNDUs within a short period of time. We may be unable, however, to sell our properties on acceptable terms and conditions, which may materially adversely affect us.
Our ability to collect payments due from payroll deductible loans is subject to laws and regulations, judicial interpretations and policies of public entities related to payroll deductions, as well as licenses and agreements with private or public employers, the credit risk of employers and the borrower retaining his or her employment.
A portion of our income is derived from payroll loans in connection with which our customers’ loan payments are deducted directly from their pensions, annuities or other earnings. Our ability to make payroll deductions is governed by various federal, state, and local laws and/or regulations that establish limits on such deductions, and requires certain licenses issued by public entities and agreements with private sector employers. Any changes in the applicable regulations or adverse judicial determinations may require adjustments to our operational procedures used to collect payroll installments as well as the granting of payroll loans.
If a borrower’s employment contract is terminated, the payment of the credit granted will depend exclusively on the borrower’s financial capacity or, in the event of his or her death, on the financial capacity of his or her successors.
Payments on payroll loans are effected through deductions from the employee’s paycheck or benefits paid by INSS benefits. Accordingly, if a private employer experiences financial difficulties or is required to file for judicial reorganization or bankruptcy, the employer may be unable to pay the salaries from which payments are deducted. Government employers may also experience difficulties that impact our ability to receive payments from borrowers.
Any of these events may increase the risk of our payroll loan portfolio and increase the need to limit the origination of new loans, which may materially adversely affect us.
Any deterioration in the credit quality of receivables that guarantee a portion of our credit portfolio and any inability to accurately estimate impairment losses may materially adversely affect us.
A portion of our corporate lending operations is guaranteed by receivables due to the borrowers from their respective customers. Any unfavorable change in the credit quality of these third-party debtors may negatively affect our ability to receive amounts owed by our customers, which may adversely affect us.
Provisions for credit losses are based on current valuations and expectations related to several factors that affect the quality of our credit portfolio. These factors include, among others: the financial condition of borrowers and their payment capacity and intentions; the realizable value of guarantees; government macroeconomic policies; interest rates and the legal and regulatory environment. Because of the number of factors beyond our control, current (or future) provisions for credit losses may not be sufficient to cover unrecovered losses. We may be required to increase our provision for credit losses and may be materially adversely affected to the extent our assessment and expectations regarding the aforementioned factors are different from actual events, if there is a deterioration in the quality of our total credit portfolio for any reason or if future actual losses exceed the estimates. We may be materially adversely affected if we are unable to control or reduce default rates or the incidence of poor quality credit.
The effectiveness of our credit risk management is affected by the quality and scope of information available in Brazil.
In determining the credit capacity of customers, we use credit information available in our database as well as public credit customer information provided by the Central Bank and other sources. Due to limitations in the availability of information and the information infrastructure in existence in Brazil, our credit risk assessment associated with a particular customer may not be based on complete, accurate or reliable information. In addition, there can be no assurance that our credit scoring systems collect complete or accurate information that reflect the actual behavior of customers or that their credit risk can be properly assessed. We rely on other publicly available resources and internal resources, which may not be effective. As
 
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a consequence, our ability to efficiently manage credit risk, and subsequently, our provision for impairment losses, could be materially adversely affected.
Changes made by the Central Bank in the basic interest rate may materially adversely affect our operating results and financial condition.
The Monetary Policy Committee of the Central Bank (Comitê de Política Monetária) (“COPOM”) periodically determines the Special System for Settlement and Custody (Sistema Especial de Liquidação e de Custódia) (“SELIC”) rate, the basic interest rate of the Brazilian banking system, which serves as an important instrument for meeting inflationary targets. The basic interest rate has fluctuated frequently in recent years. The COPOM has often adjusted the basic interest rate due to economic uncertainties and to achieve the objectives determined by the Brazilian government’s economic policy.
The recent COVID-19 pandemic has had relevant impacts on the global and local economy, affecting consumption and economic activity in countries in general. Central banks around the world have adopted monetary stimulus and fiscal expansion actions in an attempt to minimize the impacts of the crisis, which already signals a possible recession in the global economy in 2020.
In Brazil, the advance of the pandemic has resulted in the deterioration of the macroeconomic environment, causing a drop in demand for products and services, deceleration of GDP, increased unemployment, increased public debt, in addition to other effects. On August 5, 2020, the basic interest rate reached 2.0%, the lowest level in history, a decision taken at a time of strong reduction in the level of activity of the global economy. On September 30, 2021, the SELIC rate was 6.25%.
Faced with this scenario, the Central Bank, the CMN and the Brazilian government have been taking several measures to improve the liquidity conditions of the National Financial System. However, the effectiveness of such measures cannot be fully measured.
Increases in the basic interest rate may materially adversely affect the results of our operations, by reducing the demand for credit, increasing funding costs and increasing the risk of customer default, among other consequences. In particular, lending tends to be more affected by an increase in the basic interest rate, which may materially adversely affect us. Reductions in the basic interest rate may also materially adversely affect us by, for example, reducing revenues from revenue-generating assets and decreasing margins. We are unable to predict whether the Central Bank will maintain current interest rates.
The increasingly competitive environment of the Brazilian banking sector may materially adversely affect us.
The market for financial and banking services in Brazil is highly competitive. We face growing competition from other Brazilian and international banks, both public and private, as well as other fintechs in Brazil. A number of institutions have demonstrated interest in operating with a digital focus, attempting to attract new customers, which intensifies competition in the sector.
There can be no assurance that we will be able to continue to compete adequately, particularly with the entry of larger domestic and foreign financial institutions as well as fintechs.
Increased competition may materially adversely affect us, including by limiting our ability to increase our customer base and expand our operations, resulting in a reduction of our profit margins, and increasing the competition for investment opportunities.
In addition, if our customer service levels are perceived by the market as significantly below that offered by competing financial institutions, we may lose existing and prospective business opportunities. If we are not successful in retaining and strengthening our customer relationships, we may lose market share, incur losses in some or all activities, or fail to attract new ones and retain existing customers, which may materially adversely affect us.
Changes in Brazilian tax and social security laws may materially adversely affect our operating results and financial capacity.
The Brazilian government regularly implements changes in tax, social security, and other laws and regimes that affect us and our customers. These changes include changes in tax rates and, occasionally, the establishment of temporary rates, the proceeds of which are used for certain governmental purposes.
 
