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Procaps Group S.A. and subsidiaries (The
Unaudited Condensed Consolidated
Interim Financial Statements for the three
months ended March 31, 2022 and 2021
Procaps Group S.A. and subsidiaries (The Group)
Unaudited Condensed Consolidated Interim Statement
of Profit or Loss and Other Comprehensive Income
For the three months ended March 31, 2022 and 2021
(In thousands of United States Dollars, unless
| For the three months ended March 31 | ||||||||||
| Notes | 2022 | 2021 | ||||||||
| Revenue | 5 | $ | 85,630 | $ | 77,442 | |||||
| Cost of sales | (38,508 | ) | (37,755 | ) | ||||||
| Gross profit | 47,122 | 39,687 | ||||||||
| Sales and marketing expenses | (20,157 | ) | (19,481 | ) | ||||||
| Administrative expenses | (24,556 | ) | (20,578 | ) | ||||||
| Finance income (expenses), net | 7 | 14,582 | (14,237 | ) | ||||||
| Other income (expenses), net | 8 | 5,124 | (535 | ) | ||||||
| Income (loss) before tax | 22,115 | (15,144 | ) | |||||||
| Income tax expense | 9 | (5,669 | ) | (1,894 | ) | |||||
| Income (loss) for the year | $ | 16,446 | $ | (17,038 | ) | |||||
| Income (loss) for the year attributable to: | ||||||||||
| Owners of the Company | 16,446 | (17,319 | ) | |||||||
| Non-controlling interests | - | 281 | ||||||||
| Earnings per share: | ||||||||||
| Basic, income (loss) for the period attributable to ordinary equity holders of the Company 1 | 0.16 | (0.18 | ) |
The accompanying notes are an integral part of these unaudited consolidated
condensed interim financial statements.
Procaps Group S.A. and subsidiaries (The Group)
Unaudited Condensed Consolidated Interim Statement
of Profit or Loss and Other Comprehensive Income
For the three months ended March 31, 2022 and
(In thousands of United States Dollars, unless
| For the three months ended March 31 | ||||||||
| 2022 | 2021 | |||||||
| Income (loss) for the year | $ | 16,446 | $ | (17,038 | ) | |||
| Other comprehensive income/(loss) | ||||||||
| Items that will be reclassified subsequently to profit or loss: | ||||||||
| Exchange differences on translation of foreign operations | 2,234 | (4,782 | ) | |||||
| Other comprehensive income (loss) for the year, net of tax | 2,234 | (4,782 | ) | |||||
| Total comprehensive income (loss) for the year | $ | 18,680 | $ | (21,820 | ) | |||
| Total comprehensive income (loss) for the year attributable to: | ||||||||
| Owners of the Company | 18,679 | (22,101 | ) | |||||
| Non-controlling interests | 1 | 281 |
The accompanying notes are an integral part of these unaudited consolidated
condensed interim financial statements.
Procaps Group S.A. and subsidiaries (The Group)
Unaudited Condensed Consolidated
Interim Statement of Financial Position
As of March 31, 2022 and December
(In thousands of United States Dollars, unless
| Notes | As of March 31, 2022 | As of December 31, 2021 | ||||||||
| Assets | ||||||||||
| Non-current assets | ||||||||||
| Property, plant and equipment, net | 11 | 77,296 | 72,638 | |||||||
| Right-of-use assets | 40,898 | 40,167 | ||||||||
| Goodwill | 6,864 | 6,803 | ||||||||
| Intangible assets | 10 | 32,707 | 30,171 | |||||||
| Investments in joint ventures | 2,335 | 2,443 | ||||||||
| Other financial assets | 269 | 256 | ||||||||
| Deferred tax assets | 7,891 | 7,067 | ||||||||
| Other assets | 5,072 | 4,531 | ||||||||
| Total non-current assets | $ | 173,332 | $ | 164,076 | ||||||
| Current assets | ||||||||||
| Cash | 65,644 | 72,112 | ||||||||
| Trade and other receivables, net | 13 | 111,561 | 117,449 | |||||||
| Inventories, net | 12 | 98,343 | 79,430 | |||||||
