UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 6-K

 

 

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the month of December 2021

 

Commission File Number: 001-40851

 

 

 

Procaps Group, S.A.

(Translation of registrant’s name in English)

 

 

 

9 rue de Bitbourg, L-1273

Luxembourg

Grand Duchy of Luxembourg

R.C.S. Luxembourg: B253360

Tel : +356 7995-6138

(Address of Principal Executive Offices)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒          Form 40-F ☐ 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

 

 

INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K

 

Financial Results

 

On November 19, 2021, Procaps Group, S.A. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2021. The press release was furnished as Exhibit 99.1 to a previous Current Report on Form 6-K, dated November 19, 2021. On November 23, 2021, the Company announced a correction to the Adjusted EBITDA figure in the press release, which did not reflect an adjustment for transaction expenses in the amount of $500,000. As a result of the correction, the Company’s Adjusted EBITDA for the three months ended September 30, 2021 was $25.0 million instead of the previously reported $24.5 million.

 

The Unaudited Condensed Consolidated Interim Financial Statements for the third quarter ended September 30, 2021 are filed as Exhibit 99.1 to this Report on Form 6-K and are incorporated by reference into the registration statement on Form F-1 filed with the Securities and Exchange Commission on November 24, 2021 (File No. 333-261366).

 

Exhibit Index

 

Exhibit
Number
  Exhibit Title
99.1   Unaudited Condensed Consolidated Interim Financial Statements for the third quarter ended September 30, 2021.

 

1

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  PROCAPS GROUP, S.A.
     
  By:   /s/ Ruben Minski
  Name:  Ruben Minski
  Title: Chief Executive Officer

 

Dated: December 10, 2021

 

 

2

 

 

Exhibit 99.1

 

 

 

Procaps Group S.A. and subsidiaries (The Group)

Unaudited Condensed Consolidated Interim Statement of Financial Position

As of September 30, 2021 and December 31, 2020

(In thousands of United States Dollars, unless otherwise stated)

 

   As of
September 30,
2021
   As of
December 31,
2020
 
Assets          
Non-current assets          
Property, plant and equipment, net  $71,259    70,335 
Right-of-use assets   36,645    43,195 
Goodwill   6,851    6,863 
Intangible assets   24,754    27,583 
Investments in joint ventures   2,478    2,460 
Other financial assets   440    761 
Deferred tax assets   6,675    21,769 
Other assets   2,778    1,870 
Total non-current assets   151,880    174,836 
Cash   100,192    4,229 
Trade and other receivables, net   110,023    96,493 
Inventories, net   76,981    64,284 
Amounts owed by related parties   3,398    2,562 
Current tax assets   21,314    16,774 
Other current assets   960    360 
Total current assets   312,868    184,702 
Total assets  $464,748    359,538 
           
Liabilities and stockholders’ equity (deficit)          
Total equity (deficit)  $36,305    (254,678)
           
Borrowings   101,932    339,738 
Amounts owed to related parties   11,190    12,163 
Warrant liability   33,950     
Deferred tax liabilities   1,451    18,890 
Other liabilities   3,173    3,797 
Total non-current liabilities   151,696    374,588 
Borrowings   116,713    102,621 
Trade and other payables, net   132,462    106,275 
Amounts owed to related parties   5,703    8,459 
Current tax liabilities   14,249    9,393 
Provisions   1,663    1,829 
Other liabilities   5,957    11,051 
Total current liabilities   276,747    239,628 
Total liabilities and stockholders' equity (deficit)  $464,748    359,538 

 

 

 

 

 

 

Procaps Group S.A. and subsidiaries (The Group)

Unaudited Condensed Consolidated Interim Statement of Profit or Loss

For the three and nine months ended September 30, 2021 and 2020

(In thousands of United States Dollars, unless otherwise stated)

 

   For the three months ended
September 30
 
   2021   2020 
Revenue  $106,829    79,313 
Cost of sales   (44,577)   (31,525)
Gross profit   62,252    47,788 
           
Sales and marketing expenses   (22,841)   (19,234)
Administrative expenses   (21,011)   (14,370)
Finance expenses   (50,651)   (14,236)
Other expenses   (1,107)   (1,668)
Income (loss) before tax  $(33,358)   (1,720)
           
Income tax expense   (3,566)   751 
Loss for the period  $(36,924)   (969)

 

   For the nine months ended
September 30
 
   2021   2020 
Revenue  $283,206    213,320 
Cost of sales   (123,152)   (90,133)
Gross profit   160,054    123,187 
           
Sales and marketing expenses   (61,191)   (53,352)
Administrative expenses   (64,670)   (43,857)
Finance expenses   (79,242)   (39,763)
Other expenses   (3,179)   (5,406)
Income (loss) before tax  $(48,228)   (19,191)
           
