F-1 1 ff12021_procapsgroup.htm REGISTRATION STATEMENT

As filed with the Securities and Exchange Commission on November 24, 2021

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________________

FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

________________________

Procaps Group, S.A.

(Exact Name of Registrant as Specified in Its Charter)

________________________

Grand Duchy of Luxembourg

 

2834

 

Not Applicable

(Jurisdiction of Incorporation or Organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

9 rue de Bitbourg, L-1273
Luxembourg
Grand Duchy of Luxembourg
R.C.S. Luxembourg: B253360
Tel : +356 7995
-6138

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

________________________

Diana Correa
Finance Director of Sofgen Pharmaceuticals LLC
21500 Biscayne Boulevard, Suite 600
Aventura, Florida 33180
Tel: (754) 260
-6480

(Name, address, including zip code, and telephone number, including area code, of agent for service)

________________________

Copies to:
Alan I. Annex, Esq.
Flora R. Perez, Esq.
Greenberg Traurig, P.A.
333 S.E. 2
nd Avenue
Miami, FL 33131
Tel: (305) 579
-0576
Fax: (305) 579
-0717

________________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (as amended, the “Securities Act”), check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

   

Non-accelerated filer

 

 

Smaller reporting company

 

           

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

 

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CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered

 

Amount to be
registered

 

Proposed
maximum
offering
price
per
unit

 

Proposed
maximum
aggregate
offering
price

 

Amount of
registration
fee

Primary Offering Ordinary Shares, with a nominal value of $0.01 per share

 

23,375,000

(1)

 

$

11.50

 

 

$

268,812,500

 

$

29,328

(2)

Secondary Offering Ordinary Shares, with a nominal value of $0.01 per share

 

110,303,689

(3)

 

 

9.81

(4)

 

$

1,082,079,190

 

$

100,309

(5)

____________

(1)      Consists of (i) 20,000,000 ordinary shares, with a nominal value of $0.01 per share (“Ordinary Shares”) of Procaps Group, S.A., a public limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg, having its registered office at 9, rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg, and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 253360 (the “Company”) that may be issued upon exercise of warrants to purchase Ordinary Shares that were included in the public units issued by of Union Acquisition Corp. II, an exempted company incorporated under the laws of the Cayman Islands with registration number 345887 (“Union” or “SPAC”) and were converted into warrants to purchase Ordinary Shares on the closing of the Business Combination (the “Business Combination”) between the Company, Crynssen Pharma Group Limited, a private limited liability company registered and incorporated under the laws of Malta and, particularly, the Companies Act Cap. 386 with company registration number C 59671 (“Procaps”), and OZLEM Limited, an exempted company incorporated under the laws of the Cayman Islands with registration number 373625 (“Merger Sub”), and (ii) 3,375,000 Ordinary Shares that may be received upon exercise of warrants to purchase Ordinary Shares, originally issued by Union in a private placement (the “Private Placement Warrants”) that were converted into warrants to purchase Ordinary Shares on the closing of the Business Combination at an exercise price of $11.50 per share. The Ordinary Shares issuable upon the exercise of the warrants described above were previously registered on a registration statement on Form F-4 (File No. 333-257222) (the “Prior Registration Statement) and are being transferred to this registration statement on Form F-1 pursuant to Rule 457(p).

(2)      Pursuant to Rule 429 under the Securities Act of 1933, as amended (the “Securities Act”), the prospectus included herein is a combined prospectus that also relates to securities that were registered by the Prior Registration Statement and this registration statement constitutes a post-effective amendment to the Prior Registration Statement. A filing fee of $29,328 was previously paid in connection with registering offers and sales, pursuant to the Prior Registration Statement, of 23,375,000 Ordinary Shares issuable upon exercise of warrants. Such post-effective amendment shall become effective concurrently with the effectiveness of this registration statement in accordance with Section 8(a) of the Securities Act.

(3)      Consists of the resale by the selling securityholders named in the prospectus of up to (i) 4,300,000 Ordinary Shares held by Union Group International Holdings Limited and Union Acquisition Associates II, LLC (the “Sponsors”), certain affiliates of the Sponsors, and the officers, directors and certain advisors of Union prior to the Business Combination, that were issued in exchange for ordinary shares, par value $0.0001 per shares (“SPAC Ordinary Shares”) of Union on the closing of the Business Combination; (ii) 10,000,000 Ordinary Shares issued to a limited number of qualified institutional buyers and institutional and individual accredited investors on the closing of the Business Combination in a private placement; (iii) 92,628,689 Ordinary Shares issued to holders of ordinary shares of Procaps, with a nominal value of $1.00 per share (“Procaps Ordinary Shares”) in the Business Combination in exchange for their Procaps Ordinary Shares; and (iv) 3,375,000 Ordinary Shares that may be received upon exercise of the Private Placement Warrants that were converted into warrants to purchase Ordinary Shares on the closing of the Business Combination at an exercise price of $11.50 per share.

(4)      Estimated solely to calculate the registration fee in accordance with Rule 457(c) of the Securities Act on the basis of the average of the high and low sales prices of the Ordinary Shares as reported on the Nasdaq Stock Market LLC on November 22, 2021.

(5)      Paid herewith.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Securities and Exchange Commission (the “SEC”), acting pursuant to said Section 8(a), may determine.

 

 

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The information in this preliminary prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated November 24, 2021

PRELIMINARY PROSPECTUS

23,375,000 ORDINARY SHARES and
110,303,689 ORDINARY SHARES
Offered by Selling Securityholders

This prospectus relates to the issuance by us of (i) 20,000,000 shares of our Ordinary Shares that may be issued upon exercise of warrants to purchase Ordinary Shares at an exercise price of $11.50 (the “Public Warrants”), and (ii) 3,375,000 Ordinary Shares that may be issued upon exercise of warrants issued to Union Group International Holdings Limited and Union Acquisition Associates II, LLC, and its transferees to purchase Ordinary Shares at an exercise price of $11.50 (the “Private Placement Warrants”). We refer to the Public Warrants and the Private Warrants together as the “Warrants.” The Warrants were originally issued by Union Acquisition Corp. II (“Union” or “SPAC”) and automatically converted into Warrants to purchase our Ordinary Shares on the closing of the Business Combination (the “Business Combinantion”) among us, Union, Crynssen Pharma Group Limited (“Procaps”) and OZLEM Limited (“Merger Sub”). The Business Combination is described in greater detail in this prospectus. See “Prospectus Summary — Recent Developments — Business Combination.

This prospectus also relates to the offer and sale from time to time by the selling securityholders named in this prospectus (the “Selling Securityholders”), or their permitted transferees, of up to 110,303,689 of our Ordinary Shares, which includes (a) 4,300,000 Ordinary Shares that were exchanged for ordinary shares of Union on the closing of the Business Combination, (b) 10,000,000 Ordinary Shares beneficially held by a limited number of qualified institutional buyers and institutional and individual accredited investors which were issued upon the closing of the Business Combination in a private placement, (c) 92,628,689 Ordinary Shares issued to holders of ordinary shares of Procaps in the Business Combination, and (d) 3,3750,000 Ordinary Shares that may be received upon exercise of the “Private Placement Warrants. The Private Placement Warrants were originally issued by Union and automatically converted into warrants to purchase our Ordinary Shares on the closing of the Business Combination. The Business Combination is described in greater detail in this prospectus. See “Prospectus Summary — Recent Developments — Business Combination.

We will receive proceeds from the exercise of the Warrants. We will not receive any proceeds from the sale of Ordinary Shares by the Selling Securityholders pursuant to this prospectus. However, we will pay the expenses, other than underwriting discounts and commissions and expenses incurred by the Selling Securityholders for brokerage, accounting, tax or legal services or any other expenses incurred by the Selling Securityholders in disposing of the securities, associated with the sale of Ordinary Shares by the Selling Securityholders pursuant to this prospectus.