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These measures may result in increased tax payments and social security contributions, which may materially adversely affect us. There can be no assurance that conditions will be sufficient to maintain the profitability we achieved in previous years should there be substantial increases in taxes levied on us, our subsidiaries and our operations.
In addition, past tax reforms have brought uncertainties with respect to the national financial system, increased the cost of credit, and contributed to an increase in customer defaults. It is not possible to predict future tax reforms that may be implemented by the Brazilian government, their effect nor to ensure that any tax reform that may be undertaken does not materially adversely affect us.
We are unable to quantify the effects of changes in tax rules and regulations that may be implemented by the Brazilian government in the future. There can be no assurance that future changes in tax rules and regulations will not have a material adverse effect on our results and operations or those of our customers. In this respect, it is currently being discussed in Brazil a proposal of tax reform presented by the Ministry of Economy, including certain rules regarding the taxation of individuals, legal entities and financial investments. Two of the main points of the Bill of Law recently approved by the House of Representatives are the taxation of dividends at 15% rate and the disallowance of payments of interest on net equity (juros sobre o capital próprio). This bill of law is subject to further approval by the Brazilian Senate and sanction of the Brazilian President. The terms of the Tax Reform and their impact on Inter Platform and current Banco Inter Shareholders will not be known until the final version of the Tax Reform is approved by Congress and sanctioned by the Brazilian President, if that ever happens.
Our business is significantly impacted by the Brazilian regulatory environment.
Historically, the Brazilian government has implemented or amended the regulations that govern financial institutions in connection with the implementation of the Brazilian government’s economic policy. These regulations are constantly modified by the Brazilian government in order to control the availability of credit and to reduce or increase consumption. Certain controls are temporary in nature and may be modified from time to time in accordance with the Brazilian government’s credit policies. Other controls were introduced and remain in force or were gradually reduced. Since regulatory changes may occur frequently, historical operating results do not necessarily provide any indication of our expected results in the future. Brazilian financial institutions are subject to extensive and continuous regulatory review by the Central Bank.
We have no control over regulations relating to banking operations, including, but not limited to, those that govern:

minimum capital requirements;

compulsory deposit requirements;

limits on fixed asset investments;

limits on lending and other credit restrictions;

accounting and statistical requirements;

limits on exchange exposure;

limits or other restrictions on fees;

requirements for the contracting of services for the processing and storage of data and cloud computing;

requirements in relation to the prevention of money laundering, record keeping and ethical issues; and

intervention, liquidation and/or temporary monitoring.
The regulatory framework, which establishes the guidelines to be followed by Brazilian financial institutions (including banks, brokerage firms and leasing companies) has been continuously changing. Existing laws and regulations may be amended, the manner in which existing laws and regulations are enforced or interpreted may change, and new laws or regulations may be adopted. Moreover, regulations
 
