Procaps Issues Shareholder Letter Update
Procaps Group (NASDAQ: PROC) has issued a shareholder letter addressing ongoing challenges and outlining a comprehensive plan for improvement. The letter, from CEO José Antonio Vieira, focuses on four key areas:
1. Completing the Independent Investigation: An ongoing audit has revealed the need for financial restatements, with the timeline extending beyond initial expectations.
2. Addressing Financial Discrepancies: Historical transactions were improperly accounted for, impacting financial statements.
3. Governance and Compliance Enhancements: Implementation of a remediation plan including board transitions, strengthened internal controls, and enhanced financial oversight.
4. Restructuring Plan and Financial Stability: Exploring new funding sources and engaging with stakeholders to ensure long-term sustainability.
The company emphasizes its commitment to transparency, compliance, and creating long-term value for stakeholders.
Procaps Group (NASDAQ: PROC) ha inviato una lettera agli azionisti per affrontare le sfide attuali e delineare un piano esaustivo per il miglioramento. La lettera, firmata dal CEO José Antonio Vieira, si concentra su quattro aree chiave:
1. Completamento dell'Indagine Indipendente: Un audit in corso ha rivelato la necessità di riconsiderazioni finanziarie, con un orizzonte temporale che si estende oltre le aspettative iniziali.
2. Affrontare le Discrepanze Finanziarie: Le transazioni storiche sono state contabilizzate in modo errato, influenzando i bilanci finanziari.
3. Miglioramenti nella Governance e nella Compliance: Attuazione di un piano di rimedio che include transizioni nel consiglio, controlli interni rafforzati e maggiore supervisione finanziaria.
4. Piano di Ristrutturazione e Stabilità Finanziaria: Esplorare nuove fonti di finanziamento e collaborare con le parti interessate per garantire la sostenibilità a lungo termine.
L'azienda sottolinea il proprio impegno verso la trasparenza, la compliance e la creazione di valore a lungo termine per le parti interessate.
Procaps Group (NASDAQ: PROC) ha emitido una carta a los accionistas abordando los desafíos actuales y esbozando un plan integral para la mejora. La carta, del CEO José Antonio Vieira, se centra en cuatro áreas clave:
1. Finalización de la Investigación Independiente: Una auditoría en curso ha revelado la necesidad de ajustes financieros, con un cronograma que se extiende más allá de las expectativas iniciales.
2. Atención a las Discrepancias Financieras: Las transacciones históricas fueron contabilizadas incorrectamente, afectando los estados financieros.
3. Mejoras en Gobernanza y Cumplimiento: Implementación de un plan de remediación que incluye transiciones en la junta, controles internos reforzados y una mayor supervisión financiera.
4. Plan de Reestructuración y Estabilidad Financiera: Exploración de nuevas fuentes de financiación y colaboración con las partes interesadas para asegurar la sostenibilidad a largo plazo.
La empresa enfatiza su compromiso con la transparencia, el cumplimiento y la creación de valor a largo plazo para las partes interesadas.
Procaps Group (NASDAQ: PROC)는 지속적인 어려움에 대한 주주 편지를 발송하고 개선을 위한 포괄적인 계획을 설명했습니다. CEO José Antonio Vieira가 보낸 이 편지는 네 가지 핵심 분야에 중점을 둡니다:
1. 독립 조사 완료: 진행 중인 감사에서 재무 재조정이 필요하다는 것이 밝혀졌으며, 일정이 초기 예상보다 늘어났습니다.
2. 재무 불일치 해결: 과거 거래가 부적절하게 회계처리되어 재무 제표에 영향을 미쳤습니다.
3. 거버넌스 및 준수 강화: 이사회 전환, 강화된 내부 통제 및 향상된 재무 감독을 포함한 수정 계획을 시행합니다.
4. 구조 조정 계획 및 재정 안정성: 새로운 자금 출처를 탐색하고 이해관계자와 협력하여 장기적인 지속 가능성을 보장합니다.