Our registration of the Ordinary Shares covered by this prospectus does not mean that either we or the Selling Securityholders will issue, offer or sell, as applicable, any of the Ordinary Shares. The Selling Securityholders may offer and sell the Ordinary Shares covered by this prospectus in a number of different ways and at varying prices. We provide more information about how the Selling Securityholders may sell the Ordinary Shares in the section entitled “Plan of Distribution.”

The Sognatore Trust, a trust organized under the laws of New Zealand (“Sognatore”), the Simphony Trust, a trust organized under the laws of the State of Delaware (“Simphony”), and the Deseja Trust, a trust organized under the laws of the State of Delaware (“Deseja” and, together with Sognatore, Simphony and each of the direct and indirect beneficiaries of such trusts, the “Minski Family”), our majority shareholders, own 59.6% of the Ordinary Shares of the Company and have the right to propose for appointment a majority of our Board of Directors until they collectively own less than 30% of the Ordinary Shares in the aggregate. Accordingly, we are a “controlled company” under Nasdaq corporate governance rules and are eligible for certain exemptions from these rules. We are a “foreign private issuer” as defined under applicable Securities and Exchange Commission rules and an “emerging growth company” as that term is defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and are eligible for reduced public company disclosure requirements.

You should read this prospectus and any prospectus supplement or amendment carefully before you invest in our securities. Investing in the Company’s securities involves risks. See “Risk Factors” beginning on page 17 of this prospectus.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

PROSPECTUS DATED            , 2021

 

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TABLE OF CONTENTS

 

Page

ABOUT THIS PROSPECTUS

 

ii

EXCHANGE RATE PRESENTATION

 

ii

IMPORTANT INFORMATION ABOUT IFRS AND NON-IFRS FINANCIAL MEASURES

 

ii

FINANCIAL STATEMENT PRESENTATION

 

iii

INDUSTRY AND MARKET DATA

 

iii

FREQUENTLY USED TERMS

 

iv

CONVENTIONS WHICH APPLY TO THIS PROSPECTUS

 

vii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

viii

PROSPECTUS SUMMARY

 

1

SUMMARY TERMS OF THE OFFERING

 

9

SELECTED HISTORICAL FINANCIAL DATA OF UNION

 

10

SELECTED HISTORICAL FINANCIAL DATA OF PROCAPS

 

12

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

14

RISK FACTORS

 

17

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

 

39

USE OF PROCEEDS

 

51

DIVIDEND POLICY

 

52

CAPITALIZATION

 

53

BUSINESS

 

54

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

75

BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT

 

109

DESCRIPTION OF SECURITIES

 

116

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

 

120

MAJOR SHAREHOLDERS

 

123

SELLING SECURITYHOLDERS

 

125

MATERIAL LUXEMBOURG INCOME TAX CONSIDERATIONS

 

129

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

 

132

PLAN OF DISTRIBUTION

 

138

EXPENSES RELATED TO THE OFFERING

 

143

SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES UNDER U.S. SECURITIES LAWS

 

144

LEGAL MATTERS

 

145

EXPERTS

 

145

WHERE YOU CAN FIND MORE INFORMATION

 

145

INDEX TO FINANCIAL STATEMENTS

 

F-1

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

 

II-1

i

Table of Contents

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus, any amendment or supplement to this prospectus or any free writing prospectus prepared by or on our behalf. Any amendment or supplement may also add, update or change information included in this prospectus. Any statement contained in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in such amendment or supplement modifies or supersedes such statement. Any statement so modified will be deemed to constitute a part of this prospectus only as so modified, and any statement so superseded will be deemed not to constitute a part of this prospectus. See “Where You Can Find More Information.”

Neither we nor the selling securityholders have authorized any other person to provide you with different or additional information. Neither we nor the selling securityholders take responsibility for, nor can we provide assurance as to the reliability of, any other information that others may provide. The information contained in this prospectus is accurate only as of the date of this prospectus or such other date stated in this prospectus, and our business, financial condition, results of operations and/or prospects may have changed since those dates. This prospectus contains summaries of certain provisions contained in some of the documents described in this prospectus, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to in this prospectus have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described under “Where You Can Find More Information.”

Neither we nor the selling securityholders are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. Except as otherwise set forth in this prospectus, neither we nor the selling securityholders have taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States.

This prospectus contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade name or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Certain amounts that appear in this prospectus may not sum due to rounding.

EXCHANGE RATE PRESENTATION

Certain amounts described in this prospectus have been expressed in U.S. dollar for convenience and, when expressed in U.S. dollar in the future, such amounts may be different from those set forth in this prospectus due to intervening exchange rate fluctuations.

IMPORTANT INFORMATION ABOUT IFRS AND NON-IFRS FINANCIAL MEASURES

The historical financial statements of Procaps have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”) and in its presentation currency of the U.S. dollar. The historical financial statements of Union have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) in its presentation currency of the U.S. dollar. The condensed combined pro forma financial information reflects IFRS, the basis of accounting used by the registrant, the Company, and no material accounting policy difference is identified in converting Union’s historical financial statements to IFRS. The adjustments presented in the selected unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the Combined Company after giving effect to the Business Combination. Union and Procaps did not have any historical relationship prior to the Business Combinations. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

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FINANCIAL STATEMENT PRESENTATION

Accounting Treatment of the Business Combination

The Business Combination is accounted for as a capital reorganization in accordance with IFRS. Under this method of accounting, Union is treated as the “acquired” company for financial reporting purposes, and Procaps is the accounting “acquirer”. This determination was primarily based on the Procaps’ shareholders holding a majority of the voting power of the Company, Procaps’ operations substantially comprising the ongoing operations of the Company, Procaps’ designees comprising a majority of the governing body of the Company, and Procaps’ senior management comprising the senior management of the Company. However, Union does not meet the definition of a “business” pursuant to IFRS 3 Business Combinations, and thus, for accounting purposes, the Business Combination is accounted for as a capital reorganization. The net assets of Union are stated at historical cost, with no goodwill or other intangible assets recorded. The deemed costs of the shares issued by Procaps, which represents the fair value of the shares that Procaps would have had to issue for the ratio of ownership interest in the Company to be the same as if the Business Combination had taken the legal form of Procaps acquiring shares of Union, in excess of the net assets of Union are accounted for as stock-based compensation under IFRS 2 Share-based payment.

Basis of Pro Forma Presentation

The adjustments presented on the pro forma combined financial statements have been identified and presented to provide an understanding of the Company upon consummation of the Business Combination for illustrative purposes only. The financial results may have been different had the companies always been combined for the historical periods presented here. You should not rely on the pro forma combined financial statements as being indicative of the future financial position and results that the Company will experience.

INDUSTRY AND MARKET DATA

In this prospectus, we present industry data, information and statistics regarding the markets in which Procaps competes as well as Procaps’s analysis of statistics, data and other information provided by third parties relating to markets, market sizes, market shares, market positions and other industry data pertaining to Procaps’s business and markets (collectively, “Industry Analysis”). Such information is supplemented where necessary with Procaps’s own internal estimates and information obtained from discussions with its customers, taking into account publicly available information about other industry participants and Procaps’s management’s judgment where information is not publicly available. This information appears in “Prospectus Summary,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and other sections of this prospectus.

Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under “Risk Factors.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

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FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, references to the “Company” are to Procaps Group, S.A. whereas references to “Procaps” are to Crynssen Pharma Group Limited and its subsidiaries prior to the Closing and to the Company following the Closing.

In this prospectus:

“1915 Law” means the Luxembourg law of August 10, 1915 on commercial companies, as amended.

