[Unaudited Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Unaudited%20interim%20condensed%20consolidated%20financial%20statements) [Statements of Financial Position](index=2&type=section&id=Unaudited%20interim%20condensed%20consolidated%20statements%20of%20financial%20position) As of June 30, 2023, Afya's total assets increased to R$7.85 billion from R$7.20 billion at year-end 2022, primarily driven by a rise in intangible assets from acquisitions; total liabilities also grew to R$4.40 billion from R$3.95 billion, mainly due to increased accounts payable to selling shareholders and loans, consequently, total equity rose to R$3.45 billion from R$3.25 billion Consolidated Statements of Financial Position (in thousands of BRL) | | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | 1,374,239 | 1,637,657 | | **Total non-current assets** | 6,475,229 | 5,561,882 | | **Total assets** | **7,849,468** | **7,199,539** | | **Total current liabilities** | 1,170,681 | 905,689 | | **Total non-current liabilities** | 3,232,590 | 3,043,692 | | **Total liabilities** | **4,403,271** | **3,949,381** | | **Total equity** | **3,446,197** | **3,250,158** | | **Total liabilities and equity** | **7,849,468** | **7,199,539** | - The increase in non-current assets was primarily due to a significant rise in Intangible Assets, which grew from **R$4.04 billion** to **R$4.83 billion**[2](index=2&type=chunk) - Current liabilities increased notably due to a rise in 'Accounts payable to selling shareholders' from **R$261.7 million** to **R$401.8 million**[2](index=2&type=chunk) [Statements of Income and Comprehensive Income](index=3&type=section&id=Unaudited%20interim%20condensed%20consolidated%20statements%20of%20income%20and%20comprehensive%20income) For the six months ended June 30, 2023, net revenue increased by **22.2%** year-over-year to R$1.42 billion, however, higher costs and finance expenses led to a decrease in net income to R$205.3 million, compared to R$241.0 million in the same period of 2022, and basic earnings per share fell to R$2.17 from R$2.55 Consolidated Statements of Income (Six-Month Period Ended June 30, in thousands of BRL) | | 2023 (unaudited) | 2022 (unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | **Net revenue** | 1,422,568 | 1,164,480 | +22.2% | | **Gross profit** | 890,666 | 758,508 | +17.4% | | **Operating income** | 406,182 | 371,013 | +9.5% | | **Net income** | 205,310 | 241,015 | -14.8% | | **Basic earnings per share (R$)** | 2.17 | 2.55 | -14.9% | - Finance expenses for the six-month period increased significantly to **R$238.4 million** in 2023 from **R$165.0 million** in 2022, impacting overall profitability[4](index=4&type=chunk) [Statements of Changes in Equity](index=4&type=section&id=Unaudited%20interim%20condensed%20consolidated%20statements%20of%20changes%20in%20equity) Total equity increased from R$3.25 billion at the end of 2022 to R$3.45 billion as of June 30, 2023, with growth primarily driven by net income of R$205.3 million, partially offset by treasury share repurchases of R$12.4 million and dividends paid to non-controlling interests of R$10.3 million Changes in Equity for the Six-Month Period Ended June 30, 2023 (in thousands of BRL) | Description | Amount | | :--- | :--- | | **Balances at December 31, 2022** | **3,250,158** | | Net income | 205,310 | | Treasury shares | (12,369) | | Share-based compensation | 13,398 | | Dividends declared (non-controlling interests) | (10,300) | | **Balances at June 30, 2023 (unaudited)** | **3,446,197** | [Statements of Cash Flows](index=5&type=section&id=Unaudited%20interim%20condensed%20consolidated%20statements%20of%20cash%20flows) For the first six months of 2023, net cash from operating activities was R$537.5 million, an increase from R$427.9 million in the prior year period, while a significant cash outflow of R$737.9 million was used in investing activities, largely for the acquisition of subsidiaries (R$640.9 million), and financing activities used R$150.9 million, resulting in a net decrease in cash and cash equivalents of R$351.9 million Consolidated Statements of Cash Flows (Six-Month Period Ended June 30, in thousands of BRL) | | 2023 (unaudited) | 2022 (unaudited) | | :--- | :--- | :--- | | **Net cash flows from operating activities** | **537,492** | **427,916** | | **Net cash flows used in investing activities** | **(737,914)** | **(287,510)** | | **Net cash flows used in financing activities** | **(150,925)** | **(272,398)** | | Net decrease in cash and cash equivalents | (351,886) | (132,312) | | Cash and cash equivalents at the beginning of the period | 1,093,082 | 748,562 | | **Cash and cash equivalents at the end of the period** | **741,196** | **616,250** | - The primary driver for the large cash outflow in investing activities was the **R$640.9 million** used for the acquisition of subsidiaries, net of cash acquired[8](index=8&type=chunk) [Notes to the Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20consolidated%20financial%20statements) [Note 1: Corporate Information](index=6&type=section&id=1%20Corporate%20information) Afya Limited is a Cayman Islands holding company listed on Nasdaq (AFYA), with Bertelsmann SE & Co. KGaA as its ultimate parent, operating the largest network of medical higher education institutions in Brazil and providing digital services for physicians, and in January 2023, Afya acquired Sociedade Educacional e Cultural Sergipe DelRey Ltda. ("DelRey"), with no significant direct impact from COVID-19 or the Russia-Ukraine conflict as of the reporting date - Afya is the largest educational group in Brazil by the number of medical seats, with operations in **19 states**[10](index=10&type=chunk) - On January 2, 2023, the company acquired Sociedade Educacional e Cultural Sergipe DelRey Ltda. ("DelRey"), a post-secondary education institution[11](index=11&type=chunk) - The company's ultimate parent is Bertelsmann SE & Co. KGaA, following an acquisition of control on May 5, 2022[9](index=9&type=chunk) [Note 2: Significant Accounting Policies](index=7&type=section&id=2%20Significant%20accounting%20policies) The unaudited interim financial statements were prepared in accordance with IAS 34 and are consistent with the annual statements for 2022, with the Brazilian Real (BRL) as the functional and presentation currency, authorized for issuance on August 28, 2023, and the note also lists the company's subsidiaries and its **30%** associate, UEPC, detailing the basis