GP Investments : Annual financial and audit reports

GP Investments, Ltd.

Consolidated financial statements for the year ended December 31, 2022

Contents

Independent auditors' report on the consolidated interim financial information	3
Management report	7
Consolidated balance sheet	14
Consolidated statement of comprehensive income (loss)	15
Consolidated statement of changes	17
Consolidated statement of cash flows - Indirect method	19
Notes to the consolidated interim financial information	21

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Independent auditors report on the consolidated financial statements

To the Board Directors and Shareholders of

GP Investments, Ltd.

São Paulo - SP

Opinion

We have audited the consolidated financial statements of GP Investments Ltd. ("Company"), which comprise the statement of financial position as of December 31, 2022 and the related 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 a summary of significant accounting policies.

In our opinion, consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of GP Investments Ltd. as of December 31, 2022, consolidated financial performance and cash flows for the year then ended, in accordance with 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 consolidated financial statements section of our report. We are independent of the Company in accordance with the relevant ethical principles set forth in the Code of Professional Ethics for Accountants and the professional standards issued by Brazil's National Association of State Boards of Accountancy, 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 support our opinion.

Key audit matters

Key audit matters are those that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide an individual opinion on these matters.

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Fair value of investments

See Notes 6.9 and 10.4 of the financial statements

Key audit matters

As of December 31, 2022, the Company had direct and fund investments measured at fair value in the amount of USD 391,735 accounted for in the Equity Portfolio section.

For direct investments, fair value was determined based on market valuation techniques prepared by the Company, which uses, among others, assumptions and data, such as growth rates, discount and inflation rates, perpetuity, cash flow projections, liquidity preference, net asset value ("NAV"), recent capital transactions and comparison with comparable sector multiples.

For investments in Funds, fair value has been determined based on information provided by fund managers or vehicles, using the latest available NAV.

Due to the relevance of the measurement of the fair value of the Company's investments and the high degree of judgment on the part of Management, as it depends on valuation techniques based on business assumptions and subjective evaluations and with a high degree of uncertainty, we consider this matter to be significant for our audit.

How our audit addressed this matter

Our audit procedures have included, but are not limited to:

• With the help of our corporate finance experts:
  (i) evaluating the reasonableness of the methodology applied to measure the fair value of each investment (ii) checking for the consistency of the mathematical calculation (iii) understanding and analyzing the main valuation assumptions, such as growth rates, discount and inflation rates, perpetuity, used to estimate cash flows and comparison with industry multiples, when applicable;
• We inspected recent capital transactions and analyzed the events between the transaction date and the measurement date that could have an impact on fair value;
• We obtained the last consolidated financial statements available from the Invested Funds and we evaluated the significant issues that could have an impact on NAV;
• We checked the consistency of the clauses with the preference liquidity of capital transaction agreements used to measure the fair value of investments; And
• We also assessed whether disclosures made in the Company's consolidated financial statements consider all relevant information.

During our audit we identified adjustments that, although material, affected the measurement and disclosure of the fair value of investments, which were recognized by the Company.

Based to the evidence we obtained by applying the procedures described above, we considered the balances of those financial assets and their disclosures acceptable in the context of the consolidated financial statements taken as a whole for the year ended December 31, 2022 taken as a whole.

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Other matters

Consolidated financial statements for prior periods audited by other auditors

The corresponding figures for the balance sheets as at 1 January 2021 (derived from the financial statements for the year ended 31 December 2020) and 31 December 2021 and the financial statements for the statements of income, comprehensive income, changes in shareholders' equity, cash flows, for the year ended 31 December 2021, submitted for comparison purposes, were reviewed by other independent auditors who issued a report dated March 31 2023, without modification.

Other information accompanying the consolidated auditors' financial statements and report

The Management is responsible for such other information that is included in the Management Report.

Our opinion on the consolidated financial statements does not cover the Management Report and we do not express any form of assurance conclusion thereon.

In connection with the audit of the consolidated financial statements, our responsibility is to read the Management Report and, in so doing, consider whether this report is materially inconsistent with the consolidated financial statements or with our knowledge obtained in the audit or otherwise appear to contain material misstatements. If, based on the work we have performed, we conclude that there is a material misstatement of the Management Report, we are required to report that fact. We have nothing to report in respect of this matter.

Responsibilities of management for consolidated financial statements

The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting practices the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and for such internal control as the 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 consolidated financial statements, the 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 the 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 management are responsible for overseeing the Company' financial reporting process.

Auditors' responsibilities for auditing consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the 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.

As part of an audit in accordance with Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identified and assessed the risks of material misstatement of the consolidated financial statements,

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