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LUPATECH S.A. Annual Report 2025
53062_rns_2026-05-27_dce7b142-de3a-4373-a076-43c82b25e5a0.pdf
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LUPATECH
LUPATECH S.A.
CNPJ/MF n° 89.463.822/0001-12
www.lupatech.com.br
STANDARD FINANCIAL STATEMENTS 2025
LUPATECH S.A.
CNPJ/MF n° 89.463.822/0001-12
NIRE 35.3.0045756-1
Publicly-Held Company with Authorized Capital – New Market
LUPATECH
Financial & Economic Performance 4Q25
LUPATECH
LUPATECH S.A. CERT. N°: 90-403.837/0001-12
Message from the Administration
The Company began 2024 with a favorable liquidity position, driven by the funds received from the San Antonio lawsuit. Over the course of the year, revenue rose substantially, growing 43% compared to the previous year. The increased liquidity enabled the Company to accelerate order deliveries and expand underfunded business lines. Adjusted EBITDA for 2024 reached a balanced level for the first time in many years, demonstrating the potential for operational leverage through adequate liquidity.
At the time, it was anticipated that sustaining—and even increasing—sales levels would depend on the ability to inject working capital into the business. This injection would depend primarily on the company's ability to: (i) raise capital, (ii) obtain liquidity through the sale of assets or the recovery of receivables, (iii) expand credit lines, or (iv) reduce debt service.
As a result of the sudden monetary tightening that began in late 2024, the company began to face financing constraints, particularly for orders with longer delivery times. The continuation of this situation throughout 2025 materially limited the company's ability to maintain the working capital necessary to sustain operations. This was followed by a sudden contraction in operating revenues, with a corresponding drop in profitability.
Net revenue fell from R$ 123 million in 2024 to R$ 51 million in 2025. Gross profit dropped from R$ 26 million to R$ 8 million. Adjusted EBITDA, which had finally broken even in 2024, turned negative again in 2025, closing at R$ -19 million.
Faced with this scenario, the Company began negotiations to restructure its debt, initially to pursue a structural adjustment regarding the remaining liabilities from the 2015 Judicial Reorganization, as well as to organize subsequent debt in light of the crisis that had taken hold.
The prolonged crisis in the oil sector and structural changes in the offshore construction market significantly reduced demand for the company's products. The 2015 Judicial Reorganization left liabilities disproportionate to the revenue the Company was effectively able to generate. Hence the need for a definitive structural adjustment, taking into account above all the high interest rates that have once again prevailed in the country, which are incompatible with the health of manufacturing companies.
In March 2026, the Company filed a motion for a preliminary injunction in advance of a request for out-of-court or judicial reorganization. It then announced an out-of-court reorganization plan offered to its creditors, covering both labor and unsecured claims. In summary, the company proposes to labor creditors the payment in installments and to unsecured creditors the settlement of liabilities through the payment of 10% of the balance in cash and 90% in equity via the issuance of subscription warrants. The funds will be generated from liquidity events within one year of the judicial approval of the agreement.
In parallel with the effort to reduce debt, the company is also pursuing a balanced budget and working capital financing. With this dual purpose in mind, the divestiture of the mooring ropes business was arranged, with the sale of its assets in February 2026 for $9.5 million, payable in installments. The proceeds will contribute to the Company's cash flow, covering working capital and other obligations.
Amid the restructuring, the Company's order backlog and contracts with purchase obligations in Brazil totaled R$ 49.7 million, remaining at the same level as the previous quarter. Additionally, in March 2026, a contract for valve repair services with Petrobras in the amount of R$ 68 million was added to the backlog.
Rafael Gorenstein
CEO and Investor Relations Officer
LUPATECH
LUPATECH S.A. CERT. N°: 90-463.837/0001-12
www.lupatech.com.br
Economic and Financial Performance
The Lupatech Group operates in the manufacturing sector (Products segment), primarily producing industrial valves; oil and gas valves; synthetic fiber ropes for mooring oil platforms and various other applications; and composite products, mainly utility poles and casing for oil pipelines.
The Company previously operated in the oil services business (Services segment), from which various assets remain in the process of being divested, along with the associated legacy.
Net Revenue
| Net Revenue (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Products | 18,351 | 13,639 | 13,359 | 6,591 | 51,940 | 122,835 |
| Valves | 15,810 | 10,666 | 10,713 | 5,500 | 42,689 | 112,550 |
| Ropes and Composites | 2,541 | 2,973 | 2,646 | 1,091 | 9,251 | 10,285 |
| Services | 68 | - | 21 | 25 | 114 | 292 |
| Oilfield Services | 68 | - | 21 | 25 | 114 | 292 |
| Total | 18,419 | 13,639 | 13,380 | 6,616 | 52,054 | 123,127 |
In Q4 2025, total consolidated net revenue reached R$ 6.6 million. The decline observed compared to Q3 2025 is due to the postponement of raw material purchases in light of the challenging macroeconomic environment. The same trend is observed when comparing 2025 to 2024.
Services
The transactions in this segment result from the liquidation of inventory balances and other activities related to plants that have been decommissioned; they do not pertain to ordinary operations.
Order Backlog
As of December 31, 2025, the Company's order backlog in Brazil totaled R$ 49.7 million. As of the same date, the Company had a balance of supply contracts without purchase obligations of R$ 25 million. (Note: The figures do not include won bids for which the respective orders or contracts have not yet been issued).
Gross Profit and Gross Margin
| Gross Profit (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Products | 2,831 | 1,223 | 2,686 | 1,394 | 8,134 | 26,330 |
| Gross Margin - Products | 15.4% | 9.0% | 20.1% | 21.2% | 15.7% | 21.4% |
| Services | 17 | - | - | (32) | (15) | 49 |
| Gross Margin - Services | n/a | n/a | n/a | n/a | n/a | n/a |
| Total | 2,848 | 1,223 | 2,686 | 1,362 | 8,119 | 26,379 |
| Gross Margin - Total | 15.5% | 9.0% | 20.1% | 20.6% | 15.6% | 21.4% |
| Depreciation | 455 | 456 | 440 | 400 | 1,751 | 2,712 |
| Depreciation Products | 455 | 456 | 440 | 400 | 1,751 | 2,712 |
| Gross Profit without depreciation | 3,303 | 1,679 | 3,126 | 1,762 | 9,870 | 29,091 |
| Gross Profit without depreciation Products | 3,286 | 1,679 | 3,126 | 1,794 | 9,886 | 29,042 |
$^{*}n/a$ - not applied
Products
Gross profit for Q4 2025 reached R$ 1.4 million. Compared to Q3 2025, despite the decline in sales, transactions were conducted with slightly higher margins, a result of ongoing efforts to improve profitability.
LUPATECH
LUPATECH S.A. CERTIFICAT DE VALIDADES/0001-12
The year-over-year decline in margins is primarily due to lower revenue, which directly results in a lower dilution of fixed costs.
Services
The results from the services segment come from the sale of remaining inventory.
Expenses
| Expenses (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Total Sales Expenses | 2,733 | 4,022 | 3,888 | 5,058 | 15,701 | 12,796 |
| Sales Expenses - Products | 2,733 | 4,022 | 3,888 | 5,058 | 15,701 | 12,796 |
| Total Administrative Expenses | 5,331 | 5,279 | 5,092 | 5,275 | 20,977 | 20,740 |
| Administrative Expenses - Products | 4,445 | 4,723 | 4,504 | 5,123 | 18,795 | 11,171 |
| Administrative Expenses - Services | 886 | 556 | 588 | 152 | 2,182 | 9,569 |
| Management Fees | 1,501 | 1,061 | 2,352 | 1,550 | 6,464 | 3,255 |
| Total Expenses | 9,565 | 10,362 | 11,332 | 11,883 | 43,142 | 36,791 |
Selling and administrative expenses
In Q4 2025, the Company recognized R$ 5.1 million in selling expenses, and for the full year 2025, the figure was R$ 15.7 million. The increase compared to the prior-year periods is primarily due to penalties imposed on customers. Administrative expenses, however, remained similar.
Management Compensation
The amount shown consists of fixed and variable compensation. The change from previous periods relates to variable compensation amounts from the prior fiscal year, which were approved only during 2025.
Other Revenues and Operational (Expenses)
| Other Operating (Expenses) (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Products | (242) | (132) | (93) | 5,112 | 4,645 | 49,614 |
| Expenses with Idleness - Products | (1,597) | (4,677) | (4,375) | (5,484) | (16,133) | (8,348) |
| Services | (961) | 1,449 | (1,731) | (14,124) | (15,367) | (4,335) |
| Total | (2,800) | (3,360) | (6,199) | (14,496) | (26,855) | 36,931 |
In Q4 2025, "Other Operating Revenue" of R$ 7.3 million was recorded, compared with "Other Operating Expenses" of R$ 21.8 million, resulting in a net negative impact of R$ 14.5 million. The following factors are worth noting:
I. R$ 5.5 million in costs related to production downtime;
II. R$ 12.1 million, reflecting the net negative impact of adjustments to contingent liabilities based on the analysis by legal counsel and success fees;
III. R$ 3.1 million net gain on the sale of fixed assets.
Financial Result
| Financial Results (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Financial Revenue* | 809 | 3,196 | 28,193 | 460 | 32,658 | 3,996 |
| Financial Expense* | (13,915) | (11,161) | (15,603) | (12,363) | (53,042) | (45,732) |
| Net Financial Results* | (13,106) | (7,965) | 12,590 | (11,903) | (20,384) | (41,736) |
| Net Exchange Variance | 12,476 | 8,087 | 6,517 | (4,855) | 22,225 | (27,690) |
| Net Financial Results - Total | (630) | 122 | 19,107 | (16,758) | 1,841 | (69,426) |
- Excluding Exchange Variance
LUPATECH
LUPATECH S.A. CERTIFICAT DE VALIDADES/0001-12
www.lupatech.com.br
The net financial result for Q4 2025 was a loss of R$ 11.9 million, primarily due to the revaluation of interest on the bankruptcy debt. The total net financial result, on the other hand, was influenced by exchange rate fluctuations.
It is important to note that exchange rate fluctuations are primarily the result of their impact on intercompany loan balances within the group's overseas subsidiaries. Exchange rate fluctuations have an offsetting effect on the translation of these entities' equity into Brazilian reais; consequently, the effects of exchange rate fluctuations are recognized directly in the company's equity, without passing through income statement accounts.
See the following pro forma statement showing the net economic effect of exchange rate fluctuations on intercompany loans:
| 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | |
|---|---|---|---|---|---|
| Total Exchange Variation Revenue | 13,374 | 9,562 | 10,720 | 1,378 | 35,034 |
| Realized on exchange closing | 199 | 148 | 159 | (38) | 468 |
| Provision for outstanding securities | 30 | 62 | - | - | 92 |
| Provision for intercompany loans | 12,349 | 8,785 | 7,508 | 1,388 | 30,030 |
| Provision for unsecured suppliers | 796 | 567 | 3,053 | 28 | 4,444 |
| Total Exchange Variation Expense | (898) | (1,475) | (4,203) | (6,233) | (12,809) |
| Realized on exchange closing | (256) | (44) | (41) | 65 | (276) |
| Provision on outstanding securities | - | - | (31) | (39) | (70) |
| Provision on intercompany loan | (604) | (1,342) | (3,889) | (6,192) | (12,027) |
| Provision for unsecured suppliers | (38) | (89) | (242) | (67) | (436) |
| Net Exchange Variance | 12,476 | 8,087 | 6,517 | (4,855) | 22,225 |
| Counterpart in Shareholders' Equity | (11,745) | (7,443) | (3,619) | 4,804 | (18,003) |
| Net Economic Effect of Exchange Variation | 731 | 644 | 2,898 | (51) | 4,222 |
Adjusted EBITDA from Operations
| EBITDA Adjusted (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Products | (3,168) | (5,470) | (4,166) | (5,294) | (18,098) | 9,806 |
| Margin | -17.3% | -40.1% | -31.2% | -80.3% | -34.8% | 8.0% |
| Services | (672) | 99 | 1,267 | (1,412) | (718) | (9,416) |
| Margin | n/a | n/a | n/a | n/a | n/a | n/a |
| Total | (3,840) | (5,371) | (2,899) | (6,706) | (18,816) | 390 |
| Margin | -20.8% | -39.4% | -21.7% | -101.4% | -36.1% | 0.3% |
The negative Adjusted EBITDA for Products in 4Q25 compared to the prior-year periods is primarily due to a decline in revenue.
Adjusted EBITDA for Services consists of costs related to legacy management.
| Adjusted Ebitda Reconciliation (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Gross Profit | 2,848 | 1,223 | 2,686 | 1,362 | 8,119 | 26,379 |
| SG&A | (8,064) | (9,301) | (8,980) | (10,333) | (36,678) | (33,536) |
| Management Compensation | (1,501) | (1,061) | (2,352) | (1,550) | (6,464) | (3,255) |
| Depreciation and Amortization | 618 | 618 | 600 | 557 | 2,393 | 3,379 |
| Other Operating Expenses | (2,800) | (3,360) | (6,199) | (14,496) | (26,855) | 36,931 |
| EBITDA from Activities | (8,899) | (11,881) | (14,245) | (24,460) | (59,485) | 29,898 |
| Result of disposal or write-off of assets | (170) | (250) | (303) | (4,597) | (5,320) | (54,102) |
| Provisions for Legal Proceedings | 707 | (11) | 894 | 12,135 | 13,725 | (601) |
| Idle expenses | 1,597 | 4,677 | 4,375 | 5,484 | 16,133 | 8,348 |
| Extraordinary Expenses | 2,925 | 2,094 | 6,380 | 4,732 | 16,131 | 16,847 |
| Adjusted EBITDA | (3,840) | (5,371) | (2,899) | (6,706) | (18,816) | 390 |
LUPATECH
LUPATECH S.A. CERTIFICAT N° 00-163.837/0001-12
www.lupatech.com.br
| 4Q25 | |||
|---|---|---|---|
| Reconciliation of Adjusted Ebitda (R$ thd) | Products | Services | Total |
| Gross Profit | 1,394 | (32) | 1,362 |
| SG&A | (10,181) | (152) | (10,333) |
| Management Compensation | (1,098) | (452) | (1,550) |
| Depreciation and Amortization | 450 | 107 | 557 |
| Other Operating Expenses | (372) | (14,124) | (14,496) |
| EBITDA from Activities | (9,808) | (14,653) | (24,460) |
| Result of disposal or write-off of assets | (4,797) | 200 | (4,597) |
| Provisions for Legal Proceedings | 30 | 12,105 | 12,135 |
| Idle expenses | 5,484 | - | 5,484 |
| Extraordinary Expenses | 3,796 | 936 | 4,732 |
| Adjusted EBITDA | (5,294) | (1,412) | (6,706) |
Net Result
| Net Result (R$ thd) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Result Before Income Tax and Social Contribution | (10,147) | (12,377) | 4,262 | (41,775) | (60,037) | (42,907) |
| Income Tax and Social Contribution - Current | (1) | (5) | (22) | 9 | (19) | (11) |
| Income Tax and Social Contribution - Deferred | (1,236) | (263) | 880 | 499 | (120) | 11,146 |
| Net Profit for the Period | (11,384) | (12,645) | 5,120 | (41,267) | (60,176) | (31,772) |
| Profit (Loss) per Share | (0.27) | (0.29) | 0.11 | (0.88) | (1.29) | (0.75) |
The net loss reported in Q4 2025 is influenced not only by current revenues and expenses, but also by interest accruals on bankruptcy-related debt, interest accruals on loans, and the net effect of other operating revenues and expenses.
Working Capital
| Working Capital (R$ thd) | 2025 | 2024 |
|---|---|---|
| Accounts Receivable | 13,950 | 35,427 |
| Inventories | 20,620 | 26,930 |
| Advances of suppliers | 504 | 964 |
| Recoverable taxes | 22,627 | 31,017 |
| Other Accounts Receivable | 23,452 | 4,675 |
| Total Asset | 81,153 | 99,013 |
| Suppliers | 26,242 | 17,734 |
| Advances from Customers | 690 | 6,773 |
| Taxes payable | 72,157 | 22,096 |
| Other Accounts Payable/Other Obligations | 15,317 | 2,921 |
| Payroll and charges | 7,857 | 3,582 |
| Total Liabilities | 122,263 | 53,106 |
| Working Capital Employed | (41,110) | 45,907 |
| Working Capital Variation | (87,017) |
When comparing the balances as of December 31, 2025, to those as of December 31, 2024, there is a decrease in working capital. Assets decreased mainly due to: (i) the use of tax credits and (ii) accounts receivable from customers due to the decline in sales; they increased due to the settlement of short-term receivables from CSL. Liabilities, in turn, increased due to: (i) non-payment of judicial reorganization installments, (ii) tax liabilities that are in the process of being included in new amnesty plans, and (iii) recognition of success fees.
Financial Indebtedness
| Debts (R$ thd) | 2025 | 2024 |
|---|---|---|
| Short Term | 61,703 | 56,264 |
| Loans and financing - bankruptcy claims | 17,014 | 7,983 |
LUPATECH
LUPATECH S.A. CERT. N°: 90-463.837/0001-12
www.lupatech.com.br
| Loans and Financing | 44,689 | 48,281 |
|---|---|---|
| Long Term | 116,445 | 123,437 |
| Loans and financing - bankruptcy claims | 113,875 | 116,897 |
| Loans and Financing | 2,570 | 6,540 |
| Total Debts | 178,148 | 179,701 |
| Cash and Cash Equivalents | 384 | 3,515 |
| Net Debt | 177,764 | 176,186 |
The reduction in financial debt, as reflected in the comparison of balances as of December 31, 2025, with those as of December 31, 2024, is primarily attributable to the repayment of loans from financial institutions.
Short-term debt is detailed in the following tables, which show its breakdown by type and, subsequently, the collateral coverage.
| Short-term debt | 2025 |
|---|---|
| BNDES - Fiduciary Sale of Machinery | 11,167 |
| Co-obligation on discounted securities | 2,622 |
| Working Capital (various types) | 30,900 |
| Total | 44,689 |
| Guarantee Coverage - Working Capital (various types) | 2025 |
| --- | --- |
| CDB and performing credits | 357 |
| Other* | 30,543 |
| Total | 30,900 |
*Performing receivables, FGI, Intra-group guarantee.
Note that short-term debt consists of: (i) co-obligations on discounted securities (R$ 2.6 million), (ii) amounts to be settled automatically by receivables already settled or CDBs (R$ 0.4 thousand), and (iii) amounts covered by surety bonds or contingent on the future performance of receivables (R$ 30.5 million).
LUPATECH
LUPATECH S.A. CERT. N°: 97-463.837/0001-12
www.lupatech.com.br
Annexes
Annex I - Income Statements (R$ Thousand)
| 2025 | 2024 | |
|---|---|---|
| Net Revenue From Sales | 52,054 | 123,127 |
| Cost of Goods and Services Sold | (43,935) | (96,748) |
| Gross Profit | 8,119 | 26,379 |
| Operating Income/Expenses | (69,997) | 140 |
| Selling | (15,701) | (12,796) |
| General and Administrative | (20,977) | (20,740) |
| Management Fees | (6,464) | (3,255) |
| Other Operation Income (Expenses) | (26,855) | 36,931 |
| Net Financial Result | 1,841 | (69,426) |
| Financial Income | 32,658 | 3,996 |
| Financial Expenses | (53,042) | (45,732) |
| Net Exchange Variance | 22,225 | (27,690) |
| Results Before Income Tax and Social Contribution | (60,037) | (42,907) |
| Provision Income Tax and Social Contribution - Current | (19) | (11) |
| Provision Income Tax and Social Contribution - Deferred | (120) | 11,146 |
| Net Profit (Loss) for the year | (60,176) | (31,772) |
LUPATECH
LUPATECH S.A.
CORP/RE-COM-2013/027/0001-12
www.lupatech.com.br
Annex II – Reconciliation of EBITDA Adjusted (R$ Thousand)
| 2025 | 2024 | |
|---|---|---|
| Adjusted EBITDA from Operations | (18,816) | 390 |
| Idleness Expenses | (16,133) | 8,348 |
| Extraordinary expenses | (16,131) | (16,847) |
| Provisions for Losses, Impairment and Net Result on Disposal of Assets | (8,405) | 54,703 |
| EBITDA from Operations | (59,485) | 29,898 |
| Depreciation and amortization | (2,393) | (3,379) |
| Net Financial Result | 1,841 | (69,426) |
| Income Tax and Social Contribution - Current and Deferred | (139) | 11,135 |
| Net Profit (Loss) | (60,176) | (31,772) |
LUPATECH
LUPATECH S.A. CERT. N°: 90-463.837/0001-12
www.lupatech.com.br
Annex III – Consolidated Balance Sheets (R$ Thousand)
| 2025 | 2024 | |
|---|---|---|
| Total Asset | 480,101 | 508,795 |
| Current Assets | 236,427 | 156,539 |
| Cash and Cash Equivalents | 384 | 3,515 |
| Accounts Receivable | 13,950 | 35,427 |
| Inventories | 20,620 | 26,930 |
| Recoverable Taxes | 22,627 | 31,017 |
| Other Accounts Receivable | 23,452 | 4,675 |
| Prepaid Expenses | 187 | 569 |
| Advances to Suppliers | 504 | 964 |
| Assets Classified as Held for Sale | 154,703 | 53,442 |
| Non-Current Assets | 243,674 | 352,256 |
| Financial applications | 234 | - |
| Securities-restricted | - | 44 |
| Judicial Deposits | 4,013 | 4,299 |
| Recoverable Taxes | 13,236 | 3,482 |
| Deferred Income Tax and Social Contribution | 68,212 | 68,253 |
| Other Accounts Receivable | 18,559 | 33,464 |
| Investments | 19,685 | 19,685 |
| Fixed Assets | 36,627 | 139,831 |
| Intangible Assets | 83,108 | 83,198 |
| Total Liabilities and Shareholders Equity | 480,101 | 508,795 |
| Current Liabilities | 189,547 | 112,399 |
| Suppliers | 22,109 | 11,818 |
| Suppliers - bankruptcy claims | 4,133 | 5,916 |
| Loans and Financing | 44,689 | 48,281 |
| Loans and Financing - bankruptcy claims | 17,014 | 7,983 |
| Provisions Payroll and Payroll Payable | 7,857 | 3,582 |
| Taxes Payable | 72,157 | 22,096 |
| Obligations and Provisions for Labor Risks - bankruptcy claims | 93 | 106 |
| Advances from Customers | 690 | 6,773 |
| Other Accounts Payable | 15,317 | 2,921 |
| Other obligations - bankruptcy claims | 5,488 | 2,923 |
| Non-Current Liabilities | 216,084 | 258,016 |
| Suppliers - bankruptcy claims | 20,923 | 28,924 |
| Loans and Financing | 2,570 | 6,540 |
| Loans and Financing - bankruptcy claims | 113,875 | 116,897 |
| Taxes Payable | 6,608 | 38,469 |
| Provision for Contingencies | 25,175 | 25,280 |
| Obligations and Provisions Labor Risks - bankruptcy claims | 1,854 | 1,914 |
| Other Accounts Payable | 1,821 | 1,624 |
| Other obligations - bankruptcy claims | 43,258 | 38,368 |
| Shareholders' Equity | 74,470 | 138,380 |
| Capital Stock | 1,927,668 | 1,922,339 |
| Reserves and capital transactions | 144,754 | 144,754 |
| Accumulated conversion adjustments | 74,686 | 83,749 |
| Accumulated Losses | (2,072,638) | (2,012,462) |
LUPATECH
LUPATECH S.A.