of consolidation - The financial statements are prepared in accordance with IAS 34 Interim Financial Reporting and should be read with the 2022 annual statements[20](index=20&type=chunk)[21](index=21&type=chunk) - The company's functional and presentation currency is the Brazilian Real (BRL)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company consolidates all entities it controls, with a notable merger in February 2023 being ESMC with UnifipMoc[31](index=31&type=chunk)[34](index=34&type=chunk) [Note 3: Segment Information](index=10&type=section&id=3%20Segment%20information) Afya operates in three reportable segments: Undergrad, Continuing Education, and Digital Services, with the Undergrad segment being the largest contributor for the six months ended June 30, 2023, generating R$1.25 billion in net revenue, while the Continuing Education and Digital Services segments generated R$70.6 million and R$105.7 million, respectively, and the Digital Services segment experiences seasonality with higher revenues in the first and last quarters - The company has three reportable segments: Undergrad (medical and health undergraduate courses), Continuing Education (specialization programs), and Digital Services (medical education content and technology)[38](index=38&type=chunk) Segment Net Revenue (Six-Month Period Ended June 30, 2023, in thousands of BRL) | Segment | Net Revenue | | :--- | :--- | | Undergrad | 1,246,240 | | Continuing Education | 70,584 | | Digital Services | 105,744 | | **Total** | **1,422,568** | - The Undergrad segment holds the vast majority of the company's assets, with **R$7.41 billion** out of a total of **R$7.85 billion** as of June 30, 2023[42](index=42&type=chunk) [Note 4: Business Combinations](index=13&type=section&id=4%20Business%20combinations) On January 2, 2023, Afya acquired **100%** of DelRey for a total consideration of R$832.2 million, including R$575 million in cash paid at closing, R$250 million in deferred payments, and R$7.2 million in digital solutions, resulting in preliminary goodwill of R$91.4 million and adding R$722.7 million in intangible assets (primarily licenses), with DelRey contributing R$116.3 million in net revenue for 2023 DelRey Acquisition Purchase Price Allocation (in thousands of BRL) | | Amount | | :--- | :--- | | Total identifiable net assets at fair value | 740,846 | | Preliminary goodwill arising on acquisition | 91,390 | | **Purchase consideration transferred** | **832,236** | | Cash paid | 575,000 | | Consideration to be transferred | 250,000 | | Digital solutions | 7,236 | - The acquisition includes a potential additional payment of up to **R$105,000**, contingent on the approval of **84 additional medical seats**, which was not measured at the acquisition date[48](index=48&type=chunk) - The goodwill of **R$91.4 million** is allocated entirely to the Undergrad segment and is not expected to be tax-deductible[52](index=52&type=chunk) [Note 5: Cash and Cash Equivalents](index=15&type=section&id=5%20Cash%20and%20cash%20equivalents) As of June 30, 2023, cash and cash equivalents totaled R$741.2 million, a decrease from R$1.09 billion at the end of 2022, with the majority (**R$724.1 million**) held in financial investments like Bank Certificates of Deposit (CDB) with highly rated institutions, yielding an average of **100.25%** of the CDI rate Cash and Cash Equivalents (in thousands of BRL) | | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Cash and bank deposits | 17,057 | 57,509 | | Cash equivalents | 724,139 | 1,035,573 | | **Total** | **741,196** | **1,093,082** | [Note 6: Trade Receivables](index=15&type=section&id=6%20Trade%20receivables) Net trade receivables increased to R$552.4 million as of June 30, 2023, from R$495.4 million at year-end 2022, with the allowance for doubtful accounts also growing to R$59.1 million from R$44.0 million over the same period, and the majority of receivables are from tuition fees Trade Receivables Breakdown (in thousands of BRL) | | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Gross Trade Receivables | 611,545 | 539,445 | | (-) Allowance for doubtful accounts | (59,132) | (44,046) | | **Net Trade Receivables** | **552,413** | **495,399** | | Current | 509,520 | 452,831 | | Non-current | 42,893 | 42,568 | Change in Allowance for Doubtful Accounts (in thousands of BRL) | | June 30, 2023 (unaudited) | June 30, 2022 (unaudited) | | :--- | :--- | :--- | | Beginning Balance | (44,046) | (45,013) | | Additions | (39,086) | (30,420) | | Write-offs | 24,000 | 28,548 | | **Ending Balance** | **(59,132)** | **(46,885)** | [Note 7: Related Parties](index=16&type=section&id=7%20Related%20parties) Transactions with related parties include sales of educational content to associate UEPC and lease agreements with entities linked to shareholders, and as of June 30, 2023, accounts payable to selling shareholders included R$32.6 million due to shareholder Nicolau Carvalho Esteves, with key management compensation for the first six months of 2023 totaling R$17.0 million, including R$9.9 million in share-based compensation Key Management Personnel Compensation (Six-Month Period, in thousands of BRL) | | June 30, 2023 (unaudited) | June 30, 2022 (unaudited) | | :--- | :--- | :--- | | Short-term employee benefits | 7,131 | 8,037 | | Share-based compensation plan | 9,905 | 8,273 | | **Total** | **17,036** | **16,310** | - The company has accounts payable of **R$32.6 million** to shareholder Nicolau Carvalho Esteves related to the development of the ITPAC Garanhuns medical school, due in November 2023[61](index=61&type=chunk)[62](index=62&type=chunk) [Note 8: Other Assets](index=17&type=section&id=8%20Other%20assets) Total other assets increased to R$264.4 million as of June 30, 2023, from R$243.5 million at year-end 2022, with the largest component being indemnification assets of R$148.2 million, which represent the selling shareholders' responsibility for pre-acquisition liabilities of acquired subsidiaries Other Assets Breakdown (in thousands of BRL) | | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Indemnification assets | 148,175 | 145,300 | | Advances | 29,013 | 30,626 | | Judicial deposits | 14,412 | 12,693 | | Other | 72,778 | 67,382 | | **Total** | **264,378** | **243,501** | [Note 9: Investment in Associate](index=18&type=section&id=9%20Investment%20in%20associate) Afya holds a **30%** interest in UEPC, a medical school, accounted for using the equity method, with the