StoneCo Ltd.
Notes to consolidated financial statements
December 31, 2018, 2017 and 2016
(In thousands of Brazilian
Reais, unless otherwise stated)
StoneCo Ltd. (the Company), formerly known as DLP Payments Holdings Ltd., is a Cayman Islands exempted company with limited
liability, incorporated on March 11, 2014. The registered office of the Company is Harbour Place, 103 South Church Street in George Town, Grand Cayman. The Companys principal executive office is located in the city of São Paulo,
Brazil.
The Company is controlled by HR Holdings, LLC, which owns 54.5% of Class B common shares, whose ultimate parent is an
investment fund owned by the
co-founder
individuals, VCK Investment Fund Limited SAC.
The Company
and its subsidiaries (collectively, the Group) are principally engaged in providing financial technology solutions to clients and integrated partners to conduct electronic commerce seamlessly across
in-store,
online, and mobile channels, which include integration to cloud-based technology platforms, offering services for acceptance of various forms of electronic payment, automation of business processes
at the
point-of-sale
and working capital solutions.
In
December 2016, the Group launched an investment fund known as Fundo de Investimento em Direitos Creditórios (FIDC), TAPSO FIDC (FIDC TAPSO) in order to provide working capital solution to clients. In addition, in June
2017 and November 2017, the Group launched two additional FIDCs, FIDC Bancos Emissores de Cartão de CréditoStone (FIDC AR 1) and FIDC Bancos Emissores de Cartão de CréditoStone II (FIDC AR
2) in order to raise capital. A FIDC is legally an investment fund authorized by the Brazilian Monetary Council, and specifically designed as investment vehicle for investing in Brazilian credit receivables, such as credit card receivable.
On September 4, 2018, the Group acquired control of Equals S.A. (Equals), a subsidiary that provides reconciliation
services of payment transactions to clients, in which the Group previously held significant influence through its interest of 30%. Information on the acquisition is provided in Note 5.
On October 14, 2018, the Company carried out a share split of 126:1 (one hundred
twenty-six
for
one). As a result, the share capital represented by 1,757,558 shares was increased to 221,452,308 shares. The share split has been applied retrospectively to all figures in the historical financial statements regarding number of shares (Note 21) and
per share data (Note 22) as if the share split had been in effect for all periods presented.
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1.1.
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Initial Public Offering and resulting transactions
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On October 25, 2018, the Company completed its Initial Public Offering (IPO), offering 58,333,333 of its Class A common
shares, of which 45,818,182 new shares were offered by the Company and the remaining 12,515,151 shares were offered by the selling shareholders, including the full exercise of the underwriters option to purchase 7,608,695 additional shares
from the selling shareholders.
The initial offering price was US$ 24.00 per Class A common share, resulting in gross proceeds of US$
1,103,822 thousand. The Company received net proceeds of US$ 1,060,544 thousand (or R$3,923,785), after deducting US$ 43,278 thousand in underwriting discounts and commissions. Additionally, the Company incurred in US$
20,471 thousand (or R$ 75,774) regarding other offering expenses.
The shares offered and sold in the IPO were registered under the
Securities Act of 1933, as amended, pursuant to the Companys Registration Statement on Form
F-1
(Registration
No.333-227634),
which was declared effective by the
Securities and Exchange Commission on October 24, 2018. The common shares
F-7