“Adjusted EBITDA” means EBITDA further adjusted to exclude certain isolated costs incurred as a result of the COVID-19 pandemic, certain costs related to business transformation initiatives, certain foreign currency translation adjustments, certain other finance costs adjustments and adjustments in connection with Colombia’s value-added tax reform.

“Board of Directors” means the board of directors of the Company.

“Business Combination” means the transactions contemplated by the Business Combination Agreement.

“Business Combination Agreement” means the Business Combination Agreement, dated as of March 31, 2021, as amended on September 29, 2021, by and among Union, Procaps, the Company and Merger Sub.

“Closing” means the consummation of the Business Combination.

“Closing Date” means September 29, 2021.

“Code” means the Internal Revenue Code of 1986, as amended.

“Combined Company” means the Company and its subsidiaries following the Closing.

“Company” means Procaps Group, S.A., a public limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg, having its registered office at 9, rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg, and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 253360.

“Company Shareholders” means the shareholders of the Company.

“COVID-19” means the novel coronavirus known as SARS-CoV-2 or COVID-19, and any evolutions, mutations thereof or related or associated epidemics, pandemic or disease outbreaks.

“Deseja” means the Deseja Trust, a trust organized under the laws of the State of Delaware and a Procaps Shareholder.

“EBITDA” means profit (loss) for the year before interest expense, net, income tax expense and depreciation and amortization.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“FDA” means the United States Food and Drug Administration.

“GAAP” means with generally accepted accounting principles in the United States of America.

“IASB” means the International Accounting Standards Board.

“IFC” means the International Finance Corporation, an international organization established by Articles of Agreement among its member countries.

“IFC Redemption Agreement” means that certain Share Redemption Agreement entered into by and between the Company and IFC on March 31, 2021, and subsequently amended on September 29, 2021, pursuant to which the Company agreed to redeem 4,500,000 Redeemable B Shares from IFC for a total purchase price of $45,000,000 in accordance with the terms thereunder.

“IFRS” means the International Financial Reporting Standards, as issued by the IASB.

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“IPO” means Union’s initial public offering of units, consummated on October 22, 2019.

“INVIMA” means the Colombian Instituto Nacional de Vigilancia de Medicamentos y Alimentos (National Food and Drug Surveillance Institute).

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

“Merger” means the merging of Merger Sub with and into Union pursuant to the laws of the Cayman Islands, with Union surviving the Merger as a wholly owned subsidiary of the Company.

“Merger Effective Time” means the time at which the merger certificate was filed on September 29, 2021.

“Merger Sub” means OZLEM Limited, an exempted company incorporated under the laws of the Cayman Islands with registration number 373625.

“Nasdaq” means The Nasdaq Stock Market LLC.

“Nomination Agreement” means that certain nomination agreement by and among the Company, certain Procaps Shareholders and the Sponsor dated September 29, 2021.

“Ordinary Shares” means the ordinary shares of the Company, nominal value $0.01 per share.

“PIPE” means the private placement pursuant to which the PIPE Investors purchased 10,000,000 SPAC Ordinary Shares, for a purchase price of $10.00 per share, which were converted into Ordinary Shares in connection with the Closing.

“PIPE Investors” means persons that entered into Subscription Agreements to purchase for cash SPAC Ordinary Shares which became Ordinary Shares in connection with the consummation of the Business Combination on the Closing Date.

“Procaps” means (a) Crynssen Pharma Group Limited, a private limited liability company registered and incorporated under the laws of Malta and, particularly, the Companies Act Cap. 386 with company registration number C 59671 with respect to the periods prior the Closing and (b) to the Combined Company following the Closing.

“Procaps Ordinary Shares” means ordinary shares of Procaps, with a nominal value of $1.00 per share.

“Procaps Shareholders” means the shareholders of Crynssen Pharma Group Limited prior to the consummation of the transactions contemplated by the Business Combination Agreement.

“Prospectus” means the prospectus included in this Registration Statement on Form F-1.

“Redeemable A Shares” means the redeemable A shares of the Company, nominal value $0.01 per share.

“Redeemable B Shares” means the redeemable B shares of the Company, nominal value $0.01 per share.

“Registration Rights and Lock-Up Agreement” means that certain registration rights and lock-up agreement entered into on September 29, 2021 by and among the Company, the Sponsors, certain other shareholders of Union and the Procaps Shareholders.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Simphony” means the Simphony Trust, a trust organized under the laws of the State of Delaware and a Procaps Shareholder.

“Sognatore” means the Sognatore Trust, a trust organized under the laws of New Zealand and a Procaps Shareholder.

“SPAC” or “Union” means Union Acquisition Corp. II, a Cayman Islands exempted company limited by shares with registration number 345887.

“SPAC Ordinary Shares” means the ordinary shares of Union, par value $0.0001 per share.

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“SPAC Warrants” means warrants to purchase SPAC Ordinary Shares as contemplated under the Warrant Agreement, with each warrant exercisable for the number of SPAC Ordinary Shares stated in the applicable SPAC Warrant at an exercise price per SPAC Ordinary Share of $11.50.

“Sponsors” means Union Group International Holdings Limited and Union Acquisition Associates II, LLC.

“Subscription Agreements” means the subscription agreements entered into by Union and a number of qualified institutional buyers and institutional and individual accredited investors, in connection with the execution of the Business Combination Agreement, pursuant to which such investors agreed to purchase, and Union agreed to sell to such investors, an aggregate of 10,000,000 SPAC Ordinary Shares for a purchase price of $10.00 per share and an aggregate purchase price of $100,000,000, which SPAC Ordinary Shares were automatically exchanged with the Company for Ordinary Shares at the Closing.

“Transaction Support Agreement” means the Transaction Support Agreement, dated as of March 31, 2021, by and among Union, the Company, Procaps, certain Procaps Shareholders, the Sponsors, certain other shareholders of Union prior to the Closing of the Business Combination and certain officers and directors of Union, as amended, modified or supplemented from time to time.

“Trust Account” means the trust account that holds a portion of the proceeds of the IPO and the simultaneous sale of the Private Placement Warrants.

“Warrant Amendment” means that certain Assignment, Assumption and Amendment Agreement entered into on September 29, 2021 by the Company, Union and Continental Stock Transfer & Trust Company as warrant agent.

“Warrant Agreement” means the warrant agreement, dated October 17, 2019, by and between Union and Continental Stock Transfer & Trust Company, as warrant agent, governing Union’s warrants.

“Warrants” mean the former warrants of Union converted at the Merger Effective Time into a right to acquire one Ordinary Share on substantially the same terms as were in effect immediately prior to the Merger Effective Time under the terms of the Warrant Agreement, which was assigned to and assumed by the Company pursuant to the Warrant Amendment.

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CONVENTIONS WHICH APPLY TO THIS PROSPECTUS

In this prospectus, unless otherwise specified or the context otherwise requires:

“$,” “USD” and “U.S. dollar” each refers to the United States dollar;

“COP” refers to the Colombian peso, the lawful currency of Colombia; and

“Reais” and “R$” refers to the Brazilian real, the lawful currency of Brazil.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements in this prospectus constitute forward-looking statements that do not directly or exclusively relate to historical facts. You should not place undue reliance on such statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements are often, but not always, made through the use of words or phrases such as “believe,” “anticipate,” “could,” “may,” “would,” “should,” “intend,” “plan,” “potential,” “predict,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “outlook” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following:

•        the benefits of the Business Combination;

•        the Company’s financial performance;

•        the ability to obtain or maintain the listing of the Ordinary Shares or Warrants on Nasdaq;

•        changes in Procaps’ strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;

•        Procaps’ ability to develop and launch new products and services;

•        Procaps’ ability to successfully and efficiently integrate future acquisitions or execute on dispositions;

•        the availability of raw materials used in Procaps’ products and its ability to source such raw materials, or find adequate substitutes, in a cost-effective manner;

•        Procaps’ product development timeline and estimated research and development (“R&D”) costs;

•        developments and projections relating to Procaps’ competitors and industry;

•        Procaps’ expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

•        the impact of the COVID-19 pandemic on Procaps’ business;

•        changes in applicable laws or regulations; and

•        the outcome of any known and unknown litigation and regulatory proceedings.