carrying amount of this investment being R$52.7 million as of June 30, 2023, and for the first six months of 2023, Afya's share of UEPC's income was R$7.1 million, and it received R$5.1 million in dividends Reconciliation of Investment in Associate (in thousands of BRL) | | June 30, 2023 (unaudited) | | :--- | :--- | | **Opening balance** | **53,907** | | Dividends received | (5,101) | | Dividends receivable | (3,193) | | Share of income | 7,056 | | **Closing balance** | **52,669** | [Note 10: Property and Equipment](index=19&type=section&id=10%20Property%20and%20equipment) The net book value of property and equipment increased to R$588.2 million as of June 30, 2023, from R$542.1 million at year-end 2022, driven by additions of R$56.9 million and assets acquired through business combinations of R$25.0 million, offset by depreciation of R$35.6 million Property and Equipment Movement (Six-Month Period Ended June 30, 2023, in thousands of BRL) | | Amount | | :--- | :--- | | **Net Book Value at Jan 1, 2023** | **542,087** | | Additions | 56,907 | | Business combinations | 24,980 | | Depreciation | (35,550) | | Write-off (net) | (246) | | **Net Book Value at June 30, 2023** | **588,178** | [Note 11: Intangible Assets and Goodwill](index=20&type=section&id=11%20Intangible%20assets%20and%20goodwill) The net book value of intangible assets and goodwill rose significantly to R$4.83 billion as of June 30, 2023, from R$4.04 billion at year-end 2022, primarily due to the DelRey acquisition, which added R$814.0 million in intangibles, including R$576.6 million in licenses and R$91.4 million in goodwill, with goodwill now totaling R$1.35 billion Intangible Assets and Goodwill Movement (Six-Month Period Ended June 30, 2023, in thousands of BRL) | | Amount | | :--- | :--- | | **Net Book Value at Jan 1, 2023** | **4,041,491** | | Business combinations (DelRey) | 814,044 | | Additions | 45,250 | | Amortization | (71,553) | | Other (Remeasurement, Write-off, etc.) | (249) | | **Net Book Value at June 30, 2023** | **4,831,529** | - Goodwill increased from **R$1.26 billion** to **R$1.35 billion** due to the DelRey acquisition, and licenses with indefinite useful life increased from **R$2.19 billion** to **R$2.77 billion**[71](index=71&type=chunk) - No impairment of goodwill or intangible assets was indicated for the six-month period ended June 30, 2023[74](index=74&type=chunk)[75](index=75&type=chunk) [Note 12: Financial Instruments](index=21&type=section&id=12%20Financial%20assets%20and%20financial%20liabilities) This note details the company's financial instruments, as of June 30, 2023, total financial liabilities at amortized cost were R$3.80 billion, up from R$3.45 billion at year-end 2022, with the increase mainly from higher accounts payable to selling shareholders related to acquisitions, and the company manages market, credit, and liquidity risks, with primary exposure to interest rate fluctuations on its floating-rate debt [Loans and Financing](index=21&type=section&id=12.2.1%20Loans%20and%20financing) Total loans and financing stood at R$1.93 billion as of June 30, 2023, a slight increase from R$1.88 billion at year-end 2022, with the largest components being an R$825.0 million loan from Softbank and two loans from Banco Itaú totaling R$550.1 million, and the majority of the debt is indexed to the CDI rate Loans and Financing Breakdown (in thousands of BRL) | Financial institution | June 30, 2023 (unaudited) | | :--- | :--- | | Banco Itaú Unibanco S.A. (CDI + 1.90%) | 517,844 | | Softbank (6.5% p.y.) | 825,003 | | Debentures (CDI + 1.80%) | 537,426 | | Other | 44,881 | | **Total** | **1,925,154** | [Leases](index=21&type=section&id=12.2.2%20Leases) Lease liabilities increased to R$851.8 million as of June 30, 2023, from R$769.5 million at year-end 2022, primarily due to R$65.4 million in lease liabilities assumed from the DelRey acquisition and R$35.1 million from remeasurements Lease Liabilities Movement (Six-Month Period Ended June 30, 2023, in thousands of BRL) | | Amount | | :--- | :--- | | **Balance at Jan 1, 2023** | **769,525** | | Business combinations | 65,408 | | Additions & Remeasurement | 37,625 | | Interest expense | 49,033 | | Payments | (66,239) | | Write-off | (3,507) | | **Balance at June 30, 2023** | **851,845** | [Accounts Payable to Selling Shareholders](index=22&type=section&id=12.2.3%20Accounts%20payable%20to%20selling%20shareholders) This liability increased significantly to R$764.6 million as of June 30, 2023, from R$528.7 million at year-end 2022, with the primary driver being the addition of R$250.0 million in deferred payments for the DelRey acquisition, and this balance represents future payments due to the sellers of acquired companies Accounts Payable to Selling Shareholders Movement (Six-Month Period Ended June 30, 2023, in thousands of BRL) | | Amount | | :--- | :--- | | **Opening balance** | **528,678** | | Additions (DelRey) | 250,000 | | Interest | 47,758 | | Payments and deductions | (64,397) | | Remeasurement | 2,556 | | **Closing balance** | **764,595** | - The largest outstanding balances relate to the acquisitions of Unigranrio (**R$230.8M**) and DelRey (**R$266.1M**)[82](index=82&type=chunk) [Financial Risk Management](index=24&type=section&id=12.4%20Financial%20instruments%20risk%20management%20objectives%20and%20policies) The company is exposed to market (interest rate, foreign currency), credit, and liquidity risks, with the primary market risk being interest rate risk on floating-rate debt (CDI-indexed), and a sensitivity analysis shows that a **150 basis point** increase in interest rates would decrease pre-tax profit by R$17.4 million, while foreign currency risk is minimal, and credit risk is managed through monitoring of receivables, with liquidity risk managed by maintaining reserves and monitoring cash flows - The company's main financial risk is interest rate risk, as a significant portion of its debt is tied to floating rates like CDI and SELIC[93](index=93&type=chunk) Interest Rate Sensitivity Analysis (Effect on Profit Before Tax, in thousands of BRL) | Increase in basis points | Effect on profit before tax | | :--- | :--- | | +75 | (8,704) | | +150 | (17,408) | [Note 13: Fair Value Measurement](index=27&type=section&id=13%20Fair%20value%20measurement) This note outlines the fair value hierarchy for the company's financial instruments, where all disclosed financial assets and liabilities, including non-current