CORP. N° 2 - 89 - 453.837/0001-12
www.lupatech.com.br
Annex IV – Statements of the Consolidated Cash Flow (R$ Thousand)
| 2025 | 2024 | |
|---|---|---|
| Cash Flow from Operating Activities | ||
| Profit (Loss) for the year | (60,176) | (31,772) |
| Adjustments: | ||
| Depreciation and Amortization | 3,769 | 5,498 |
| Income from sale of property, plant and equipment | (4,299) | (56,723) |
| Financial charges and exchange variation on financing | 11,706 | 47,939 |
| Reversal (Provision) for loss due to non-recoverability of assets | 777 | (12,171) |
| Deferred Income Tax and Social Contribution | 41 | (12,073) |
| Inventory obsolescence | 4,370 | 2,445 |
| (Reversal) Estimated losses for doubtful accounts | 202 | (283) |
| Actual losses with doubtful accounts | 1 | 33 |
| Adjust to present value | 19,518 | 13,721 |
| Exchange variation on investments abroad | (9,063) | 8,430 |
| Changes in Assets & Liabilities | ||
| (Increase) Decrease in Accounts Receivable | 21,274 | (17,037) |
| (Increase) Decrease in Inventories | 1,940 | 3,303 |
| (Increase) Decrease in Recoverable Taxes | (1,364) | 13,155 |
| (Increase) Decrease in Other Assets | (3,125) | 9,611 |
| (Increase) Decrease in Suppliers | (9,436) | (1,964) |
| (Increase) Decrease in Taxes Payable | 16,322 | (4,432) |
| (Increase) Decrease in Others Accounts Payable | 19,092 | (2,148) |
| Net Cash Flow from Operating Activities | 11,549 | (34,468) |
| Cash Flow from Investment Activities | ||
| Bonds and securities - restricted account | 151 | 470 |
| Resources from the sale of fixed assets | 5,941 | 81,018 |
| Acquisition of fixed assets | (4,940) | (56,985) |
| Aquisition of Intangible Assets | (101) | (233) |
| Net cash provided by (used in) investing activities | 1,051 | 24,270 |
| Cash Flow from Financing Activities | ||
| Borrowing and financing | 75,493 | 135,478 |
| Capital increase | 5,329 | 1,519 |
| Payment of loans and financing | (96,553) | (143,191) |
| Net cash provided by (used in) financing activities | (15,731) | (6,194) |
| Net Increase (Decrease) in Cash and Cash Equivalents | (3,131) | (16,392) |
| At the Beginning of the Period | 3,515 | 19,907 |
| At the End of the Period | 384 | 3,515 |
LUPATECH
LUPATECH S.A.
CERTIFICAT N° 09-463.837/0001-17
www.lupatech.com.br
About Lupatech
Lupatech S.A. is a Brazilian high value-added products company focused on the oil and gas sector. It operates in manufacturing (Products segment), producing mainly industrial valves; valves for oil and gas; mooring ropes oil rigs; composite material artifacts, mainly power poles and tubes for lining oil pipes.
LUPATECH S.A.
INDIVIDUAL AND CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2025, AND DECEMBER 31, 2024
(In thousands of Brazilian reais)
| ASSETS | Explanatory note | Company | Consolidated | ||
|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||
| CURRENT ASSETS | |||||
| Cash and cash equivalents | 5 | 249 | 1,829 | 384 | 3,515 |
| Accounts receivable from customers | 6 | 12,008 | 31,531 | 13,950 | 35,427 |
| Inventories | 7 | 19,567 | 25,055 | 20,620 | 26,930 |
| Taxes recoverable | 8 | 5,382 | 20,324 | 22,627 | 31,017 |
| Advances to suppliers | 335 | 797 | 504 | 964 | |
| Other accounts receivable | 9 | 21,436 | 892 | 23,452 | 4,675 |
| Prepaid expenses | 183 | 435 | 187 | 569 | |
| Affiliated companies | 16.1 | 176 | 213 | - | - |
| Assets classified as held for sale | 10 | 300 | 1,057 | 154,703 | 53,442 |
| Total current assets | 59,636 | 82,133 | 236,427 | 156,539 | |
| NON-CURRENT | |||||
| Financial investments | 5 | 234 | - | 234 | - |
| Judicial deposits | 20.1 | 2,121 | 1,420 | 4,013 | 4,299 |
| Securities | 5 | - | 44 | - | 44 |
| Taxes recoverable | 8 | 3,845 | 3,482 | 13,236 | 3,482 |
| Deferred income tax and social contribution | 18 | 62,424 | 64,526 | 68,212 | 68,253 |
| Affiliated companies | 16.1 | 1,319 | 1,479 | - | - |
| Other accounts receivable | 9 | 15,881 | 33,341 | 18,559 | 33,464 |
| Investments | |||||
| Investments in subsidiaries and affiliates | 11.1 | 305,602 | 314,683 | - | - |
| Investment property | 11.2 | - | - | 19,685 | 19,685 |
| Fixed assets | 12 | 15,861 | 17,293 | 36,627 | 139,831 |
| Intangible assets | |||||
| Goodwill on the acquisition of investments | 13 | 61,479 | 61,479 | 82,166 | 82,166 |
| Other intangible assets | 13 | 698 | 761 | 942 | 1,032 |
| Total non-current assets | 469,464 | 498,508 | 243,674 | 352,256 | |
| TOTAL ASSETS | 529,100 | 580,641 | 480,101 | 508,795 |
The notes to the financial statements are an integral part of the interim individual and consolidated financial statements.
LUPATECH S.A.
INDIVIDUAL AND CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2025, AND DECEMBER 31, 2024
(In thousands of Brazilian reais)
| LIABILITIES AND NET EQUITY | Explanatory note | Company | Consolidated | ||
|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||
| CURRENT ASSETS | |||||
| Accounts payable | 14 | 15,496 | 10,246 | 22,109 | 11,818 |
| Accounts payable | 14 | 4,133 | 5,916 | 4,133 | 5,916 |
| Accounts payable - bankruptcy claims | 15 | 38,932 | 43,333 | 44,689 | 48,281 |
| Loans and financing | 15 | 12,357 | 5,943 | 17,014 | 7,983 |
| Loans and financing - bankruptcy claims | 7,000 | 3,173 | 7,857 | 3,582 | |
| Wages, provisions, and social security contributions | 21 | 46,919 | 14,028 | 72,157 | 22,096 |
| Taxes payable | 93 | 106 | 93 | 106 | |
| Labor obligations and provisions - bankruptcy claims | 644 | 6,639 | 690 | 6,773 | |
| Advances from customers | 19 | 14,728 | 2,385 | 15,317 | 2,921 |
| Other accounts payable | 19 | 5,488 | 2,923 | 5,488 | 2,923 |
| Other liabilities - bankruptcy claims | 16.1 | 12,529 | 13,116 | - | - |
| Total current liabilities | 158,319 | 107,808 | 189,547 | 112,399 | |
| NON-CURRENT | |||||
| Suppliers - bankruptcy claims | 14 | 20,923 | 28,924 | 20,923 | 28,924 |
| Loans and financing | 15 | 2,570 | 6,540 | 2,570 | 6,540 |
| Loans and financing - bankruptcy claims | 15 | 62,804 | 61,169 | 113,875 | 116,897 |
| Taxes payable | 21 | 5,787 | 22,468 | 6,608 | 38,469 |
| Provision for tax, labor, and civil risks | 20.2 | 13,949 | 12,013 | 25,175 | 25,280 |
| Labor liabilities and provisions - bankruptcy claims | 1,854 | 1,914 | 1,854 | 1,914 | |
| Other accounts payable | 19 | - | - | 1,821 | 1,624 |
| Other liabilities - bankruptcy claims | 19 | 43,258 | 38,368 | 43,258 | 38,368 |
| Affiliated companies | 16.1 | 145,166 | 163,057 | - | - |
| Total non-current liabilities | 296,311 | 334,453 | 216,084 | 258,016 | |
| Share capital | 1,927,668 | 1,922,339 | 1,927,668 | 1,922,339 | |
| Capital reserves and transactions | 144,754 | 144,754 | 144,754 | 144,754 | |
| Accumulated translation adjustments | 74,686 | 83,749 | 74,686 | 83,749 | |
| Accumulated losses | (2,072,638) | (2,012,462) | (2,072,638) | (2,012,462) | |
| Total equity | 22 | 74,470 | 138,380 | 74,470 | 138,380 |
| TOTAL LIABILITIES AND NET ASSETS | 529,100 | 580,641 | 480,101 | 508,795 |
The notes to the financial statements are an integral part of the interim individual and consolidated financial statements.
LUPATECH S.A.
INDIVIDUAL AND CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In thousands of Brazilian reais, except for loss per share, or as otherwise indicated)
| Explanatory note | Company | Consolidated | |||
|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||
| NET OPERATING REVENUE | 16 / 26 | 48,205 | 119,243 | 52,054 | 123,127 |
| COST OF GOODS SOLD | 30 | (40,065) | (90,362) | (43,935) | (96,748) |
| Gross profit | 8,140 | 28,881 | 8,119 | 26,379 | |
| OPERATING EXPENSES | |||||
| Sales-related | 30 | (14,812) | (12,636) | (15,701) | (12,796) |
| General and administrative | 30 | (16,670) | (16,249) | (20,977) | (20,740) |
| Management compensation | 17 / 30 | (6,464) | (3,255) | (6,464) | (3,255) |
| Equity in earnings of affiliates | 11.1 | (21,729) | (14,949) | - | - |
| Other operating income (expenses), net | 28 | (16,215) | 47,604 | (26,855) | 36,931 |
| OPERATING INCOME (LOSS) BEFORE FINANCIAL RESULT | (67,750) | 29,396 | (61,878) | 26,519 | |
| FINANCIAL RESULT | |||||
| Financial income | 16 / 29 | 31,579 | 2,838 | 32,658 | 3,996 |
| Financial expenses | 16 / 29 | (43,805) | (37,625) | (53,042) | (45,732) |
| Net foreign exchange variation | 16 / 29 | 21,901 | (35,751) | 22,225 | (27,690) |
| LOSS BEFORE INCOME TAX AND SOCIAL CONTRIBUTION | (58,075) | (41,142) | (60,037) | (42,907) | |
| INCOME TAX AND SOCIAL CONTRIBUTION | |||||
| Current | 18 | - | - | (19) | (11) |
| Deferred | 18 | (2,101) | 9,370 | (120) | 11,146 |
| NET LOSS FOR THE PERIOD | (60,176) | (31,772) | (60,176) | (31,772) | |
| NET LOSS ATTRIBUTABLE TO: | |||||
| Equity of the Company's shareholders | (60,176) | (31,772) | (60,176) | (31,772) | |
| NET LOSS PER SHARE | |||||
| Basic per share | 27 | (1.28890) | (0.75413) | (1.28890) | (0.75413) |
| Diluted per share | 27 | (1.28890) | (0.75413) | (1.28890) | (0.75413) |
The notes to the financial statements are an integral part of the interim individual and consolidated financial statements.
LUPATECH S.A.
INDIVIDUAL AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In thousands of Brazilian reais)
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| NET LOSS FOR THE PERIOD | (60,176) | (31,772) | (60,176) | (31,772) |
| OTHER COMPREHENSIVE INCOME FOR THE PERIOD | ||||
| Foreign exchange gains and losses on foreign investments | (9,063) | 9,070 | (9,063) | 9,070 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | (69,239) | (22,702) | (69,239) | (22,702) |
| TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: | ||||
| The Company’s shareholders | (69,239) | (22,702) | (69,239) | (22,702) |
The notes to the financial statements are an integral part of the interim individual and consolidated financial statements.
LUPATECH S.A.
STATEMENTS OF CHANGES IN NET ASSETS (INDIVIDUAL AND CONSOLIDATED)
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In thousands of Brazilian reais)
| Stock capital | Capital reserves, options granted | Accumulated losses | Accumulated translation adjustments | Total equity attributable to the Company's shareholders | Total equity | |
|---|---|---|---|---|---|---|
| BALANCES AS OF DECEMBER 31, 2023 | 1,920,820 | 144,754 | (1,980,690) | 74,679 | 159,563 | 159,563 |
| Capital increase | 1,519 | - | - | - | 1,519 | 1,519 |
| Net loss for the period | - | - | (31,772) | - | (31,772) | (31,772) |
| Foreign exchange gains/losses on foreign investments | - | - | - | 9,070 | 9,070 | 9,070 |
| BALANCES AS OF DECEMBER 31, 2024 | 1,922,339 | 144,754 | (2,012,462) | 83,749 | 138,380 | 138,380 |
| BALANCES AS OF DECEMBER 31, 2024 | 1,922,339 | 144,754 | (2,012,462) | 83,749 | 138,380 | 138,380 |
| Capital increase | 5,329 | - | - | - | 5,329 | 5,329 |
| Net loss for the period | - | - | (60,176) | - | (60,176) | (60,176) |
| Foreign exchange variation on foreign investments | - | - | - | (9,063) | (9,063) | (9,063) |
| BALANCES AS OF DECEMBER 31, 2025 | 1,927,668 | 144,754 | (2,072,638) | 74,686 | 74,470 | 74,470 |
The notes to the financial statements are an integral part of the interim individual and consolidated financial statements.
LUPATECH S.A.
INDIVIDUAL AND CONSOLIDATED CASH FLOW STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In thousands of Brazilian reais)
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| CASH FLOW FROM OPERATING ACTIVITIES | ||||
| Net loss for the period | (60,176) | (31,772) | (60,176) | (31,772) |
| Depreciation and amortization | 1,521 | 2,575 | 3,769 | 5,498 |
| (Reversal of) Provision for impairment of assets | 581 | (2,340) | 777 | (12,171) |
| Equity in earnings of affiliates | 21,729 | 14,949 | - | - |
| Gain on disposal of fixed assets | (4,784) | (49,728) | (4,299) | (56,723) |
| Interest expense and foreign exchange gains/losses on borrowings | 4,096 | 62,324 | 11,706 | 47,939 |
| Deferred income tax and social contribution | 2,102 | (9,370) | 41 | (12,073) |
| Obsolescence of inventories | 511 | 844 | 4,370 | 2,445 |
| (Reversal) Estimated losses on doubtful accounts | 188 | (20) | 202 | (283) |
| Actual losses on doubtful accounts | 1 | 33 | 1 | 33 |
| Present value adjustment | 11,194 | 7,541 | 19,518 | 13,721 |
| Foreign exchange variation on foreign investments | 161 | 1,037 | (9,063) | 8,430 |
| (Increase) decrease in operating assets | ||||
| Accounts receivable from customers | 19,334 | (18,204) | 21,274 | (17,037) |
| Inventories | 4,977 | 1,032 | 1,940 | 3,303 |
| Taxes recoverable | 14,579 | 8,911 | (1,364) | 13,155 |
| Other assets | (3,305) | 7,810 | (3,125) | 9,611 |
| Increase (decrease) in operating liabilities: | ||||
| Accounts payable | (14,481) | (618) | (9,436) | (1,964) |
| Taxes payable | 15,045 | (156) | 16,322 | (4,432) |
| Other liabilities and accounts payable | 19,493 | (2,492) | 19,092 | (2,148) |
| Net cash (used in) from operating activities | 32,766 | (7,644) | 11,549 | (34,468) |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Capital contribution to a subsidiary | (21,873) | (65,041) | - | - |
| Securities - restricted account | 112 | 130 | 151 | 470 |
| Proceeds from loans received - related parties | 37 | 10,249 | - | - |
| Proceeds from the sale of fixed assets | 5,221 | 55,677 | 5,941 | 81,018 |
| Acquisition of fixed assets | (187) | (3,328) | (4,940) | (56,985) |
| Additions to intangible assets | (100) | (232) | (101) | (233) |
| Net cash from (used in) investing activities | (16,790) | (2,545) | 1,051 | 24,270 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Proceeds from loans and financing | 66,808 | 115,696 | 75,493 | 135,478 |
| Proceeds from (Repayment of) loans - related parties | (886) | 4,744 | - | - |
| Capital increase | 5,329 | 1,519 | 5,329 | 1,519 |
| Repayment of loans and financing | (88,807) | (111,381) | (96,553) | (143,191) |
| Convertible debentures | - | - | - | - |
| Net cash provided by (used in) financing activities | (17,556) | 10,578 | (15,731) | (6,194) |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,580) | 389 | (3,131) | (16,392) |
| Cash and cash equivalents at the beginning of the period | 1,829 | 1,440 | 3,515 | 19,907 |
| Cash and cash equivalents at the end of the period | 249 | 1,829 | 384 | 3,515 |
The notes to the financial statements are an integral part of the interim individual and consolidated financial statements.
LUPATECH S.A.
INDIVIDUAL AND CONSOLIDATED STATEMENTS OF VALUE ADDED
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In thousands of Brazilian reais)
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| REVENUE | ||||
| Sales of goods, products, and services (includes IPI) | 59,025 | 145,072 | 63,546 | 149,715 |
| Revenue from the sale of fixed assets | 4,783 | 55,677 | 4,532 | 81,018 |
| Reversal of estimated losses due to the unrecoverability of assets | - | 2,341 | - | 11,200 |
| Other revenue | 4,778 | 7,113 | 9,445 | 6,335 |
| Reversal (estimate) of losses on doubtful accounts | (188) | 20 | (202) | 283 |
| Actual losses on doubtful accounts | (1) | (33) | (1) | (33) |
| 68,397 | 210,190 | 77,320 | 248,518 | |
| INPUTS PURCHASED FROM THIRD PARTIES | ||||
| Cost of products, goods, and services sold | (11,190) | (60,601) | (5,129) | (55,124) |
| Materials, energy, third-party services, and others | (27,252) | (19,135) | (33,902) | (25,237) |
| Loss on sale of fixed assets | - | (5,950) | - | (38,112) |
| Other expenses | (25,776) | (11,577) | (40,832) | (23,510) |
| (64,218) | (97,263) | (79,863) | (141,983) | |
| GROSS VALUE ADDED | 4,179 | 112,927 | (2,543) | 106,535 |
| DEPRECIATION AND AMORTIZATION | (1,521) | (2,575) | (3,769) | (5,498) |
| NET VALUE ADDED PRODUCED BY THE COMPANY | 2,658 | 110,352 | (6,312) | 101,037 |
| VALUE ADDED RECEIVED FROM TRANSFERS | ||||
| Equity in earnings of affiliates | (21,729) | (14,949) | - | - |
| Financial income | 66,270 | 14,206 | 67,693 | 23,463 |
| 44,541 | (743) | 67,693 | 23,463 | |
| TOTAL VALUE ADDED TO BE DISTRIBUTED | 47,199 | 109,609 | 61,381 | 124,500 |
| DISTRIBUTION OF VALUE ADDED | 47,199 | 109,609 | 61,381 | 124,500 |
| Personnel: | 32,943 | 34,591 | 38,180 | 41,275 |
| Direct compensation | 24,145 | 24,752 | 27,781 | 29,408 |
| Benefits | 7,077 | 7,980 | 8,379 | 9,509 |
| FGTS | 1,721 | 1,859 | 2,020 | 2,358 |
| Taxes, fees, and contributions: | 17,564 | 21,733 | 17,127 | 21,637 |
| Federal and State | 11,007 | 6,982 | 10,191 | 6,353 |
| State | 6,134 | 14,350 | 6,432 | 14,805 |
| Municipal | 423 | 401 | 504 | 479 |
| Remuneration of third-party capital: | 56,868 | 85,057 | 66,250 | 93,360 |
| Interest and other financial expenses | 56,595 | 84,744 | 65,852 | 92,889 |
| Rent | 273 | 313 | 398 | 471 |
| Remuneration (losses) of equity: | (60,176) | (31,772) | (60,176) | (31,772) |
| Profit (Loss) for the period | (60,176) | (31,772) | (60,176) | (31,772) |
The notes to the financial statements are an integral part of the individual and consolidated interim financial information.
LUPATECH
LUPATECH S.A. CERTIFICAT N° 00-163 022/0001-12
www.lupatech.com.br
Lupatech S.A
Notes to the individual and consolidated financial statements contained in the Standardized Financial Statements Form (DFP) for the years ended December 31, 2025, and December 31, 2024.