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issued by the Central Bank are not subject to the legislative process and, as such, may be enacted and implemented expeditiously, affecting our activities in an unforeseen and sudden manner. Any such changes may materially adversely affect us.
Moreover, the Central Bank has periodically modified the level of reserves and compulsory deposits that Brazilian banks are required to maintain with the Central Bank. Reserve and compulsory deposit requirements may reduce our liquidity and ability to provide loans and undertake other investments. In the future, the Central Bank may increase reserve requirements or establish new reserve or compulsory deposit requirements, and such developments may materially adversely affect us.
In addition, any restrictions on bank loan interest rates may materially adversely affect us, including in relation to our results of operations and our ability to grant loans. Decree No. 22,626/33 (“Brazilian Usury Law”), prohibits banks from charging interest rates of more than 12% per year. However, the Banking Reform Law, Law No. 4,595, dated December 31, 1964 (“Law No. 4,595”), exempted banks from this prohibition and was upheld in several recent court decisions. Any changes in the interpretation of this exception, amendments to applicable laws or regulations limiting the interest rate which may be applied to the loans that we grant may materially adversely affect us.
Changes in compulsory deposit requirements may reduce our operating margins.
The Central Bank has periodically changed the level of compulsory deposits that financial institutions in Brazil must maintain. The Central Bank may increase our compulsory deposit requirements in the future or impose new requirements. Compulsory deposits typically generate lower returns than other investments given that no interest is received on a portion of our compulsory deposits with the Central Bank and that the monies cannot be loaned. Any increase in compulsory deposit requirements may reduce our ability to lend funds and make other investments, which may materially adversely affect us.
We may be materially adversely affected as a result of any intervention by Central Bank in other Brazilian financial institutions.
Medium-sized Brazilian banks may experience a decrease in deposits as a result of certain circumstances and conditions in the Brazilian financial market, particularly relating to the financial health of these institutions, as previously observed in various local and global crisis, which had a pronounced effect on the availability of liquidity for Brazilian small and medium banks.
There can be no assurance that the Central Bank will not intervene in other financial institutions. If the Central Bank undertakes an intervention, even in other financial institutions that are not part of our economic group, we may experience unexpected withdrawals of funds that may materially adversely affect us.
Payroll loans and the policies of public entities in relation to payroll loans are subject to change.
Payroll deductions are regulated by a number of federal, state and municipal laws and regulations that establish maximum limits for deductions. These laws and regulations enforce the irrevocable permission given by a civil servant, private sector worker or INSS beneficiary authorizing deduction from payrolls to repay the loan.
The enactment of any new law, regulation or amendment, or the repeal or emergence of a new interpretation of existing laws or regulations that result in a ban or restriction on our ability to make these direct deductions could increase the risk profile of our credit portfolio, resulting in a higher percentage of loan-related losses. We cannot guarantee that laws and regulations governing direct deductions from employee payrolls or from INSS benefits will not be altered or suspended in the future.
In addition, we are subject to the imposition of limits on the interest rates charged on loans to INSS pensioners, retired persons and civil servants of other government entities with which we enter into agreements for our payroll loans, as well as to delays in receiving the payroll deductions. We cannot guarantee that the entities with which we enter into agreements will maintain the maximum interest rates applicable at their current levels.
 
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Moreover, granting payroll loans to civil servants, retired persons and INSS pensioners requires the authorization of certain public sector bodies. The Brazilian government or other government entities may alter the regulation of these authorizations. Currently, we do not have the required authorization to offer payroll loans to employees of certain municipal and State governments due to statutory restrictions which require such transactions to be authorized only for government-owned banks. Other government agencies may impose regulations that restrict or prevent us from offering payroll loans to employees. In addition, unfavorable administrative or judicial rulings, related to or issued in the context of payroll loans, including, without limitation, rulings imposing any restrictions or encumbrances on us relating to (1) our granting of payroll loans; or (2) the deduction of amounts directly from the paychecks of retired persons, pensioners, staff and employees of the public and private sector, may lead to an increase in losses and expenses related to such operations, which may materially adversely affect us.
Furthermore, if an employment contract between a public employer and the payroll borrower is terminated or if the payroll borrower fails to receive the applicable benefit or payment for any reason, the payroll borrower may default under the payroll loan.
In addition, the agreement entered into between us and the INSS for the purpose of lending to INSS beneficiaries has a fixed term and must be periodically renewed. The most recent renewal occurred on June 12, 2020 and is valid for five years. There can be no assurance that this agreement will be renewed. Any failure to renew this agreement may materially adversely affect our payroll credit card operations. In addition, if a public employer suffers losses or declares bankruptcy or otherwise experiences financial difficulty, it may be unable to pay the salaries of payroll borrowers. Any of the above-mentioned risks may increase our risk under our payroll credit card portfolio, and may increase our implementation of default control measures, such as reducing the borrower’s credit limit or implementing borrower lockouts so that the payroll borrower does not enter into new payroll loans. The realization of any of these risks may materially adversely affect our financial condition and results of operations.
During the pandemic, new rules relating to payroll loans came into effect (and other measures may still be enacted), which included provided a grace period before the commencement of the payroll deduction. Legislative Decree No. 6, dated March 20, 2020, established that financial institutions may offer a grace period for the beginning of the discount of the first installment on the social security benefit, for the payment of payroll loans, provided that it does not exceed 90 days.
Moreover, any changes regarding the abovementioned processes and regulations may result in changes to the system we use to deduct payments due from employee salaries. A new system may not be as effective as the current payroll deduction system and may result in increased operating costs in addition to new implementation costs. As a result, we may find it necessary to redirect our operations to products that may have an increased credit risk profile.
Certain claims over the payroll borrower’s income have priority over payroll loan payments and may result in the temporary suspension of, or permanent reduction in, payroll loan payments.
The INSS and other governmental entities impose a series of requirements on payroll deductible loans of INSS retirees and pensioners as well as public sector employees. In particular, payroll deductions for INSS retirees and pensioners and federal public servants cannot exceed 40% of the total monthly amount that payroll borrowers receives from the INSS or their employer, after deducting certain preferred expenses (such as alimony, INSS contributions and income taxes), 35% of which is payroll deductible and 5% of which may be used exclusively for the payment of payroll deductible credit cards. The amount available for deductions from payroll after preferred expenses is referred to as the payroll borrower’s margin. The margin is a total limit that applies to all deductions from the payroll of INSS retirees and pensioners and the salaries of federal public servants.
The suspension or reduction in payments deducted from payroll may occur when a borrower assumes additional obligations that have priority in payment over payroll loan payments, thereby reducing the payroll borrower’s (with payments in respect of payroll credit cards having priority over other payroll loan payments). If the amount owed monthly by a payroll borrower exceeds the borrower’s margin that may be lawfully assigned, only the assignable amount may be deducted from the payroll borrower’s benefits or salary,
 