receivables, loans, leases, and payables to selling shareholders, are categorized as **Level 2**, with their fair values determined using observable inputs, such as discounted cash flow (DCF) models with current market rates, and there were no transfers between levels during the period - The company's financial instruments, including loans, lease liabilities, and accounts payable to selling shareholders, are measured at fair value using **Level 2 inputs** (significant observable inputs)[106](index=106&type=chunk) - The fair value of interest-bearing borrowings is determined using the Discounted Cash Flow (DCF) method, reflecting the issuer's current borrowing rate[89](index=89&type=chunk) [Note 15: Labor and Social Obligations](index=28&type=section&id=15%20Labor%20and%20social%20obligations) This note details compensation plans, for the first half of 2023, share-based compensation expense was R$13.4 million, comprising R$9.7 million for the stock option plan and R$3.7 million for the Restricted Stock Units (RSU) program, and the company granted **45,000** new stock options and **24,000** new RSUs during the period - The company has two main share-based compensation plans: a stock option plan and a Restricted Stock Units (RSU) program[111](index=111&type=chunk)[117](index=117&type=chunk) Share-Based Compensation Expense (Six-Month Period Ended June 30, in thousands of BRL) | Plan | 2023 (unaudited) | 2022 (unaudited) | | :--- | :--- | :--- | | Stock Options Plan | 9,672 | 11,581 | | RSU Program | 3,726 | - | | **Total** | **13,398** | **11,581** | [Note 16: Equity](index=30&type=section&id=16%20Equity) As of June 30, 2023, Afya had **93.7 million** shares outstanding, and during the period, subsidiaries CCSI and IESVAP paid R$10.3 million in dividends to non-controlling shareholders, and in March 2023, the board approved a new share repurchase program for up to **2 million Class A shares**, under which the company repurchased R$12.4 million worth of shares by June 30, 2023 - On March 24, 2023, the board approved the fourth share repurchase program, authorizing the buy-back of up to **2,000,000 Class A common shares** until December 31, 2024[125](index=125&type=chunk) - In the first six months of 2023, the company repurchased **216,339 shares** for **R$12.4 million** under the new program[125](index=125&type=chunk)[127](index=127&type=chunk) - Dividends of **R$10.3 million** were paid to non-controlling shareholders during the six-month period ended June 30, 2023[123](index=123&type=chunk) [Note 17: Earnings Per Share (EPS)](index=31&type=section&id=17%20Earnings%20per%20share%20(EPS)) For the six-month period ended June 30, 2023, basic EPS was R$2.17, calculated on a net income of R$194.9 million and **89.9 million** weighted average shares, diluted EPS was R$2.16, reflecting the potential dilution from stock options and restricted share units, and this is a decrease from the R$2.55 basic and diluted EPS in the same period of 2022 EPS Calculation (Six-Month Period Ended June 30) | | 2023 (unaudited) | 2022 (unaudited) | | :--- | :--- | :--- | | Net income attributable to parent (thousands BRL) | 194,916 | 231,115 | | Weighted average shares (basic) | 89,872,136 | 90,740,133 | | Weighted average shares (diluted) | 90,429,310 | 90,740,133 | | **Basic EPS (R$)** | **2.17** | **2.55** | | **Diluted EPS (R$)** | **2.16** | **2.55** | [Note 18: Revenue](index=32&type=section&id=18%20Revenue) Net revenue from contracts with customers for the six months ended June 30, 2023, was R$1.42 billion, up from R$1.16 billion in the prior-year period, with revenue primarily from tuition fees, which totaled R$1.73 billion before deductions, and the vast majority of revenue (R$1.39 billion) is recognized over time Revenue Breakdown (Six-Month Period Ended June 30, in thousands of BRL) | | 2023 (unaudited) | 2022 (unaudited) | | :--- | :--- | :--- | | Tuition fees | 1,729,136 | 1,400,931 | | Other | 127,092 | 98,693 | | Deductions (Discounts, Taxes, PROUNI, etc.) | (423,660) | (335,144) | | **Net revenue from contracts with customers** | **1,422,568** | **1,164,480** | - Revenue is primarily generated in Brazil, and the Undergrad segment contributed **R$1.25 billion** to net revenue in the first half of 2023[131](index=131&type=chunk)[133](index=133&type=chunk) [Note 19: Expenses and Costs by Nature](index=33&type=section&id=19%20Expenses%20and%20costs%20by%20nature) For the six months ended June 30, 2023, total costs and expenses amounted to R$1.01 billion, up from R$791.9 million in the same period of 2022, with the largest expense categories being payroll (R$529.9 million), depreciation and amortization (R$138.3 million), and maintenance (R$48.6 million) Expenses and Costs by Nature (Six-Month Period Ended June 30, in thousands of BRL) | Expense Category | 2023 (unaudited) | 2022 (unaudited) | | :--- | :--- | :--- | | Payroll | (529,916) | (419,197) | | Depreciation and amortization | (138,264) | (99,089) | | Maintenance | (48,622) | (35,633) | | Hospital and medical agreements | (41,446) | (30,131) | | Allowance for doubtful accounts | (39,086) | (30,523) | | Consulting fees | (32,488) | (14,869) | | Other | (184,886) | (162,462) | | **Total** | **(1,014,708)** | **(791,901)** | [Note 20: Finance Result](index=34&type=section&id=20%20Finance%20result) The company reported a net finance expense of R$186.8 million for the first six months of 2023, a significant increase from the R$117.5 million expense in the same period of 2022, with the rise driven by higher interest expenses on loans (R$152.4 million) and lease liabilities (R$49.0 million), reflecting a higher interest rate environment and increased debt levels Finance Result (Six-Month Period Ended June 30, in thousands of BRL) | | 2023 (unaudited) | 2022 (unaudited) | | :--- | :--- | :--- | | **Finance income** | **51,579** | **47,443** | | **Finance expenses** | **(238,357)** | **(164,967)** | | *Interest expense* | *(152,404)* | *(95,165)* | | *Interest expense on lease liabilities* | *(49,033)* | *(41,392)* | | **Finance result** | **(186,778)** | **(117,524)** | [Note 21: Income Taxes](index=34&type=section&id=21%20Income%20taxes) For the six months ended June 30, 2023, the income tax expense was R$21.2 million on a pre-tax income of R$226.5 million, resulting in an effective tax rate of **9.3%**, which is significantly lower than the Brazilian statutory rate of **34%** primarily due to tax exemptions from the PROUNI federal program, providing