회사는 투명성, 준수 및 이해관계자를 위한 장기 가치 창출에 대한 헌신을 강조합니다.
Procaps Group (NASDAQ: PROC) a envoyé une lettre aux actionnaires pour aborder les défis actuels et esquisser un plan global d'amélioration. La lettre, du PDG José Antonio Vieira, se concentre sur quatre domaines clés :
1. Achèvement de l'Enquête Indépendante : Un audit en cours a révélé la nécessité de reconstitutions financières, avec un calendrier qui s'étend au-delà des attentes initiales.
2. Résolution des Discrepances Financières : Des transactions historiques ont été mal comptabilisées, impactant les états financiers.
3. Améliorations de la Gouvernance et de la Conformité : Mise en œuvre d'un plan de remédiation comprenant des transitions au sein du conseil, des contrôles internes renforcés et une supervision financière accrue.
4. Plan de Restructuration et Stabilité Financière : Exploration de nouvelles sources de financement et engagement avec les parties prenantes pour assurer la durabilité à long terme.
L'entreprise souligne son engagement en faveur de la transparence, de la conformité et de la création de valeur à long terme pour les parties prenantes.
Procaps Group (NASDAQ: PROC) hat einen Brief an die Aktionäre veröffentlicht, um aktuelle Herausforderungen anzusprechen und einen umfassenden Verbesserungsplan zu skizzieren. Der Brief, verfasst von CEO José Antonio Vieira, konzentriert sich auf vier zentrale Bereiche:
1. Abschluss der Unabhängigen Untersuchung: Eine laufende Prüfung hat ergeben, dass finanzielle Korrekturen notwendig sind, wobei der Zeitrahmen über die ursprünglichen Erwartungen hinausgeht.
2. Behebung finanzieller Unstimmigkeiten: Historische Transaktionen wurden falsch verbucht, was die Finanzberichte beeinträchtigt hat.
3. Verbesserungen in der Governance und Compliance: Umsetzung eines Sanierungsplans einschließlich Vorstandstransitionen, verstärkten internen Kontrollen und einer verbesserten finanziellen Aufsicht.
4. Umstrukturierungsplan und finanzielle Stabilität: Erschließung neuer Finanzierungsquellen und Einbindung der Stakeholder zur Sicherstellung der langfristigen Nachhaltigkeit.
Das Unternehmen betont sein Engagement für Transparenz, Compliance und die Schaffung von langfristigem Wert für die Stakeholder.
- Implementation of a comprehensive remediation plan to strengthen governance and compliance
- Ongoing independent investigation to address historical accounting issues
- Plans to transition to an independent board with expertise in SOX compliance and corporate governance
- Strengthening of internal controls and financial reporting processes
- Exploration of new funding sources to support long-term sustainability
- Need for restatement of historical financial statements
- Identification of improperly accounted transactions affecting financial statements
- Significant delay in finalizing the 2023 20-F beyond original expectations
- Resignation of a Board member
- Potential financial instability requiring restructuring and new funding sources
Insights
This shareholder letter reveals significant issues at Procaps Group, including an ongoing independent investigation, financial restatement and governance challenges. The company acknowledges improper accounting for historical transactions and other errors, necessitating a restatement of financial statements. This is a major red flag for investors.
Key points of concern:
- Timeline for completing the 2023 20-F will "extend significantly beyond original expectations"
- Implementation of a comprehensive remediation plan to address governance and compliance weaknesses
- Restructuring plan being pursued, including exploring new funding sources
- Proactive engagement with lenders, shareholders and partners to secure new capital
These developments suggest serious financial and operational instability. The extended timeline for financial restatements and the need for restructuring indicate potential liquidity issues. Investors should be cautious, as the full extent of the financial impact is yet unknown. The
The shareholder letter outlines significant governance failures and the steps being taken to address them. Key governance enhancements include:
- Transitioning to an independent board with expertise in SOX compliance and corporate governance
- Redesigning finance functions and centralizing oversight
- Implementing automated controls and improved monitoring systems
- Conducting a comprehensive review of personnel and related party contracts
- Launching ethics and compliance training programs
While these measures are positive, they also highlight the severity of the previous governance shortcomings. The need for such extensive reforms suggests a historical lack of proper oversight and controls. Investors should closely monitor the implementation of these changes and their effectiveness in preventing future issues. The company's ability to restore trust and credibility will be important for its long-term viability.