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as applicable, which may result in a partial payment or no payment of the payroll credit obligation and materially adversely affect us.
The increase in the competitiveness of the banking sector due to the implementation of the Open Financial System (Open Banking) may hinder customer retention and affect our results.
On May 4, 2020, the CMN and the Central Bank enacted Joint Resolution No. 1/2020 and Central Bank Circular No. 4,015 that implemented the Open Financial System (“Open Banking”), in Brazil, in order to facilitate the access of new players to the financial markets, as well as encouraging competition between financial institutions. The changes brought by these new regulations started to demand the opening and sharing of information about the services of the main financial institutions in Brazil, and the expansion of the portability of data and transactions of customers. As a consequence, financial institutions will be required to adopt minimum technological standards for the implementation and operationalization of interfaces dedicated to sharing data and services. Thus, data from customers and services of financial institutions are now available for access by participants in the financial system, provided that the sharing of their data is previously allowed by customers. The implementation of Open Banking is expected to be completed in 2021.
If we are unable to be competitive in the face of these new market conditions or fully and duly observe the minimum technological standards, including those related to cybersecurity, we may experience difficulties in retaining customers and our financial results may be negatively impacted, as well as our reputation.
We may face difficulties in adapting our operational structure to the requirements for the implementation of instant payment arrangements.
By issuing Central Bank Resolution No. 1, dated August 12, 2020, and Central Bank Circular No. 4,027, dated June 12, 2020, the Central Bank instituted and regulated, among other aspects, the arrangement for instant payments (“PIX”) and SPI, which comprise instant payment (the electronic transfer of funds in which the transmission of the availability of funds to the recipient user occurs in real time and whose service is available 24 hours a day, seven days a week and at every day of the year).
We cannot assure you that we will not need to make improvements or that we will not face difficulties in developing the operational structure necessary to reconcile and maintain our systems in compliance with the legal requirements for instant payments. In addition, we may experience operational problems after the system starts to operate or when new features been included on the system, which may result in complaints and administrative and judicial demands by customers and difficulties in retaining customers and require additional unforeseen investments, which may negatively impact your financial results, as well as your reputation.
We may incur financial and reputational losses due to our relationship with shareholders and/or customers, whose activities may result in negative social environmental impacts that may materially adversely affect us.
We have a diversified customer base that may be exposed to socio-environmental risk factors. Socio-environmental risk may materialize for our customers in a variety of ways and with differing degrees of intensity in relation to economic, social and environmental scenarios, resulting in financial and/or reputational losses that may impact their relationship with us, and materially adversely affect us.
We may become part in legal proceedings, receive infraction notices and fines, be accused of being involved in the business of our customers or third-party service providers and, consequently, any environmental harm caused by them, any of which may adversely affect our operations and reputation.
Our controls to identify environmental risks in property offered to us as collateral may fail. Accepting assets with environmental risks may subject us to additional costs (such as repairing the environmental harm in the property in question) and fines, both of which may adversely affect our financial condition and reputation. Such assets (whether or not used) may become socio-environmental liabilities due to contamination, deforesting and illegal occupations, among others. Such events may adversely affect our operations, financial condition and reputation.
 