a tax benefit of R$167.7 million Income Tax Reconciliation (Six-Month Period Ended June 30, 2023, in thousands of BRL) | | Amount | | :--- | :--- | | Income before income taxes | 226,460 | | Income taxes at statutory rates (34%) | (76,996) | | PROUNI - Fiscal Incentive | 167,681 | | Unrecognized deferred tax assets | (91,241) | | Other adjustments | (1,304) | | **Income taxes expense – current** | **(21,150)** | - The company had unrecognized deferred tax assets of **R$1.02 billion** (tax-basis) as of June 30, 2023, due to a lack of available tax planning opportunities to support their recognition[139](index=139&type=chunk) [Note 22: Legal Proceedings and Contingencies](index=35&type=section&id=22%20Insurance%20contracts%20and%20contingencies) As of June 30, 2023, the company had provisions of R$202.9 million for labor, civil, and tax proceedings where loss is deemed probable, with a significant portion of these potential liabilities (R$148.2 million) covered by indemnification agreements with the selling shareholders of acquired companies, and additionally, there are proceedings with a possible risk of loss totaling R$77.5 million for which no provision has been made Provision for Legal Proceedings (in thousands of BRL) | Type | June 30, 2023 (unaudited) | | :--- | :--- | | Labor | 24,400 | | Civil | 26,683 | | Taxes | 151,857 | | **Total** | **202,940** | - The company has an indemnification asset of **R$148.2 million**, corresponding to provisions for legal proceedings arising from events prior to acquisitions, for which selling shareholders are responsible[144](index=144&type=chunk) [Note 24: Subsequent Events](index=36&type=section&id=24%20Subsequent%20events) After the reporting period, on July 31, 2023, the company modified its share-based compensation plan, allowing holders to exchange stock options for Restricted Stock Units (RSUs) and changing the index for strike price adjustments from CDI to the IPCA inflation rate, and in August 2023, a subsidiary settled a tax proceeding with the municipality of Rio de Janeiro by paying R$14.8 million through a tax amnesty program - On July 31, 2023, the company approved changes to its share-based compensation plan, including an option to exchange stock options for RSUs and changing the strike price index to IPCA[146](index=146&type=chunk) - In August 2023, subsidiary Unigranrio settled a tax proceeding by paying **R$14.8 million** under a tax amnesty program[147](index=147&type=chunk)

Financial Data and Key Metrics Changes - Adjusted net revenue increased by 25% year-over-year, reaching BRL 709.4 million [7][12] - Adjusted EBITDA grew almost 22% year-over-year, totaling BRL 330.2 million with a margin of 46.5% [7][12] - Strong cash flow generation of BRL 349.4 million, up 19% year-over-year, with a cash conversion of 112% [7][12] - Adjusted net income was BRL 166.4 million, consistent with the same period last year, impacted by higher financial expenses [8][14] Business Line Data and Key Metrics Changes - The number of operating medical seats increased by over 25.5% year-over-year, reaching 3,113 [8][15] - The number of undergraduate medical students grew by 18.8% year-over-year, reaching almost 21,000 [8][15] - Continuing education segment net revenue grew by more than 46.6% year-over-year, totaling BRL 34.9 million [8][17] - Digital health services reported a revenue increase of almost 20% year-over-year, reaching BRL 56.8 million [9][18] Market Data and Key Metrics Changes - The ecosystem now has 295,000 active users, indicating strong penetration among physicians and medical students in Brazil [9][18] - The average ticket for medical courses increased by 8.3% year-over-year, reaching BRL 8,570 [15][44] Company Strategy and Development Direction - The company aims to add 600 new medical seats by 2028, focusing on expanding its educational offerings [10][15] - The digital services segment is expected to grow significantly, with a focus on B2B engagements and new contracts with pharmaceutical companies [9][39] - The company is committed to maintaining a margin guidance of 40% to 42% for the year, despite current pressures from new acquisitions [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the Medcel offering and the overall digital services growth, anticipating a stronger intake cycle in the second half of the year [23][26] - The company is monitoring the competitive landscape and adapting its offerings to maintain market share [24][25] - Future pricing adjustments for medical courses will be based on inflation expectations, with a planned increase in September [44][46] Other Important Information - Cash and cash equivalents at the end of Q1 were BRL 723 million, a decrease of 8% year-over-year [19] - Net debt increased to BRL 2.29 billion, primarily due to acquisitions [19] Q&A Session Summary Question: Insights on Medcel's performance and competitive landscape - Management noted a decrease in active payers for Medcel but highlighted a good intake from other offerings, expecting recovery in the next cycle [22][23] Question: Expectations on margins and business mix - Management confirmed a commitment to margin guidance of 40% to 42%, with pressures from new acquisitions expected to stabilize over time [28][30] Question: Demand changes in medical schools and B2B product development - Management reported a strong candidate-to-seat ratio and ongoing development in B2B solutions, particularly in the pharmaceutical sector [34][39] Question: Future pricing behavior for medical tickets and updates on Mais Medicos - Management indicated an expected increase in medical ticket prices above inflation and mentioned ongoing developments regarding the Mais Medicos program [42][46]

(In thousands of Brazilian reais) | | Notes | March 31, 2023 | December 31, 2022 | | --- | --- | --- | --- | | Assets | | (unaudited) | | | Current assets | | | | | Cash and cash equivalents | 5 | 722,691 | 1,093,082 | | Trade receivables | 6 | 475,712 | 452,831 | | Inventories | | 9,925 | 12,190 | | Recoverable taxes | | 36,858 | 27,809 | | Other assets | 8 | 50,123 | 51,745 | | Total current assets | | 1,295,309 | 1,637,657 | | Non-current assets | | | | | Trade receivables | 6 | 45,966 | 42,568 | | Other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report For the transition period from to . Commission file number: 001-38992 AFYA LIMITED (Exact name of Registrant as specified in its charter) N/A (Translation of Registrant's name in ...