These and other factors are more fully discussed under “Risk Factors” and elsewhere in this prospectus. These risks could cause actual results to differ materially from those implied by forward-looking statements in this prospectus.

You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. These forward-looking statements are based on information available as of the date of this prospectus, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

•        the risk that the Business Combination disrupts current plans and operations of Procaps as a result of the announcement and consummation of the transactions related thereto;

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•        our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of Procaps to grow and manage growth profitably following the Business Combination; changes in applicable laws or regulations;

•        any identified material weaknesses in Procaps’ internal control over financial reporting which, if not corrected, could adversely affect the reliability of Procaps’ and the Company’s financial reporting;

•        the effects of the COVID-19 pandemic on Procaps’ business;

•        the ability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities;

•        the risk of failure in the development of new pharmaceutical products and the costs involved;

•        the risk that delays in regulatory reviews and approvals of new products could delay Procaps’ ability to market such products, and that post-approval requirements, including additional clinical trials, could result in increased costs;

•        the risk associated with fluctuations in the costs, availability, and suitability of the components of the products Procaps manufactures, including active pharmaceutical ingredients, excipients, purchased components, and raw materials;

•        the risk of a change in demand for Procaps products and services, consumer preferences and the possibility of rapid technological change in the highly competitive industry in which Procaps operates;

•        the risk that changes to price control regulations could negatively affect Procaps’ margins and its ability to pass on cost increases to its customers;

•        the risks associated with the effect of Procaps’ products on Procaps’ customers and potential exposure to product and other liability risks;

•        the risk of disruption at any of Procaps’ manufacturing facilities;

•        the risks associated with exchange rate volatility of the currencies in which Procaps does business;

•        the risk of any breach, disruption or misuse of our, or our external business partners’, information systems or cyber security efforts;

•        the risk of changes in market access or healthcare reimbursement for, or public sentiment towards Procaps’, or its customers’, products, or other changes in applicable policies regarding the healthcare industry;

•        the risk that Procaps, or its customers, is unable to secure or protect its intellectual property or that Procaps, or its customers, may infringe on the intellectual property rights of others;

•        the possibility that Procaps may be adversely affected by other economic, business, and/or competitive factors; and

•        other risks and uncertainties described in this prospectus, including those under the section entitled “Risk Factors.”

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in the Company’s securities. Before making an investment decision, you should read this entire prospectus carefully, especially “Risk Factors” and the financial statements and related notes thereto, and the other documents to which this prospectus refers. Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” for more information.

Procaps

Founded in 1977 by the Minski family, Procaps is a leading integrated international healthcare and pharmaceutical company. Our mission focuses on health improvement, offering services and pharmaceutical products that adhere to international quality standards, being innovative and promoting education for a healthier way of life and well-being for individuals around the world.

Procaps’ business model focuses on four strategic cornerstones to drive growth. First, we have state-of-the-art manufacturing capabilities that allow us to provide innovative delivery technologies. Our corporate culture focuses on innovation and R&D, which has enabled us to offer extensive scientific expertise with more than 280 scientists, technicians and skilled personnel and over 500 formulations, allowing us to develop an average of over 150 new products, including more than 50 first time launch products, per year. Second, our regional footprint and vertical integration enables organic growth opportunities and synergies. We currently operate six manufacturing facilities in Latin America, including the first FDA-approved pharmaceutical plant in South America and Central America, and sell and distribute products to over fifty distinct markets. Third, our prescription pharmaceutical drugs (“Rx”) and over the counter (“OTC”) pharmaceutical product portfolio is driven by our proprietary delivery systems, allowing us to focus on the development and sale of high-growth and premium pharmaceutical products which we believe are subject to less pricing pressures when compared to more generic pharmaceutical products. Finally, we have an extensive track record of developing new businesses and growing via mergers and acquisitions, which is evidenced by the development of one of our diabetes-focused treatment and management platform (“Diabetrics”), one of our in-house business incubation, which took place in 2015, and several successful acquisitions throughout Latin America (including, but not limited to the acquisitions of Rymco S.A., Laboratorios Lopez and Biokemical S.A. de C.V.) which took place between 2012 and 2016.

Procaps is primarily engaged in developing, producing and marketing pharmaceutical solutions consisting of the following four products and services categories: (i) integral contract development and manufacturing organization (“iCDMO”), (ii) Rx pharmaceutical products, (iii) OTC products, and (iv) Diabetrics. For more information, see “Business — Products and Services.

Our Strengths and Competitive Advantages

Innovation in Delivery Systems.    We are one of the leading global providers of advanced delivery technologies and development and manufacturing solutions for pharmaceutical and consumer health products. In particular, we are the number one manufacturer of soft gelatin capsules (“Softgel”) in South and Central America and top three in the world in terms of Softgel production capacity, according to an independent third-party industry analysis report. We have extensive expertise in developing and manufacturing Softgel capsules and related dosage forms as evidenced by our development of over 500 pharmaceutical products formulations, resulting in the development of an average of over 150 new products, including more than 50 first time launch products, per year. Furthermore, as of June 30, 2021, we have been granted 39 patents and have 34 patents pending approval. Our innovative oral delivery mechanisms allow us to transform branded generics into differentiated products for the pharmaceutical market. For more information, see “BusinessResearch and Development” and “BusinessIntellectual Property.”

Flexibility & Adaptability.    Our Nextgel operating segment’s Softigel iCDMO platform provides an extensive set of solutions designed to serve our clients’ unique needs, with the goal of ultimately improving product time to market, which is primarily accomplished through our ability to adapt to a diverse set of customer business structures and our experience servicing different markets. For more information, see “Business — Products and Services — iCDMO-Nextgel (Sofitgel).

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Cost Competitiveness.    We are able to maintain a competitive price and cost structure due to a combination of the geographic location of our facilities, our expertise in R&D, our skilled labor force, our ability to manufacture in-house several of the equipment used in the production of Softgel and the flexible nature of our equipment. These factors allow us to produce a wide variety of products, and our ability to purchase raw materials at scale. For more information, see “Business — Manufacturing and Distribution”, “Business — Raw Materials and Material Sourcing”, and “Business — Research and Development.”

Specialized Facilities.    Our state-of-the-art facilities are segregated and highly adaptable, enabling Procaps to undertake the manufacturing of highly complex products. Our manufacturing facilities include the first FDA-approved Rx pharmaceutical plant in South and Central America and one of only five hormonal Softgel plants in the world. Additionally, our manufacturing facilities are certified, where required, by several regulatory entities including the FDA, Health Canada, the United Kingdom’s Medicines and Healthcare products Regulatory Agency (the “MHRA”), Australia’s Department of Health Therapeutic Goods Administration (the “TGA”), Mexico’s Federal Commission for the Protection against Sanitary Risk (Comisión Federal para la Protección contra Riesgos Sanitarios, or “Cofepris”) and the International Organization for Standardization (“ISO”). For more information, see “Business — Manufacturing and Distribution — Manufacturing Facilities.”

Integration into Clients’ Value Chain.    We strive to be part of our customer’s value chain by adapting to their logistics’ process by adopting and integrating with our customers’ manufacturing resource planning software and other processes. For more information, see “Business — Manufacturing and Distribution — Distribution and Logistics.”