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We are subject to various risks in our credit card operations.
We issue credit cards and payroll cards to our customers. Our credit card operations are subject to various risks, including risk of fraud and credit risk of our customers, as well as risk relating to the general economic conditions of the Brazilian economy. Fraud risks include losses from various types of fraud by our customers or third-parties, including use of stolen or fraudulent credit card data, attempted payments with insufficient funds and other frauds. People use increasingly sophisticated methods to engage in illegal activities involving personal information, such as unauthorized use of another person’s identity, account information or payment information and unauthorized acquisition or use of credit or debit card details, bank account information and mobile phone numbers and accounts. Our credit risk with credit cards is the risk that our customer does not have enough funds to pay the credit card balance when due. This risk can be exacerbated if the models we use to determine the amount of credit we extend to each customer are not properly calibrated. Additionally, our credit card operations are relatively new. As such, we are still developing and implementing more sophisticated methods and models to mitigate the risks relating to our credit card operations.
Risks Relating to Brazil
The Brazilian government exercises significant influence over the Brazilian economy and government actions may materially adversely affect the Brazilian market and us.
Economic policies, including credit, monetary, tax and exchange policies, are used as instruments to maintain the functioning of Brazil’s economic system. In this context, changes in regulations of exchange controls, taxes and other areas applicable to services offered by financial institutions may materially adversely affect us.
Uncontrolled inflation, significant exchange rate variations, social instability and other political, economic and diplomatic events, as well as the Brazilian government’s response to these events, may materially adversely affect us. In addition, uncertainty regarding the guidelines of economic policy may contribute to a lack of confidence and increased volatility in the Brazilian capital markets, as well as in the price of securities of Brazilian issuers. It is not possible to predict with any certainty how the approval of any reforms, such as labor, social security, political and tax reforms, will impact the Brazilian economy. Continuing political uncertainty may affect the approval of important measures and lead to reversals in expectations, such as, but not limited to:

fluctuations in interest rates;

fluctuations in exchange rates;

reductions in salary and income levels;

increased unemployment rates;

inflation;

reserve requirements;

capital requirements;

liquidity of capital and credit markets;

macroeconomic measures;

customer defaults;

monetary and fiscal policies, as well as changes in the tax regime;

political, social or economic instability;

allegations of corruption against political parties, civil servants and others; and

other political, social and economic events affecting Brazil.
We cannot foresee which measures may be adopted by the Brazilian government, which measures (if and when implemented) may create instability in the Brazilian economy. For example, the deterioration in
 
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federal, state and municipal governments’ fiscal results in recent years has led to an unprecedented increase in gross debt as well as in the gross debt to GDP ratio. In this environment, the government may encounter difficulty honoring its commitment to pass on to us the credit installments deducted from the salaries of its employees, increasing our provisions for credit in general.
We are unable to estimate the impact of changes in Brazilian economic and fiscal policy. We also cannot predict how current or future measures may impact our business. Moreover, due to the current political and economic instability, there are substantial uncertainties in relation to future economic policies and we cannot foresee which policies will be adopted by the Brazilian government and whether these policies will materially adversely affect the economy or us. Any changes in the regulatory capital requirements, the reserve requirements or regulations that govern our products and services, for example, or continued policy uncertainty, may materially adversely affect us.
Political instability in Brazil, including instability resulting from corruption investigations may materially adversely affect us. In addition, these investigations may result in reputational risks.
Historically, Brazil’s political landscape has influenced and continues to influence the performance of the country’s economy. Political crises have affected and continue to affect the confidence of both investors and of the general public, which has resulted in an economic downturn and increased the volatility of securities issued by Brazilian companies.
The Brazilian markets have experienced an increase in volatility on account of the uncertainties generated by corruption investigations, led by the Federal Public Prosecutor’s Office and other authorities, and its impact on the Brazilian economy and political environment. Certain members of the federal executive and legislative branches, as well as senior officers of large state-owned companies, are facing allegations of political corruption for having allegedly accepted bribes in contracts awarded by the Brazilian government to various construction, infrastructure, oil and agribusiness companies. There can be no assurance that any individuals directly or indirectly connected to us, including, employees, executive officers, board members, suppliers, service providers, or subcontractors, are not or will not be involved in criminal investigations (related to corruption or not) that may adversely affect our image and reputation.
The outcome of any such investigation is uncertain. We cannot foresee whether the investigations being carried out by the Federal Police and the Attorney General’s Office will lead to political and economic instability or whether there will be any future investigation. We are unable to predict the outcome of any such investigation (future or present), including its effects on the Brazilian economy.
The potential result of these and other investigations is uncertain, but they already had a negative impact in the image and reputation of the companies involved, as well as in the general perception on the Brazilian economy. The development of these cases has and may continue to adversely affect our business, financial condition, results of operations, as well as the market price of our shares. We cannot predict if the ongoing investigations will result in economic and political instability, nor if there will be new allegations against government and elected officers or private companies in the future. We cannot predict the results of the ongoing investigations nor their impact on the Brazilian economy and stock market.
We cannot predict how the Brazilian government may impact the overall stability, growth prospects and the country’s economy and political situation. Neither can we predict how ongoing and future investigations may affect Brazil’s political and economic environment. Likewise, any difficulty of the Brazilian government in obtaining a majority of votes in the Brazilian Congress may result in political standstill, protests and strikes, all of which may adversely affect our operations. Any of the above factors may create political uncertainty, which may materially impact the Brazilian economy, our business, financial conditions and the results of our operations.
Any further downgrading of Brazil’s credit rating may have a material adverse effect on our funding costs.
Rating agencies regularly evaluate Brazil and its sovereign ratings based on a number of factors, including macroeconomic trends, physical and budgetary conditions, debt metrics and the prospect of changes in any of these factors.
 