E D U C A T I O N �XT� T E C H N O L O G Y H E A L T H C A R E WEBCAST PRESENTATION 2022 RESULTS SAFE HARBOR FORWARD – LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward-looking, including risks and uncertainties related to statements about our competition; our ability to ...

Afya Limited (NASDAQ:AFYA) Q4 2022 Earnings Conference Call March 22, 2023 5:00 PM ET Company Participants Renata Couto - Investor Relations Executive Manger Virgílio Gibbon - Chief Executive Officer Luis André Blanco - Chief Financial Officer Conference Call Participants Marcelo Santos - JPMorgan Fred Mendes - Merrill Lynch Lucca Marquezini - Itau Pedro Caravina - Credit Suisse Renata Couto Thank you for joining us for Afya’s Fourth Quarter and Full Year 2022 Conference Call. Today I am here with Afya’s CE ...

[Report of Independent Registered Public Accounting Firm](index=2&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor's report provides an unqualified opinion on the financial statements and highlights a critical audit matter regarding business combinations [Opinion on the Financial Statements](index=2&type=section&id=Opinion%20on%20the%20Financial%20Statements) Ernst & Young issued an unqualified opinion on Afya Limited's consolidated financial statements for 2020-2022, confirming fair presentation in accordance with IFRS - Ernst & Young issued an unqualified audit opinion, confirming the financial statements fairly represent the company's financial position and results of operations in accordance with IFRS[3](index=3&type=chunk) [Critical Audit Matter](index=2&type=section&id=Critical%20Audit%20Matter) The audit identified the valuation of acquired intangible assets (**R$64.3 million**) from 2022 business combinations as a complex critical audit matter - The critical audit matter relates to the acquisition of three entities in 2022 for a total of **R$99.4 million**[7](index=7&type=chunk) - Auditing the fair value of identified intangible assets, amounting to **R$64.3 million** (mainly customer relationships, trademarks, and technology), was complex due to the high degree of subjective judgment required for valuation assumptions[8](index=8&type=chunk) - Key assumptions in the valuation included discount rates, revenue growth rates, projected profit margins, and royalty rates, which are forward-looking and sensitive to future economic conditions[8](index=8&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section presents Afya's consolidated financial position, income, equity changes, and cash flows for the reported periods [Consolidated Statements of Financial Position](index=4&type=section&id=Consolidated%20statements%20of%20financial%20position) As of December 31, 2022, Afya's total assets increased to **R$7.20 billion** from **R$6.45 billion** in 2021, driven by cash and intangible assets, while liabilities and equity also grew Consolidated Statement of Financial Position (in thousands of BRL) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Total Current Assets** | 1,637,657 | 1,206,852 | | **Total Non-current Assets** | 5,561,882 | 5,240,554 | | **Total Assets** | **7,199,539** | **6,447,406** | | **Total Current Liabilities** | 905,689 | 766,506 | | **Total Non-current Liabilities** | 3,043,692 | 2,680,882 | | **Total Liabilities** | **3,949,381** | **3,447,388** | | **Total Equity** | **3,250,158** | **3,000,018** | | **Total Liabilities and Equity** | **7,199,539** | **6,447,406** | [Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Consolidated%20statements%20of%20income%20and%20comprehensive%20income) For 2022, revenue increased by **35.5%** to **R$2.33 billion**, operating income grew by **50.6%** to **R$664.1 million**, and net income attributable to parent rose to **R$373.6 million** Consolidated Statement of Income (in thousands of BRL) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Revenue** | 2,329,057 | 1,719,371 | 1,201,191 | | **Gross Profit** | 1,469,505 | 1,067,071 | 766,537 | | **Operating Income** | 664,100 | 440,895 | 363,335 | | **Net Income** | 392,756 | 242,283 | 307,987 | | **Net Income attributable to parent** | 373,569 | 223,326 | 292,075 | | **Basic EPS (R$)** | 4.14 | 2.39 | 3.15 | | **Diluted EPS (R$)** | 4.12 | 2.37 | 3.12 | [Consolidated Statements of Changes in Equity](index=6&type=section&id=Consolidated%20statements%20of%20changes%20in%20equity) Total equity increased from **R$3.00 billion** in 2021 to **R$3.25 billion** in 2022, primarily due to net income, partially offset by share repurchases - Total equity grew from **R$2.83 billion** in 2020 to **R$3.00 billion** in 2021, and further to **R$3.25 billion** in 2022[15](index=15&type=chunk) - Key changes in 2022 included net income of **R$373.6 million**, share-based compensation of **R$29.4 million**, and treasury share purchases of **R$152.3 million**[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20statements%20of%20cash%20flows) In 2022, net cash from operating activities significantly increased to **R$843.9 million**, while investing activities used **R$591.5 million**, resulting in a **R$344.5 million** net increase in cash Consolidated Statement of Cash Flows (in thousands of BRL) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Net cash flows from operating activities** | 843,899 | 630,867 | 371,507 | | **Net cash flows used in investing activities** | (591,469) | (1,274,052) | (1,042,762) | | **Net cash flows from (used in) financing activities** | 92,942 | 364,678 | 756,422 | | **Net increase (decrease) in cash and cash equivalents** | 344,520 | (296,480) | 101,833 | | **Cash and cash equivalents at end of period** | 1,093,082 | 748,562 | 1,045,042 | [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on the company's corporate information, significant accounting policies, estimates, segment performance, business combinations, intangible assets, financial instruments, equity, revenue, contingencies, and subsequent events [Note 1: Corporate Information](index=8&type=section&id=1%20Corporate%20information) Afya Limited, Brazil's largest medical education group, expanded its medical school capacity and digital health offerings in 2022, with Bertelsmann increasing its voting interest - Afya is the largest educational group in Brazil by the number of medical seats, with a network of institutions across **18 states**[19](index=19&type=chunk) - In 2022, the Ministry of Education (MEC) authorized operations for four new medical schools under the Mais Medicos II program, adding **200 