| Amounts owed by related parties | 1,804 | 1,147 | ||||||||
| Current tax assets | 28,839 | 22,082 | ||||||||
| Other current assets | 3,747 | 5,839 | ||||||||
| Total current assets | $ | 309,938 | $ | 298,059 | ||||||
| Total assets | $ | 483,270 | $ | 462,135 | ||||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||||
| Equity (Deficit) | ||||||||||
| Share capital | 1,011 | 1,011 | ||||||||
| Share premium | 377,677 | 377,677 | ||||||||
| Reserves | 45,743 | 42,749 | ||||||||
| Accumulated deficit | (417,607 | ) | (431,059 | ) | ||||||
| Accumulated other comprehensive loss | (25,544 | ) | (27,778 | ) | ||||||
| Equity (deficit) attributable to owners of the company | $ | (18,720 | ) | $ | (37,400 | ) | ||||
| Non-controlling interest | (939 | ) | (940 | ) | ||||||
| Total equity (deficit) | $ | (19,659 | ) | $ | (38,340 | ) | ||||
| Non-Current liabilities | ||||||||||
| Borrowings | 14 | 168,631 | 178,720 | |||||||
| Amounts owed to related parties | - | - | ||||||||
| Warrant liabilities | 16 | 21,384 | 23,112 | |||||||
| Shares held in escrow | 17 | 83,349 | 101,859 | |||||||
| Deferred tax liabilities | 6,393 | 6,070 | ||||||||
| Other liabilities | 2,061 | 2,750 | ||||||||
| Total non-current liabilities | $ | 281,818 | $ | 312,511 | ||||||
| Current liabilities | ||||||||||
| Borrowings | 14 | 100,100 | 74,646 | |||||||
| Trade and other payables, net | 90,282 | 85,381 | ||||||||
| Amounts owed to related parties | 6,465 | 8,450 | ||||||||
| Current tax liabilities | 18,323 | 11,756 | ||||||||
| Provisions | 15 | 578 | 501 | |||||||
| Other liabilities | 5,363 | 7,230 | ||||||||
| Total current liabilities | $ | 221,111 | $ | 187,964 | ||||||
| Total liabilities and stockholders' equity (deficit) | $ | 483,270 | $ | 462,135 |
The accompanying notes are an integral part of these unaudited consolidated
condensed interim financial statements.
Procaps Group S.A. and subsidiaries (The Group)
Unaudited Condensed Consolidated
Interim Statement of Changes in Equity
for the three months ended March
(In thousands of United States Dollars, unless
| 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 January 1, 2021 | $ | 2,001 | $ | 54,412 | $ | 39,897 | $ | (327,344 | ) | $ | (24,421 | ) | $ | (255,455 | ) | $ | 777 | $ | (254,678 | ) | ||||||||||||
| Loss for the period | - | - | - | (17,319 | ) | - | (17,319 | ) | 281 | (17,038 | ) | |||||||||||||||||||||
| Transfer reserves | - | - | (8 | ) | 8 | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | (4,782 | ) | (4,782 | ) | - | (4,782 | ) | |||||||||||||||||||||
| Non-controlling interest | - | - | - | 281 | - | 281 | - | 281 | ||||||||||||||||||||||||
| Balance as of March 31, 2021 | $ | 2,001 | $ | 54,412 | $ | 39,889 | $ | (344,374 | ) | $ | (29,203 | ) | $ | (277,275 | ) | $ | 1,058 | $ | (276,217 | ) | ||||||||||||
| Balance as of January 1, 2022 | 1,011 | 377,677 | 42,749 | (431,059 | ) | (27,778 | ) | (37,400 | ) | (940 | ) | (38,340 | ) | |||||||||||||||||||
| Income for the period | - | - | - | 16,446 | - | 16,446 | - | 16,446 | ||||||||||||||||||||||||
| Transfer reserves | - | - | 2,994 | (2,994 | ) | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | 2,233 | 2,233 | 1 | 2,234 | ||||||||||||||||||||||||
| Non-controlling interest | - | - | - | - | 1 | 1 | - | 1 | ||||||||||||||||||||||||
| Balance as of March 31, 2022 | $ | 1,011 | $ | 377,677 | $ | 45,743 | $ | (417,607 | ) | $ | (25,544 | ) | $ | (18,720 | ) | $ | (939 | ) | $ | (19,659 | ) |
The accompanying notes are an integral part of
these unaudited consolidated condensed interim financial statements.