Recent Developments

Business Combination

On September 29, 2021, the Business Combination was consummated. As part of the Business Combination, on the Closing Date, pursuant to the Business Combination Agreement:

•        Merger Sub merged with and into SPAC, with SPAC surviving such merger and becoming a direct wholly-owned subsidiary of the Company and, in the context of the Merger, (a) all SPAC Ordinary Shares outstanding were exchanged with the Company for Ordinary Shares pursuant to a share capital increase of the Company, (b) each SPAC Warrant became a Warrant exercisable for Ordinary Shares, on substantially the same terms as the SPAC Warrants, and (c) the Company entered into the Warrant Amendment to amend and assume SPAC’s obligations under the SPAC Warrant Agreement to give effect to the conversion of SPAC Warrants to Warrants;

•        immediately following the consummation of the Merger and prior to the Exchange (as defined below), the Company redeemed all 4,000,000 Redeemable A Shares held by Procaps as a result of the incorporation of the Company at their nominal value;

•        immediately following the consummation of the Merger and the redemption of all the Redeemable A Shares, pursuant to those certain individual contribution and exchange agreements, each dated as of March 31, 2021, as amended, and entered into by and among the Company, Procaps and each of the Procaps Shareholders, each of the Procaps Shareholders, contributed its respective Procaps Ordinary Shares to the Company in exchange for Ordinary Shares, and, in the case of IFC, for Ordinary Shares and 4,500,000 Redeemable B Shares, which were subscribed for by each such Procaps Shareholder (such contributions and exchanges of Procaps Ordinary Shares for Ordinary Shares and, in the case of IFC, Ordinary Shares and Redeemable B Shares, collectively, the “Exchange”);

•        as a result of the Exchange, Procaps become a direct wholly-owned subsidiary of the Company and the Procaps Shareholders became holders of issued and outstanding Ordinary Shares and, in the case of IFC, Ordinary Shares and Redeemable B Shares; and

•        immediately following the Exchange, the Company redeemed 4,500,000 Redeemable B Shares from IFC for a total purchase price of $45,000,000 in accordance with the IFC Redemption Agreement.

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Certain Agreements Related to the Business Combination

Registration Rights and Lock-Up Agreement

In connection with the Closing of the Business Combination, the Company, the Sponsors, certain other persons and entities (“Original Holders”) holding SPAC Ordinary Shares issued by Union prior to its IPO (the “Founder Shares”) and the Procaps Shareholders entered into the Registration Rights and Lock-Up which provides customary demand and piggyback registration rights. Additionally, the Ordinary Shares held by the Sponsors and the Original Holders which were previously Founder Shares will be locked-up until the earliest of: (i) the date that is one year from the Closing Date, (ii) the date on which the closing price of the Ordinary Shares on the Nasdaq equals or exceeds $12.50 per Ordinary Share for any 20 trading days within any 30-trading day period commencing 150 days after the Closing Date, or (iii) such date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the shareholders of the Company having the right to exchange their Ordinary Shares for cash, securities or other property.

The Ordinary Shares held by the Procaps Shareholders, except for four million Ordinary Shares held by the Procaps Shareholders, will be locked-up until the earliest of: (i) the date that is 180 days from Closing Date, and (ii) such date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the shareholders of the Company having the right to exchange their Ordinary Shares for cash, securities or other property.

Four million Ordinary Shares held by the Procaps Shareholders will be locked-up until the earliest of: (i) the date that is 90 days from Closing Date, (ii) the date on which the closing price of the Ordinary Shares on the Nasdaq equals or exceeds $12.00 per Ordinary Share for any 20 trading days within any 30-trading day period commencing on the Closing Date, and (iii) such date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the shareholders of the Company having the right to exchange their Ordinary Shares for cash, securities or other property.

Assignment, Assumption and Amendment Agreement

On the Closing Date, the Company entered into the Warrant Amendment to amend and assume Union’s obligations under the existing Warrant Agreement to give effect to the conversion of SPAC Warrants to Warrants of the Company.

Nomination Agreement

On the Closing Date, the Company, the Sponsors, certain Original Holders and certain Procaps Shareholders entered into the Nomination Agreement pursuant to which, in connection with any general meeting at which directors of the Company are to be elected, or any adjournment or postponement thereof, the Deseja Trust, the Sognatore Trust and the Simphony Trust (collectively, the “Minski Family Shareholders”) shall collectively have the right to propose for appointment a number of directors that equals a majority of the Board of Directors of the Company (each, a “Majority Shareholder Director”). For as long as Hoche Partners Pharma Holding S.A. (“Hoche”) owns no less than 7% of the issued and outstanding share capital of the Company, Hoche shall have the right to propose for appointment one director (such director, the “Hoche Shareholder Director” and collectively with the Majority Shareholder Directors, each a “Shareholder Director” and collectively, the “Shareholder Directors”). On the Closing and until the one-year anniversary of the preceding annual general shareholders’ meeting of the Company, Alejandro Weinstein shall be the Hoche Shareholder Director. In connection with the first two consecutive general shareholders’ meetings of the Company following September 1, 2021 at which directors are to be elected, or any adjournment or postponement thereof, the Sponsors shall have the right to propose for appointment Daniel W. Fink and Kyle P. Bransfield as directors of the Company. At least one-half of the Shareholder Directors must qualify as independent directors (“Independent Directors”) under applicable stock exchange rules, subject to any independence requirements established by the listing rules of the stock exchange on which the Ordinary Shares are listed that would require a greater number of Shareholder Directors to qualify as Independent Directors, provided that the Minski Family Shareholders will not be required to nominate any additional Independent Directors unless and until all of the directors, other than the Majority Shareholder Directors, qualify as Independent Directors. In addition, for so long as the Company maintains any committee, such committees shall each include at least one Majority Shareholder Director so long as he or she

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is independent. The Nomination Agreement will automatically terminate upon the earlier of (i) the date on which the Minski Family Shareholders or their affiliates cease to beneficially own, in the aggregate, 30% of the outstanding shares of the Company and (ii) 20 years from the date of the Nomination Agreement.

Share Forfeiture Agreement

On the Closing Date, the Sponsors entered into a share forfeiture agreement by and among the Sponsors, the Company, Procaps and Union (the “Share Forfeiture Agreement”), pursuant to which, the Sponsors forfeited a combined 700,000 SPAC Ordinary Shares prior to the consummation of the Business Combination.

Senior Notes Offering

On November 12, 2021, the Company closed a private placement offering of $115 million aggregate principal amount of 4.75% guaranteed senior notes (the “Senior Notes”) issued by Procaps, S.A., a subsidiary of the Company, due November 12, 2031, pursuant to a note purchase agreement entered into on November 5, 2021 with The Prudential Insurance Company of America, Prudential Annuities Life Assurance Corporation, Healthspring Life & Health Insurance Company, Inc. and Cigna Health and Life Insurance Company Inc. The Senior Notes are the senior unsecured obligations of Procaps, S.A. and unconditionally guaranteed by the Company and the following subsidiaries of the Company: Crynssen Pharma Group Limited, C.I. Procaps, S.A., Diabetrics Healthcare S.A.S., Pharmayect S.A., Procaps, S.A. de C.V., Biokemical, S.A. de C.V., Colbras Indústria e Comércio Ltda., and Sofgen Pharmaceuticals LLC.

The Senior Notes were issued in a single tranche, with a final maturity of 10 years and a principal amortization schedule of five annual equal payments commencing on the sixth anniversary of the closing (i.e. years 6 to 10), resulting in a weighted average life of 8 years. Procaps, S.A. intends to use the net proceeds from the issuance of the Senior Notes primarily to repay certain of its and its subsidiaries existing indebtedness in full, as well as for general corporate purposes. The Senior Notes also contain change-of-control provisions and certain customary affirmative and negative covenants and events of default. In addition, the Senior Notes require Procaps, S.A., the Company and the other obligors thereunder to comply with the following financial ratios: (i) a consolidated total debt of Procaps, S.A., the Company and the other obligors thereunder to consolidated EBITDA for the last twelve months of 3.50:1.00 or less, measured at certain dates of determination and (ii) an EBITDA interest coverage ratio (calculated as the consolidated EBITDA for the last twelve months of Procaps, S.A., the Company and the other obligors thereunder divided by the consolidated interest expenses of Procaps, S.A., the Company and the other obligors thereunder) in excess of, or equal to, 3.00:1.00, calculated at certain dates of determination.