(In thousands of Brazilian reais, unless otherwise indicated)
1. General Information
Lupatech S.A. (“the Company”) and its subsidiaries and affiliates (collectively, the “Group”) is a corporation headquartered in Nova Odessa, in the state of São Paulo, whose shares are traded on the São Paulo Stock Exchange (“B3” LUPA3).
The Group operates in the manufacturing sector (Products segment), primarily producing: industrial valves; oil and gas valves; synthetic fiber ropes for anchoring oil platforms and various other applications; and composite products, such as utility poles and tubular casings for oil pipelines.
Until 2017, the Company operated in the oil services business (Services segment), from which various assets remain in the process of being divested, along with the associated legacy. These assets are classified as assets held for sale.
1.1 Business continuity
As of December 31, 2025, the Company reported a loss before income tax and social contribution of R$ 58,075 at the parent company and R$ 60,037 on a consolidated basis (loss before income tax and social contribution of R$ 41,142 at the parent company and R$ 42,907 on a consolidated basis in the same period of 2024). On the same date, the Company’s total current liabilities exceeded current assets by R$ 98,683 at the parent company (in the same period of 2024, total current liabilities exceeded total current assets by R$ 25,675 at the parent company).
Management constantly monitors the Company’s resource needs in order to assess risks to the normal continuity of business operations and determine the actions to be taken in this context. To this end, Management prepares financial and operational projections to guide appropriate and feasible actions. Given the Company’s current situation, Management has considered the following actions within its scope: (i) sale and recovery of assets; (ii) debt restructuring; (iii) reorganization of the industrial complex; (iv) execution of tax transactions; (v) capital increase.
In the scenarios developed by Management, estimates indicate the need for one or more of the measures listed, as well as others that may arise, with a view to raising funds to secure the necessary levels of working capital to adequately support operations, as well as to restructure debt. Management has been conducting negotiations with various counterparties with a view to implementing the respective measures.
The Company is currently undergoing an economic and financial restructuring process with the aim of preserving its business operations, maintaining jobs, and continuing to meet its obligations; to this end, it intends to renegotiate its debt through an out-of-court reorganization plan, as set forth in the Draft Out-of-Court Reorganization Plan filed with the CVM on April 2, 2026: https://www.rad.cvm.gov.br/ENET/frmExibirArquivoIPEExterno.aspx?NumeroProtocoloEntrega=1500337
LUPATECH
LUPATECH S.A. CERTIFICADO ÀS EMPRESAS DE INSTITUIÇÃO E DESENVOLVIMENTO
www.lupatech.com.br
2. Preparation base
2.1 Declaration of Conformity
The individual and consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and in accordance with accounting practices adopted in Brazil (BR GAAP).
The Company's management states that all relevant financial information—and only such information—is being disclosed, and that it corresponds to the information used by the Company in its management.
The issuance of the individual and consolidated financial statements was authorized by the Board of Directors on April 29, 2026.
2.2 Functional currency and presentation currency
These financial statements, both individual and consolidated, are presented in Brazilian reais (R$), which is the Company’s functional currency. All balances have been rounded to the nearest thousand, unless otherwise indicated.
2.3 Measurement basis
The individual and consolidated financial statements were prepared on a historical cost basis, except for certain financial instruments measured at fair value.
2.4 Scope of consolidation and investments in subsidiaries
Subsidiaries
The financial information of subsidiaries is accounted for using the equity method and is included in the consolidated financial statements from the date the Group obtains control until the date control ceases to exist.
The consolidated financial statements include the financial information of Lupatech S.A. and its direct and indirect subsidiaries, as shown below:
| Directly and indirectly controlled companies | Direct and indirect control (%) | |
|---|---|---|
| 12/31/2025 | 12/31/2024 | |
| Direct interest | ||
| Mipel Comércio e Indústria de Peças Técnicas Ltda. - (Brazil) | 100.00 | 100.00 |
| UEP Equipamentos e Serviços para Petróleo S.A. - (Brazil) | 100.00 | 100.00 |
| Lupatech Finance Limited - (Ilhas Cayman) | 100.00 | 100.00 |
| Recu S.A. - (Argentina) | 95.00 | 95.00 |
| Lochness Participações S.A. - (Brazil) | 100.00 | 100.00 |
| Ilno Administradora de Bens e Direitos Ltda - (Brazil) | 100.00 | 100.00 |
| LPT Ropes Ltda - (Brazil) | 100.00 | 100.00 |
| MNA Valves Ltda - (Brazil) * | 100.00 | - |
| Indirect interest | ||
| Recu S.A. - (Argentina) | 5.00 | 5.00 |
| UPC Perfuração e Completação S.A. - (Brazil) | 100.00 | 100.00 |
| Sotep Sociedade Técnica de Perfuração S.A. - (Brazil) | 100.00 | 100.00 |
| Prest Perfurações Ltda. - (Brazil) | 100.00 | 100.00 |
| Ciaval II Administração de Bens e Direitos SPE S.A - (Brazil) | 100.00 | 100.00 |
- Company incorporated on February 28, 2025.
LUPATECH
LUPATECH S.A. CERTIFICAT N° 08-163 012/0001-12
www.lupatech.com.br
3. Accounting practices for inventory
The summary of the Group’s significant accounting policies is as follows:
3.1 Financial Instruments
The classification depends on the purpose for which the financial assets and liabilities were acquired or entered into and is determined upon the initial recognition of the financial instruments.
The Company classifies non-derivative financial assets and liabilities into the following categories: financial assets measured at fair value through profit or loss, at fair value through other comprehensive income, and at amortized cost.
3.1.1 Non-derivative financial assets and liabilities – recognition and derecognition
The Company recognizes loans, receivables, and debt instruments initially on the date they were originated. All other financial assets and liabilities are recognized on the trade date, when the entity becomes a party to the contractual provisions of the instrument.
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when the Company transfers the rights to receive the contractual cash flows on a financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest that is created or retained by the Company in such transferred financial assets is recognized as a separate asset or liability.
The Company derecognizes a financial liability when its contractual obligation is withdrawn, canceled, or expires.
Financial assets or liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to offset the amounts and intends to settle them on a net basis or to realize the asset and settle the liability simultaneously.
3.1.2 Non-derivative financial assets and liabilities – measurement
Financial assets measured at fair value through profit or loss
A financial asset is classified as measured at fair value through profit or loss if it is classified as held for trading or designated as such upon initial recognition. Transaction costs are recognized in profit or loss as incurred; the asset is measured at fair value, and changes in fair value—including interest and dividend income—are recognized in profit or loss for the period.
Financial assets held to maturity
These assets are initially recognized at their fair value plus any directly attributable transaction costs. After initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents include cash, bank deposits, and marketable securities that are readily convertible to cash. Marketable securities are recorded at their face value plus accrued interest through the balance sheet date, in accordance with the rates agreed upon with the financial institutions.
Accounts receivable
They are stated at the nominal value of the securities, plus exchange rate fluctuations and adjusted to present value as of the balance sheet date, when applicable. An allowance for doubtful accounts is recognized, when
LUPATECH
www.lupatech.com.br
necessary, based on an analysis of the customer portfolio, in an amount deemed sufficient by management to cover any estimated losses on the realization of the receivables.
3.1.3 Non-derivative financial liabilities – measurement
A financial liability is classified as measured at fair value through profit or loss if it is classified as held for trading or designated as such upon initial recognition. Transaction costs are recognized in profit or loss as incurred. Financial liabilities are measured at fair value through profit or loss, and changes in the fair value of these liabilities, including interest and dividend income, are recognized in profit or loss for the period.
Other non-derivative financial liabilities are initially measured at fair value less any attributable transaction costs. After initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.
Loans and financing
Loans and financing (the portion related to debt instruments) are stated at amortized cost. They are recognized at the amount borrowed, net of transaction costs incurred, and are subsequently measured at amortized cost using the effective interest method.
3.2 Present value adjustment
For transactions that give rise to an asset, liability, revenue, or expense, or another change in equity, where the offsetting entry is a noncurrent asset or liability, a receivable or payable, or a short-term item when there is a material effect, a present value adjustment is recognized based on discount rates that reflect the best market assessments of the time value of money and the specific risks of the asset and liability on their original dates.
The present value adjustment is presented as an adjusting account for receivables and payables and is recognized in income as financial income or expense on an accrual basis, using the effective interest rate method.
3.3 Fair value adjustment
The fair value adjustment is recorded in a separate account designated as a fair value adjustment, and changes in this account are recognized in income as financial income or expenses on an accrual basis.
3.4 Inventory
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average cost of purchases or production, taking into account the full absorption method for manufacturing costs, which is lower than the realizable values.
For finished goods and work in progress, the cost includes a portion of manufacturing overhead based on normal operating capacity.
3.5 Fixed Assets
Recognition and measurement
Fixed assets are measured at historical cost of acquisition or construction, less accumulated depreciation and impairment losses.
The cost includes expenses that are directly attributable to the acquisition of an asset. The cost of assets constructed by the Company itself includes:
- The cost of materials and direct labor;
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- Any other costs incurred to bring the asset to the location and condition necessary for it to operate as intended by management;
- The costs of dismantling and restoring the site where these assets are located;
- Costs of loans secured by eligible assets.
When parts of a fixed asset have different useful lives, they are recorded as separate fixed assets (major components). Any gains or losses on the disposal of a fixed asset are recognized in income.
Subsequent costs
Subsequent expenditures are capitalized to the extent that it is probable that future benefits associated with the expenditures will be realized by the Company. Recurring maintenance and repair expenses are recognized in income.
Depreciation
Fixed assets are depreciated using the straight-line method in the income statement for the fiscal year based on the estimated economic useful life of each component. Leased assets are depreciated over the shorter of the asset's estimated useful life and the lease term, unless it is reasonably certain that the Company will obtain ownership of the asset at the end of the lease term. Land is not depreciated. Fixed assets are depreciated from the date they are installed and available for use, or in the case of internally constructed assets, from the date construction is completed and the asset is available for use.
The estimated rates are as follows:
| Weighted average depreciation rates (%) per year | ||
|---|---|---|
| 12/31/2025 | 12/31/2024 | |
| Land | - | - |
| Buildings and structures | 2% | 9% |
| Machinery and equipment | 12% | 13% |
| Molds and dies | 21% | 18% |
| Industrial facilities | 6% | 6% |
| Furniture and fixtures | 13% | 12% |
| Data processing equipment | 17% | 18% |
| Improvements | 10% | 10% |
| Vehicles | 25% | 9% |
3.6 Intangible Assets
Goodwill
Goodwill arising from a business combination is recognized at cost as of the date of the business combination, net of any accumulated impairment loss, if any.
Goodwill is tested annually, or more frequently if there are indications of impairment, to identify potential losses (impairment).
Goodwill is allocated to cash-generating units (CGUs) for impairment testing purposes. The allocation is made to the cash-generating units or groups of cash-generating units that are expected to benefit from the business combination from which the goodwill arose, appropriately segregated according to the operating segment.
3.7 Estimation of asset impairment
a. Non-derivative financial assets (including receivables)
Financial assets not classified as financial assets at fair value through profit or loss, including investments accounted for using the equity method, are assessed at each balance sheet date to determine whether there is objective evidence of an impairment loss.
b. Financial assets measured at amortized cost
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The Company considers evidence of impairment of assets measured at amortized cost at both the individual and collective levels. All individually significant assets are assessed for impairment. Those that have not been individually impaired are assessed collectively for any impairment that may have occurred but has not yet been identified. Assets that are not individually significant are assessed collectively for impairment based on the grouping of assets with similar risk characteristics.
An impairment loss is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the asset's original effective interest rate. Impairment losses are recognized in income and reflected in a contra account to the respective asset. When the Company determines that there is no reasonable expectation of recovery, the amounts are written off. When a subsequent event indicates a reduction in the impairment loss, the impairment loss is reversed through income.
c. Assets classified as at fair value through profit or loss
Impairment losses on available-for-sale financial assets are recognized by reclassifying the cumulative loss previously recognized in equity adjustments to net equity to income. The reclassified loss is the difference between the acquisition cost, net of any principal repayments and amortization, and the current fair value, less any impairment loss previously recognized in income. If the fair value of a debt security, for which an impairment loss has been recognized, increases and that increase can be objectively related to an event occurring after the impairment loss was recognized, then the loss is reversed and the amount of the reversal is recognized in profit or loss. Otherwise, the reversal is recognized in other comprehensive income.
d. Investments accounted for using the equity method
An impairment loss on an investee accounted for using the equity method is measured by comparing the investment's recoverable amount with its carrying amount. An impairment loss is recognized in profit or loss and is reversed if there has been a favorable change in the estimates used to determine the recoverable amount.
e. Non-financial assets
The carrying amounts of the Company's non-financial assets, other than inventory and deferred income tax and social contribution assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the asset's recoverable amount is estimated. In the case of goodwill and intangible assets with indefinite useful lives, recoverable amount is tested annually.
Impairment losses are recognized in income. Impairment losses recognized for cash-generating units (CGUs) are initially allocated to reduce any goodwill allocated to that CGU (or group of CGUs), and then to reduce the carrying amount of the other assets of the CGU (or group of CGUs) on a pro rata basis.
An impairment loss related to goodwill is not reversed. For other assets, impairment losses are reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, had the impairment loss not been recognized.
3.8 Income Tax and Social Security Contributions
Current and deferred income tax and social contribution are calculated based on the rates in effect, as detailed in Note 18.
Income tax and social contribution expenses include current and deferred income taxes. Current and deferred income taxes are recognized in net income unless they relate to a business combination or to items recognized directly in equity or in other comprehensive income.
a. Current income tax and social security contribution expenses
Current tax expense is the tax payable on the profit for the fiscal year and any adjustments to taxes payable relating to prior fiscal years. The amount of current taxes payable is recognized on the balance sheet as a tax liability based on the best estimate of the expected amount of taxes to be paid, reflecting any uncertainties related to their calculation, if any. It is measured based on the tax rates in effect as of the balance sheet date.
LUPATECH
LUPATECH S.A. CERTIFICAT N° DE-163.927/0001-12
www.lupatech.com.br
b. Deferred income tax and social contribution expenses
Deferred tax assets and liabilities are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and those used for tax purposes. Changes in deferred tax assets and liabilities during the year are recognized as deferred income tax and social contribution expense. Deferred tax is not recognized for:
- temporary differences arising from the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither taxable income nor accounting profit;
- temporary differences related to investments in subsidiaries, associates, and joint ventures, to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future; and
- taxable temporary differences arising from the initial recognition of goodwill.
A deferred tax asset is recognized in respect of unused tax losses and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each balance sheet date and are reduced to the extent that their realization is no longer probable.
Deferred tax assets and liabilities are measured based on the tax rates expected to apply to temporary differences when they reverse, using the tax rates in effect as of the balance sheet date.
The measurement of deferred tax assets and liabilities reflects the tax consequences arising from the manner in which the Company expects to recover or settle its assets and liabilities.
3.9 Provisions
A provision is recognized in response to a past event if the Company has a legal or constructive obligation that can be reliably estimated, and it is probable that an outflow of economic resources will be required to settle the obligation. The financial costs incurred are recognized in income.
Provisions for tax, labor, and civil liabilities are recorded based on the best estimates of the risk involved (Note 20). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, an asset is recognized if, and only if, the reimbursement is virtually certain and the amount can be measured reliably.
3.10 Other rights and obligations
They are presented as realizable values (assets) and recognized or estimable values, plus, where applicable, the corresponding charges and monetary adjustments incurred (liabilities).
3.11 Conversion of foreign currency balances
a. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rate in effect on the transaction date. Gains and losses resulting from the difference between the translation of foreign currency assets and liabilities at the end of the fiscal year and the translation of those amounts on the transaction dates are recognized in the income statement.
The functional currency of each entity is listed below:
| Direct and indirect subsidiaries | Functional Currency | Country |
|---|---|---|
| Direct participation | ||
| Mipel Comércio e Indústria de Peças Técnicas Ltda. | Real | Brazil |
| UEP Equipamentos e Serviços para Petróleo Ltda. | Real | Brazil |
| Lupatech Finance Limited. | American dollar | Cayman Islands |
LUPATECH
LUPATECH S.A.
CERTIFICADO ÀS EMPRESAS DE
INSTITUTO DE
LIFECATO EMPRESA
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Recu S.A.
Locitness Participações S.A.
Ilno Administradora de Bens e Direitos Ltda.
LPT Ropes Ltda
MNA Valves Ltda
Argentinian peso
American dollar
Real
Real
Real
Argentina
Netherlands
Brazil
Brazil
Brazil
Indirect participation
Recu S.A.
UPC Perfuração e Completação Ltda.
Sotep Sociedade Técnica de Perfuração S.A.
Prest Perfurações Ltda.
Ciaval II Administração de Bens e Direitos SPE S.A.
Argentinian peso
Real
Real
Real
Real
Argentina
Brazil
Brazil
Brazil
b. Group Companies
The results and financial position of all Group companies used as the basis for evaluating investments accounted for using the equity method, whose functional currency differs from the presentation currency, are converted into the presentation currency as follows:
- Assets and liabilities are translated at the exchange rate in effect on the balance sheet date;
- Income statements are converted using the monthly average exchange rate;
- All differences resulting from foreign exchange rate conversions are recognized in equity, in the Statement of Comprehensive Income, under the line item “Accumulated Translation Adjustments,” a subaccount of the “Valuation Adjustments” group.
3.12 Net income (loss) per share
Basic earnings (loss) per share are calculated by dividing the net income (loss) attributable to the Company’s shareholders by the weighted-average number of common shares outstanding during the fiscal year.
Diluted net income (loss) per share is calculated by adjusting the weighted-average number of common shares outstanding to assume the conversion of all potential common shares that would result in dilution.
3.13 Investments in subsidiaries (Parent Company)
In the parent company’s financial statements, investments in subsidiaries are accounted for using the equity method, and the result of this valuation is recorded in an operating income account, with the exception of foreign exchange gains and losses on foreign investments, which are recorded in a specific equity account and recognized as revenue or expense upon the sale or disposal of the investment.
3.14 Revenue Recognition
Revenue is recognized when the performance obligation is satisfied, taking into account the following indicators of a transfer of control of the asset: (i) the entity has a right to payment; (ii) the customer has title; (iii) the entity has transferred physical possession; (iv) the customer bears the significant risks and rewards; and (v) the customer has accepted the asset.
3.15 Report by segment
The report by operating segment is presented in a manner consistent with the internal report provided for operational decision-making. The primary operational decision-maker, responsible for resource allocation and the evaluation of operating segment performance, is the Executive Board. The Group’s strategic decisions are the responsibility of the Board of Directors.
LUPATECH
LUPATECH S.A. CERTIFICAT N° DE-163.922/0001-12
www.lupatech.com.br
3.16 Statement of Value Added ("SVA")
The Company has prepared separate and consolidated statements of value added (SVA) in accordance with Technical Pronouncement CPC 09 – Statement of Value Added, which are presented as an integral part of the financial statements in accordance with Brazilian GAAP applicable to publicly traded companies, while under IFRS they constitute supplementary financial information.
3.17 Consumption Tax Reform
On December 20, 2023, Constitutional Amendment ("EC") No. 132 was enacted, establishing the Tax Reform ("Reform") on consumption. The Reform model is based on a split VAT ("dual VAT") divided into two jurisdictions: a federal tax (Contribution on Goods and Services—CBS), which will replace PIS and COFINS, and a subnational tax (Tax on Goods and Services—IBS), which will replace ICMS and ISS.
A Selective Tax ("IS")—under federal jurisdiction—was also established, which will be levied on the production, extraction, sale, or importation of goods and services that are harmful to health and the environment, pursuant to a complementary law.
On December 17, 2024, the National Congress completed the approval of the first Complementary Bill (PLP) 68/2024, which regulated part of the Reform. PLP 68/2024 was signed into law with vetoes by the President of the Republic on January 16, 2025, becoming Complementary Law No. 214/2025.
Although the regulation and establishment of the IBS Management Committee were initially addressed in PLP No. 108/2024, the second draft regulation of the Reform, which is still pending consideration by the Federal Senate, part of the provisions has already been incorporated into PLP No. 68/2024, approved as mentioned above, which, among other provisions, established, by December 31, 2025, of the aforementioned Committee, responsible for the administration of the aforementioned tax, with which the Company is in compliance regarding the procedures for issuing invoices.
There will be a transition period from 2026 to 2032, during which the two tax systems—the old and the new—will coexist. The impacts of the Reform on the calculation of the aforementioned taxes, starting at the beginning of the transition period, will only be fully known upon completion of the process of regulating pending issues through complementary law. Consequently, the Reform has no effect on the Financial Statements as of December 31, 2025.
3.18 New standards, amendments, and interpretations
The amendments to standards and new standards that have become effective are not applicable or have not had a material impact on these individual and consolidated financial statements, as listed below:
| Statements and Revisions | Change / Improvement | Term |
|---|---|---|
| CPC 02 (R2) The Effects of Changes in Foreign Exchange Rates / IAS 21 | Effects of changes in exchange rates and the translation of financial statements, which will require companies to apply a consistent approach when assessing whether one currency can be exchanged for another. | January 1, 2025 |
| CPC 48 - Financial Instruments/IFRS 9 and CPC 40 (R1) - Instruments Financial: Disclosure/IFRS 7 | The IASB provides guidance on the classification of financial assets related to ESG and the derecognition of financial assets and liabilities upon settlement and introduces additional disclosure requirements regarding investments in equity instruments designated at fair value through other comprehensive income and financial instruments with contingencies. | January 1, 2026 |
| IFRS S1 - Disclosure of Sustainability-Related Financial Information: | Establishes general requirements for the disclosure of sustainability-related information, including principles for reporting risks and opportunities that are useful to users in making decisions. | January 1, 2026 |
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| IFRS S2 - Disclosure of Climate-Related Information | Establishes general requirements for the disclosure of climate-related information, as well as specific disclosures regarding physical risks, transition risks, and climate-related opportunities. | January 1, 2026 |
|---|---|---|
| IFRS 18 – Presentation and Disclosure of Financial Statements | The adoption is expected to result in significant changes to the presentation of the income statement, as it requires the consistent segregation of revenues and expenses between operating, investing, and financing activities. | January 1, 2027 |
With the exception of CPC 51 – Presentation and Disclosure in Financial Statements (IFRS 18), the adoption of which is expected to result in significant changes to the presentation of the income statement, as it requires the consistent segregation of revenues and expenses between operating, investing, and financing activities, in addition to introducing the requirement to disclose performance measures defined by management, accompanied by reconciliations to the most comparable IFRS subtotal, a description of the calculation methodology, and a justification of relevance, the Company does not expect significant impacts resulting from the adoption of the other standards in its Financial Statements.
