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

FORM 10-Q

(Mark One)
☒   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 20182019 OR
 
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                     to                     
 
Commission File No. 001-37986

INTERNATIONAL MONEY EXPRESS, INC.
(Exact name of registrant as specified in its charter)

Delaware 47-4219082
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

9480 South Dixie Highway
Miami, FLFlorida
 
 
33156
(Address of Principal Executive Offices) (Zip Code)

(305) 671-8000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

FINTECH ACQUISITION CORP. II, 2929 Arch Street, Suite 1703, Philadelphia, PA  19104Title of each classTrading Symbol(s)Name of each exchange on which registered
(Former name, former address and former fiscal year, if changed since last report)Common stock ($0.0001 par value)IMXINasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐  No ☒

As of August 7, 2018,6, 2019 there were 36,182,78337,982,848 shares of the registrant’s common stock, $.0001$0.0001 par value per share, outstanding. The registrant has no other class of common stock outstanding.

EXPLANATORYINTERNATIONAL MONEY EXPRESS, INC.
INDEX TO FINANCIAL STATEMENTS

Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
3
PART 1 - FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
4
Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018
4
Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018
5
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2019 and 2018
6
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018
8
Notes to Condensed Consolidated Financial Statements (unaudited)
10
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
36
Item 4.
Controls and Procedures
37
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings
39
Item 1A.
Risk Factors
39
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
39
Item 3.
Defaults Upon Senior Securities
39
Item 4.
Mine Safety Disclosures
39
Item 5.
Other Information
39
Item 6.
Exhibits
39
SIGNATURES
41

2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q that reflect our current views with respect to future events and financial performance, business strategies, expectations for our business and the business of the Company and any other statements of a future or forward-looking nature, constitute “forward-looking statements” for the purposes of federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “will,” “approximately,” “shall” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, the future financial performance of the Company.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. We cannot assure you that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:
the ability to maintain the listing of our common stock on Nasdaq;
the ability to recognize the anticipated benefits of the Merger, which may be affected by, among other things, competition, and the ability of the combined business to grow and manage growth profitably;
changes in applicable laws or regulations;
the possibility that we may be adversely affected by other economic, business and/or competitive factors;
factors relating to our business, operations and financial performance, including:

o
competition in the markets in which we operate;

o
our ability to maintain agent relationships on terms consistent with those currently in place;

o
our ability to maintain banking relationships necessary for us to conduct our business;

o
credit risks from our agents and the financial institutions with which we do business;

o
bank failures, sustained financial illiquidity, or illiquidity at our clearing, cash management or custodial financial institutions;

o
our ability to meet our debt obligations and remain in compliance with our credit facility requirements;

o
interest rate risk from elimination of LIBOR as a benchmark interest rate;

o
new technology or competitors that disrupt the current ecosystem;

o
cyber-attacks or disruptions to our information technology, computer network systems and data centers;

o
our success in developing and introducing new products, services and infrastructure;

o
customer confidence in our brand and in consumer money transfers generally;

o
our ability to maintain compliance with the regulatory requirements of the jurisdictions in which we operate or plan to operate;

o
international political factors or implementation of tariffs, border taxes or restrictions on remittances or transfers of money out of the United States;

o
changes in tax laws and unfavorable outcomes of tax positions we take;

o
political instability, currency restrictions and devaluation in countries in which we operate or plan to operate;

o
weakness in U.S. or international economic conditions;

o
change or disruption in international migration patterns;

o
our ability to protect our brand and intellectual property rights;

o
our ability to retain key personnel;

o
changes in foreign exchange rates could impact consumer remittance activity; and
other economic, business and/or competitive factors, risks and uncertainties, including those described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

3
PART 1 – FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS

INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)

    
June 30,
2019
    
December 31,
2018
  
ASSETS (unaudited)    
Current assets:      
Cash $106,884  $73,029 
Accounts receivable, net of allowance of $670 and $842, respectively
  93,029   35,795 
Prepaid wires  8,890   26,655 
Other prepaid expenses and current assets  2,260   3,171 
Total current assets  211,063   138,650 
         
Property and equipment, net  11,071   10,393 
Goodwill  36,260   36,260 
Intangible assets, net  32,058   36,395 
Deferred tax asset, net  1,932   2,267 
Other assets  1,993   1,874 
Total assets $294,377  $225,839 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Current portion of long-term debt, net $5,767  $3,936 
Accounts payable  14,451   11,438 
Wire transfers and money orders payable  83,780   36,311 
Accrued and other liabilities  19,275   16,355 
Total current liabilities  123,273   68,040 
         
Long-term liabilities:        
Debt, net  126,144   113,326 
Total long-term liabilities  126,144   113,326 
         