2021 Colombia Tax Reform

On September 14, 2021, Colombia’s President approved the Social Investment Law (Ley de Inversión Social, or the “2021 Colombian Tax Reform”), which includes certain tax measures intended to generate additional tax revenues to fund social programs for purposes of mitigating the impact of the COVID-19 pandemic. The 2021 Colombian Tax Reform will take effect beginning in 2022, and, among other things:

(i)     includes a corporate tax rate increase from 30% to 35% for both domestic and foreign entities, permanent establishments and branches;

(ii)    continues to limit the amount of turnover tax that taxpayers may claim as a corporate income tax credit to 50% by repealing a previously enacted law change that would have allowed taxpayers to claim 100% of the turnover tax effectively paid as an income tax credit;

(iii)   increases the carry forward period of profits subject to taxation at the corporate level exceeding the profits recorded in the company’s accounting records in the same year, from 5 to 10 years for taxpayers engaged in concession and public-private agreements;

(iv)   establishes a new normalization tax (i.e., tax amnesty) applicable to income taxpayers that did not declare certain assets or claimed non-existent liabilities for tax purposes, taxing such amounts at a rate of 17%, as of January 1, 2022.; and

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(v)    eliminates the value added tax (“VAT”) exclusion for imports of goods with a value of $200 or less that enter Colombia through postal services. The exclusion, however, continues for imports from countries with which Colombia has signed a free trade agreement, by virtue of which the non-collection of VAT has been expressly agreed. For imports from countries with a free trade agreement with Colombia, the exclusion will not apply if the imports are for commercial purposes.

The Company is evaluating the potential impact of 2021 Colombia Tax Reform on its business, financial condition and results of operations. The Company cannot anticipate the impact that the 2021 Colombia Tax Reform may have, nor the measures that could be adopted by the current administration in order to meet its financial obligations, which might negatively affect Colombian’s economy and, in turn, the Company’s business, financial condition and results of operations.

Implications of Being an “Emerging Growth Company,” a “Foreign Private Issuer” and a “Controlled Company”

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an “emerging growth company,” the Company may take advantage of certain exemptions from specified disclosure and other requirements that are otherwise generally applicable to public companies. These exemptions include:

•        not being required to comply with the auditor attestation requirements for the assessment of our internal control over financial reporting provided by Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

•        reduced disclosure obligations regarding executive compensation; and

•        not being required to hold a nonbinding advisory vote on executive compensation or seek shareholder approval of any golden parachute payments not previously approved.

The Company may take advantage of these reporting exemptions until it is no longer an “emerging growth company.” The Company expects to remain an “emerging growth company” until December 31, 2021.

The Company is also considered a “foreign private issuer” and will report under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) as a non-U.S. company with “foreign private issuer” status. This means that, even after the Company no longer qualifies as an “emerging growth company,” as long as it qualifies as a “foreign private issuer” under the Exchange Act, it will be exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including:

•        the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

•        the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

•        the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission (the “SEC”) of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.

The Company may take advantage of these reporting exemptions until such time as it is no longer a “foreign private issuer.” The Company could lose its status as a “foreign private issuer” under current SEC rules and regulations if more than 50% of the Company’s outstanding voting securities become directly or indirectly held of record by U.S. holders and any one of the following is true: (i) the majority of the Company’s directors or executive officers are U.S. citizens or residents; (ii) more than 50% of the Company’s assets are located in the United States; or (iii) the Company’s business is administered principally in the United States.

The Company may choose to take advantage of some but not all of these reduced burdens. The Company has taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained in this prospectus may be different from the information you receive from the Company’s competitors that are public companies, or other public companies in which you have made an investment.

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As a foreign private issuer, the Company is permitted to follow certain Luxembourg corporate governance practices in lieu of certain listing rules of Nasdaq (the “Nasdaq Listing Rules”). The Company plans to follow the corporate governance requirements of the Nasdaq Listing Rules, except that it intends to follow Luxembourg practice with respect to quorum requirements for shareholder meetings in lieu of the requirement under Nasdaq Listing Rules that the quorum be not less than 33 1/3% of the outstanding voting shares. Under the Company’s articles of association, at an ordinary general meeting, there is no quorum requirement and resolutions are adopted by a simple majority of validly cast votes. In addition, under the Company’s articles of association, for any resolutions to be considered at an extraordinary general meeting of shareholders, the quorum shall be at least one half of our issued share capital unless otherwise mandatorily required by law.

For purposes of the Nasdaq Listing Rules, the Company will be a “controlled company.” Under Nasdaq Listing Rules, controlled companies are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company. The Minski Family owns 59.6% of the outstanding Ordinary Shares. Accordingly, although the Company will be eligible to take advantage of certain exemptions from certain Nasdaq corporate governance standards, it currently does not intend to do so except for the quorum requirement discussed above.

Summary Risk Factors

Investing in the Company’s securities entails a high degree of risk as more fully described under “Risk Factors.” You should carefully consider such risks before deciding to invest in the Company’s securities. These risks include, among others:

•        The development of new pharmaceutical products is a complex, risky and lengthy process involving significant financial, research and development and other resources, which may be delayed due to various factors. Such delays can result in increased costs or the emergence of competing products, which may have a material adverse effect on Procaps’ business, financial condition and results of operations.

•        Procaps is subject to strict controls on the commercialization processes for its pharmaceutical products, including their development, manufacture, distribution and marketing, which vary by country and by region. Any delays in regulatory reviews or approvals could delay Procaps’ ability to market our products, which could have a material adverse effect on its business, financial condition and results of operations.

•        Procaps’ future results of operations are subject to fluctuations in the costs, availability, and suitability of the components of the products it manufactures, including active pharmaceutical ingredients, excipients, purchased components, and raw materials. In addition, the COVID-19 pandemic may interfere with the operations of certain of Procaps’ direct or indirect suppliers or with international trade for these supplies, which could raise Procaps’ costs or reduce the productivity or slow the timing of its operations, which could have a material adverse effect on its business, financial condition and results of operations.

•        A disruption at any of Procaps’ main manufacturing facilities could materially and adversely affect its business, financial condition and results of operations.

•        Procaps’ independent registered public accounting firm has included an explanatory paragraph relating to Procaps’ ability to continue as a going concern in its report on Procaps’ audited consolidated financial statements included in this this prospectus.

•        Procaps has identified a material weakness in its internal control over financial reporting. If Procaps is unable to develop and maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in Procaps and materially and adversely affect its business and results of operations.

•        Procaps is an international company with operations primarily in Latin America and is subject to the market risks of the countries in which it manufactures and/or sells its products, and to risks associated with foreign exchange rates.

•        If Procaps does not enhance its existing products and services, or introduce new technology or service offerings in a timely manner, its products and services may become uncompetitive over time, or customers may not buy its products or buy less of them, which could have a material adverse effect on Procaps’ business, financial condition and results of operations.

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•        The demand for OTC products may be impacted by changes in consumer preferences. If Procaps is unable to adapt to these changes, it may lose market share and its net sales may be negatively impacted, which could have a material adverse effect on Procaps’ business, financial condition and results of operations.

•        Procaps’ business depends upon certain customers for a significant portion of its sales, therefore, a disruption of Procaps’ relationship with these customers or any material adverse change in these customers’ businesses could have a material adverse effect on Procaps’ business, financial condition and results of operations.