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The rating agencies began to review Brazil’s sovereign credit rating in September 2015. Subsequently, the three major rating agencies downgraded Brazil’s investment-grade status. On January 11, 2018, Standard & Poor’s (“S&P”), downgraded Brazil’s credit rating from BB to BB-negative, besides changing the outlook from negative to stable, citing delay in the approval of fiscal measures that would rebalance public finances. In December 2019, S&P revised Brazil’s rating outlook from stable to positive and maintained the credit rating at BB-, considered speculative grade, citing that the government continues to implement fiscal consolidation measures that have helped reduce the country’s still high deficit, which together with lower interest rates and gradual implementation of the reform agenda should contribute to stronger growth and investment prospects over the next three years, in addition to a gradual improvement in fiscal results.
In April 2018, Moody’s reaffirmed Brazil’s Ba2 rating, changing the outlook from negative to stable.
In 2018, Fitch Ratings (“Fitch”), downgraded Brazil’s sovereign credit rating to BB-positive with a negative outlook, citing the rapid expansion of the country’s budget deficit and the worse-than-expected recession. In November 2019, Fitch reaffirmed Brazil’s BB- rating, with stable outlook. In the first half of 2020, Fitch revised the outlook from stable to negative due to deteriorating economic prospects, political uncertainties, including tensions between the Executive Branch and the National Congress, and uncertainties regarding the duration of COVID-19.
As a result, Brazil lost its investment grade status with the three major rating agencies and, consequently, the trading prices of the Brazilian debt and equity markets’ securities were adversely affected. Any extension of the current Brazilian recession could lead to further downgrades of the ratings, while any further decline in Brazil’s sovereign credit rating could increase investors’ risk perception and, consequently, may increase our future borrowing costs and materially adversely affect us.
Brazil’s economy is vulnerable to external shocks that may have a material adverse effect on its economic growth and us.
The globalization of capital markets has increased vulnerability to adverse events. The economic crisis that impacted Brazil in 2014 caused a reduction in liquidity, a credit crisis and an economic recession in developed countries, which negatively affected emerging markets. Financial losses and cash shortages, together with the bankruptcies of financial and non-financial institutions and a decline in the economy have increased risk aversion and resulted in a more cautious lending.
In addition, fiscal problems in a number of countries, particularly in Europe, have heightened concerns regarding the fiscal sustainability of weaker economies and have reduced the confidence of international investors, generating volatility in the markets. This environment may affect our ability and the ability of other Brazilian financial institutions to obtain financing in the international capital markets, restricting the credit market.
The occurrence of negative effects such as these may lead to a deterioration in Brazil’s economic conditions. The resulting impacts, such as a decrease in the payment capacity of the banking system’s customers, would have a direct impact on our business, limiting our ability to achieve our strategies and materially adversely affecting us.
Events and the perception of risks in other countries, particularly in emerging market countries, may have a material adverse effect on the market price of Brazilian securities, including those issued by us.
The market value of securities issued by Brazilian companies is influenced, to varying degrees, by the economic and market conditions in other countries, including the United States, European countries, Latin American countries and emerging market countries.
Investors’ reactions to the events in these other countries may have an adverse effect on the market value of Brazilian companies’ securities. The prices of the stocks traded on B3, for example, have historically been sensitive to fluctuations in U.S. interest rates as well as to variations in major U.S. stock exchanges. Moreover, crises in other emerging market countries may reduce investors’ interest in the securities of Brazilian companies, including those issued by us, which may negatively affect the market price of the shares issued by us. In addition, the instability or volatility of the global financial markets may further increase the negative effects on Brazil’s financial and economic environment, which may materially adversely affect us.
 