Commitments and Contingencies, see Note 13        
         
Stockholders’ equity:        
Common stock $0.0001 par value; 230,000,000 shares authorized, 37,982,848 and 36,182,783 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
  4   4 
Additional paid-in capital  53,118   61,889 
Accumulated deficit  (8,203)  (17,418)
Accumulated other comprehensive income (loss)  41   (2)
Total stockholders’ equity  44,960   44,473 
Total liabilities and stockholders’ equity $294,377  $225,839 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(in thousands, except for share data, unaudited)

  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  2019  2018  2019  2018 
Revenues:            
Wire transfer and money order fees $70,490  $59,368  $128,941  $107,222 
Foreign exchange  11,623   10,585   21,025   18,316 
Other income  562   426   1,058   797 
Total revenues  82,675   70,379   151,024   126,335 
                 
Operating expenses:                
Service charges from agents and banks  54,622   46,323   100,191   84,260 
Salaries and benefits  7,597   7,441   15,194   13,673 
Other selling, general and administrative expenses  5,337   4,184   11,061   8,185 
Transaction costs  -   2,553   -   4,014 
Depreciation and amortization  3,155   3,818   6,307   7,607 
Total operating expenses  70,711   64,319   132,753   117,739 
                 
Operating income  11,964   6,060   18,271   8,596 
                 
Interest expense  2,288   3,392   4,358   6,676 
                 
Income before income taxes  9,676   2,668   13,913   1,920 
                 
Income tax provision  2,602   824   3,683   616 
                 
Net income  7,074   1,844   10,230   1,304 
                 
Other comprehensive income (loss)  35   (36)  43   (15)
                 
Comprehensive income $7,109  $1,808  $10,273  $1,289 
                 
Income per common share:                
Basic and diluted $0.19  $0.11  $0.28  $0.08 
                 
Weighted-average common shares outstanding:                
Basic  37,505,598   17,227,682   36,847,845   17,227,682 
Diluted  37,594,151   17,227,682   36,898,462   17,227,682 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except for share data, unaudited)

  Three Months Ended 

 
Common Stock
 
Additional
Paid-in Capital


Accumulated
Deficit
  
Accumulated Other
Comprehensive
Income
  
Total
Stockholders’
Equity
 
   
 Shares  Amount 
Balance, March 31, 2019  36,182,783  $4  $62,515  $(15,277) $6  $47,248 
Warrant exchange  1,800,065   -   (10,031)  -   -   (10,031)
Net income  -   -   -   7,074   -   7,074 
Share-based compensation  -   -   634   -   -   634 
Adjustment from foreign currency translation, net  -   -   -   -   35   35 
Balance, June 30, 2019  37,982,848  $4  $53,118  $(8,203) $41  $44,960 


  Three Months Ended 

  
Common Stock
  
Additional
Paid-in Capital
  
Accumulated
Deficit
  
Accumulated Other
Comprehensive
Income (Loss)
  
Total
Stockholders’
Equity
 
 
  Shares  Amount 
Balance, March 31, 2018  17,227,682  $2  $46,304  $(10,714) $19  $35,611 
Net income  -   -   -   1,844   -   1,844 
Share-based compensation  -   -   485   -   -   485 
Adjustment from foreign currency translation, net  -   -   -   -   (36)  (36)
Balance, June 30, 2018  17,227,682  $2  $46,789  $(8,870) $(17) $37,904 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)
(in thousands, except for share data, unaudited)

  Six Months Ended 
   
Common Stock
  
Additional
Paid-in Capital
  
Accumulated
Deficit
  
Accumulated Other
Comprehensive
Income (Loss)
  
Total
Stockholders’
Equity
 
 
 Shares  Amount 
Balance, December 31, 2018  36,182,783  $4  $61,889  $(17,418) $(2) $44,473 
Adoption of new accounting pronouncement  -   -   -   (1,015)  -   (1,015)
Warrant exchange  1,800,065   -   (10,031)  -   -   (10,031)
Net income  -   -   -   10,230   -   10,230 
Share-based compensation  -   -   1,260   -   -   1,260 
Adjustment from foreign currency translation, net  -   -   -   -   43   43 
Balance, June 30, 2019  37,982,848  $4  $53,118  $(8,203) $41  $44,960 

  Six Months Ended 
       Common Stock  
Additional
Paid-in Capital
  
Accumulated
Deficit
  
Accumulated Other
Comprehensive
Loss
  
Total
Stockholders’
Equity
 
 
 Shares  Amount 
Balance, December 31, 2017  17,227,682  $2  $46,076  $(10,174) $(2) $35,902 
Net income  -   -   -   1,304   -   1,304 
Share-based compensation  -   -   713   -   -   713 
Adjustment from foreign currency translation, net  -   -   -   -   (15)  (15)
Balance, June 30, 2018  17,227,682  $2  $46,789  $(8,870) $(17) $37,904 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)