4. Critical accounting estimates and judgments
In preparing these individual and consolidated financial statements, management has made judgments, estimates, and assumptions that affect the application of the Company's accounting policies and the reported amounts of assets, liabilities, revenues, and expenses. Actual results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
Information regarding judgments made in applying accounting policies and uncertainties regarding assumptions and estimates that have a significant risk of resulting in a material adjustment within the next fiscal year is included in the following notes:
- Note 10 – Assets held for sale.
- Note 12 – Fixed Assets;
- Note 13 – Intangible Assets;
- Note 18 – Income taxes and social security contributions;
- Note 20 – Contingent proceedings and court deposits;
To provide an understanding of how the Company forms its judgments regarding future events, including the variables and assumptions used in its estimates, we have included comments regarding each critical accounting practice described below:
a. Deferred income tax
The amount of deferred tax assets is reviewed at each reporting date and reduced by any amount that is no longer expected to be realized through future taxable income. It is calculated using the tax rates applicable to taxable income in the years in which these temporary differences are expected to be realized. Future taxable income may be higher or lower than the estimates considered when determining the need to recognize, and the amount to be recognized, of the tax asset.
Tax credits recognized for tax losses and negative social contribution bases are supported by projections of taxable income, based on technical feasibility studies submitted annually to the Group's management. These studies consider the profitability history of the Company and its subsidiaries and the outlook for continued profitability, enabling an estimate of the recovery of these credits in future years. Other credits, which are based on temporary differences, primarily provisions for tax liabilities as well as provisions for losses were recognized in accordance with the expectation of their realization, also taking into account projections of future taxable income.
LUPATECH
LUPATECH S.A. CERTIFICAT N° DE-163.922/0001-12
www.lupatech.com.br
b. Useful life of long-lived assets
The Company recognizes depreciation and/or amortization of its long-lived assets based on their estimated useful lives, which generally reflect the economic lives of such assets. However, actual useful lives may vary depending on technological updates at each unit. The useful lives of long-lived assets also affect impairment tests for long-lived assets, when necessary.
c. Impairment testing of long-lived assets
There are specific rules for assessing the recoverability of long-lived assets, particularly property, plant, and equipment, goodwill, and other intangible assets. At the date of each financial statement, the Company performs an analysis to determine whether there is evidence that the carrying amount of long-lived assets is not recoverable. If such evidence is identified, the Company estimates the recoverable amount of the assets. The recoverable amount of an asset is determined as the higher of: (a) its fair value less estimated costs to sell and (b) its value in use. Value in use is measured based on discounted cash flows (before taxes) derived from the continued use of an asset until the end of its useful life.
Regardless of whether there is any indication that the value of an asset may not be recoverable, goodwill arising from business combinations and intangible assets with indefinite useful lives are tested for recoverability at least once a year, or more frequently if circumstances require analysis at intervals shorter than annually. When the residual value of an asset exceeds its recoverable amount, the Company recognizes a reduction in the carrying amount of these assets.
If the recoverable amount of the asset cannot be determined individually, the recoverable amount of the business segments to which the asset belongs is analyzed.
Except for an impairment loss on goodwill, a reversal of an impairment loss on an asset is permitted. The reversal in these circumstances is limited to the amount of the provision for impairment of the corresponding asset.
The recoverability of goodwill is assessed based on the analysis and identification of facts and circumstances that may necessitate bringing forward the annual impairment test. If any fact or circumstance indicates that the recoverability of goodwill is impaired, then the test is brought forward. The Company performed new goodwill impairment tests for all of its cash-generating units, which represent the lowest level at which goodwill is monitored by Management and are based on projections of discounted cash flow expectations that take into account the following assumptions: cost of capital, growth rate, and adjustments used for cash flow perpetuity purposes, methodology for determining working capital, and long-term economic and financial forecasts.
The process of assessing recoverability is subjective and requires significant judgment based on analysis. The valuation of the Company's cash-generating units, based on projected cash flows, could be negatively impacted if the economic recovery and growth rates occur at a slower pace than anticipated, as well as if management's plans for the Company's businesses do not materialize as expected in the future.
The impairment tests and assessments of cash-generating units are based on the assumption that the Company and its subsidiaries will continue as going concerns.
- Cash, cash equivalents, long-term investments, and marketable securities
| Company | Consolidated | |||
|---|---|---|---|---|
| Cash and cash equivalents | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Current | ||||
| Petty cash and cash at banks | ||||
| In Brazil | 249 | 1,058 | 370 | 1,073 |
| Overseas | - | - | 14 | 6 |
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LUPATECH S.A. CERTIFICAT N° DE-103.022/0001-12
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| Short-term certificates of deposit | - | 771 | - | 2,436 |
|---|---|---|---|---|
| Total | 249 | 1,829 | 384 | 3,515 |
| Non-current | ||||
| Long-term certificates of deposit | 234 | - | 234 | - |
| Securities | - | 44 | - | 44 |
| Total | 234 | 44 | 234 | 44 |
Cash equivalent consists of fixed-income investments and bank certificates of deposit, which are immediately liquid except when they are used as collateral for obligations entered into by the Company.
For the current period, the consolidated balance related to guarantees is R$ 234.
6. Accounts receivable from customers
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Receivable in the domestic market | 12,820 | 32,203 | 14,869 | 36,127 |
| Receivable in the foreign market | 53 | 4 | 53 | 70 |
| 12,873 | 32,207 | 14,922 | 36,197 | |
| Allowance for doubtful accounts | (865) | (676) | (972) | (770) |
| 12,008 | 31,531 | 13,950 | 35,427 |
The amount of the risk of potential losses is presented as Estimated Loss on Doubtful Accounts ("PECLD"). These estimates are prepared taking into account the Company's credit policy, the length of time since default, and the specific circumstances of the account or customer.
The credit risk associated with accounts receivable stems from the possibility that the Company may not receive payments arising from sales transactions. To mitigate this risk, the Company routinely conducts a detailed analysis of its customers' financial and creditworthiness, establishes credit limits, and continuously monitors outstanding balances. The allowance for credit risks was calculated based on a credit risk analysis, which considers loss history, the individual situation of customers, the situation of the economic group to which they belong, collateral for the debts, and the assessment of legal counsel, and is considered sufficient by management to cover any losses on accounts receivable.
The write-off for loss complies with the provisions of tax law, and the recovery refers to the revenue resulting from the recovery of the credit previously estimated as a loss, arising from the actual receipt of funds.
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Amounts to be billed | 8,791 | 16,794 | 8,791 | 16,794 |
| Not yet due | 1,791 | 11,765 | 2,282 | 13,652 |
| Due up to 30 days | 410 | 1,238 | 619 | 1,182 |
| Overdue from 31 to 90 days | 102 | 1,362 | 222 | 1,988 |
| Overdue from 91 to 180 days | 1,054 | 69 | 1,167 | 479 |
| Overdue from 181 to 360 days | 29 | 287 | 29 | 444 |
| Overdue for more than 360 days | 696 | 692 | 1,812 | 1,658 |
| 12,873 | 32,207 | 14,922 | 36,197 |
The "To be billed" amount represents projects currently in progress, recognized as each performance obligation agreed upon by the parties is fulfilled.
LUPATECH
www.lupatech.com.br
As part of its financing arrangements, the Company discounts receivables with or without joint liability. When joint liability remains, a corresponding liability is recorded on the liability side, as presented in Note 15 under the heading “Discounted securities with joint liability.”
7. Inventory
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Finished products | 3,419 | 11,272 | 3,645 | 11,593 |
| Merchandise for resale | 481 | 612 | 481 | 612 |
| Work in process | 12,855 | 11,511 | 13,491 | 12,429 |
| Raw materials and subsidiary materials * | 9,748 | 9,107 | 13,011 | 15,420 |
| Stocks of service units | - | - | 8,492 | 9,746 |
| Losses to be incurred with inventory | (6,936) | (7,447) | (18,500) | (22,870) |
| Total | 19,567 | 25,055 | 20,620 | 26,930 |
- For the current period, the consolidated balance of inventory pledged as collateral for bank guarantees is R$ 2,138.
Inventory obsolescence losses consist of management estimates based on inventory turnover, the order backlog, and the outlook for future demand for inventory items. Typically, the loss is provisioned gradually starting in the first year of disuse. Items classified as obsolete may have their status changed if the outlook for their utilization changes.
Inventory at service facilities that have been inactive since 2017 is provisioned for as inventory obsolescence losses due to their disuse.
Changes in inventory losses:
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Balance at beginning of period | (7,447) | (8,291) | (22,870) | (25,315) |
| Loss estimate | (13) | (61) | (13) | (733) |
| Reversal | 524 | 905 | 4,383 | 3,178 |
| Ending balance | (6,936) | (7,447) | (18,500) | (22,870) |
8. Taxes to be recovered
| Company | Consolidated | |||
|---|---|---|---|---|
| Recoverable taxes | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Refundable ICMS | 3,385 | 4,998 | 3,833 | 5,169 |
| Import ICMS | - | - | 4,557 | - |
| ICMS (excluding PIS and COFINS) | 3,138 | 14,750 | 17,552 | 18,447 |
| Refundable IPI | 1,162 | 1,291 | 1,324 | 1,461 |
| Refundable PIS | 175 | 237 | 186 | 316 |
| Refundable COFINS | 758 | 1,042 | 809 | 1,182 |
| Refundable IRRF | 21 | 15 | 36 | 72 |
| Refundable IRPJ | 321 | 790 | 6,413 | 6,430 |
| Refundable CSLL | 217 | 619 | 1,026 | 1,330 |
| Other | 50 | 64 | 127 | 92 |
| Total | 9,227 | 23,806 | 35,863 | 34,499 |
| Current assets | 5,382 | 20,324 | 22,627 | 31,017 |
| Noncurrent assets | 3,845 | 3,482 | 13,236 | 3,482 |
LUPATECH
LUPATECH S.A. CERTIFICADO ÀS EMPRESAS DE BENS E DIREITOS SPE
www.lupatech.com.br
The source of the credits listed above is as follows:
- ICMS - credits for purchases of inputs used in the manufacture of products whose sale is subject to the reduced ICMS tax base, as well as credits for purchases of inputs used in the manufacture of products intended for export.
- ICMS (excluding PIS and COFINS) – refers to the amount determined by the Company as a result of a final and unappealable decision ruling in favor of excluding ICMS from the PIS and COFINS tax base.
The Company has filed a request for a partial refund of the amounts which are currently under review by the Federal Revenue Service pending completion of the refund procedure and any offsetting in accordance with Article 92, paragraph 6, of Federal Revenue Service Instruction No. 2,055/2021.
- Refundable IPI, PIS, and COFINS – tax credits on purchases of raw materials. These credits have been realized through offsetting against other federal taxes.
- Refundable income tax and social security contributions – withholding taxes on income from financial transactions and services provided to third parties. These taxes have been offset against taxes payable of the same nature or have been the subject of a refund request, where applicable.
9. Other accounts receivable
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Other receivables - current | ||||
| Debentures convertible into shares | 177 | 749 | 177 | 1,142 |
| Receipt Agreement - CSL | 21,240 | - | 21,240 | - |
| Other receivables | 19 | 143 | 2,035 | 3,533 |
| Total | 21,436 | 892 | 23,452 | 4,675 |
| Other receivables - noncurrent | ||||
| Receipt Agreement - CSL | 15,743 | 33,341 | 15,743 | 33,341 |
| Other receivables | 138 | - | 2,816 | 123 |
| Total | 15,881 | 33,341 | 18,559 | 33,464 |
"Share-convertible debentures" consist of rights convertible into shares of Ciaval Administradora de Bens e Direitos SPE S.A., a special purpose entity incorporated pursuant to subparagraph XVI of Article 50 of Law No. 11,101/2005, to effect the transfer of assets and rights in lieu of payment to Class I creditors in the judicial reorganization of the Lupatech group.
The "Receivables Agreement - CSL" represents amounts owed to the Company by Cordoaria São Leopoldo Ltda (CSL) and its successor, Cordoaria São Leopoldo Original Ltda (CSLO). The agreement provides for full payment to Lupatech of the updated amount of the judgment, which will be made in installments, with a final maturity date of December 31, 2028, and includes cash payments and the transfer of receivables from the State of Rio Grande do Sul in lieu of payment.
"Other accounts receivable" consist of receivables assigned for payment arising from the maturity of loans made to Luxxon Participações Ltda., a company in which the Company ceased to hold an interest in January 2021, as well as other receivables that are currently subject to legal collection proceedings.
LUPATECH
LUPATECH S.A. CENTRO DE DELEGATÓRIO 12
www.lupatech.com.br
10. Assets classified as held for sale
The Company has assets classified as held for sale, which include: (i) specialized equipment used for specific operations in oil wells, primarily for offshore use, the nature of which means that the sale process extends beyond one year. The specialized nature and geographical challenges result in a factor that reduces the liquidity of the assets, which are beyond the entity's control; (ii) industrial assets dedicated to the manufacture of synthetic fiber cables and ropes, consisting of machinery and other equipment; (iii) real estate in Caxias do Sul, Rio Grande do Sul; (iv) real estate in Nova Odessa, São Paulo.
The carrying value of the assets recorded on the Company's balance sheet is consistent with the reports of independent appraisers. The balance of assets held for sale is presented as follows:
| Company | Consolidated | |||
|---|---|---|---|---|
| Assets classified as held for sale | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Plots of land | - | - | 44,786 | 28,893 |
| Buildings and facilities | - | - | 43,349 | 13,416 |
| Machinery and equipment | 300 | 1,057 | 65,059 | 9,737 |
| Industrial tools | - | - | 1,130 | 1,396 |
| Furniture and utensils | - | - | 139 | - |
| Vehicles | - | - | 240 | - |
| Total | 300 | 1,057 | 154,703 | 53,442 |
Summary of Changes in Fixed Assets Held for Sale:
| Costs of assets - net of impairment | Company | ||||
|---|---|---|---|---|---|
| Plots of land | Buildings and facilities | Machinery and equipment | Others | Total | |
| Balance as at December 31, 2024 | - | - | 1,057 | - | 1,057 |
| Write-offs | - | - | (176) | - | (176) |
| Reversal/set up of provision for non-recoverable assets | - | - | (581) | - | (581) |
| Balance as at December 31, 2025 | - | - | 300 | - | 300 |
| Cost of Assets – Net of Impairment | Consolidated | ||||
| Balance as at December 31, 2024 | 28,893 | 13,416 | 9,737 | 1,396 | 53,442 |
| Additions | 15,893 | 29,933 | 58,322 | 410 | 104,559 |
| Write-offs | - | - | (879) | (436) | (1,315) |
| Reversal/set up of provision for non-recoverable assets | - | - | (1,234) | 138 | (1,096) |
| Effect of conversion of amounts of investees abroad | - | - | (887) | - | (887) |
| Balance as at December 31, 2025 | 44,786 | 43,349 | 65,059 | 1,509 | 154,703 |
LUPATECH
LUPATECH S.A. CERT. NO. 27-01-003.822/0001-12
11. Investments
11.1 Investments in subsidiaries and affiliates
| Mipel | Recu | UEP | Finance | Lochness | Ilno | LPT | MNA Valves | Company | ||
|---|---|---|---|---|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | |||||||||
| Investment data | ||||||||||
| Number of shares hold | ||||||||||
| Ordinary shares (‘000) | - | 3,000 | - | - | 734,613 | - | - | - | ||
| Interest held in the capital (‘000) | 54,260 | - | 395,119 | 50 | - | 97,765 | 54,107 | 17,214 | ||
| Percentage of ownership interest held | 100% | 95% | 100% | 100% | 100% | 100% | 100% | 100% | ||
| Equity | 504 | - | 25,014 | 71,969 | 26,870 | 97,602 | 58,760 | 17,133 | ||
| Income (loss) in the period | (5,953) | - | (1,949) | (357) | (5,850) | - | (6) | (81) | ||
| Unrealized income | (283) | - | - | - | - | - | - | - | ||
| Change in long-term investment | ||||||||||
| Beginning balance for the period | 5,988 | - | 26,963 | 105,435 | 32,874 | 89,316 | 54,107 | - | 314,683 | 256,555 |
| Capital increase | - | - | - | - | - | - | 4,659 | 17,214 | 21,873 | 65,041 |
| Equity in earnings of affiliates | (5,767) | - | (1,949) | (6,699) | (5,850) | (1,377) | (6) | (81) | (21,729) | (14,949) |
| Valuation adjustment | - | - | - | (9,071) | (154) | - | - | - | (9,225) | 8,036 |
| Balance at end of period | 221 | - | 25,014 | 89,665 | 26,870 | 87,939 | 58,760 | 17,133 | 305,602 | 314,683 |
The names of the subsidiaries and affiliates are as follows: Mipel Comércio e Indústria de Peças Técnicas Ltda.; Recu – S.A.; UEP Equipamentos e Serviços para Petróleo S.A.; Lupatech Finance Limited; Lochness Participações S.A.; Ilno Administradora de Bens e Direitos Ltda.; LPT Ropes Ltda.; and MNA Valves Ltda.
11.2 Investment Property
It currently consists of land and a building located in Macaé, Rio de Janeiro, where there are no operational activities. The property is owned by the company Ciaval II Administração de Bens e Direitos SPE S.A., incorporated to carry out the transfer of the property in lieu of payment to the Class I creditors in the group’s judicial reorganization. Lupatech, pursuant to subparagraph XVI of Article 50 of Law No. 11,101 of 2005, as authorized by the court in the context of the judicial reorganization proceedings. Investment property is measured at fair value. According to a technical report by an independent firm, the fair value determined for the investment properties is R$ 19,685.
LUPATECH
www.lupatech.com.br
- Fixed assets
| Weighted average depreciation rates per year (%) | Company | Consolidated | |||
|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||
| Property, plant and equipment, net | Property, plant and equipment, net | Property, plant and equipment, net | Property, plant and equipment, net | ||
| Plots of land | - | 3,751 | 3,751 | 3,884 | 19,777 |
| Buildings and construction | 2% | 5,144 | 5,320 | 15,140 | 46,722 |
| Machinery and equipment | 12% | 4,737 | 5,610 | 8,012 | 63,199 |
| Molds and matrixes | 21% | 580 | 684 | 625 | 727 |
| Industrial facilities | 6% | 69 | 73 | 1,252 | 1,310 |
| Furniture and fixtures | 13% | 539 | 559 | 588 | 629 |
| Data processing equipment | 17% | 119 | 163 | 169 | 244 |
| Improvements | 10% | 343 | 432 | 884 | 998 |
| Vehicles | 25% | 53 | 58 | 56 | 61 |
| Advance for purchase of property, plant and equipment | - | 100 | 100 | 5,419 | 5,419 |
| Assets in construction | - | 426 | 543 | 598 | 745 |
| Total | 15,861 | 17,293 | 36,627 | 139,831 |
LUPATECH
www.lupatech.com.br
Summary of changes in fixed assets:
| Gross cost | Company | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Plots of land | Buildings and construction | Machinery, equipment and facilities | Facilities and improvements made | Furniture and fixtures | Data processing equipment | Assets in construction | Others | Total | |
| Balance as at December 31, 2024 | 3,751 | 8,269 | 61,941 | 2,316 | 3,944 | 3,982 | 543 | 577 | 85,323 |
| Additions | - | - | 33 | 2 | 21 | 8 | 122 | - | 186 |
| Write-offs | - | (39) | (1,170) | (147) | (58) | (5) | (101) | (165) | (1,685) |
| Transference | - | - | 97 | 41 | - | - | (138) | - | - |
| Balance as at December 31, 2025 | 3,751 | 8,230 | 60,901 | 2,212 | 3,907 | 3,985 | 426 | 412 | 83,824 |
| Accumulated depreciation | |||||||||
| Balance as at December 31, 2024 | - | (2,949) | (55,647) | (1,811) | (3,385) | (3,819) | - | (419) | (68,030) |
| Additions | - | (176) | (956) | (127) | (41) | (52) | - | (5) | (1,357) |
| Disposal | - | 39 | 1,019 | 138 | 58 | 5 | - | 165 | 1,424 |
| Balance as at December 31, 2025 | - | (3,086) | (55,584) | (1,800) | (3,368) | (3,866) | - | (259) | (67,963) |
| Property, plant and equipment, net | |||||||||
| Balance as at December 31, 2024 | 3,751 | 5,320 | 6,294 | 505 | 559 | 163 | 543 | 158 | 17,293 |
| Balance as at December 31, 2025 | 3,751 | 5,144 | 5,317 | 412 | 539 | 119 | 426 | 153 | 15,861 |
LUPATECH
www.lupatech.com.br
LUPATECH S.A. CERTIFICA DE MAÇÃO DE LICENÇA
| Gross cost | Consolidated | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Plots of land | Buildings and construction | Machinery, equipment and facilities | Facilities and improvements made | Furniture and fixtures | Data processing equipment | Assets in construction | Others | Total | |
| Balance as at December 31, 2024 | 19,777 | 62,991 | 159,263 | 5,839 | 5,331 | 6,634 | 745 | 13,108 | 273,688 |
| Additions | - | 33 | 4,311 | 3 | 155 | 8 | 181 | 247 | 4,938 |
| Write-offs | - | (39) | (3,158) | (147) | (98) | (41) | (117) | (895) | (4,496) |
| Transference | - | - | 169 | 42 | - | - | (211) | - | - |
| Reversal/set up of provision for non-recoverable assets | - | 289 | 31 | - | - | - | - | - | 320 |
| Assets held for sale | (15,893) | (29,933) | (58,353) | - | (139) | - | - | (240) | (104,558) |
| Balance as at December 31, 2025 | 3,884 | 33,341 | 102,262 | 5,737 | 5,249 | 6,601 | 598 | 12,220 | 169,892 |
| Accumulated depreciation | |||||||||
| Balance as at December 31, 2024 | - | (16,269) | (95,337) | (3,531) | (4,702) | (6,390) | - | (7,628) | (133,857) |
| Additions | - | (1,971) | (1,248) | (208) | (56) | (83) | - | (12) | (3,578) |
| Write-offs | - | 39 | 2,960 | 138 | 97 | 41 | - | 895 | 4,170 |
| Balance as at December 31, 2025 | - | (18,201) | (93,625) | (3,601) | (4,661) | (6,432) | - | (6,745) | (133,265) |
| Property, plant and equipment, net | |||||||||
| Balance as at December 31, 2024 | 19,777 | 46,722 | 63,926 | 2,308 | 629 | 244 | 745 | 5,480 | 139,831 |
| Balance as at December 31, 2025 | 3,884 | 15,140 | 8,637 | 2,136 | 588 | 169 | 598 | 5,475 | 36,627 |
Certain fixed assets (machinery, equipment, and land) are encumbered by mortgages, which secure loans, or by liens in connection with certain tax contingencies. The following table shows the amounts of encumbered assets, based on their current book value:
| Assets encumbered by | Company | Consolidated |
|---|---|---|
| Taxation (tax actions in progress) | 8,625 | 9,429 |
| Loans and financing | 3,329 | 94,257 |
| Total | 11,954 | 103,686 |
LUPATECH
www.lupatech.com.te
13. Intangibles
| Weighted amortization rate | Company | Consolidated | |||
|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||
| Intangible assets, net | Intangible assets, net | ||||
| Goodwill determined in the acquisition of long-term investment (*) | - | 61,479 | 61,479 | 82,166 | 82,166 |
| Software and other licenses | 13% p.a. | 2 | 8 | 88 | 122 |
| Development of new products | 24% p.a. | 696 | 753 | 854 | 910 |
| Total | 62,177 | 62,240 | 83,108 | 83,198 |
- Goodwill arising from the acquisition of companies by the Parent Company and its subsidiaries.