seats** in total (**50 each**)[20](index=20&type=chunk)[21](index=21&type=chunk) - The company acquired three digital health platforms in 2022: Além da Medicina (medical content), CardioPapers (cardiology content), and Glic (diabetes care app)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - In May 2022, Bertelsmann SE & Co. KGaA increased its stake in Afya, acquiring **6 million Class B shares** from the Esteves Family, resulting in a **~57.5%** voting interest for Bertelsmann[29](index=29&type=chunk) [Note 2: Significant Accounting Policies](index=11&type=section&id=2%20Significant%20accounting%20policies) The consolidated financial statements are prepared under IFRS using the Brazilian Real, detailing policies for consolidation, business combinations, revenue recognition, leases, and impairment testing - The financial statements are prepared in accordance with IFRS, using the Brazilian Real (R$) as the functional and presentation currency[41](index=41&type=chunk)[43](index=43&type=chunk) - Business combinations are accounted for using the acquisition method, with goodwill measured as the excess of consideration over the fair value of net identifiable assets[53](index=53&type=chunk)[56](index=56&type=chunk) - Revenue from tuition and digital subscriptions is recognized over time as services are rendered, while revenue from sales of books and certain other services is recognized at a point in time[135](index=135&type=chunk)[137](index=137&type=chunk) - For impairment testing, goodwill is allocated to Cash-Generating Units (CGUs); each operating subsidiary is a CGU, except for the digital services segment, which is combined into one CGU[115](index=115&type=chunk) [Note 3: Significant Accounting Estimates and Assumptions](index=29&type=section&id=3%20Significant%20accounting%20estimates%20and%20assumptions) This note outlines key management judgments and estimates, including fair-value measurement in business combinations, impairment testing of non-financial assets, and share-based compensation valuation - Key estimates include the fair value of assets and liabilities from business combinations, which requires significant judgment on valuation techniques and prospective financial inputs[153](index=153&type=chunk) - Impairment testing of non-financial assets, particularly goodwill, relies on discounted cash flow (DCF) models based on five-year budgets, which are sensitive to discount rates and growth assumptions[154](index=154&type=chunk) - The fair value of share-based payments is estimated using the Binomial model, requiring assumptions about expected life, volatility, and dividend yield[157](index=157&type=chunk) [Note 4: Segment Information](index=30&type=section&id=4%20Segment%20information) Afya operates in Undergrad, Continuing Education, and Digital Services segments, with Undergrad being the largest contributor to revenue (**R$2.04 billion**) and assets (**R$6.78 billion**) in 2022 Segment Revenue for Year Ended Dec 31, 2022 (in thousands of BRL) | Segment | Revenue | Gross Profit | | :--- | :--- | :--- | | Undergrad | 2,037,889 | 1,274,704 | | Continuing Education | 108,806 | 52,252 | | Digital Services | 182,362 | 142,549 | | **Total** | **2,329,057** | **1,469,505** | Segment Assets as of Dec 31, 2022 (in thousands of BRL) | Segment | Total Assets | Total Liabilities | | :--- | :--- | :--- | | Undergrad | 6,775,829 | 3,650,856 | | Continuing Education | 149,254 | 121,595 | | Digital Services | 275,564 | 178,038 | | **Total** | **7,199,539** | **3,949,381** | - The Digital Services segment experiences seasonality, with higher revenues in the first and last quarters due to enrollment periods for its Medcel brand[168](index=168&type=chunk) [Note 5: Business Combinations](index=33&type=section&id=5%20Business%20combinations) This note details Afya's acquisitions in 2022 and 2021, which significantly expanded its Undergrad and Digital Services segments, adding substantial intangible assets and goodwill [Acquisitions in 2022](index=33&type=section&id=5.1%20Acquisitions%20in%202022) In 2022, Afya acquired Além da Medicina, CardioPapers, and Glic for a total of **R$99.4 million**, generating **R$42.2 million** in goodwill and **R$64.3 million** in intangible assets within Digital Services Summary of 2022 Acquisitions (in thousands of BRL) | Acquired Entity | Purchase Consideration | Goodwill | Intangible Assets | | :--- | :--- | :--- | :--- | | Além da Medicina | 26,789 | 12,335 | 20,299 | | CardioPapers | 42,013 | 14,324 | 28,655 | | Glic | 30,597 | 15,587 | 15,395 | | **Total** | **99,399** | **42,246** | **64,349** | - The acquisitions include contingent consideration (earn-outs) payable upon achieving specific revenue and product development targets in 2023 and 2024[170](index=170&type=chunk)[176](index=176&type=chunk)[182](index=182&type=chunk) [Acquisitions in 2021](index=38&type=section&id=5.2%20Acquisitions%20in%202021) In 2021, Afya completed eight acquisitions, including iClinic, UnifipMoc, and Unigranrio, significantly expanding its Undergrad and Digital Services segments with substantial intangible assets and goodwill Summary of Key 2021 Acquisitions (in thousands of BRL) | Acquired Entity | Segment | Purchase Consideration | Goodwill | | :--- | :--- | :--- | :--- | | iClinic | Digital Services | 191,120 | 99,168 | | Unifipmoc | Undergrad | 328,322 | 87,777 | | Unigranrio | Undergrad | 618,956 | 130,073 | | RXPRO | Digital Services | 45,622 | 38,446 | - The acquisition of Unigranrio included a purchase price of **R$619.0 million**, with **40%** payable in installments through 2025, and a potential additional payment of up to **R$90.2 million** contingent on the approval of **82 additional medical seats**[222](index=222&type=chunk) - The acquisition of iClinic, a leading medical practice management software provider, was settled with **R$119.6 million** in cash and **R$71.5 million** in Afya's shares[191](index=191&type=chunk) [Note 12: Intangible Assets and Goodwill](index=53&type=section&id=12%20Intangible%20assets%20and%20goodwill) As of December 31, 2022, total intangible assets and goodwill reached **R$4.04 billion**, with no impairment recognized after the annual test Intangible Assets and Goodwill (Net Book Value, in thousands of BRL) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Goodwill | 1,257,045 | 1,184,336 | | Licenses with indefinite useful life | 2,189,814 | 2,165,406 | | Other Intangible Assets | 594,632 | 551,093 | | **Total** | **4,041,491** | **3,900,835** | - The