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Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of Inter Platform 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. For more information about the exchange rate between the real and the U.S. dollar, see “Exchange Rates.”
A devaluation of the real relative to the U.S. dollar could create inflationary pressures in Brazil and cause the Brazilian government to, among other measures, increase interest rates. Any depreciation of the real may generally restrict access to the international capital markets. It would also reduce the U.S. dollar value of our results of operations. Restrictive macroeconomic policies could reduce the stability of the Brazilian economy and harm our results of operations and profitability. In addition, domestic and international reactions to restrictive economic policies could have a negative impact on the Brazilian economy. These policies and any reactions to them may harm us by curtailing access to foreign financial markets and prompting further government intervention. A devaluation of the real relative to the U.S. dollar may also, as in the context of the current economic slowdown, decrease consumer spending, increase deflationary pressures and reduce economic growth.
On the other hand, an appreciation of the real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts. We and certain of our suppliers purchase services from countries outside Brazil, and thus changes in the value of the U.S. dollar compared to other currencies may affect the costs of services that we purchase. Depending on the circumstances, either devaluation or appreciation of the real relative to the U.S. dollar and other foreign currencies could restrict the growth of the Brazilian economy, as well as our business, results of operations and profitability.
Our ability to make payments may be limited by liquidity constraints in Brazil in the occurrence of an event that could lead to an exodus of capital from Brazil and/or induce the Central Bank to effect a sudden and substantial increase in the basic interest rate of the Brazilian economy.
The occurrence of an event that could lead to an exodus of capital from Brazil and/or induce the Central Bank to effect a sudden and substantial increase in the basic interest rate of the economy could have repercussions on local liquidity conditions. These financial uncertainties, which could be both external and internal, may increase liquidity risks, adversely affecting the main sources of funds, particularly short-term deposits, and raising financing costs, which may have a material adverse effect on our profits as well as our liquidity levels.
In addition, negative events affecting the Brazilian economy may directly or indirectly affect certain customers’ ability to honor their financial commitments with us, which can materially adversely affect us.
A substantial increase in inflation could materially adversely affect us.
In the past, Brazil has experienced high rates of inflation. A number of measures and plans were adopted by the Brazilian government in order to combat inflation, which negatively affected the Brazilian economy. Although the Brazilian inflation targets system that was adopted in 1999 has been relatively successful in controlling inflation, there is no guarantee that inflationary pressures will not affect the Brazilian economy in the future. At present, the Central Bank adjusts monetary policy to ensure that inflation rate remains in line with a predetermined target that is announced publicly. Brazil’s inflation was 4.52%, 4.31%, and 3.75%, in the years ended December 31, 2020, 2019 and 2018, respectively, according to the Broad National Consumer Price Index (Índice de Preços ao Consumidor) (“IPCA”).
If, however, the Brazilian government fails to control inflation, we may be materially adversely affected due to a negative impact on our ability to meet our obligations given certain of our agreements are adjusted by the inflation indices. Inflationary pressures may also reduce our ability to access foreign financial
 
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markets, affect our customers’ ability to meet their obligations and lead to further government intervention in the economy, including the introduction of economic policies that may materially adversely affect the performance of the Brazilian economy as a whole and, consequently, us.
Shortcomings in infrastructure and labor in Brazil may have an impact on the growth of the Brazilian economy, with a material adverse effect on us.
Overall, our performance is strongly influenced by the growth of the Brazilian economy. Brazilian GDP growth has fluctuated in recent years, with Brazil recording GDP reduction of 4.1% in 2020 and a GDP growth of 1.1% in 2019 and 1.1% in 2018. Any growth is limited by inadequacies in infrastructure, including possible energy shortages and deficiencies in the transport, logistics and telecommunications sectors, the lack of skilled manpower and of public and private investment in these areas and in education, limiting productivity and efficiency.
Any of these factors could result in volatility in the labor market and have an aggregate impact on income, purchasing power and consumption levels, which may materially adversely affect us due to restricted growth in the economy and a resulting increase in default rates.
Exposure to risk arising from the Brazilian government’s indebtedness may materially adversely affect us.
In the event the Brazilian government fails to make payments due to holders of bonds issued by the Brazilian National Treasury in order to finance public debt, we may be materially adversely affected in light of our investments in these securities.
In addition, a significant decrease in the market value of Brazilian government securities allocated in our portfolio could result in negative adjustments to the market value of these securities, which could materially adversely affect us.
 