Summary of Intangible Asset Transactions:
| Gross intangible asset costs | Company | |||
|---|---|---|---|---|
| Goodwill determined in the acquisition of longterm investment | Software and other licenses | Development of new products | Total | |
| Balance as at December 31, 2024 | 61,479 | 13,270 | 10,262 | 85,011 |
| Additions | - | - | 100 | 100 |
| Balance as at December 31, 2025 | 61,479 | 13,270 | 10,362 | 85,111 |
| Accumulated amortization | ||||
| Balance as at December 31, 2024 | - | (13,262) | (9,509) | (22,771) |
| Additions | - | (6) | (157) | (163) |
| Balance as at December 31, 2025 | - | (13,268) | (9,666) | (22,934) |
| Intangible assets, net | ||||
| Balance as at December 31, 2024 | 61,479 | 8 | 753 | 62,240 |
| Balance as at December 31, 2025 | 61,479 | 2 | 696 | 62,177 |
| Consolidated | ||||
| Gross intangible asset costs | Goodwill determined in the acquisition of longterm investment | Software and other licenses | Development of new products | Total |
| Balance as at December 31, 2024 | 82,166 | 16,411 | 11,509 | 110,086 |
| Additions | - | - | 101 | 101 |
| Balance as at December 31, 2025 | 82,166 | 16,411 | 11,610 | 110,187 |
| Accumulated amortization | ||||
| Balance as at December 31, 2024 | - | (16,289) | (10,599) | (26,888) |
| Additions | - | (34) | (157) | (191) |
| Balance as at December 31, 2025 | - | (16,323) | (10,756) | (27,079) |
| Intangible assets, net | ||||
| Balance as at December 31, 2024 | 82,166 | 122 | 910 | 83,198 |
| Balance as at December 31, 2025 | 82,166 | 88 | 854 | 83,108 |
a. New product development
This refers to costs incurred in the development of new products, processes, and equipment. The amortization of these projects, which have a term not exceeding 5 years, is charged to income for the fiscal year.
LUPATECH
LUPATECH S.A. CERTIFICAT DE VALORES/0001-12
www.lupatech.com.br
b. Software and other licenses
This includes all data processing systems and software licenses, which are recorded at acquisition cost and amortized on a straight-line basis. Software amortization is charged to income over a period of 5 years.
c. Goodwill on the acquisition of investments
Goodwill is allocated to the cash-generating units to which it can be identified in the cash flows of the cash-generating units ("CGUs"). The balance of goodwill is not amortized and is subject to annual impairment tests or whenever there are indications of a potential loss in value. In 2025, no indications of impairment were identified regarding the recoverability of goodwill.
The assumptions used to determine fair value using the discounted cash flow method for impairment testing include: cash flow projections based on management's estimates of business performance over a 10-year horizon. The projections are made in nominal currency, taking into account assumptions regarding exchange rates and inflation. Discounted cash flows are calculated for 5- and 10-year horizons and also considering the perpetuity of the businesses, with these values compared to the carrying amounts of the assets in use to assess the need to recognize any impairment loss. Whenever applicable, management compares the values in use with the estimated sales values of the CGUs to identify any distortions in the calculations.
The discount rates used were determined based on market information available as of the test date. The discount rate used was 10.2% per annum, based on the weighted average cost of capital calculated using the CAPM methodology.
Management's estimates assume a gradual recovery of business operations; therefore, significant events or changes in the business environment could lead to the recognition of significant impairment losses on goodwill.
The following table provides a summary of the allocation of the goodwill balance by Cash-Generating Unit:
| CGUs | Goodwill determined in the acquisition of long-term investment | |||
|---|---|---|---|---|
| Company | Consolidated | |||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Line of products | ||||
| Industrial Valves | 6,065 | 6,065 | 6,065 | 6,065 |
| Ropes | 55,414 | 55,414 | 55,414 | 55,414 |
| Composite items (Fiberware) | - | - | 20,687 | 20,687 |
| Total | 61,479 | 61,479 | 82,166 | 82,166 |
| CGUs | Goodwill from the acquisition of investment | Impairment | Net impairment | |
| --- | --- | --- | --- | |
| Line of products | ||||
| Industrial Valves | 6,065 | - | 6,065 | |
| Ropes | 125,414 | (70,000) | 55,414 | |
| Composite items (Fiberware) | 20,687 | - | 20,687 | |
| Total | 152,166 | (70,000) | 82,166 |
During the fiscal year ended December 31, 2025, no reversal or provision for losses due to the non-recoverability of goodwill was recognized.
- Suppliers
| Suppliers - trade payables | Company | Consolidated | ||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Domestic | 36,659 | 44,954 | 36,659 | 44,954 |
LUPATECH
www.lupatech.com.br
LUPATECH S.A.
TEL./Fax 36-255.822/0001-12
| Foreign | 2,903 | 10,515 | 2,903 | 10,515 |
|---|---|---|---|---|
| (-) Present value adjustment | (14,506) | (20,629) | (14,506) | (20,629) |
| Total | 25,056 | 34,840 | 25,056 | 34,840 |
| Current | 4,133 | 5,916 | 4,133 | 5,916 |
| Non-current | 20,923 | 28,924 | 20,923 | 28,924 |
| Company | Consolidated | |||
| --- | --- | --- | --- | --- |
| Suppliers | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Domestic | 13,477 | 9,723 | 20,090 | 11,295 |
| Foreign | 2,019 | 523 | 2,019 | 523 |
| Total | 15,496 | 10,246 | 22,109 | 11,818 |
| Current | 15,496 | 10,246 | 22,109 | 11,818 |
| Non-current | - | - | - | - |
The due dates for non-current accounts payable are as follows:
| Maturity | 12/31/2025 |
|---|---|
| 2027 | 1,674 |
| 2028 | 2,276 |
| 2029 | 2,770 |
| 2030 | 3,512 |
| After 2031 | 10,691 |
| 20,923 |
LUPATECH
LUPATECH S.A. CENTRO DE ASSEMBLADORES 12
- Loans and financing
| Bankruptcy Claims | Indexer | Weighted average interest rates | 12/31/2025 | 12/31/2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company | Consolidated | Company | Consolidated | |||||||||||
| Current | Non-current | Total | Current | Non-current | Total | Current | Non-current | Total | Current | Non-current | Total | |||
| Domestic currency | ||||||||||||||
| Secured creditors (Class II) | FIXED | 3,0% p.a. + TR | 5,980 | 33,937 | 39,917 | 5,980 | 33,937 | 39,917 | 2,990 | 37,314 | 40,304 | 2,990 | 37,314 | 40,304 |
| (-) Present value adjustment | - | (12,574) | (12,574) | - | (12,574) | (12,574) | - | (15,301) | (15,301) | - | (15,301) | (15,301) | ||
| Unsecured creditors (Class III) | FIXED | 3,3% p.a. + TR | 6,377 | 72,816 | 79,193 | 6,377 | 72,816 | 79,193 | 2,953 | 72,213 | 75,166 | 2,953 | 72,213 | 75,166 |
| (-) Present value adjustment | - | (31,375) | (31,375) | - | (31,375) | (31,375) | - | (33,057) | (33,057) | - | (33,057) | (33,057) | ||
| Foreign currency | ||||||||||||||
| Unsecured creditors (Class III) | FIXED | 0,4% p.a. | - | - | - | 4,657 | 74,294 | 78,951 | - | - | - | 2,040 | 87,276 | 89,316 |
| (-) Present value adjustment | - | - | - | - | (23,223) | (23,223) | - | - | - | - | (31,548) | (31,548) | ||
| Total | 12,357 | 62,804 | 75,161 | 17,014 | 113,875 | 130,889 | 5,943 | 61,169 | 67,112 | 7,983 | 116,897 | 124,880 | ||
| Indexer | Weighted average interest rates | 12/31/2025 | 12/31/2024 | |||||||||||
| Company | Consolidated | Company | Consolidated | |||||||||||
| Current | Non-current | Total | Current | Non-current | Total | Current | Non-current | Total | Current | Non-current | Total | |||
| Domestic currency | ||||||||||||||
| Working capital / expansion - BNDES* | TJLP | 9,07% p.a. | 5,034 | - | 5,034 | 8,648 | - | 8,648 | 5,034 | - | 5,034 | 8,648 | - | 8,648 |
| Discounted securities with joint liability, fiduciary assignment of receivables, and fiduciary-secured loans | FIXED | 2,34% p.m. | 26,308 | - | 26,308 | 27,033 | - | 27,033 | 27,080 | 666 | 27,746 | 27,109 | 666 | 27,775 |
| Working capital and FGI | FIXED | 1,91% p.m | 6,376 | 2,570 | 8,946 | 6,489 | 2,570 | 9,059 | 10,005 | 5,874 | 15,879 | 10,005 | 5,874 | 15,879 |
| Foreign currency | ||||||||||||||
| Working capital / expansion - BNDES* | DOLLAR | 6,06% p.a. | 1,214 | - | 1,214 | 2,519 | - | 2,519 | 1,214 | - | 1,214 | 2,519 | - | 2,519 |
| Total | 38,932 | 2,570 | 41,502 | 44,689 | 2,570 | 47,259 | 43,333 | 6,540 | 49,873 | 48,281 | 6,540 | 54,821 |
- The loans granted by BNDES are the subject of litigation (Note 20) involving, among other matters, the classification of the loans. The amounts shown in the table correspond to the total amount in dispute and are subdivided into a portion subject to judicial reorganization and a portion not subject to it. The portion not subject to the proceedings is limited to the value of the assets subject to fiduciary sale, a value that could only be determined at a public auction pursuant to a decision by the São Paulo Court of Appeals (TJ-SP)—according to appraisal reports commissioned by the Company, the assets are valued at R$ 5,005.
LUPATECH
www.lupatech.com.te
The due dates for the non-current portions of the loans are detailed below:
| Maturity | Company | Consolidated |
|---|---|---|
| 12/31/2025 | 12/31/2025 | |
| 2027 | 2,576 | 8,427 |
| 2028 | 8,053 | 10,490 |
| 2029 | 8,600 | 13,180 |
| 2030 | 9,420 | 14,841 |
| After 2031 | 36,725 | 69,507 |
| 65,374 | 116,445 |
The collateral pledged for the loans and financing is detailed below:
| Portion not included in the reorganization plan | 12/31/2025 | 12/31/2024 | |||
|---|---|---|---|---|---|
| Guarantee value | Guarantee value | ||||
| Company Carrying Amount | Consolidated Carrying Amount | Company Carrying Amount | Consolidated Carrying Amount | ||
| In domestic currency | Garantee | ||||
| Working capital / expansion | Mortgage / buildings | 2,634 | 90,736 | 2,634 | 92,112 |
| Machinery and equipment | 461 | 3,287 | 597 | 3,236 | |
| Investment guarantee fund | 234 | 234 | 3,386 | 3,386 | |
| 3,329 | 94,257 | 6,617 | 98,734 |
16. Affiliated Companies
16.1 Parent Company
Balances and transactions between the Company and its subsidiaries, which are its related parties, have been eliminated on consolidation. Details regarding transactions between the parent company and its subsidiaries are presented below:
| Company | |
|---|---|
| Lochness | MNA Valves |
| Current assets | |
| Accounts receivable | - |
| Other receivables | 163 |
| Noncurrent assets | |
| Loans | - |
| 163 | |
| Current liabilities | |
| Payables | - |
| Other payables | 7,356 |
| Noncurrent liabilities | |
| Loans | - |
| 7,356 | |
| Income (loss) of the year | |
| Sale of products | - |
| Financial revenue | - |
| Financial expenses | - |
| Exchange rate gains (losses) | - |
| - |
LUPATECH
LUPATECH S.A. CERTIFICAT N° DE 02/2001-12
www.lupatech.com.br
| Company | |||||||
|---|---|---|---|---|---|---|---|
| Transaction date | Maturity | Interest rate | Value (R$) | Existing balance (US$) | 12/31/2025 | 12/31/2024 | |
| Loans receivable | |||||||
| In foreign currency | |||||||
| Contract 1 | Jul-14 | Undetermined | 105% do DI-Cetip | 19,820 | 240 | 1,319 | 1,479 |
| 19,820 | 240 | 1,319 | 1,479 | ||||
| Loans payable | |||||||
| In foreign currency | |||||||
| Contract 2 | Jan-18 | Undetermined | 0,4% p.a. | 225,416 | 26,382 | 145,166 | 163,057 |
| 225,416 | 26,382 | 145,166 | 163,057 |
Transactions are conducted in accordance with the terms agreed upon by the parties.
Guarantees granted
Transactions with related parties do not involve any collateral; they consist solely of ordinary commercial transactions (purchase and sale of supplies), which are not secured by collateral, as well as loan transactions with Group companies, which also do not involve any collateral.
17. Key members of management
Management Compensation
Each year, the shareholders, meeting at the Annual General Meeting, set compensation limits for the management bodies. Management compensation consists of a fixed portion and, in the case of the Executive Board, also includes a variable portion.
The following table details the compensation of the management bodies:
| Management compensation | Company and Consolidated | Company and Consolidated | ||||
|---|---|---|---|---|---|---|
| Fixed compensation | Variable Compensation | 12/31/2025 | Fixed compensation | Variable Compensation | 12/31/2024 | |
| Executive Board | (1,879) | (3,342) | (5,221) | (1,878) | (288) | (2,166) |
| Board of Directors | (1,243) | - | (1,243) | (1,089) | - | (1,089) |
| Total | (3,122) | (3,342) | (6,464) | (2,967) | (288) | (3,255) |
The Company does not compensate its executives with stock. Furthermore, it offers key personnel the opportunity to participate in stock option plans for shares issued by the Company. Such plans grant beneficiaries the right, but not the obligation, to purchase shares at a previously agreed-upon price within defined time frames, upon payment of the price. It is, therefore, a commercial transaction between the parties.
The amount of the executive team's variable compensation, approved by the Board of Directors in April 2025, is based on the results achieved in 2024.
18. Income tax and social security contributions
Lupatech S.A. and its subsidiaries and affiliates have accumulated tax loss carryforwards of R$ 871,831 and R$ 1,095,256, respectively, for a total of R$ 1,967,087 through December 2025.
LUPATECH
LUPATECH S.A. CERTIFICAT N° DE-103.022/0001-12
www.lupatech.com.br
a) Deferred income tax and social contribution - Assets
The Company has tax losses that can be offset against future taxable income, and a deferred tax asset has been recognized. Based on the technical analyses performed, the Company estimates the realization of these tax assets as follows:
| Company | Consolidated | |
|---|---|---|
| Income and social contribution tax assets - Tax Credits | 12/31/2025 | 12/31/2025 |
| Estimated realization - 2026 | 4,317 | 4,911 |
| Estimated realization - 2027 | - | - |
| Estimated realization - 2028 | 2,254 | 2,563 |
| Estimated realization - 2029 | 5,680 | 6,461 |
| Estimated realization - 2030 | 7,431 | 8,453 |
| After 2031 | 70,868 | 80,612 |
| Total | 90,550 | 103,000 |
The Company recognizes deferred income taxes and social contribution taxes on temporary differences arising from adjustments to accounting profit, as shown below:
| Company | Consolidated | |||
|---|---|---|---|---|
| Income and social contribution taxes on temporary differences | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Discount to present value of trade accounts payable, fines and loans | (21,414) | (24,078) | (26,941) | (31,587) |
| Allocated Cost | - | - | (1,135) | (1,214) |
| Other | (6,712) | (1,946) | (6,712) | (1,946) |
| (28,126) | (26,024) | (34,788) | (34,747) |
The above composite amounts are presented on a net basis in the balance sheet, as follows:
| Company | Consolidated | |||
|---|---|---|---|---|
| Noncurrent income and social contribution tax assets | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Tax credit | 90,550 | 90,550 | 103,000 | 103,000 |
| Temporary differences | (28,126) | (26,024) | (34,788) | (34,747) |
| 62,424 | 64,526 | 68,212 | 68,253 |
b) Reconciliation of income tax and social contribution expenses
| Company | Consolidated | |||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Income (loss) before taxes | (58,075) | (41,142) | (60,037) | (42,907) |
| Additions and exclusions | ||||
| Equity method adjustment of interest held in investees | (21,729) | (14,949) | - | - |
| Obsolescence of inventories | 511 | (844) | 4,370 | 2,445 |
| (Reversal) set up of provision for impaired assets | (581) | 2,341 | (776) | 11,200 |
| (Reversal) set up of an allowance for doubtful accounts | 188 | (20) | 202 | (283) |
| Provision for lawsuits | (10,370) | 5,644 | (13,725) | 601 |
| Non-deductible expenses | (24) | - | (3,834) | (11) |
| Discount to present value | (11,195) | - | (19,519) | (13,721) |
| Provision for interest on suppliers | (351) | 60 | (427) | 399 |
| Provision for foreign currency exchange rate variation | (21,901) | 35,751 | (22,225) | 27,690 |
| Other | 104,037 | 11,915 | 86,504 | (3,378) |
| Tax base | (19,490) | (1,244) | (29,467) | (17,965) |
| Current income and social contribution taxes | - | - | (19) | (11) |
| Deferred income and social contribution taxes | (2,101) | 9,370 | (120) | 11,146 |
LUPATECH
LUPATECH S.A. CERTIFICAT N° 001022/0001-12
www.lupatech.com.br
19. Other accounts payable
| Company | Consolidated | |||
|---|---|---|---|---|
| Other current payables | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Provision for legal costs | 773 | 448 | 773 | 448 |
| Claims payable | 402 | 383 | 583 | 579 |
| Sundry provisions | 6,683 | - | 6,683 | - |
| Other liabilities (*) | 5,488 | 2,923 | 5,488 | 2,923 |
| Contract violation fines | 5,682 | 928 | 5,948 | 928 |
| Other payables | 1,188 | 626 | 1,330 | 966 |
| Total | 20,216 | 5,308 | 20,805 | 5,844 |
| Company | Consolidated | |||
| Other noncurrent payables | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| Claims payable | - | - | 1,821 | 1,624 |
| Other liabilities (*) | 43,258 | 38,368 | 43,258 | 38,368 |
| Total | 43,258 | 38,368 | 45,079 | 39,992 |
- Insolvency debts
The due dates for the installments of the other bankruptcy debts classified as non-current assets—are as follows:
Company and Consolidated
| Maturity | 12/31/2025 |
|---|---|
| 2027 | 3,363 |
| 2028 | 4,485 |
| 2029 | 5,460 |
| 2030 | 6,922 |
| After 2031 | 23,028 |
| 43,258 |
20. Contingent proceedings and court deposits
20.1 Judicial Deposits
The Company reports the following balances of court-ordered deposits, which are linked to contingent liabilities:
| Judicial deposits | ||||
|---|---|---|---|---|
| Company | Consolidated | |||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Tax contingencies | 598 | 287 | 754 | 443 |
| Labor contingencies | 1,514 | 1,114 | 3,231 | 3,397 |
| Civil contingencies | 9 | 19 | 28 | 459 |
| Total as at December 31, 2025 | 2,121 | 1,420 | 4,013 | 4,299 |
20.2 Provision for tax, labor, and civil liabilities
The Company is involved in litigation regarding tax, labor, and civil matters. The provision for tax, labor, and civil risks was determined by management based on available information and supported by its attorneys' opinion regarding the expected outcome, in an amount deemed sufficient to cover losses considered likely to occur as a result of adverse court decisions.