MIAMI and BARRANQUILLA, Colombia, Oct. 10, 2024 (GLOBE NEWSWIRE) -- Procaps Group, S.A. (NASDAQ: PROC) (“Procaps” or the “Company”), a leading integrated LatAm healthcare and pharmaceutical services, today issued the below letter to shareholders from José Antonio Vieira, CEO of Procaps, providing critical updates on the Company’s ongoing independent investigation, financial restatement, governance enhancements, and commitment to long-term stability.
“Dear Shareholders,
As we navigate recent challenges at Procaps, I want to personally reaffirm our dedication to transparency, compliance, and sustainable management. We are committed to addressing the findings from our ongoing investigation with the utmost integrity for Procaps to emerge as a stronger, more resilient company and have developed a remediation plan to ensure we achieve that goal.
Our approach centers on four key areas of improvement:
1. Completing the Independent Investigation
The independent investigation led by our Audit Committee, supported by external advisors, to address historical accounting matters remains ongoing. As disclosed in our recent 6-K filing, the preliminary findings underscore challenges from past practices; however, we have made considerable progress toward resolution and are focused on implementing the necessary steps to strengthen Procaps for the future.
As part of this process, we have confirmed the need for applicable historical financial statements to be restated. While we aim to progress the restatement process and finalize the 2023 20-F as promptly as possible, we recognize that, given the complexity of this effort, our timeline to do so will extend significantly beyond our original expectations. We are focused on ensuring our disclosures are complete, accurate, and aligned with required standards.
2. Addressing Financial Discrepancies and Financial Restatement
The independent investigation has identified certain historical transactions that were improperly accounted for and other accounting errors, as described in our most recent 6-K filing. These transactions, although they originated prior to our listing on Nasdaq, have had a continuing impact our financial statements.
We are working diligently to address these matters, including through the restatement of our financials and enhancements to our internal controls. Our commitment to integrity and transparency is unwavering, and we will continue to take all necessary steps to rectify these issues.
3. Governance and Compliance Enhancements
To strengthen oversight and in response to the findings of the ongoing independent investigation, we are implementing a comprehensive remediation plan designed to strengthen governance and compliance across all levels. Key elements of this plan include:
- Board and Management Oversight: To strengthen governance at the highest levels, we are implementing a multi-year plan to transition to an independent board that includes independent search for directors - led by the Nomination and Governance Committee - with expertise in SOX compliance, corporate governance, and industry knowledge and any other key capabilities essential to Procaps' strategic goals. Following the recent resignation of a Board member, the Board is actively working to identify a qualified successor who will support our commitment to enhanced governance and alignment with long-term objectives.
- Strengthening Internal Controls: As part of our remediation Plan, we are redesigning our finance and supporting functions, such as centralizing oversight of all finance areas, launching training programs focused on internal controls and SOX compliance, and enhancing the oversight role of our Audit Committee. These measures are intended to prevent future issues and restore the trust of our stakeholders.
- Enhanced Financial Controls and Compliance: We are reinforcing financial reporting processes and SOX compliance by implementing automated controls, improved monitoring systems, and regular SOX compliance training for all relevant teams. These improvements are already underway and will be further strengthened as necessary in response to the findings of the investigation.
- Enhanced Financial Controls and Compliance: We are reinforcing financial reporting processes and SOX compliance by implementing automated controls, improved monitoring systems, and regular SOX compliance training for all relevant teams. These improvements are already underway and will be further strengthened as necessary in response to the findings of the investigation.