  Six Months Ended June 30, 
  2019  2018 
    
Cash flows from operating activities:      
Net income $10,230  $1,304 
Adjustments to reconcile net income to net cash provided by operating activities:
        
Depreciation and amortization  6,307   7,607 
Share-based compensation  1,260   713 
Provision for bad debt  552   385 
Debt origination costs amortization  358   464 
Deferred taxes  672   (1,031)
Loss on disposal of property and equipment  113   104 
Total adjustments  9,262   8,242 
Changes in operating assets and liabilities:        
Accounts receivable  (57,861)  (4,821)
Prepaid wires  17,954   (6,662)
Other prepaid expenses and assets  726   (19)
Wire transfers and money orders payable  47,222   1,787 
Accounts payable and accrued and other liabilities  4,553   7,099 
Net cash provided by operating activities  32,086   6,930 
         
Cash flows from investing activities:        
Purchases of property and equipment  (2,413)  (2,238)
Acquisition of agent locations  (250)  - 
Net cash used in investing activities  (2,663)  (2,238)
         
Cash flows from financing activities:        
Borrowings under term loan  12,000   - 
Borrowings (repayments) under revolving loan, net  5,000   (2,425)
Repayment of term loan  (2,402)  - 
Debt origination costs  (240)  - 
Cash paid in warrant exchange  (10,031)  - 
Net cash provided by (used in) financing activities  4,327   (2,425)
         
Effect of exchange rate changes on cash  105   (86)
         
Net increase in cash and restricted cash  33,855   2,181 
         
Cash and restricted cash, beginning of the period  73,029   59,795 
         
Cash and restricted cash, end of the period $106,884  $61,976 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands, unaudited)

  Six Months Ended June 30, 
  2019  2018 
    
Supplemental disclosure of cash flow information:      
Cash paid for interest $3,783  $6,205 
Cash paid for income taxes $1,060  $1,480 
         
Supplemental disclosure of non-cash investing activity:        
Agent business acquired in exchange for receivables $85  $- 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - BUSINESS AND ACCOUNTING POLICIES

On July 26, 2018 (the “Closing Date”), International Money Express, Inc. (formerly FinTech Acquisition Corp. II) consummated the previously announced transaction (the “Merger”) by and among FinTech Acquisition Corp. II, a Delaware corporation (“FinTech”) consummated the previously announced transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 19, 2017, by and among FinTech, FinTech II Merger Sub Inc., a wholly-owned subsidiary of FinTech (“Merger Sub 1”), FinTech II Merger Sub 2 LLC, a wholly-owned subsidiary of FinTech (“Merger Sub 2”), Intermex Holdings II, Inc. (“Intermex”) and SPC Intermex Representative LLC (“SPC Intermex”)(See Note 2). TheAs a result of the Merger, Agreement provided for the acquisitionseparate corporate existence of Intermex by FinTech pursuant to the merger of Intermex withceased and into Merger Sub 1 (the “First Merger”),2 (which changed its name to International Money Express Sub 2, LLC in connection with Intermex continuingthe closing of the Merger) continued as the surviving entity, and immediately following the consummation of the First Merger, the merger of Intermex with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving entity (such merger together with the First Merger, the “Merger”).

entity. In connection with the closing of the Merger, (the “Closing”), the registrantFinTech changed its name from FinTech Acquisition Corp. II to International Money Express, Inc. (the “Company”). Unless the context below otherwise provides, the “Company” refers to the combined company following the Merger and, together with their respective subsidiaries, “FinTech” refers to the registrant prior to the closing of the Merger Sub 2 changed its nameand “Intermex” refers to Intermex Holdings II, Inc. prior to the closing of Merger.

The Merger was accounted for as a reverse recapitalization where FinTech was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the facts that following the Merger, the former stockholders of Intermex control the majority of the voting rights in respect of the board of directors of the Company, Intermex comprising the ongoing operations of the Company and Intermex’s senior management comprising the senior management of the Company. Accordingly, the Merger was treated as the equivalent of Intermex issuing stock for the net assets of FinTech, accompanied by a recapitalization. The net assets of FinTech were stated at historical cost, with no goodwill or other intangible assets resulting from FinTech II Merger Sub 2 LLC to International Money Express Sub 2, LLC. Unless otherwise stated, this Report contains information about FinTech before the Merger. The consolidated assets, liabilities and results of operations prior to the Closing Date of the Merger are those of Intermex, and FinTech’s assets, liabilities and results of operations are consolidated with Intermex beginning on the Closing Date. The shares and corresponding capital amounts included in common stock and additional paid-in capital, pre-merger, have been retroactively restated as shares reflecting the exchange ratio in the Merger. The historical financial information and operating results of FinTech prior to the Merger have not been separately presented in these condensed consolidated financial statements as they were not significant or meaningful.