LUPATECH
LUPATECH S.A. CERTIFICAT N° DE 165 022/0001-12
www.lupatech.com.br
| Company | Consolidated | ||||
|---|---|---|---|---|---|
| Loss rating | Loss rating | ||||
| Possible | Probable | Possible | Probable | ||
| Tax-related actions (i) | |||||
| ICMS | (i.1) | 90,238 | - | 90,665 | - |
| CSLL | 2,526 | - | 7,724 | - | |
| IRPJ | (i.2) | 23,220 | - | 61,772 | - |
| IRRF | (i.3) | 67,625 | - | 67,625 | - |
| IPI | 1,082 | - | 1,082 | - | |
| PIS/COFINS | - | - | 307 | - | |
| ISS | (i.4) | - | - | 10,380 | - |
| CIDE | - | - | 1,880 | - | |
| Importing taxes | (i.5) | - | - | 33,666 | - |
| Other | (i.6) | 1,452 | - | 6,316 | - |
| 186,143 | - | 281,417 | - | ||
| Labor complaints (ii) | 5,998 | 13,155 | 10,619 | 15,455 | |
| Civil action (iii) | 6,812 | 794 | 15,800 | 9,720 | |
| Total as at December 31, 2025 | 198,953 | 13,949 | 307,836 | 25,175 | |
| Total as at December 31, 2024 | 185,974 | 12,013 | 290,385 | 25,280 |
These figures cover all Group companies and include amounts subject to legal and administrative proceedings, as well as situations where, even in the absence of formal assessments or challenges by the authorities, there is a risk of future losses.
The provision for assets involved in legal proceedings in the amounts set forth above and relating to the areas listed below takes into account the probability of a probable loss, which is established when an outflow of economic benefits is foreseeable given the subject matter in dispute, the judgments rendered in each case, and the legal precedent applicable to each case. Claims with a probability of a possible loss are excluded from the provision.
The changes in the provision balance are as follows:
| Company | Consolidated | |||||||
|---|---|---|---|---|---|---|---|---|
| Tax | Labor | Civil | Total | Tax | Labor | Civil | Total | |
| Total as at 12/31/2024 | - | 11,657 | 356 | 12,013 | - | 16,380 | 8,900 | 25,280 |
| Additions during the year | - | 2,548 | 457 | 3,005 | - | 3,112 | 857 | 3,969 |
| Write-offs during the year | - | (1,050) | (19) | (1,069) | - | (4,037) | (37) | (4,074) |
| Total as at 12/31/2025 | - | 13,155 | 794 | 13,949 | - | 15,455 | 9,720 | 25,175 |
Legal proceedings are divided into three levels, namely:
(i) Tax contingencies
Litigation involving state and federal taxes, including IRPJ, PIS, COFINS, INSS, ICMS, and IPI. There are cases at all stages of the legal process, from the lower courts to the higher courts, the Superior Court of Justice (STJ), and the Federal Supreme Court (STF). The main cases and amounts are as follows:
Major contingent liabilities of the parent company classified as possible losses as of December 31, 2025:
(i.1) Action for Annulment filed by the State of Rio Grande do Sul seeking to invalidate an ICMS tax liability, on the grounds that the company failed to pay the tax at the time of the deemed export of goods under the REPETRO program, given that such transaction is exempt from the tax. Case filed on April 28, 2017, subject to a potential loss of R$ 90,238.
LUPATECH
www.lupatech.com.br
(i.2) Objection filed to seek recognition of a negative IRPJ balance. Case assigned on May 30, 2014, subject to a potential loss of R$ 9,622.
Action for annulment seeking the cancellation of the tax liability (IRPJ and CSLL for the calendar years 2009 and 2010). Case filed on April 15, 2020, subject to a potential loss of R$ 7,296.
Notice of Assessment issued by the Brazilian Federal Revenue Service in response to a Notice of Disagreement filed against the final decision. Case filed on July 23, 2014, subject to a potential penalty of R$ 6,302.
(i.3) Tax Enforcement by the National Treasury regarding the collection of withholding income tax (IRRF) liabilities. The merits of the case are being debated in the Writ of Mandamus proceedings, in which a ruling was issued recognizing that a substantial portion of the tax claims arising from the administrative proceeding is unfounded. Case filed on January 21, 2016, subject to a potential loss of R$ 67,625.
(i.6) Administrative proceedings aimed at discharging debts covered by the PER/DCOMP program. Proceedings are subject to potential losses totaling R$ 1,452.
Major contingent liabilities at subsidiaries classified as possible losses as of December 31, 2025:
(i.2) Notice of Assessment issued by the Brazilian Federal Revenue Service regarding alleged irregularities in the calculation of IRPJ, CSLL, PIS, and COFINS for the 2013 fiscal year. Case filed on October 6, 2016, with a potential liability of R$ 14,441.
Notice of Assessment issued by the Brazilian Federal Revenue Service, based on the assessment of taxable income for the 2010 calendar year. Case filed on November 10, 2014, subject to a potential penalty of R$ 17,491.
Administrative proceeding seeking to offset debts with a tax credit corresponding to a negative IRPJ balance for the 2010 calendar year. Case filed on April 30, 2013, subject to a potential loss of R$ 6,610.
(i.4) Tax Enforcement Division of the Municipality of Macaé, Rio de Janeiro, for the collection of ISS taxes for the 2012 and 2013 tax years. Case filed on December 10, 2015, with a potential claim amount of R$ 3,848.
Tax Enforcement Division of the Municipality of Três Rios, Rio de Janeiro, for the collection of ISS taxes for the 2013 and 2014 periods. Case filed on December 2, 2016, with a potential claim amount of R$ 3,401.
Outstanding cases related to ISS collection and subject to potential write-offs totaling R$ 3,131.
(i.5) Notices of violation issued by the Brazilian Federal Revenue Service to collect fines for alleged noncompliance with the special customs regime for temporary admission. Cases subject to a potential loss of R$ 17,885.
Tax assessment notices issued by the Brazilian Federal Revenue Service to collect the remaining balance of VAT, IPI, PIS, and COFINS levied on declared imports. Cases subject to a potential loss of R$ 4,217.
Notice of Assessment issued by the Brazilian Federal Revenue Service regarding the collection of fines imposed due to alleged non-compliance with the special customs regime for temporary admission. Case filed on January 22, 2010. Case subject to a potential fine of R$ 3,380.
Notice of assessment issued by the Brazilian Federal Revenue Service due to alleged non-compliance with the special customs regime for temporary admission. Case filed on February 21, 2020. Case subject to a potential penalty of R$ 2,991.
Tax assessment notices issued by the Brazilian Federal Revenue Service due to alleged non-compliance with the special customs regime for temporary admission. Cases subject to potential forfeiture totaling R$ 5,193.
LUPATECH
www.lupatech.com.br
(i.6) Administrative proceedings aimed at discharging debts covered by the PER/DCOMP program and canceling tax credits. Proceedings subject to potential losses totaling R$ 6,316.
(ii) Labor contingencies
The Company and its subsidiaries are parties to labor-related lawsuits concerning disputes that primarily involve claims for overtime pay, compensatory and punitive damages, and hazardous working conditions, among other matters.
The following table details the Company’s labor-related liabilities and contingencies, as well as the associated assets:
| Labor liabilities | Statement of financial position | Portion included in the reorganization plan | Portion not included in the reorganization plan | Total as at 12/31/2025 |
|---|---|---|---|---|
| Employees' pay and related charges | Current liabilities | 93 | - | 93 |
| Employees' pay and related charges | Noncurrent liabilities | 1,854 | - | 1,854 |
| Provision for labor contingencies | Noncurrent liabilities | 10,535 | 2,061 | 12,596 |
| Labor contingencies rated as possible | Not included in the statement of financial position | 1,244 | 1,934 | 3,178 |
| Assets tied to labor contingencies | Statement of financial position | Total as at 12/31/2025 | ||
| --- | --- | --- | ||
| Other accounts receivable/bonds convertible into shares (note 9) | Current assets | 177 | ||
| Deposits into court – labor contingencies (note 20.1) | Noncurrent assets | 3,231 | ||
| Properties held for investment (note 11.2) | Noncurrent assets | 19,685 |
In connection with the judicial reorganization, the Company took steps to ensure full payment of the contingent labor claims subject to the judicial reorganization. These measures include: (i) the transfer in lieu of payment of shares in a Special Purpose Entity into which assets and rights were contributed for sale and subsequent distribution of proceeds to the former creditor shareholders; (ii) the issuance of Subscription Warrants to pay claims in excess of 150 times the minimum wage in effect as of the date of the request for judicial reorganization, and (iii) the necessary steps to contribute additional assets to the SPE.
(iii) Civil liabilities
The main issues in this area, classified as a potential loss at the parent company as of December 31, 2025, relate to:
(iii.1) Search and seizure action filed on October 20, 2015, by the Brazilian Development Bank (“BNDES”) against Lupatech S.A. and UEP – Equipamentos e Serviços para Petróleo S.A., seeking the search and seizure of machinery and equipment offered as collateral in connection with financing granted by the BNDES to the aforementioned companies of the Group. Due to the Lupatech Group’s judicial reorganization, on February 1, 2017, the 5th Federal Court of São Paulo, where the action is pending, ordered the suspension of all expropriation proceedings and referred to the judicial reorganization court the analysis regarding the essentiality of said machinery and equipment for the Lupatech Group’s operations.
In the judicial reorganization proceedings, with the exception of the assets belonging to the Macaé unit, the court ruled that the remaining assets were essential to the Lupatech Group’s operations, thereby preventing their search and seizure. Subsequently, after the appeal deadlines had expired, the BNDES again demanded the resumption of the search and seizure of assets in the judicial reorganization. The new request, although granted
LUPATECH
LUPATECH S.A. CERTIFICADO ÀS EMPRESAS DE INVESTIGAÇÃO
www.lupatech.com.br
in the lower courts, was blocked by the Superior Court of Justice, which ordered the use of alternative measures, other than the seizure of assets, to satisfy the BNDES’s claim.
BNDES filed an appeal against the decision handed down by the STJ justice, which is currently pending. On July 12, 2023, BNDES submitted a brief stating that the judgment terminating the judicial reorganization had been issued and reiterating its request that its internal appeal be granted. The STJ is expected to review the appeals.
In December 2021, the São Paulo Court of Justice ruled that the value of the BNDES’s extra-bankruptcy claim—arising from the assets comprising the security for the fiduciary sale, which were the subject of the search and seizure—is limited to their actual auction sale value. According to an asset appraisal report dated 2018, the value of the assets is R$ 5,005. The debt is recorded in liabilities (Note 15) at its balance as of the date of the petition for judicial reorganization of R$ 11,167, which is subdivided into a portion subject to Judicial Reorganization (Class II) and a portion not subject to it (the actual value of the assets).
The main issues in this area, classified as potential losses in subsidiaries as of December 31, 2025, relate to:
(iii.1) A civil lawsuit filed by Weatherford Indústria e Comércio Ltda. and Weus Holding Inc. on July 14, 2008, against UEP, involving a dispute in the area of industrial and intellectual property. The case is classified as having a probable loss of approximately R$ 5,691, a possible loss of R$ 471, and a remote loss of R$ 18,970.
(iii.2) Lawsuit filed by Petrobras against Sotep Sociedade Técnica de Perfuração S.A. seeking recognition and collection of contractual penalties. The dispute centers on the legality of the penalties imposed by the contractor. The collection, if valid, is subject to Sotep’s judicial reorganization. In October 2024, a judgment was rendered declaring the penalties charged by Petrobras unenforceable. The parties filed motions for clarification, which were denied. The parties filed an appeal. A court decision is pending. The case involves a potential loss of R$ 4,717.
20.3 Contingent Assets
The statement containing information on unrecorded contingent liabilities, as advised by the company’s legal counsel, is detailed below, along with the potential for a gain:
| Company | Consolidated | |||
|---|---|---|---|---|
| Rated as | Rated as | |||
| Possible | Probable | Possible | Probable | |
| Tax-related actions | - | - | 6,862 | - |
| Civil actions | 8,167 | 720 | 16,833 | 1,040 |
| Total as at December 31, 2025 | 8,167 | 720 | 23,695 | 1,040 |
| Total as at December 31, 2024 | 12,891 | 8,953 | 17,915 | 21,472 |
(i) Tax Contingent Assets
The Lupatech Group is involved in legal proceedings seeking the refund of ICMS-Import tax levied on transactions covered by the special temporary admission regime, in which there was no transfer of ownership of the goods. As these matters are still under dispute, the accounting treatment of a portion of the contingent assets remains unchanged until the necessary elements are in place to recognize the corresponding tax credits.
21. Taxes Payable
Taxes payable - current
State VAT (ICMS)
| Company | Consolidated | ||
|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| 860 | 724 | 5,324 | 1,339 |
LUPATECH
www.lupatech.com.br
| Contributions for the Brazilian Social Security Institute (INSS) to be paid in installments | 64 | 40 | 93 | 58 |
|---|---|---|---|---|
| Contributions for the Severance Pay Fund (FGTS) to be paid in installments | 3,974 | 1,700 | 4,171 | 1,894 |
| Ordinary installment plan | - | 6,234 | - | 10,320 |
| PGFN installment plan | - | - | - | 221 |
| Reorganization plan to be paid in installments | - | 530 | - | 1,351 |
| Federal Taxes* | 20,859 | - | 37,216 | - |
| Local taxes to be paid in installments | 149 | 151 | 444 | 337 |
| State VAT (ICMS) | 2,190 | 69 | 2,370 | 205 |
| Contributions for The Brazilian Social Security Institute (INSS) | 8,226 | 1,897 | 9,628 | 2,266 |
| Withholding Income Tax (IRRF) | 3,849 | 709 | 4,135 | 790 |
| Social Contribution Tax (CSLL) | 165 | 60 | 185 | 69 |
| Contribution for Social Security Funding (COFINS) | 2,661 | 295 | 3,225 | 659 |
| Contribution for the Social Integration Program (PIS) | 533 | 64 | 673 | 164 |
| Severance Pay Fund (FGTS) | 3,281 | 1,488 | 3,772 | 1,747 |
| Other | 108 | 67 | 921 | 676 |
| Total | 46,919 | 14,028 | 72,157 | 22,096 |
| Taxes payable - noncurrent | Company | Consolidated | ||
| --- | --- | --- | --- | --- |
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| State VAT (ICMS) | 5,497 | 6,060 | 5,497 | 9,644 |
| Contributions for the Brazilian Social Security Institute (INSS) to be paid in installments | - | - | - | 17 |
| Contributions for the Severance Pay Fund (FGTS) to be paid in installments | 241 | 2,646 | 478 | 2,929 |
| Ordinary installment plan | - | 13,369 | - | 22,914 |
| PGFN installment plan | - | - | - | 826 |
| Reorganization plan to be paid in installments | - | 299 | - | 1,130 |
| Local taxes to be paid in installments | - | 1 | 387 | 584 |
| Other | 49 | 93 | 246 | 425 |
| Total | 5,787 | 22,468 | 6,608 | 38,469 |
*Valores em fase de negociação de novos parcelamentos.
22. Shareholders' equity
| 12/31/2025 | 12/31/2024 | |
|---|---|---|
| Capital | 1,927,668 | 1,922,339 |
| Capital reserves and change in capital | 144,754 | 144,754 |
| Accumulated Conversion Adjustments | 74,686 | 83,749 |
| Accumulated losses | (2,072,638) | (2,012,462) |
| Total equity | 74,470 | 138,380 |
a) Share capital
The current paid-in capital consists solely of common stock, with a 100% tag-along right:
| Company and Consolidated | ||
|---|---|---|
| Number of shares held | Capital | |
| Total as at December 31, 2024 | 42,131 | 1,922,339 |
| Minutes 002/2025 as at January 18, 2025 | 9 | 3 |
| Minutes 013/2025 as at June 06, 2025 | 1,576 | 1,935 |
LUPATECH
LUPATECH S.A. CERTIFICADO ÀS EMPRESAS DE
| Minutes 020/2025 as at September 10, 2025 | 1,525 | 1,636 |
|---|---|---|
| Minutes 021/2025 as at September 19, 2025 | 1,446 | 1,755 |
| New issuance of shares – exercise of subscription bonus | 4,556 | 5,329 |
| Total as at December 31, 2025 | 46,687 | 1,927,668 |
b) Subscription Bonus
Third Issue of Subscription Warrants – (Additional Benefit of the Fourth Debenture Issue)
At a meeting held on March 24, 2023, the Board of Directors approved the Company’s fourth issuance of Convertible Debentures. A total of 250 debentures were issued in a single series, with a par value of R$ 100,000 each, for a total amount of up to R$ 25 million, with subscription bonuses as an additional benefit. A total of 101 debentures were subscribed for, amounting to R$ 10.1 million, and the remaining 149 unsubscribed debentures were canceled.
For each Debenture subscribed to and paid up in the Offering, 175,600 Subscription Warrants were delivered free of charge as an additional benefit, entitling their holders to subscribe to and pay for shares, at a ratio of one Share for each Subscription Warrant exercised, under the terms and conditions of the respective issuance of the Subscription Warrants, conducted in conjunction with the 4th Debenture Issue. Upon final approval, 17,735,600 Subscription Warrants were issued.
The Subscription Warrants are exercisable until March 24, 2026, as extended on March 20, 2025, by a meeting of the Board of Directors.
c) Cumulative translation adjustments
The Company recognizes under this heading the effect of foreign exchange rate fluctuations on investments in foreign subsidiaries and on goodwill arising from the acquisition of foreign investments, the functional currency of which is the same as that of the foreign operation. The cumulative effect may be reversed to income for the period as a gain or loss only upon the disposal or write-off of the investment.
d) Dividends
Shareholders are entitled to an annual distribution of mandatory minimum dividends equal to 25% of adjusted net income, in accordance with corporate law and the Company’s bylaws. Due to accumulated losses, current results, and its financial condition, the Company has not declared any dividends payable.
23. Financial instruments
23.1 Financial Risk Management
Financial risk factors
The Company’s activities expose it to various financial risks, which fall into three main categories, without prejudice to any other risks that may arise:
(i) Market Risks: arise from the possibility of losses that may result from changes in economic price trends, such as, but not limited to: interest rates, exchange rates, inflation, stocks, and commodities;
(ii) Credit Risks: These are characterized by the possibility of loss resulting from uncertainty regarding counterparties’ fulfillment of their obligations, particularly the receipt of payments or the delivery of purchased goods, whether due to their financial inability or mere breaches of contract;
(iii) Liquidity Risks: These refer to the possibility that the Company may be unable to effectively meet its obligations when they become due or may only be able to do so at a significant loss.
LUPATECH
LUPATECH S.A. CERTIFICAT DE VALOR ENCORPORTO
www.lupatech.com.br
Market risks
Foreign exchange risk arises from commercial and financial transactions, recognized assets and liabilities, and net investments in foreign operations. Due to its international operations, the Company is exposed to foreign exchange risk in certain currencies, primarily the U.S. dollar.
The Company and its subsidiaries have assets and liabilities denominated in U.S. dollars, as shown in the tables below:
| Item | In thousands of US$ | |||
|---|---|---|---|---|
| Company | Consolidated | |||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Cash and cash equivalents | - | - | - | 3 |
| Other assets | - | 3 | 1,272 | 1,455 |
| Related party transactions - assets | 240 | 239 | 240 | 239 |
| Loans | (221) | (196) | (14,806) | (14,830) |
| Related parties transactions - liabilities | (26,382) | (26,332) | - | - |
| Other liabilities | - | - | (355) | (81) |
| Net exposure in US dollars | (26,363) | (26,286) | (13,649) | (13,214) |
Interest rate fluctuations also pose risks to the Company, primarily through changes in the value of assets or liabilities, particularly debts indexed to post-fixed rates, such as the TR, TJLP, and CDI.
Sensitivity analysis of changes in foreign exchange rates and interest rates:
The analysis takes into account three scenarios for fluctuations in these variables, along with their respective probability assessments. These assumptions are estimates made by management for the purposes of this simulation and may differ significantly from actual results.
Management's estimated likely scenario for interest rates and the exchange rate of the U.S. dollar (USD) against the Brazilian real (BRL):
Interest rate for 2025: 15%
5,57 US-Dollar
Possible scenario for interest rates and the exchange rate of the U.S. dollar (USD) against the Brazilian real (BRL), assuming a 25% (twenty-five percent) deterioration in the risk variable, which is considered likely:
Interest rate for 2025: Increase to 18.8%
6,96 US-Dollar
Interest rate scenario and exchange rate of the U.S. dollar (USD) against the Brazilian real (BRL) are unlikely, with a 50% (fifty percent) deterioration in the risk variable considered probable:
Interest rate for 2025: Increase to 22.5%
8,35 US-Dollar
The impact shown in the table below refers to the projected 1-year period:
| Operation | Risk | Scenarios according to the definitions above | |||||
|---|---|---|---|---|---|---|---|
| Company | Consolidated | ||||||
| Probable | Possible | Remote | Probable | Possible | Remote | ||
| Loans and financing | Increase in U.S. dollar rate | (16) | 346 | 676 | (127) | 836 | 1,544 |
| Loans and financing | Increase in interest rates | (388) | 86 | 103 | 118 | 147 | 176 |
| Loan agreements | Increase in U.S. dollar rate | (1,735) | 38,606 | 75,476 | - | - | - |
| Total (gains) losses | (2,139) | 39,038 | 76,255 | (9) | 983 | 1,720 |
The credit and liquidity constraints faced by the Company limit its ability to manage market risk.
LUPATECH
LUPATECH S.A. CERTIFICAT N° DE-103.022/0001-12
www.lupatech.com.br
Credit risk
The following items are typically exposed to credit risk: cash and cash equivalents, derivative financial instruments, deposits with banks and financial institutions, and receivables from customers and payables to suppliers.
Credit limits are monitored regularly at the time of approval. In the event of default, the need for an allowance for doubtful accounts is assessed.
Our revenues include amounts related to Petrobras, both directly and indirectly, which accounted for approximately 42% (72% in the same period of 2024) of the Company's total revenues as of December 31, 2025.
Liquidity risk
Management monitors the Company's liquidity level through projections and by raising funds via committed credit lines, when feasible, given that liquidity constraints are a reality imposed by the Company's situation.