Procaps Group S.A. and subsidiaries (The Group)
Unaudited Condensed Consolidated Interim Statement
For the three months ended March 31, 2022 and
(In thousands of United States Dollars, unless
| For the three months ended March 31 | ||||||||||
| Notes | 2022 | 2021 As restated 1 | ||||||||
| Operating activities | ||||||||||
| Loss for the year | $ | 16,446 | $ | (17,038 | ) | |||||
| Adjustments to reconcile net loss with net cash from operating activities: | ||||||||||
| Depreciation of property, plant and equipment | 11 | 1,452 | 1,598 | |||||||
| Depreciation of right-of-use | 1,230 | 1,137 | ||||||||
| Amortization of intangibles | 10 | 818 | 1,800 | |||||||
| Income tax expense | 9 | 5,669 | 1,894 | |||||||
| Finance (income) expenses | 7 | (14,582 | ) | 14,237 | ||||||
| Share of result of joint ventures | 100 | (129 | ) | |||||||
| Net (gain)/loss on sale of property, plant and equipment | 11 | 33 | 2 | |||||||
| Inventory provision | 12 | 591 | 906 | |||||||
| Provision for bad debt | 13 | 314 | (299 | ) | ||||||
| Provisions | 15 | - | 1,083 | |||||||
| Cash flow from operating activities before changes in working capital | 12,071 | 5,191 | ||||||||
| (Increase)/decrease in operating assets and liabilities: | ||||||||||
| Trade and other receivables | 5,573 | 2,675 | ||||||||
| Amounts owed by related parties | (521 | ) | 520 | |||||||
| Inventories | (19,830 | ) | 1,513 | |||||||
| Current tax assets | (6,757 | ) | (1,272 | ) | ||||||
| Other current assets | 2,092 | (1,219 | ) | |||||||
| Trade and other payables | 16,814 | 4,701 | ||||||||
| Amounts owed to related parties | 333 | (354 | ) | |||||||
| Current tax liabilities | 1,442 | 1,807 | ||||||||
| Other liabilities | (2,843 | ) | (413 | ) | ||||||
| Provisions | 15 | (7 | ) | (1,083 | ) | |||||
| Other financial assets | (12 | ) | 297 | |||||||
| Other assets | (541 | ) | (1,726 | ) | ||||||
| Cash generated from operations | 7,814 | 10,637 | ||||||||
| Interest paid | (434 | ) | (525 | ) | ||||||
| Income tax paid | (1,046 | ) | (319 | ) | ||||||
| Cash flow from (used in) operating activities | $ | 6,334 | $ | 9,793 | ||||||
| Investing activities | ||||||||||
| Acquisition of property, plant and equipment | 11 | (2,197 | ) | (1,785 | ) | |||||
| Acquisition of intangibles | 10 | (1,827 | ) | (1,452 | ) | |||||
| Advances to related parties | (136 | ) | - | |||||||
| Proceeds from related parties | - | - | ||||||||
| Cash flow used in investing activities | $ | (4,160 | ) | $ | (3,237 | ) | ||||
| Financing activities | ||||||||||
| Proceeds from borrowings | 14 | 30,334 | 49,219 | |||||||
| Payments on borrowings | 14 | (33,624 | ) | (40,730 | ) | |||||
| Payments to related parties | (2,359 | ) | (1,477 | ) | ||||||
| Interest paid on borrowings | 14 | (3,924 | ) | (2,609 | ) | |||||
| Payment of lease liabilities | 14 | (587 | ) | (1,204 | ) | |||||
| Cash flow generated from (used in) financing activities | $ | (10,160 | ) | $ | 3,199 | |||||
| Net increase in cash | (7,986 | ) | 9,755 | |||||||
| Cash less bank overdrafts at beginning of the year/period | 72,112 | 4,229 | ||||||||
| Effect of exchange rate fluctuations | 1,518 | (6,385 | ) | |||||||
| Cash less bank overdrafts at end of the year/period | $ | 65,644 | $ | 7,599 | ||||||
| Non-cash financing and investing activities 2 | $ | 13,463 | $ | 13,970 |
The accompanying notes are an integral part of these unaudited consolidated
condensed interim financial statements.