annual impairment test for goodwill and indefinite-lived licenses was performed on December 31, 2022, and no impairment was recognized[259](index=259&type=chunk)[260](index=260&type=chunk) - Key assumptions for the value-in-use calculation in the impairment test include student enrollment, tuition fees, occupancy rates, and discount rates ranging from **13.14%** to **15.40%**[266](index=266&type=chunk)[269](index=269&type=chunk) [Note 13: Financial Instruments and Risk Management](index=56&type=section&id=13%20Financial%20instruments%20risk%20management%20objectives%20and%20policies) This note details Afya's financial assets and liabilities, risk management policies, and changes in financing liabilities, with total financial liabilities at amortized cost reaching **R$3.45 billion** in 2022 [Financial Liabilities](index=56&type=section&id=13.2%20Financial%20liabilities) Total financial liabilities at amortized cost increased to **R$3.45 billion** in 2022, primarily comprising loans, lease liabilities, and accounts payable to selling shareholders, with new debentures issued Financial Liabilities at Amortized Cost (in thousands of BRL) | Liability | 2022 | 2021 | | :--- | :--- | :--- | | Loans and financing | 1,882,901 | 1,374,876 | | Lease liabilities | 769,525 | 714,085 | | Accounts payable to selling shareholders | 528,678 | 679,826 | | Notes payable | 62,176 | 72,726 | | **Total (selected)** | **3,243,280** | **2,841,513** | - In December 2022, Afya Brazil issued **R$500 million** in debentures maturing in 2028, with interest at CDI + **1.80%** per year[287](index=287&type=chunk) - The company carries a **R$824.3 million** liability related to Series A perpetual convertible preferred shares issued to Softbank in 2021, which is classified as a financial liability at amortized cost[281](index=281&type=chunk)[284](index=284&type=chunk) [Financial Risk Management](index=63&type=section&id=13.4%20Financial%20instruments%20risk%20management%20objectives%20and%20policies) Afya is exposed to market risk (primarily interest rate), credit risk, and liquidity risk, with a **75 basis point** interest rate increase potentially decreasing pre-tax profit by **R$4.5 million** - The company's primary market risk exposure is to changes in interest rates, affecting its floating-rate debt and cash equivalents[319](index=319&type=chunk) Interest Rate Sensitivity Analysis (2022) | Change in Basis Points | Effect on Profit Before Tax (in thousands of BRL) | | :--- | :--- | | +75 | (4,504) | | +150 | (9,010) | - The company manages liquidity risk by monitoring cash flows and maintaining reserves; the maturity profile of financial liabilities shows total undiscounted contractual payments of **R$4.91 billion**[328](index=328&type=chunk)[331](index=331&type=chunk) [Note 17: Equity](index=70&type=section&id=17%20Equity) As of December 31, 2022, Afya's share capital comprised **93.7 million** shares, with **2.1 million** Class A common shares repurchased for **R$152.3 million** during the year - The company's Board of Directors approved a new share repurchase program on January 27, 2022, for up to **1,874,457 Class A common shares**, which was completed during the year[354](index=354&type=chunk) Treasury Share Movements | Metric | Number of Shares | Average Price (BRL) | | :--- | :--- | :--- | | **Outstanding at Dec 31, 2021** | **1,654,927** | **92.23** | | Repurchased in 2022 | 2,131,358 | 71.46 | | **Outstanding at Dec 31, 2022** | **3,786,285** | **80.54** | [Note 19: Revenue](index=71&type=section&id=19%20Revenue) Total revenue from contracts with customers reached **R$2.33 billion** in 2022, primarily from tuition fees recognized over time, with the Undergrad segment as the dominant generator Revenue Breakdown (in thousands of BRL) | Item | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Tuition fees (gross) | 2,827,567 | 2,124,589 | 1,388,735 | | Total Deductions | (711,546) | (523,357) | (287,369) | | **Revenue from contracts with customers** | **2,329,057** | **1,719,371** | **1,201,191** | - Revenue recognized over time (tuition, digital content, subscriptions) was **R$2.27 billion** in 2022, while revenue recognized at a point in time was **R$55.5 million**[360](index=360&type=chunk) [Note 23: Insurance Contracts and Contingencies](index=75&type=section&id=23%20Insurance%20contracts%20and%20contingencies) Provisions for probable legal losses increased to **R$195.9 million** in 2022, mainly due to tax contingencies, while possible loss contingencies totaled **R$78.4 million**, with indemnification assets of **R$145.3 million** Provision for Legal Proceedings (Probable Loss, in thousands of BRL) | Category | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Labor | 22,484 | 25,490 | | Civil | 24,664 | 22,928 | | Taxes | 148,706 | 99,869 | | **Total** | **195,854** | **148,287** | - The company has recorded an indemnification asset of **R$145.3 million**, representing the right to be reimbursed by selling shareholders for liabilities arising from events prior to acquisitions[379](index=379&type=chunk) - Contingencies assessed as a possible risk of loss, for which no provision is made, amount to **R$78.4 million**, primarily related to civil claims[375](index=375&type=chunk) [Note 25: Subsequent Events](index=76&type=section&id=25%20Subsequent%20events) On January 2, 2023, Afya completed the acquisition of UNIT Alagoas and FITS Jaboatão dos Guararapes for **R$825 million**, including cash and installment payments, with a contingent payment for additional medical seats - On January 2, 2023, Afya acquired UNIT Alagoas and FITS Jaboatão dos Guararapes[381](index=381&type=chunk) - The aggregate purchase price was **R$825 million**, with **R$575 million** paid in cash at closing and **R$250 million** in installments[382](index=382&type=chunk) - A contingent payment of **R$1.25 million** per seat is payable if **84 additional medical seats** are approved by December 31, 2024[383](index=383&type=chunk)

Afya Limited (NASDAQ:AFYA) Q3 2022 Earnings Conference Call November 21, 2022 5:00 PM ET Company Participants Ana Raquel Torres - IR Virgilio Gibbon - CEO Luis Andre Blanco - CFO Conference Call Participants Luca Marcussini - Itau Frederico Mendes - Bank of America Merrill Lynch Marcelo Santos - JPMorgan Vitor Tomita - Goldman Sachs Mauricio Cepeda - Credit Suisse Ana Raquel Torres Thank you for joining us for AfyaÂ's Third Quarter 2022 Conference Call. Today, I'm here with AfyaÂ's CEO, Virgilio Gibbon and ...