23.2 Fair Value Estimate
The fair value of financial assets and liabilities that have standard terms and conditions and are traded in active markets is determined based on prices observed in those markets.
The fair value of other financial assets and liabilities (excluding derivative instruments) is determined using pricing models based on estimated discounted cash flows derived from the prices of similar instruments in active markets.
The fair value of derivative instruments is calculated using quoted prices. When such prices are not available, discounted cash flow analysis using the yield curve is applied, based on the duration of the instruments for derivatives that do not contain options. For derivatives that contain options, option pricing models are used.
The Company's principal financial assets and liabilities are described below, along with the criteria used to measure their value:
a) Cash, cash equivalents, and marketable securities - restricted
The balances of cash and cash equivalents and marketable securities are similar to their book values, given their turnover and liquidity. The table below shows this comparison:
| Items – December 31, 2025 | Company | Consolidated | ||
|---|---|---|---|---|
| Carrying Amount | Market value | Carrying Amount | Market value | |
| Cash and cash equivalents | 249 | 249 | 384 | 384 |
| Items – December 31, 2024 | Company | Consolidated | ||
| Carrying Amount | Market value | Carrying Amount | Market value | |
| Cash and cash equivalents | 1,829 | 1,829 | 3,515 | 3,515 |
| Securities | 44 | 44 | 44 | 44 |
b) Loans and financing
The market value was estimated based on the present value of future cash outflows, using interest rates available to the Company, as shown below:
| Items – December 31, 2025 | Company | Consolidated | ||
|---|---|---|---|---|
| Carrying Amount | Market value | Carrying Amount | Market value | |
| Working Capital / Expansion - BNDES | 6,248 | 6,658 | 11,167 | 10,530 |
LUPATECH
LUPATECH S.A. CENTRE D'ESCALES,22/0001-12
www.lupatech.com.br
| Discounted securities with joint liability, fiduciary assignment of receivables, and receivables secured by a fiduciary guarantee | 26,308 | 28,045 | 27,034 | 28,215 |
|---|---|---|---|---|
| Working Capital and FGI | 8,946 | 7,850 | 9,059 | 7,964 |
| Loans and financing | 41,502 | 42,553 | 47,260 | 46,709 |
| Loans and financing - bankruptcy credits | 75,161 | 75,162 | 130,889 | 130,890 |
| Total | 116,663 | 160,268 | 178,149 | 224,308 |
| Items – December 31, 2024 | Company | Consolidated | ||
| --- | --- | --- | --- | --- |
| Carrying Amount | Market value | Carrying Amount | Market value | |
| Working Capital / Expansion - BNDES | 6,248 | 6,033 | 11,167 | 10,577 |
| Discounted securities with joint liability, fiduciary assignment of receivables, and receivables secured by a fiduciary guarantee | 27,746 | 24,900 | 27,775 | 24,929 |
| Working Capital and FGI | 15,879 | 15,869 | 15,879 | 15,869 |
| Loans and financing | 49,873 | 46,802 | 54,821 | 51,375 |
| Loans and financing - bankruptcy credits | 67,112 | 67,112 | 124,880 | 124,880 |
| Total | 116,985 | 113,914 | 179,701 | 176,255 |
23.3 Financial Instruments by Category
| Company | ||||||
|---|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | |||||
| Amortized cost | Measured at fair value through profit or loss | Total financial assets | Amortized cost | Measured at fair value through profit or loss | Total financial assets | |
| Financial assets | ||||||
| Securities | - | - | - | - | 44 | 44 |
| Trade accounts receivable | 12,008 | - | 12,008 | 31,531 | - | 31,531 |
| Cash and cash equivalents | 249 | - | 249 | 1,829 | - | 1,829 |
| Related-party transactions | 1,495 | - | 1,495 | 1,692 | - | 1,692 |
| Total | 13,752 | - | 13,752 | 35,052 | 44 | 35,096 |
| Financial liabilities | ||||||
| Loans | - | 116,663 | 116,663 | - | 116,985 | 116,985 |
| Trade accounts payable | 40,552 | - | 40,552 | 45,086 | - | 45,086 |
| Related-party transactions | 157,695 | - | 157,695 | 176,173 | - | 176,173 |
| Total | 198,247 | 116,663 | 314,910 | 221,259 | 116,985 | 338,244 |
| Consolidated | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| 12/31/2025 | 12/31/2024 | |||||
| Amortized cost | Measured at fair value through profit or loss | Total financial assets | Amortized cost | Measured at fair value through profit or loss | Total financial assets | |
| Financial assets | ||||||
| Securities | - | - | - | - | 44 | 44 |
| Trade accounts receivable | 13,950 | - | 13,950 | 35,427 | - | 35,427 |
| Cash and cash equivalents | 384 | - | 384 | 3,515 | - | 3,515 |
| Total | 14,334 | - | 14,334 | 38,942 | 44 | 38,986 |
| Financial liabilities | ||||||
| Loans | - | 178,147 | 178,147 | - | 179,701 | 179,701 |
LUPATECH
www.lupatech.com.br
| Trade accounts payable
Total | 47,165 | - | 47,165 | 46,658 | - | 46,658 |
| --- | --- | --- | --- | --- | --- | --- |
| | 47,165 | 178,147 | 225,312 | 46,658 | 179,701 | 226,359 |
24. Insurance coverage (unrevised)
It is the Company's policy to maintain "Comprehensive Business" insurance coverage for fixed assets and inventory subject to risk; however, the Company currently does not have an active policy. It also has general liability insurance and life insurance coverage, as shown below:
| Insurance type | Amount insured |
|---|---|
| 12/31/2025 | |
| - Life insurance | $ 46,280 |
| - General civil liability insurance | $ 8,029 |
| - International transportation insurance (*) | US$ 400 |
(*) Value in US$'000
The scope of our auditors' work does not include expressing an opinion on the adequacy of the insurance coverage, which was purchased by the Company's management in accordance with prevailing market conditions and the restrictions imposed on the Company, with the aim of ensuring sufficient coverage for any potential claims.
25. Stock Option Plan – “Stock Option”
The Company has Stock Option Plans whose main objectives are to incentivize the Company's performance and retain its key employees. There are four such plans currently in effect:
(i) 2017 Incentive Plan, approved by the Extraordinary General Meeting on April 12, 2017: All grants provided for under this plan have already been made, with certain exercises still pending.
(ii) 2020 Incentive Plan, approved by the Extraordinary General Meeting on August 18, 2020: All grants provided for under this plan have already been made, with certain exercises still pending.
(iii) 2023 Incentive Plan, approved by the Extraordinary General Meeting on May 18, 2023: All grants provided for under this plan have already been made, with certain exercises still pending.
(iv) 2024 Incentive Plan, approved by the Extraordinary General Meeting on May 16, 2024: No grant has been made yet, and there are no outstanding grants.
The options granted but not exercised are listed in the table below:
| Amount to be granted | Plan 2017 | Plan 2020 | Plan 2023 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Quantity | Exercise Price | Maximum period for exercise | Quantity | Exercise Price | Maximum period for exercise | Quantity | Exercise Price | Maximum period for exercise | |
| Management members | 104,401 | 1.20 | 5/10/2027 | ||||||
| Other Beneficiaries | 292,500 | 1.23 | 11/30/2025 | 165,000 | 1.23 | 11/30/2026 | |||
| 406,250 | 1.23 | 11/30/2026 | 128,949 | 1.20 | 11/30/2027 | ||||
| Total | 402,048 | 698,750 | 398,350 | ||||||
| - To be exercised | - | 698,750 | 398,350 | ||||||
| - Non-exercisable | - | - | - | ||||||
| - Conditional ones | 402,048 | - | - |
LUPATECH
www.lupatech.com.br
The vesting of the right to exercise the Options is governed by the respective Plans and Board Meetings that authorized the grants. Options designated as “not yet exercisable” correspond to those for which the contractual vesting period has not yet expired. Those indicated as “conditional,” in turn, are subject to the occurrence of certain corporate events that increase the share capital and/or ratify a specific grant.
As a result of the decisions made at Board of Directors meetings during the 2025 fiscal year, the key parameters of the Incentive Plans were adjusted, including a revision of the exercise price, an adjustment of the vesting periods, and changes to the number of eligible shares.
26. Net revenue
| Company | Consolidated | |||
|---|---|---|---|---|
| Gross revenue from sales and/or services | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 |
| In Brazil | 57,467 | 143,946 | 61,892 | 147,666 |
| Overseas | 1,558 | 1,126 | 1,654 | 2,049 |
| 59,025 | 145,072 | 63,546 | 149,715 | |
| Deductions from gross revenue | ||||
| Taxes on sales | (10,820) | (25,829) | (11,492) | (26,588) |
| Net sales and/or services | 48,205 | 119,243 | 52,054 | 123,127 |
27. (Loss) per share
Basic
Basic (loss) per share is calculated by dividing the loss attributable to the Company’s shareholders by the weighted-average number of common shares outstanding during the period.
| Item | Company and Consolidated | |
|---|---|---|
| 12/31/2025 | 12/31/2024 | |
| Net income (loss) | (60,176) | (31,772) |
| Earnings (loss) attributed to shareholders | (60,176) | (31,772) |
| Weighted average number of outstanding ordinary shares (‘000) | 46,688 | 42,131 |
| Basic earnings (loss) per share - R$ | (1.28890) | (0.75413) |
28. Other operating revenue and (expenses)
| Item | Company | Consolidated | ||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Other operating revenue | ||||
| Reversal of provision for lawsuits | - | 5,644 | - | 601 |
| Revenue from the sale of property, plant and equipment | 4,783 | 55,677 | 4,532 | 81,018 |
| Reversal of provision for impaired assets | - | 2,341 | - | 11,200 |
| Credit Rights - ICMS Import | 4,557 | - | 4,557 | - |
| Other | 549 | 948 | 1,409 | 230 |
| Total other operating revenue | 9,889 | 64,610 | 10,498 | 93,049 |
| Other operating expenses | ||||
| Provision for lawsuits | (10,370) | - | (13,725) | - |
| Cost incurred in the disposal of assets | - | (5,950) | - | (38,112) |
| Provision for impaired assets | (581) | - | (776) | - |
| Production idleness cost | (13,666) | (7,162) | (16,134) | (8,347) |
LUPATECH
LUPATECH S.A. CENTRE N° 36-103.822/0001-12
www.lupatech.com.br
Taxes to be paid in installments
- (2,901) - (4,218)
Other
(1,487) (993) (6,718) (5,441)
Total other operating expenses
(26,104) (17,006) (37,353) (56,118)
Other operating expenses, net
(16,215) 47,604 (26,855) 36,931
29. Financial Results
| Item | Company | Consolidated | ||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Financial revenue | ||||
| Yield from short-term financial investment | 68 | 130 | 107 | 470 |
| Adjustment for inflation | 530 | 2,234 | 741 | 2,340 |
| Receipt Agreement - CSL | 10,363 | - | 10,363 | - |
| Other | 20,618 | 474 | 21,447 | 1,186 |
| Total financial revenue | 31,579 | 2,838 | 32,658 | 3,996 |
| Financial expenses | ||||
| Interest paid on loans and financing | (10,832) | (8,908) | (11,301) | (9,226) |
| Interest paid on loans and financing* | (6,436) | (4,962) | (6,034) | (2,585) |
| Discount to present value | (11,195) | (7,541) | (19,519) | (13,721) |
| Interest to be paid on trade accounts payable and other liabilities* | (9,413) | (3,363) | (9,413) | (3,363) |
| Fines, interest and adjustment for inflation | (1,165) | (10,030) | (1,877) | (13,475) |
| Other | (4,764) | (2,821) | (4,898) | (3,362) |
| Total financial expenses | (43,805) | (37,625) | (53,042) | (45,732) |
| Foreign currency exchange rate variation gains | 34,691 | 11,368 | 35,035 | 19,467 |
| Foreign currency exchange rate variation losses | (12,790) | (47,119) | (12,810) | (47,157) |
| Foreign currency exchange rate gains (losses), net | 21,901 | (35,751) | 22,225 | (27,690) |
- Bankruptcy debts
30. (Expenses and Costs) by nature
| Item | Company | Consolidated | ||
|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Raw materials, materials for use and consumption, labor and third-party services | (39,102) | (88,488) | (42,114) | (93,987) |
| Depreciation and amortization | (1,317) | (2,370) | (1,751) | (2,712) |
| Other | 354 | 496 | (70) | (49) |
| Labor and third-party services | (4,813) | (5,956) | (4,946) | (4,036) |
| Depreciation and amortization | (9) | (10) | (9) | (10) |
| Other selling expenses | (9,990) | (6,670) | (10,746) | (8,750) |
| Labor and third-party services | (12,409) | (11,171) | (13,864) | (12,735) |
| Depreciation and amortization | (196) | (194) | (633) | (657) |
| Other administrative expenses | (4,065) | (4,884) | (6,480) | (7,348) |
| Management compensation | (6,464) | (3,255) | (6,464) | (3,255) |
| Total | (78,011) | (122,502) | (87,077) | (133,539) |
| Cost of goods sold | (40,065) | (90,362) | (43,935) | (96,748) |
| Selling expenses | (14,812) | (12,636) | (15,701) | (12,796) |
| General and administrative expenses | (16,670) | (16,249) | (20,977) | (20,740) |
| Management compensation | (6,464) | (3,255) | (6,464) | (3,255) |
| Total | (78,011) | (122,502) | (87,077) | (133,539) |
31. Information by business segment and geographic region
LUPATECH
LUPATECH S.A.
CERTIFIED O:36-160-827/0001-12
www.lupatech.com.br
The Company has defined the Group's operating segments as:
a) Products: primarily manufacturing industrial valves; valves for the oil and gas industry; synthetic fiber ropes for anchoring oil platforms and various other applications; and composite products, such as utility poles and tubular casings for oil pipelines.
b) Services: The Company continues to wind down its operations through the sale of equipment and related assets. The revenue generated by this segment stems from the liquidation of inventory balances and does not relate to regular operations.
Geographically, management evaluates the performance of the Brazilian and export markets.
Sales between segments were treated as sales between unrelated parties. The amounts for total assets and liabilities are consistent with the balances reported in the financial statements. These assets or liabilities are allocated based on the segment’s operations and the physical location of the asset.
LUPATECH
LUPATECH S.A. CERT. NO. 25-05-003/0001-12
As informações por segmento estão demonstradas abaixo:
| Products | Services | Consolidated | ||||
|---|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Net revenue from sales | 51,941 | 122,836 | 113 | 291 | 52,054 | 123,127 |
| Cost of products sold | (43,807) | (96,505) | (128) | (243) | (43,935) | (96,748) |
| Gross income (loss) | 8,134 | 26,331 | (15) | 48 | 8,119 | 26,379 |
| Selling expenses | (15,701) | (12,796) | - | - | (15,701) | (12,796) |
| Administrative expenses | (18,795) | (18,896) | (2,182) | (1,844) | (20,977) | (20,740) |
| Management compensation | (4,824) | - | (1,640) | (3,255) | (6,464) | (3,255) |
| Reversal of provision for impaired assets | (581) | 2,341 | (776) | 11,200 | (1.357) | 13,541 |
| Other revenue (expenses), net | (10,907) | 38,925 | (14,591) | (15,535) | (25.498) | 23,390 |
| Operating income (loss) before financial income (expenses) | (42,674) | 35,905 | (19,204) | (9,386) | (61,878) | 26,519 |
| Products | Services | Consolidated | ||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Identifiable assets | 197,138 | 206,077 | 147,026 | 166,262 | 344,164 | 372,339 |
| Identifiable liabilities | 17,797 | 17,365 | 207,516 | 203,078 | 225,313 | 220,443 |
| Products | Services | Consolidated | ||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Depreciation and amortization | 1,948 | 2,901 | 111 | 478 | 2,059 | 3,379 |
| Purchase of property, plant and equipment | 4,933 | 56,937 | 4 | 49 | 4,937 | 56,986 |
LUPATECH
www.lupatech.com.br
LUPATECH S.A.
CERTIFICA DE ASSISTÊNCIA E REFERÊNCIA
As informações por região geográfica estão demonstradas abaixo:
| Brazil | Other | Consolidated | ||||
|---|---|---|---|---|---|---|
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Net revenue from sales | 52,054 | 123,127 | - | - | 52,054 | 123,127 |
| Cost of products sold | (43,935) | (96,748) | - | - | (43,935) | (96,748) |
| Gross income (loss) | 8,119 | 26,379 | - | - | 8,119 | 26,379 |
| Selling expenses | (15,701) | (12,796) | - | - | (15,701) | (12,796) |
| Administrative expenses | (20,977) | (20,740) | - | - | (20,977) | (20,740) |
| Management compensation | (6,464) | (3,255) | - | - | (6,464) | (3,255) |
| Reversal of estimated losses due to the non-recoverability of assets | (1,357) | 13,541 | - | - | (1,357) | 13,541 |
| Other revenue (expenses), net | (25,498) | 23,390 | - | - | (25,498) | 23,390 |
| Operating income (loss) before financial income (expenses) | (61,878) | 26,519 | - | - | (61,878) | 26,519 |
| Brazil | Other | Consolidated | ||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Identifiable assets | 344,164 | 372,339 | - | - | 344,164 | 372,339 |
| Identifiable liabilities | 169,585 | 184,399 | 55,728 | 36,044 | 225,313 | 220,443 |
| Brazil | Other | Consolidated | ||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |
| Depreciation and amortization | 2,059 | 3,379 | - | - | 2,059 | 3,379 |
| Purchase of property, plant and equipment | 4,937 | 56,986 | - | - | 4,937 | 56,986 |
LUPATECH
LUPATECH S.A. LABO DE VERDE 2000-12
32. Judicial reorganization concluded on March 14, 2023
In order to address the effects of the prolonged financial crisis in which it found itself, Lupatech S.A. and its direct and indirect subsidiaries (“Lupatech Group”) filed for judicial reorganization on May 25, 2015, which was heard before the 1st Bankruptcy and Judicial Reorganization Court of the District of São Paulo and granted on June 22, 2015.
The Judicial Reorganization Plan (“Plan”) was approved by the General Meeting of Creditors on November 8, 2016, and subsequently confirmed by the 1st Court of Bankruptcy, Judicial Reorganization, and Arbitration-Related Disputes of the City of São Paulo on February 19, 2017.
The Plan was the subject of two amendments, which were approved and judicially ratified on November 30, 2018, and November 26, 2020, respectively.
On March 14, 2023, a ruling was issued ordering the termination of the judicial reorganization proceedings, which became final on June 21, 2023; the certificate of termination was issued by the São Paulo Board of Trade on August 4, 2023.
One of the main objectives of the judicial reorganization was to settle the claims subject to the Plan, which were partially settled through the transfer of Subscription Bonds in lieu of payment and partially paid or rescheduled, as detailed in the table below:
| Class of Creditors | Payment Terms | Interest Rate* | Deadline |
|---|---|---|---|
| I - Labor | Cash or shares in a Special Purpose Entity (SPE) up to a limit of 150 times the minimum wage in effect in May 2015; any amount in excess of that limit in subscription rights | Not applicable | 12 months from the date the credit was approved |
| II - Real Guarantee | 35% in subscription bonuses, 65% in cash | TR + 3% p.a. | January 2032 |
| III - Unsecured bonds | Local currency: 50% in subscription bonuses, 50% in cash | ||
| Foreign currency: 70% in subscription bonuses, 30% in cash | National currency: TR +3.3% p.a. | ||
| Foreign currency: Exchange rate +0.4% y/y. | January 2033** | ||
| IV - Micro and Small Businesses | 50% Subscription Bonus, 50% in cash | TR + 3% a.a. | January 2032 |
- TR=Reference Rate
**Credits that become eligible for payment at a later date are subject to a 180-month payment schedule starting from the date they become eligible. Depending on exchange rate fluctuations, the payment of exchange rate adjustments and interest on foreign currency credits may extend beyond the specified period.
The principal is paid in fixed quarterly installments in Brazilian reais according to the growth schedule set forth in the Plan. Interest and exchange rate variations are paid: (a) Classes II and IV: in a single installment 30 days after the principal is due; or (b) Class III: in four quarterly installments after the principal is due, for credits in local currency, or in as many installments as the amount of the last installment of the corresponding principal, in the case of credits in foreign currency.
The portion to be paid in cash—which corresponds to 65% of Class II credits, 50% of domestic currency credits in Classes III and IV, and 30% of foreign currency credits listed in Class III—is subject to interest and exchange rate fluctuations at the rates indicated in the table above.
The table below details the schedule of payments due to creditors under the court-supervised reorganization:
LUPATECH
www.lupatech.com.br
| Class I | Class II | Class III | Class III | Class IV | TOTAL | TOTAL | |
|---|---|---|---|---|---|---|---|
| Payables and labor provisions | Loans and financing in domestic currency | Payables, loans and financing in domestic currency | Payables, loans and financing in foreign currency | Payables in domestic currency | 12/31/2025 | 31/12/2024 | |
| Carrying amount of Bankruptcy Liabilities | 2,268 | 39,917 | 187,556 | 81,854 | 8,242 | 319,837 | 335,749 |
| Discount to Present Value * | - | (12,574) | (73,820) | (24,068) | (2,737) | (113,199) | (132,718) |
| Net carrying amount | 2,268 | 27,343 | 113,735 | 57,786 | 5,506 | 206,638 | 203,031 |
| Carrying amount maturity | |||||||
| 2025 | 414 | 2,990 | 6,774 | 2,117 | 644 | 12,939 | 13,120 |
| 2026 | - | 2,990 | 8,572 | 2,696 | 637 | 14,895 | 15,085 |
| 2027 | - | 3,861 | 10,359 | 3,269 | 808 | 18,297 | 18,536 |
| 2028 | - | 4,485 | 13,802 | 4,358 | 936 | 23,581 | 23,905 |
| 2029 | - | 4,485 | 16,794 | 5,306 | 960 | 27,545 | 27,934 |
| 2030 | - | 4,485 | 21,290 | 6,727 | 945 | 33,447 | 33,939 |
| 2031 | - | 4,485 | 22,790 | 7,201 | 945 | 35,421 | 35,949 |
| 2032 | - | 12,136 | 29,111 | 9,188 | 2,367 | 52,802 | 58,589 |
| 2033 | - | - | 58,064 | 9,184 | - | 67,248 | 60,852 |
| After 2034 | 1,854 | - | - | 31,808 | - | 33,662 | 47,840 |
| Total | 2,268 | 39,917 | 187,556 | 81,854 | 8,242 | 319,837 | 335,749 |
| Litigation (dates and amounts undetermined) | 10,535 | - | 3,251 | - | 520 | 14,305 | 13,263 |
*The carrying amounts of receivables in Classes II, III, and IV include present value adjustments based on discount rates of 13.65% per annum for receivables denominated in local currency and 5.85% per annum for those denominated in foreign currency.