Procaps Group S.A. and subsidiaries (The Group)
Notes to Unaudited Condensed Consolidated Interim
Financial Statements
For the three months ended March 31, 2022 and
(In thousands of United States Dollars, unless otherwise stated)
Note 1. General Company Information
Procaps Group S.A., a public limited liability
company (soci t anonyme) governed by the laws of the Grand Duchy of Luxembourg and its subsidiaries ("the Group")
primarily engages in developing, producing and marketing pharmaceutical solutions. Further information about the Group's business activities,
reportable segments and related party relationships of the Group is included in Note 5. Revenue, Note 6. Segment reporting and Note 19.
Key management personnel, respectively.
The Group's principal subsidiaries as of March
31, 2022 and December 31, 2021 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares
that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country
of incorporation or registration is also their principal place of business.
| Place of | Ownership interests held by: | |||||||||||||||||||
| Name of entity | business/country of incorporation | The Group | Non-controlling interests | Principal activities | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Procaps S.A. | Colombia | 100 | % | 100 | % | - | % | - | % | Manufacturing and distribution of prescription and over-the-counter pharmaceutical products. | ||||||||||
| C.I. Procaps S.A. | Colombia | 100 | % | 100 | % | - | % | - | % | |||||||||||
| Procaps S.A. de C.V (previously Laboratorios Lopez S.A. de C.V.) | El Salvador | 100 | % | 100 | % | - | % | - | % | |||||||||||
| Softcaps - Colbras | Brazil | 100 | % | 100 | % | - | % | - | % | |||||||||||
| Diabetrics Healthcare S.A.S. | Colombia | 100 | % | 100 | % | - | % | - | % | Diabetes solutions and chronic disease management tool. |
There are no significant restrictions on the ability of the Group to
access or use assets and settle liabilities.
Reverse reorganization
Crynssen Pharma Group Limited ("OpCo")
is a private limited liability company registered under the laws of Malta with company registration number C59671 and with registered
office at Ground Floor, Palace Court, Church Street, St. Julians STJ 3049. Union Acquisition Corp. II is a Cayman Islands company previously
listed on the NASDAQ under "LATNU". Union, a publicly-traded special purpose acquisition company ("SPAC"), had
limited operations but was established as a public investment vehicle with the purpose of making an investment in an operating company,
particularly in Latin America.
On March 31, 2021, SPAC, OpCo, Procaps Group,
S.A. ("Holdco") and OZLEM Limited, an exempted company incorporated under the laws of the Cayman Islands ("Merger Sub")
entered into a Business Combination Agreement (the "Business Combination Agreement" or "BCA" or the "Transaction").
With the execution of the BCA, SPAC also entered
into separate Subscription Agreements, each dated March 31, 2021, with certain investors (collectively, the "PIPE Investors"),
pursuant to, and on the terms and subject to the conditions of which, the PIPE Investors collectively subscribed for an aggregate of 10,000,000
ordinary shares of SPAC, par value $0.0001 per share ("SPAC Ordinary Shares") for a purchase price of $10.00 per SPAC Ordinary
Share and an aggregate purchase price of $100,000,000 (the "PIPE Investment"). The PIPE Investment were consummated, and the
SPAC Ordinary Shares subscribed for by the PIPE Investors were exchanged for ordinary shares of Holdco, nominal value $0.01 per share
("Holdco Ordinary Shares"), concurrently with the closing of the Transaction.
Procaps Group S.A. and subsidiaries (The Group)
Notes to Unaudited Condensed Consolidated Interim
Financial Statements
For the three months ended March 31, 2022 and
(In thousands of United States Dollars, unless otherwise stated)
The Transaction was approved at an Extraordinary
General Meeting of LATNU's shareholders on September 22, 2021 and subsequently consummated on September 29, 2021.
Summary of significant steps to implement the
reverse reorganization:
As a result of the Exchange and following the
consummation of the Transaction, OpCo and SPAC had become a direct wholly-owned subsidiaries of Holdco and the OpCo shareholders and SPAC
shareholders became holders of issued and outstanding Holdco Ordinary Shares: Procaps Group S.A.
Procaps Group S.A. and subsidiaries (The Group)
Notes to Unaudited Condensed Consolidated Interim
Financial Statements
For the three months ended March 31, 2022 and
(In thousands of United States Dollars, unless otherwise stated)
Emerging Growth Company Status
Upon execution of the public equity offering,
Holdco ("the Company") is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS
Act"). The Company will remain an emerging growth company until the earliest of:
The unaudited consolidated condensed interim financial statements of