Income tax expense   (6,342)   (701)
Loss for the period  $(54,570)   (19,892)

 

2

 

 

 

 

Procaps Group S.A. and subsidiaries (The Group)

Unaudited Condensed Consolidated Interim Statement of Cash Flows

For the nine months ended September 30, 2021 and 2020

(In thousands of United States Dollars, unless otherwise stated)

 

   For the nine months ended
September 30
 
   2021   2020 
Operating activities          
Loss for the period  $(54,570)  $(19,892)
Adjustments to reconcile net loss with net cash from operating activities:          
           
Depreciation of property, plant and equipment   4,184    4,062 
Depreciation of right-of-use   3,281    3,098 
Amortization of intangibles   5,892    4,705 
Income tax expense   6,342    701 
Finance expenses   79,242    39,763 
Share of result of joint ventures   (371)   (416)
Net (gain)/loss on sale of property, plant and equipment   710     
Inventory provision   3,263    3,538 
Provision for bad debt   741    (2,087)
Provisions   1,182    1,599 
Cash flow from operating activities before changes in working capital  $49,896   $35,071 
           
(Increase)/decrease in operating assets and liabilities:          
Trade and other receivables   (14,271)   20,526 
Amounts owed by related parties   (835)   (7,038)
Inventories   (15,523)   828 
Current tax assets   (4,540)   (5,295)
Other current assets   (563)   (47)
Trade and other payables   (10,975)   (12,772)
Amounts owed to related parties   (252)   9,148 
Current tax liabilities   (1,120)   (3,542)
Other liabilities   13,710    (4,534)
Provisions   (1,182)   (2,110)
Other financial assets   321     
Other assets   (946)   (4,027)
Cash generated from operations  $13,720   $26,208 
           
Dividends received   300     
Income tax paid   (2,711)   3,291 
Cash flow from operating activities  $11,309   $29,499 
           
Investing activities          
Acquisition of property, plant and equipment   (10,933)   (5,641)
Proceeds from sale of property, plant and equipment   26     
Acquisition of intangibles   (5,898)   (5,595)
Cash flow used in investing activities  $(16,805)  $(11,236)
Financing activities          
Proceeds from borrowings   122,042    89,950 
Payments on borrowings   (80,101)   (75,209)
Payments to related parties   (3,577)   (4,836)
Interest paid on borrowings   (9,527)   (7,997)
Payment of lease liabilities   (4,354)   (3,511)
Cash obtained from acquisition   91,585     
Cash flow generated from (used in) financing activities  $116,068   $(1,603)
           
Net increase/(decrease) in cash   110,572    16,660 
Cash less bank overdrafts at beginning of the period   4,229    2,042 
Effect of exchange rate fluctuations   (14,609)   (12,229)
Cash less bank overdrafts at end of the period  $100,192   $6,473 
           
Non-cash financing and investing activities (1)  $948   $6,418 

 

3

 

  

 

Procaps Group S.A. and subsidiaries (The Group)

Unaudited Condensed Consolidated Interim Statement of Changes in Equity

For the nine months ended September 30, 2021 and 2020

(In thousands of United States Dollars, unless otherwise stated)

 

   Attributable to equity holders of the Group         
   Issued
Capital
   Share
premium
   Reserves 1   Accumulated
deficit
   Other
Comprehensive
Income
   Total   Non-
controlling
interest
   Total
equity
(deficit)
 
Balance as of December 31, 2019   2,001    54,412    28,681    (305,634)   (23,753)   (244,293)   346    (243,947)
Loss for the period               (20,620)       (20,620)   728    (19,892)
Transfer reserves           11,177    (11,177)                
Other comprehensive income                   11,600    11,600        11,600 
Non-controlling interest               728        728        728 
Balance as of September 30, 2020  $2,001   $54,412   $39,858   $(336,703)  $(12,153)  $(252,585)  $1,074   $(251,511)
                                         
Balance as of December 31, 2020   2,001    54,412    39,897    (327,344)   (24,421)   (255,455)   778    (254,677)
Loss for the period               (54,947)       (54,947)   377    (54,570)
Transfer reserves           (8)   8                 
Other comprehensive income                   (3,894)   (3,894)       (3,894)
Non-controlling interest                377        377        377 
Share redemption and issuance in business combination   (873)   201,304         148,638        349,069        349,069 
Balance as of September 30, 2021  $1,128   $255,716   $39,889   $(233,268)  $(28,315)  $35,150   $1,155   $36,305 

 

1Includes the appropriate values from net income to comply with legal provisions related to asset protection according to applicable jurisdictions with cumulative earnings.

 

 

4