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SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA
The following summary consolidated financial information has been derived from the Audited Financial Statements and Unaudited Financial Information, and the respective notes thereto, included elsewhere in this prospectus.
Accordingly, you should read this information in conjunction with the rest of this prospectus, including the sections entitled “Presentation of Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as the Audited Financial Statements and the Unaudited Financial Information, and the respective notes thereto, included elsewhere in this prospectus.
Nine-Month Period Ended
September 30,
Year Ended December 31,
2021(1)(2)
2021(2)
2020
2020(1)
2020
2019
2018
(US$ million)
(R$ million)
(US$ million)
(R$ million)
Consolidated Income Statement Data:
Interest income calculated using the effective interest method
176.9 962.1 663.4 173.3 942.8 775.5 614.1
Interest expenses
(53.4) (290.4) (136.2) (33.9) (184.3) (256.7) (216.2)
Net interest income
123.5 671.7 527.2 139.4 758.5 518.8 397.9
Revenues from services and commissions
66.4 361.2 162.6 47.3 257.1 130.5 60.5
Expenses from services and commissions
(13.2) (71.6) (47.4) (13.2) (71.6) (56.6) (38.3)
Net result from services and commissions
53.2 289.6 115.2 34.1 185.5 73.8 22.2
Income from securities
75.0 407.9 (18.8) 2.2 12.1 62.5 19.7
Gains / (losses) from derivatives
(7.0) (38.3) (22.4) (10.0) (54.4) 4.2 (16.6)
Other revenues
24.9 137.3 81.2 20.2 109.9 52.8 38.6
Revenues
269.6
1,468.1
682.4
186.0
1,011.5
712.2
461.9
Other Income
 —   —  108.5 20.1 109.2
Impairment losses on financial instruments
(75.8) (412.1) (158.0) (39.3) (213.7) (138.6) (49.3)
Personnel expenses
(54.4) (296.2) (167.0) (42.1) (229.1) (169.2) (118.5)
Depreciation and amortization
(13.9) (75.4) (28.1) (8.0) (43.7) (17.5) (2.6)
Other administrative expenses
(147.7) (803.2) (436.8) (117.9) (641.3) (386.3) (222.2)
Total Other Expenses (net of other revenues)
(291.8) (1,586.9) (681.4) (187.2) (1,018.6) (711.6) (343.3)
Income from equity interest in affiliates
(0.3) (1.6)  —   —   —   —   — 
Profit / (loss) before taxes
(22.1) (120.3) 0.9 (1.3) (7.0) 0.7 69.3
Current income tax and social contributions
(6.3) (34.3) (6.5) (2.4) (13.2) (5.9) (12.7)
Deferred income tax and social contributions
28.6 155.8 25.4 9.4 50.9 35.5 (1.0)
Income tax expense
22.3 121.5 18.9 6.9 37.7 29.7 (13.6)
Profit for the period
0.2 1.2 19.9 5.6 30.7 30.4 55.7
Profit Attributable to
Shareholders of the company
2.6 14.3 11.7 3.3 17.9 27.7 53.6
Non-controlling interest(2)
(2.4) (13.2) 8.1 2.4 12.8 2.7 2.1
(1)
Solely for the convenience of the reader, Brazilian real amounts for the nine-month period ended September 30, 2021 and for the year ended December 31, 2020 have been translated into U.S. dollars at the selling rate as of September 30, 2021 of R$5.4394 to US$1.00. See “Exchange Rates” for further information about recent fluctuations in exchange rates. These convenience translations are not part of our financial statements included elsewhere in this prospectus.
(2)
Consolidated income statement data for the nine-month period ended September 30, 2021 reflects (i) the historical operating results of Banco Inter (predecessor) for period prior to May 7, 2021, (ii) the contribution of Banco Inter consolidated assets and liabilities at book value on May 7, 2021, (iii) the consolidated operating results of Inter Platform, Inc. for period following May 7, 2021, (iv) the recognition of non-controlling interest on May 7, 2021 relating to the Banco Inter shareholders that currently are not shareholders of Inter Platform, Inc., measured at the proportion of their economic interest in the book value of the consolidated net assets of Banco Inter.
 
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As of September 30,
As of December 31,
2021(1)(2)
2021(2)
2020(1)
2020
2019
2018
(US$ million)
(R$ million)
(US$ million)
(R$ million)
Consolidated Balance Sheet data:
Assets:
Cash and cash equivalents
83.1 451.8 396.1 2,154.7 3,114.8 1,546.1
Amounts due from financial institutions
258.9 1,408.2 92.4 502.4 256.1 151.6
Compulsory Deposits at Banco Central do Brasil
428.7 2,331.7 314.3 1,709.7 392.3 90.1
Loans and advances to customers, net of provision for expected loss
2,629.2 14,301.5 1,564.1 8,507.7 4,561.8 3,221.6
Securities
2,434.3 13,241.2 1,068.6 5,812.6 1,155.1 316.9
Derivative financial assets
1.4 7.6 5.1 27.5
Non-current assets held for sale
24.8 134.9 22.0 119.9 121.6 78.5
Property and equipment
27.3 148.4 25.3 137.8 91.9 13.8
Intangible assets
69.7 379.3 41.3 224.5 79.2 26.4
Deferred tax assets
104.6 569.1 37.9 206.0 112.2 57.3
Investments 16.5 89.6  —   —   —   — 
Other assets
128.5 699.2 95.4 518.7 192.1 129.0
Total assets
6,207.0
33,762.6
3,662.5
19,921.6
10,077.1
5,631.4
Liabilities:
Liabilities with financial institutions and similar institutions
778.7 4,235.6 323.0 1,756.9 1,152.50 737.4
Liabilities with customers
3,142.5 17,093.5 2,286.4 12,436.6 4,714.4 2,009.9
Securities issued