•        Procaps depends on key personnel to operate and grow its business and to develop new and enhanced offerings and technologies and the loss of, or the failure to attract and retain, such key personnel could adversely affect its operations.

•        Procaps’ business, financial condition, and results of operations may be adversely affected by global health epidemics, including the COVID-19 pandemic.

•        Procaps may be unable to identify acquisition opportunities and successfully execute and close acquisitions, which could limit its potential for growth.

•        Procaps may not be able to realize the benefits of business acquisitions and divestitures it enters into, including being unable to successfully and efficiently integrate acquisitions or execute on dispositions, which could have a material adverse effect on its business, financial condition and results of operations.

•        The demand for Procaps’ iCDMO services depends in part on its customers’ research and development and the clinical and market success of their products. In the event Procaps’ customers spend less on, or are less successful in, these activities for any reason, including as a result of decrease in spending due to the COVID-19 pandemic or recessionary economic conditions caused in whole or in part by the pandemic, Procaps’ business, financial condition, and results of operations may be materially adversely affected.

•        Procaps participates in a highly competitive market, and increased competition may adversely affect its business, financial condition and results of operations.

•        Changes in market access or healthcare reimbursement for, or public sentiment towards Procaps, or its customers’, products in Latin America, the United States and other countries in which Procaps operates, or other changes in applicable policies regarding the healthcare industry, could adversely affect Procaps’ financial condition and results of operations by affecting demand for Procaps’ products and services.

•        The illegal trade in pharmaceutical products, including counterfeiting, theft and illegal diversion, is widely recognized. Public loss of confidence in the integrity of pharmaceutical products as a result of illegal trade could materially adversely affect Procaps’ reputation, financial condition and results of operation.

•        Procaps and its customers depend on patents, copyrights, trademarks, know-how, trade secrets, and other forms of intellectual property protections, but these protections may not be adequate.

•        Procaps’ products and services, or its customers’ products, may infringe on the intellectual property rights of third parties and any such infringement could have a material adverse effect on Procaps’ business.

•        A significant portion of medication on the market, including Procaps’, is subject to price control regulations. This control may limit Procaps’ margins and its ability to pass on cost increases to its customers, which could have a material adverse effect on Procaps’ business, financial condition and results of operations.

•        Procaps may be held liable if a consumer has an adverse health reaction to a product it sells or manufactures.

•        Procaps is subject to product and other liability risks that could exceed its anticipated costs or adversely affect its results of operations, financial condition, liquidity, and cash flows.

•        Failure to comply with existing and future regulatory requirements could adversely affect Procaps’ business, financial condition and results of operations, or result in claims from customers.

•        Procaps is subject to environmental, health, and safety laws and regulations, which could increase its costs and restrict its operations in the future.

•        Failure to meet regulatory or ethical expectations on environmental impact, including climate change, could affect Procaps’ ability to market and sell its products if other products with a better carbon footprint are available.

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•        Procaps’ global operations are subject to economic, political, and regulatory risks, including the risks of changing regulatory standards or changing interpretations of existing standards that could affect its financial condition and results of operation or require costly changes to its business.

•        Tax legislative or regulatory initiatives, such as the 2021 Colombian Tax Reform, new interpretations or developments concerning existing tax laws, or challenges to Procaps’ tax positions could adversely affect its results of operations and financial condition.

•        Procaps is subject to labor and employment laws and regulations, which could increase its costs and restrict its operations in the future.

•        Procaps is subject to governmental export and import controls that could impair its ability to compete in international markets and subject it to liability if Procaps is not in compliance with applicable laws.

•        Failure to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010 and similar laws associated with Procaps’ activities in other jurisdictions could subject Procaps to penalties and other adverse consequences.

Corporate Structure

The following diagram shows the ownership percentages (excluding the impact of the shares underlying the Warrants) and structure of the Company immediately following the consummation of the Business Combination.

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(1)      The diagram above only shows selected subsidiaries of Procaps.

Corporate Information

The Company was incorporated under the laws of the Grand Duchy of Luxembourg on March 29, 2021 as a public limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg, having its registered office at 9, rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg, and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 253360. The Company’s principal website address is www.procapsgroup.com. We do not incorporate the information contained on, or accessible through, the Company’s websites into this prospectus, and you should not consider it a part of this prospectus.

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SUMMARY TERMS OF THE OFFERING

The summary below describes the principal terms of the offering. The “Description of Securities” section of this prospectus contains a more detailed description of the Company’s Ordinary Shares and Warrants.

We are registering the issuance by us of up to 23,375,000 Ordinary Shares that may be issued upon exercise of Warrants at an exercise price of $11.50 per share.

We are registering the resale by the Selling Securityholders or their permitted transferees of up to 110,303,689 Ordinary Shares.

Any investment in the securities offered hereby is speculative and involves a high degree of risk. You should carefully consider the information set forth under “Risk Factors” on page 17 of this prospectus.

Issuance of Ordinary Shares

   

Ordinary Shares to be issued upon exercise
of all Warrants

 


23,375,000

Resale of Ordinary Shares

   

Ordinary Shares offered by the Selling
Securityholders

 


110,303,689

Use of Proceeds

 

We will receive up to an aggregate of $268,812,500 if all the Warrants are exercised to the extent such Warrants are exercised for cash. We expect to use the net proceeds from the exercise of the Warrants for general corporate purposes. We will not receive any proceeds from the sale of the Ordinary Shares to be offered by the Selling Securityholders.

Dividend Policy

 

Other than as disclosed elsewhere in this prospectus, we currently expect to retain all future earnings for use in the operation and expansion of our business and do not plan to pay any dividends on our Ordinary Shares in the near future. The declaration and payment of any dividends in the future will be determined by the Board of Directors in its discretion, and will depend on a number of factors, including our earnings, capital requirements, overall financial condition, applicable law and contractual restrictions. See “Dividend Policy.”

Registration Rights and Lock-Up Agreement

 

Certain of our shareholders are subject to certain restrictions on transfer until the termination of applicable lock-up periods. See “Summary — Recent Developments — Certain Agreements Related to the Business Combinantion — Registration Rights and Lock-Up Agreement” for further discussion.

Market for our securities

 

Our Ordinary Shares and Warrants are listed on The Nasdaq Global Market under the symbols “PROC” and “PROCW,” respectively.

Risk factors

 

Investing in our securities involves substantial risks. See “Risk Factors” for a description of certain of the risks you should consider before investing in the Company.

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SELECTED HISTORICAL FINANCIAL DATA OF UNION

The following tables summarize the relevant financial data for Union’s business and should be read in conjunction with Union’s audited financial statements as of and for the fiscal year ended September 30, 2020, and the notes related thereto, and Union’s unaudited financial statements as of and for the nine months ended June 30, 2021, and the notes related thereto, which are included elsewhere in this prospectus.

Union’s balance sheet data as of June 30, 2021 and statement of operations data for the nine months ended June 30, 2021 are derived from Union’s unaudited financial statements included elsewhere in this prospectus. Union’s balance sheet data as of September 30, 2020 and September 30, 2019, and statement of operations data for the year ended September 30, 2020 and for the period from December 6, 2018 (inception) through September 30, 2019 are derived from Union’s audited financial statements included elsewhere in this prospectus.

The historical results presented below are not necessarily indicative of the results to be expected for any future period.