The portion paid in Subscription Bonds corresponds to 35% of Class II claims, 50% of domestic currency claims in Classes III and IV, and 70% of foreign currency claims listed in Class III. The Subscription Bonds necessary to fulfill the obligation were issued by the Company and were either registered in the creditors' names or held in treasury by court order in the case of creditors whose registration information was incomplete or irregular. The Subscription Bonds were issued in payment at the rate of 1 (one) Bond for every R$ 100 (one hundred reais) of listed credits. Each Bond entitles the holder to, but does not oblige the holder to, subscribe to one share at a price of R$0.88 per share, until March 24, 2026.
A total of 4,352,503 Subscription Warrants were issued, of which 2,123,370 were registered in the names of the respective 1,482 creditors. 487 are held in treasury as collateral for the Subscription Warrants issued in the U.S. by Lupatech Finance, and 746,646 are held in the Company's treasury for delivery to creditors who did not provide the registration information required for bookkeeping or are reserved to cover contingent liabilities.
Due to the adverse macroeconomic conditions that took hold beginning in December 2024, marked by significant increases in exchange rates and interest rates, the Company's liquidity was adversely affected by the resulting reduction in the availability of credit. Consequently, the Company delayed payments of the January, April, July, and October 2025 installments to creditors in Classes II, III, and IV of the Judicial Reorganization. Negotiations are currently underway to resolve the matter.
Information regarding the Judicial Reorganization is available at www.lupatech.com.br/ri.
33. Subsequent events
Sale of Industrial Assets
On February 13, 2026, as disclosed in a Material Fact, the Company announced the sale to a multinational group of its industrial assets used for the manufacture of synthetic fiber cables and ropes, consisting of machinery and other equipment, for a price of US$9.5 million, to be paid in local currency within two years, backed by performance bonds. Upon completion of the transaction, the Company will cease its operations in that business.
LUPATECH
LUPATECH S.A.
CERTIFICAT N° 90-163-027/0001-12
www.lupatech.com.br
Filing of an urgent preliminary injunction prior to the filing of a petition for out-of-court or court-supervised reorganization
On March 16, 2026, the Company filed a motion for preliminary injunctive relief prior to the reorganization proceedings with the Commercial Court of the 4th and 10th Regional Courts of São Paulo (“Preliminary Injunction”), pursuant to Article 20-B et seq. of Law No. 11,101/2005. In conjunction with the Injunction, the Company initiated mediation proceedings before the Specialized Chamber CMIRb (Mediation Center of the Recupera Brasil Institute).
The measures are intended to facilitate the settlement of the Company’s obligations and are a preliminary step toward a request for out-of-court or court-supervised reorganization to be filed at a later date, depending on the progress of negotiations with creditors.
Expiration of the Exercise Period for the Third Issue of Subscription Warrants – (Additional Benefit of the Fourth Issue of Debentures)
At a meeting held on March 20, 2025, the Company determined that it was necessary to extend the exercise period for the Subscription Warrants of the Third Issue of Subscription Warrants – (Additional Benefit of the 4th Issue of Debentures) – to March 24, 2026. Since the exercise period has expired, Subscription Warrants not exercised in a timely manner have lost their validity.
LUPATECH
LUPATECH S.A.
CERT.NAT. n° 20.481.922/0001-12
www.lupatech.com.br
Commentary on the trend in business projections
Consolidated total net revenue in 4Q25 reached R$ 6.6 million. The decline observed compared to 3Q25 is due to the financial crisis that unfolded throughout 2025, which resulted in severe working capital constraints.
The Company’s order backlog in Brazil totaled R$ 49.7 million, remaining at the same level as the previous quarter. Additionally, in March 2026, a contract for valve repair services with Petrobras in the amount of R$ 68 million was added to the backlog.
There are major investment projects in the oil and gas sector that could result in significant demand in the coming years.
In the current scenario, the Company is focusing its efforts on securing sources of liquidity, primarily through divestitures or structured transactions backed by its assets, as well as seeking a sustainable debt restructuring with its creditors, so that it is ready for the upcoming business cycle.
Due to the restructuring that began in 2025, which has already included, among other measures, the divestment of one of its businesses—anchor cables—the Company no longer considers the long-term objectives it had been pursuing and reporting to be valid.
Forecasts, when disclosed, are estimates made by the Company’s management and reflect its opinion, taking into account factors that may affect its performance, such as general economic conditions, as well as the dynamics of the markets in which it operates and its operations, based on information available in the market as of this date.
Any projections are therefore subject to risks, uncertainties, and changes and do not constitute a promise of performance.
LUPATECH
LUPATECH S.A.
CNPJ/MF n° 89.463.822/0001-12
NIRE 35.3.0045756-1
Publicly Traded Company with Authorized Capital – Novo Mercado
AUDIT COMMITTEE REPORT – April 27, 2026
I – INTRODUCTION AND COMPOSITION OF THE COMMITTEE:
The AUDIT COMMITTEE, as provided for in the internal regulations, Bylaws, and applicable laws, is responsible for advising the Company’s Board of Directors regarding the exercise of its duties to oversee and monitor the quality of the financial statements, internal controls, compliance, and risk management of the Company, with a view to ensuring the reliability of the information reflected therein. The AUDIT COMMITTEE is composed of the following members who are currently serving their full terms, namely:
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Paulo Pinese, Brazilian, married, business administrator and accountant, holder of Identity Card No. 8.138.961-9, registered with the CPF/MF under No. 921.449. 938-15 and with the São Paulo Regional Council of Accountants (CRC SP) under No. 134.267/O-6, with a business address at Rodovia Anhanguera, km. 119, Distrito Industrial, Nova Odessa (SP), ZIP Code 13388-220, serving as Coordinator of the Audit Committee,
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Carlos Mario Calad Serrano, a Colombian national, married, engineer, holder of RNE Identity Card No. V471179-4, registered with the CPF/MF under No. 060.144.487-64, with a business address at Rodovia Anhanguera, km. 119, Distrito Industrial, Nova Odessa (SP), CEP 13388-220,
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Simone Anhaia Melo, Brazilian, biologist, holder of Identity Card RG No. 4011785492, registered with the CPF/MF under No. 449.983.170-91, with a business address at Rodovia Anhanguera, km. 119, Industrial District, Nova Odessa (SP), ZIP Code 13388-220.
II – RESPONSIBILITIES OF THE AUDIT COMMITTEE
In addition to other duties assigned to it by law, regulations, or the Bylaws, the Audit Committee is responsible for:
II.1. - Providing its opinion on the hiring and dismissal of the independent auditor;
II.2 - Supervise the activities of the independent auditors, assessing their independence, the quality of the services provided, and the adequacy of such services to the Company’s needs;
II.3 - Supervise the activities carried out in the areas of internal control, internal audit, and the preparation of the Company's financial statements;
II.4 - Monitor the quality and integrity of internal control mechanisms, financial statements, and the information and measurements disclosed by the Company;
II.5 - assess and monitor the Company's risk exposures, and may request, among other things, detailed information on policies and procedures regarding: a) executive compensation; b) use of the Company's assets; and c) expenses incurred on behalf of the Company.
II.6 - assess and monitor, in conjunction with the Company's management and the internal audit department, the appropriateness and disclosure of related-party transactions;
II.7 - prepare an annual report containing information on the Committee's activities, findings, conclusions, and recommendations, noting, if any, significant differences between management, the independent auditor, and the Audit Committee itself regarding the financial statements;
II.8 - report to the Board of Directors on the work carried out by the Committee, communicating the main facts through entries in the meeting minutes; and
II.9 - perform duties and take any other actions necessary to fulfill its responsibilities.
III – ACTIVITIES OF THE AUDIT COMMITTEE:
With regard to the fiscal year ended December 31, 2025, the Committee met again on April 27, 2026, at 2:30 p.m., virtually via the Teams platform. Both members—Mr. Paulo Pinese and Ms. Simone Anhaia Mello, as listed above—were present at the meeting. Mr. Carlos Mario Calad Serrano—due to circumstances beyond his control—was not present.
Also present were the Company's President, Mr. Rafael Gorenstein, and Ms. Vanessa Melo de Souza, the Financial Statement Preparer, who provided information on the work to finalize the financial statements for the 2025 fiscal year, as well as on the audit work that had already been completed.
At this regular meeting held on April 27, 2026, this Audit Committee discussed accounting and tax matters related to the closing of the 2025 annual financial statements, corresponding to the twelve-month period beginning January 1 and ending December 31, 2025.
The Board of Directors will accept the recommendation of this Audit Committee to approve the Financial Statements for the fiscal year ended December 31, 2025, which have been discussed and reviewed by this same Committee.
Independent Accounting Audit: Assessed independence, particularly with regard to the provision of other services, and compliance with applicable legal and regulatory provisions, on an ongoing basis; Reviewed the Independent Auditor's Annual Work Plan; monitored the work of the independent accounting audit; reviewed the audit report on the financial statements for the 12-month period ended December 31, 2025.
IV – Topics addressed during the fiscal year ended December 31, 2025:
a. Financial Statements / Finance / Accounting: Monitored the Company's financial results for the first three quarters of the fiscal year—January through March 2025, April through June 2025, and July through September 2025—as well as for the 2025 year-end closing, with respect to the financial statements prepared for this period —
Balance Sheet, Income Statement for the year 2025, Statement of Comprehensive Income, Cash Flow Statement, Statement of Changes in Equity, and Statement of Value Added for the 12-month period ended December 31, 2025.
b. Reviewed in addition to the financial statements and their accompanying notes. The accounting policies adopted were evaluated; the process for preparing and disclosing the financial statements for the period was evaluated; and the reasonableness of the criteria for recognizing revenue and expensing costs that have a material impact on the financial statements of the Company and its subsidiaries was evaluated.
c. Internal controls and compliance: Monitoring and oversight of the tools used by the COMPANY to assess risks, protect assets, and supervise the effectiveness of compliance structures in combating fraud, corruption, and preventing money laundering; Analysis and understanding of the COMPANY's corporate policies; Monitoring of procedures related to the Prevention and Combating of Money Laundering; Monitoring of procedures related to Fraud Prevention and Combating, as well as review of investigation reports and their respective results; Monitoring the dissemination and actions related to the Anti-Corruption Law (Law 12,846/2013, Decree 8,420/2015, and CGU Ordinance 909), the Code of Ethics and Conduct, and the Compliance Program; Assessment of risks related to the information technology (IT) environment; Assessment of the process for monitoring legal proceedings, deposits, and judicial freezes, as well as the adequacy of the respective estimates of accounting provisions; Monitoring of controls related to the financial area; Monitoring of third-party contracting management; Monitoring of work related to the implementation of the LGPD; Monitoring, identification, and mitigation of IT environment and cyber risks.
d. Irregularities and Complaints: Monitored the development of the process for reporting and monitoring the systems and controls implemented by Management to receive and handle information regarding noncompliance with applicable laws and regulations, as well as its internal regulations and codes, ensuring that they include effective mechanisms to protect the whistleblower and the confidentiality of the information;
V – HIGHLIGHTS FROM THE AUDIT COMMITTEE:
The members of the Audit Committee, in the exercise of their legal duties and responsibilities, note that they discussed in detail the accounting procedures and the recording of the most significant transactions entered into the accounting records during the 12-month period corresponding to the 2025 fiscal year, ending on December 31, 2025, and their consistency with the procedures adopted at the close of the immediately preceding fiscal year, ending on December 31, 2024, as specifically reflected in the minutes of the Audit Committee meetings held during the quarterly sessions.
Among the topics discussed, the following stand out:
a. Net sales revenue and revenue from Lupatech and its subsidiaries, based on the same figures as the corresponding period in 2024, including the calculation of EBITDA for the period;
b. Operating costs; current inventory position and its probable and possible realization over time,
c. establishment of reserves for the non-realization of assets such as inventory, accounts receivable, and other assets no longer in use—assets available for sale and their
provisions (impairment) for potential realization losses, as well as the realization of other receivables from third parties (CSL – Cordoaria São Leopoldo),
d. Recording of recognized deferred IRPJ and CSLL credits, their future realization, and supporting documentation, as well as the realization of goodwill on investments in subsidiaries acquired in the past;
e. Valuation of assets available for sale, no longer used in the operations of the Company and its subsidiaries; their valuation at fair value,
f. Capitalization and depreciation policies for fixed assets in use; and
g. Analysis of liabilities reflected in the 2025 annual financial statements.
Accordingly, this Committee believes that the reference to the DFs as the most relevant aspect in the Notes to the Financial Statements should, by 2025, be revised and perhaps adjusted in wording and/or reclassified to the notes to the financial statements as liabilities that remain pending future settlement, arising from the RJ, as was in fact the case.
Furthermore, the accounting procedures in use by the Company remained unchanged during the quarter under review.
VI – RECOMMENDATION REGARDING THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2025
The members of the Audit Committee of Lupatech S.A. in the exercise of their duties and responsibilities, and in accordance with the Internal Regulations of this Committee, have reviewed the financial statements—both individual and consolidated—and the Management’s annual report, including the Notes to the aforementioned financial statements, prepared for the fiscal year ended December 31, 2025, and, based on the information provided by Management, this Committee expresses a favorable opinion and hereby recommends to the Board of Directors the approval of the aforementioned documents.
Nova Odessa (SP), April 27, 2026.
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Paulo Pinese
RG nº 8.138.961-9 e CPF/MF nº 921.449.938-15
CRC SP 134.267/O-6. -
Carlos Mario Calad Serrano - ausente
RNE nº V471179-4 e CPF/MF nº 060.144.487-64. -
Simone Anhaia Melo
RG nº 4011785492 e CPF/MF sob o nº 449.983.170-91
LUPATECH
Management’s declaration of the financial statements
The Company’s directors, in accordance with the provisions of item VI of Article 27 of CVM Instruction No. 80, dated March 29, 2022, as amended, hereby declare that they have reviewed, discussed, and approved the Company’s Financial Statements for the fiscal year ended December 31, 2025.
Nova Odessa, April 29, 2026.
Rafael Gorenstein – Director President and of Investor Relations Officer
Marco Antônio Miola – Director without a specific designation
LUPATECH
Management’s declaration of the independent auditor’s report
The Company’s directors, in accordance with the provisions of item V of Article 27 of CVM Instruction No. 80, dated March 29, 2022, as amended, hereby declare that they have reviewed, discussed, and approved the independent auditors’ report on the Company’s Financial Statements for the fiscal year ended December 31, 2025.
Nova Odessa, April 29, 2026.
Rafael Gorenstein – Director President and of Investor Relations Officer
Marco Antônio Miola – Director without a specific designation
Crowe
Crowe Macro Auditoria e Consultoria
R. XV de Novembro, 184
3º Andar – Centro, São Paulo, SP
+55 (11) 5632.3733
www.crowe.com/br
(Free translation from the original in Portuguese)
INDEPENDENT AUDITOR'S REPORT ON THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS
To the
Shareholders, Directors and Officers of
Lupatech S.A.
Nova Odessa - SP
Opinion
We have audited the accompanying individual and consolidated financial statements of Lupatech S.A. ("Company"), identified as Parent and Consolidated, respectively, which comprise the statement of financial position as at December 31, 2025, and the statements of profit or loss, of comprehensive income, of changes in equity and of cash flows for the year then ended, and notes to the financial statements, including the material accounting policies and other explanatory information.
In our opinion, the individual and consolidated financial statements referred to above present fairly, in all material respects, the individual and consolidated financial position of Lupatech S.A. as at December 31, 2025, and its individual and consolidated financial performance and its individual and consolidated cash flows for the year then ended in accordance with accounting practices adopted in Brazil and International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB").
Basis for opinion
We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the "Auditor's responsibilities for the audit of the individual and consolidated financial statements" section of our report. We are independent of the Company and its subsidiaries in accordance with the relevant ethical requirements in the Code of Ethics for Professional Accountants and the professional standards issued by the Brazilian Federal Accounting Council ("CFC"), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Crowe
Emphasis of matter
Significant uncertainty related to going concern
These individual and consolidated financial statements of Lupatech S.A. for the year ended December 31, 2025 have been prepared on a going concern basis and, as mentioned in Note 1.1 to the financial statements, the Company and its subsidiaries have reported recurring losses. During the year ended December 31, 2025, the loss before income tax and social contribution was R$ 58,075 thousand in the parent and R$ 60,037 thousand in the consolidated (R$ 41,142 thousand and R$ 42,907 thousand in 2024, respectively) and the Company has not generated sufficient operating cash to settle its obligations. These conditions indicate the existence of significant uncertainty that may cast significant doubt on the Company's and its subsidiaries' ability to continue as a going concern. The reversal of this situation of recurring losses and difficulty to generate cash, as well as the capacity to realize their assets and settle their liabilities in the normal course of the Company's business, depend on the success of the plans for monetization of credits and other assets, and the actions for materialization of the projections, which include mainly the growth of revenues and the improvement of operating margins, as described in Note 1.1 to the financial statements. Notwithstanding, as mentioned in Note 33, on March 16, 2026 the Company filed for a precautionary injunction prior to the reorganization proceedings before the Business Court of the 4th and 10th Judicial Administrative Regions (RAJS) of the State of São Paulo ("Precautionary Injunction"). Concurrently with the Precautionary Injunction, the Company initiated mediation proceedings before the Specialized Chamber. These measures are intended to restructure the Company's obligations and precede any subsequent filing for out-of-court or court-supervised reorganization, depending on the progress of the negotiation with creditors. Our opinion is not qualified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, the description of how the matter was addressed in our audit, including any comments on the results of our procedures, is presented in the context of the financial statements taken as a whole
Assessment of impairment of goodwill, deferred income tax assets and assets classified as held for sale – Parent and Consolidated
The Company and its subsidiaries performed procedures to assess the existence of impairment in its Cash-Generating Units ("CGUs"), to which goodwill is allocated, deferred income tax assets and assets classified as held for sale, as described in Notes 10, 13 and 18 to the financial statements. For the calculation of the recoverable amount, the discounted cash flow method was used, based on economic and financial projections and future taxable profits. The determination of future profitability estimates for purposes of assessing the recoverable amount of these assets requires the use of significant assumptions and judgments by the Company and its subsidiaries, which are subject to a high degree of uncertainty as to the realization of future business assumptions, the market indicators used to determine the discount rates, and the significant uncertainty on the Company's and its subsidiaries' ability to continue as a going concern, which may impact the amount of these assets in the individual and consolidated financial statements and the amount of
Crowe
the investment accounted for under the equity method in the parent's financial statements. For this reason, we consider this to be a key audit matter.
How the matter was addressed in the audit
We evaluated the mathematical accuracy and significant assumptions used in the preparation of the projected discounted cash flows for each CGU, including also a comparison of the forecasts with past performance, the assessment of the existence of an active market for the CGUs assessed and other evidences about the determination of the fair value used in the calculation of the recoverable amount, such as market value reports prepared by experts, when applicable, and the evaluation and consistency of these assumptions with the business plans approved by the Board of Directors. Based on the results of the audit procedures described above, we consider the assumptions and methodologies used by the Company and its subsidiaries in the assessment of the recoverable amount of these assets to be reasonable, and the disclosures made to be adequate, in the context of the individual and consolidated financial statements taken as a whole.
Going concern
We draw attention to the matter described in the "Emphasis of matter" section in the item Material uncertainty related to going concern, which is considered a key audit matter, but is reported in a specific section as required by the standard on auditing "NBC TA 570 Going Concern" (equivalent to international standard on auditing ISA 570).
Other matters
Statements of value added
The individual and consolidated statements of value added for the year ended December 31, 2025, prepared under the responsibility of the Company's management and presented as supplementary information for IFRS purposes, were submitted to audit procedures performed in conjunction with the audit of the Company's financial statements. For the purposes of forming our opinion, we evaluated whether these statements are reconciled with the financial statements and accounting records, as applicable, and if their form and content are in accordance with the criteria defined in Technical Pronouncement CPC 09 - "Statement of Value Added". In our opinion, these statements of value added have been properly prepared, in all material respects, in accordance with the criteria defined in the Technical Pronouncement and are consistent with the individual and consolidated financial statements taken as a whole.
Crowe
Other information accompanying the individual and consolidated financial statements and the independent auditor's report
The Company's management is responsible for the other information that comprises the Management Report.
Our opinion on the individual and consolidated financial statements does not cover the Management Report and we do not express any form of audit conclusion thereon.
In connection with the audit of the individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether this report is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement in the Management Report, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the individual and consolidated financial statements
Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board ("IASB"), and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the individual and consolidated financial statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company and its subsidiaries or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's and its subsidiaries' financial reporting process.
Auditor's responsibilities for the audit of the individual and consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Crowe
As part of an audit conducted in accordance with Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the 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 the internal control of the Company and its subsidiaries.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.
- Conclude on the appropriateness of Management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company and its subsidiaries to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company and its subsidiaries to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the individual and consolidated financial statements, including the disclosures, and whether the individual and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Crowe
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
São Paulo, April 29, 2026.
Crowe Macro Auditores Independentes
CRC-2SP033508/O-1
Diego Del Mastro Monteiro
Accountant – CRC-1SP302957/O-3
Sérgio Ricardo de Oliveira
Accountant – CRC-1SP186070/O-8