- Thorough Personnel and Contract Review: We are conducting a comprehensive review of all other personnel potentially involved in the transactions being investigated and assessing existing related party contracts for alignment with our governance standards.
- Culture of Ethics and Transparency: We are launching targeted training programs to promote ethics and compliance across all organizational levels, reinforcing a culture of integrity and accountability.
These initiatives are designed to reinforce ethical governance across every level of the organization, with a commitment to ensuring that Procaps operates in accordance with the highest industry standards.
4. Restructuring Plan and Financial Stability
We recognize the critical importance of a stable financial foundation. In conjunction with our remediation plan, we are also pursuing a long-term restructuring plan that involves exploring new funding sources and other strategies to support the long-term sustainability of our operations.
This includes proactive engagement with our lenders, shareholders, and strategic partners to secure new capital and resources aligned with our strategic goals.
Executing this Restructuring Plan is essential not only for our financial health and to achieve our full potential, but also for maintaining strong relationships with suppliers, providers, and other stakeholders.
Commitment to Long-Term Stability and Value Creation
While addressing these internal priorities, we remain focused on creating long-term stability and value creation for our stakeholders. The support of our shareholders and lenders remains critical as we implement our remediation and strategic plans and restructure our business to operate more efficiently and sustainably.
We will continue to keep you informed of our progress and provide regular updates as we implement the Remediation Plan and progress with the Restructuring Plan.
Thank you for your continued support and trust in Procaps Group.
Sincerely,
José Antonio Vieira
CEO of Procaps Group”
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Procaps Group
Procaps Group, S.A. (“Procaps”) (NASDAQ: PROC) is a leading developer of pharmaceutical and nutraceutical solutions, medicines, and hospital supplies that reach more than 50 countries in all five continents. Procaps has a direct presence in 13 countries in the Americas and nearly 5,000 employees working under a sustainable model. Procaps develops, manufactures, and markets over-the-counter (OTC) pharmaceutical products, prescription pharmaceutical drugs (Rx), nutritional supplements, and high-potency clinical solutions.
For more information, visit www.procapsgroup.com or Procaps’ investor relations website investor.procapsgroup.com.
Investor Contact:
Melissa Angelini
ir@procapsgroup.com
+1 754 260-6476
investor.procapsgroup.com
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by the use of words such as "forecast," "intend," "seek," "target," "anticipate," "believe," "expect," "estimate," "plan," "outlook," “goal,” “objective,” “will,” “may,” “should,” “can,” “project” and other similar expressions that predict or indicate future events, objectives, results or trends or that are not statements of historical matters. Such forward-looking statements include, without limitation, projected financial information, the Company’s expectations about the timing of completion of the independent investigation, financial restatement and filing of the 2023 20-F, the Company’s statements regarding seeking additional financing, statements related to the Company’s plans, outlook and strategy, other Company initiatives and objectives or forecasts related to the Company’s business, performance and industry. These forward-looking statements involve substantial risks and uncertainties, or assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, and actual results could vary materially from these forward-looking statements. Factors that may cause future results to differ materially from management’s current expectations include, among other things, the discovery of additional information relevant to the investigation; the conclusions of management (and the timing of the conclusions) concerning matters relating to the investigation; the timing of the review by, and the conclusions of, the Company’s independent registered public accounting firm regarding the internal investigation and the Company’s financial statements; the possibility that additional errors may be identified; the risk that the completion and filing of the 2023 20-F will take longer than expected; the inability to successfully implement or execute on the Company’s strategic objectives or initiatives, including governance and compliance enhancements; the inability to obtain additional financing; the inability to successfully implement or execute on our restructuring plans; changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; the inability of the Company to execute on its expense reductions plans or growth initiatives; and other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission ("SEC") by the Company. The Company disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.
FAQ
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