Income Statement Data:

 

Nine months
ended June 30,
2021

 

Year ended
September 30,
2020

 

Period from
December 6,
2018 (inception)
through
September 30,
2019

General and administrative expenses

 

$

1,023,152

 

 

$

867,455

 

 

$

15,175

 

Loss from operations

 

 

(1,023,152

)

 

 

(867,455

)

 

 

(15,175

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of warrant liabilities

 

 

(4,575,000

)

 

 

(13,050,000

)

 

 

 

Interest earned on marketable securities held in Trust Account

 

 

44,435

 

 

 

1,367,922

 

 

 

 

Other (expense) income, net

 

 

(4,530,565

)

 

 

(11,682,078

)

 

 

 

Net loss

 

$

(5,553,717

)

 

$

(12,549,533

)

 

$

(15,175

)

Weighted average shares outstanding of ordinary shares

 

 

23,293,485

 

 

 

23,849,315

 

 

 

4,375,000

 

Basic and diluted net income (loss) per ordinary share

 

$

(0.24

)

 

$

(0.53

)

 

$

0.00

 

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Balance Sheet Data:

 

As of
June 30,
2021

 

As of
September 30,
2020

 

As of
December 6,
2018
(inception)
through
September 30,
2019

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

2,126

 

 

$

955,800

 

 

$

27,831

 

Prepaid expenses

 

 

41,100

 

 

 

96,472

 

 

 

 

Total Current Assets

 

 

43,226

 

 

 

1,052,272

 

 

 

27,831

 

Deferred offering costs

 

 

 

 

 

 

 

 

213,307

 

Cash and marketable securities held in Trust Account

 

 

137,245,382

 

 

 

201,323,339

 

 

 

 

TOTAL ASSETS

 

$

137,288,608

 

 

$

202,375,611

 

 

$

241,138

 

   

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses

 

$

121,146

 

 

$

144,541

 

 

$

 

Accrued offering costs

 

 

 

 

 

 

 

 

56,313

 

Advances from related parties

 

 

813,190

 

 

 

 

 

 

 

Promissory note – related party

 

 

 

 

 

 

 

 

175,000

 

Total Current Liabilities

 

 

934,336

 

 

 

144,541

 

 

 

231,313

 

Warrant liabilities

 

 

30,075,000

 

 

 

25,500,000

 

 

 

 

TOTAL LIABILITIES

 

 

31,009,336

 

 

 

25,644,541

 

 

 

231,313

 

   

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

Ordinary shares subject to possible redemption, 13,553,164, 20,000,000, and 0 shares at redemption value as of June 30, 2021, September 30, 2020, and 2019, respectively

 

 

135,101,919

 

 

 

200,000,000

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ (Deficit) Equity

 

 

 

 

 

 

 

 

 

 

 

 

Preference shares, $0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding

 

 

 

 

 

 

 

 

 

Ordinary shares, $0.0001 par value, 150,000,000 shares authorized; 5,000,000, 5,000,000 and 5,031,250 shares issued and outstanding (excluding 13,553,164, 20,000,000 and 0 shares subject to possible redemption) at June 30, 2021, September 30, 2020, and 2019, respectively

 

 

500

 

 

 

500

 

 

 

503

 

Additional paid-in capital

 

 

 

 

 

 

 

 

24,497

 

Accumulated deficit

 

 

(28,823,147

)

 

 

(13,770,756

)

 

 

(15,175

)

Total Shareholders’ (Deficit) Equity

 

 

(28,822,647

)

 

 

(13,770,256

)

 

 

9,825

 

TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY

 

$

137,288,608

 

 

$

202,375,611

 

 

$

241,138

 

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SELECTED HISTORICAL FINANCIAL DATA OF PROCAPS

The information presented below is derived from Procaps’ unaudited condensed and consolidated interim financial statements included elsewhere in this prospectus as of and for the six months ended June 30, 2021 and 2020, and audited consolidated financial statements included elsewhere in this prospectus as of and for the fiscal years ended December 31, 2020 and 2019 (collectively, the “Consolidated Financial Statements”). The information presented below should be read alongside Procaps’ Consolidated Financial Statements and accompanying footnotes included elsewhere in this prospectus. You should read the following financial data together with “Risk Factors — Risks Related to Procaps” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

The following table highlights key measures of Procaps’ financial condition and results of operations (in thousands of U.S. dollars, except for per share amounts):

Consolidated Statement of Profit or Loss and Other Comprehensive Income:

 

For the Six Months
ended June 30,

 

For the Year ended
December 31,

2021

 

2020

 

2020

 

2019

Revenue

 

$

176,377

 

 

134,007

 

 

331,467

 

 

324,792

 

Cost of sales

 

 

(78,575

)

 

(58,608

)

 

(140,153

)

 

(142,294

)

Gross Profit/(Loss)

 

 

97,802

 

 

75,399

 

 

191,314

 

 

182,498

 

Sales and marketing expenses

 

 

(38,350

)

 

(34,118

)

 

(69,629

)

 

(84,810

)

Administrative expenses

 

 

(43,659

)

 

(29,487

)

 

(58,631

)

 

(60,257

)

Finance expenses

 

 

(28,591

)

 

(25,527

)

 

(54,489

)

 

(42,983

)

Other expenses

 

 

(2,072

)

 

(3,738

)

 

(7,716

)

 

(4,426

)

Income (loss) before tax

 

 

(14,870

)

 

(17,471

)

 

849

 

 

(9,978

)

Income tax expense

 

 

(2,776

)

 

(1,452

)

 

(11,296

)

 

(7,035

)

Gain (loss) for the period

 

$

(17,646

)

 

(18,923

)

 

(10,447

)

 

(17,013

)

Consolidated Statement of Financial Position (at period end)

 

As of June 30,
2021

 

As of December 31,

2020

 

2019

Assets:

 

 

 

 

   

 

   

 

Non-current assets:

 

 

 

 

   

 

   

 

Property, plant and equipment, net

 

$

67,488

 

 

70,335

 

 

74,915

 

Right-of-use assets

 

 

38,318

 

 

43,195

 

 

38,296

 

Intangible assets

 

 

25,183

 

 

27,583

 

 

23,201

 

Deferred tax assets

 

 

6,745

 

 

21,769

 

 

16,215

 

Total non-current assets

 

 

150,768

 

 

174,836

 

 

165,279

 

Current assets:

 

 

 

 

   

 

   

 

Cash

 

 

7,695

 

 

4,229

 

 

2,042

 

Trade and other receivables, net

 

 

104,736

 

 

96,493

 

 

96,466

 

Inventories, net

 

 

68,383

 

 

64,284

 

 

65,002

 

Current tax assets

 

 

16,809

 

 

16,774

 

 

6,697

 

Total current assets

 

 

201,265

 

 

184,702

 

 

172,449

 

Total assets

 

 

352,033

 

 

359,538

 

 

337,728

 

Liabilities and Stockholders’ Equity (Deficit):

 

 

 

 

   

 

   

 

Equity (Deficit):

 

 

 

 

   

 

   

 

Share premium

 

$

54,412

 

 

54,412

 

 

54,412

 

Reserves

 

 

39,889

 

 

39,897

 

 

28,681

 

Accumulated deficit

 

 

(344,982

)

 

(327,344

)

 

(305,634

)

Accumulated other comprehensive loss

 

 

(28,882

)

 

(24,421

)

 

(23,753

)

Total equity (deficit)

 

 

(276,463

)

 

(254,678

)

 

(243,947

)

Non-current liabilities:

 

 

 

 

   

 

   

 

Borrowings

 

 

381,918

 

 

339,738

 

 

320,462

 

Total non-current liabilities

 

 

398,812

 

 

374,588

 

 

333,198

 

Current liabilities:

 

 

 

 

   

 

   

 

Borrowings

 

 

95,262

 

 

102,621

 

 

90,157

 

Trade and other payables

 

 

113,117

 

 

106,275

 

 

114,426

 

Total current liabilities

 

 

229,684

 

 

239,628

 

 

248,477

 

Total liabilities and stockholders’ equity (deficit)

 

 

352,033

 

 

359,538

 

 

337,728

 

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Consolidated Statement of Cash Flows:

 

For the Six Months
ended June 30,

 

For the Year ended
December 31,

2021

 

2020

 

2020

 

2019

Net Cash provided by operating activities

 

$

(1,499

)