The Company operates as a money transmitter, primarily between the United States of America (“U.S.”) and Mexico, Guatemala and other countries in Latin America and Africa through a network of authorized agents located in various unaffiliated retail establishments throughout the U.S.

The condensed consolidated financial statements of the Company include Intermex, its wholly-owned indirect subsidiary, Intermex Wire Transfer, LLC (“LLC”), Intermex Wire Transfers de Guatemala, S.A. (“Intermex Guatemala”) - 99.8% owned by LLC, Intermex Wire Transfer de Mexico, S.A. and Intermex Transfers de Mexico, S.A. (“Intermex Mexico”) - 98% owned by LLC, Intermex Wire Transfer Corp. - 100% owned by LLC, Intermex Wire Transfer II, LLC - 100% owned by LLC and Canada International Transfers Corp. - 100% owned by LLC. Non-controlling interest in the results of operations of consolidated subsidiaries represents the minority stockholders’ share of the profit or (loss) of Intermex Mexico and Intermex Guatemala. The non-controlling interest asset and non-controlling interest in the portion of the profit or (loss) from operations of these subsidiaries were not recorded by the Company as they are considered immaterial.

The condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements.

10
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)

INDEX TO FINANCIAL STATEMENTS

Page
PART 1 - FINANCIAL INFORMATION
Item 1.
Financial Statements
1
Condensed Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017
1
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2018 and 2017 (unaudited)
2
Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2018 and 2017 (unaudited)
3
Notes to Condensed Consolidated Financial Statements (unaudited)
4
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
11
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
13
Item 4.
Controls and Procedures
13
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings
14
Item 1A.
Risk Factors
14
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
14
Item 3.
Defaults Upon Senior Securities
14
Item 4.
Mine Safety Disclosures
14
Item 5.
Other Information
14
Item 6.
Exhibits
14
SIGNATURES
15
PART 1 - FINANCIAL INFORMATION

Item 1.
Financial Statements

INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
CONDENSED CONSOLIDATED BALANCE SHEETS

  
June 30,
2018
  
December 31,
2017
 
  (Unaudited)    
       
ASSETS      
Current Assets      
Cash $51,659  $362,581 
Prepaid expenses and other current assets  110,694   13,560 
Total Current Assets  162,353   376,141 
         
Cash and held-to-maturity securities held in Trust Account  176,418,186   175,883,186 
Total Assets $176,580,539  $176,259,327 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current Liabilities        
Accrued expenses $747,805  $480,538 
Income taxes payable  180,352   436,721 
Advances from related party  275,000   — 
Promissory note – related party  115,000   — 
Total Current Liabilities  1,318,157   917,259 
         
Deferred underwriting fees  9,190,000   9,190,000 
Deferred legal fees payable  25,000   25,000 
Total Liabilities  10,533,157   10,132,259 
         
Commitments and Contingencies        
Common stock subject to possible redemption, $0.0001 par value; 16,104,738 and 16,112,706 shares (at redemption value of approximately $10.00 per share as of June 30, 2018 and December 31, 2017, respectively)  161,047,380   161,127,060 
         
Stockholders’ Equity        
Preferred stock, $0.0001 par value; 5,000,000 authorized, none issued and outstanding  —   — 
Common stock, $0.0001 par value; 35,000,000 shares authorized; 7,788,595 and 7,780,627 shares issued and outstanding (excluding 16,104,738 and 16,112,706 shares subject to possible redemption) as of June 30, 2018 and December 31, 2017, respectively  779   778 
Additional paid-in capital  5,268,064   5,188,385 
Accumulated deficit  (268,841)  (189,155)
Total Stockholders’ Equity  5,000,002   5,000,008 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $176,580,539  $176,259,327 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
1
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  2018  2017  2018  2017 
             
Operating costs $614,652  $106,063  $1,027,825  $332,819 
Loss from operations  (614,652)  (106,063)  (1,027,825)  (332,819)
                 
Other income:                
Interest income  708,882   340,465   1,193,551   402,131 
                 
Income before taxes  94,230   234,402   165,726   69,312 
Provision for income taxes  (144,675)  (109,457)  (245,412)  (109,457)
                 
Net Income (Loss) $(50,445) $124,945  $(79,686) $(40,145)
                 
Weighted average shares outstanding                
Basic  7,783,551
(1) 
  7,070,173
(1) 
  7,783,163
(1) 
  7,426,344
(1) 
Diluted  7,783,551
(1) 
  21,321,280   7,783,163
(1) 
  7,426,334
(1) 
                 
Net income (loss) per common share                
Basic $(0.01) $0.02  $(0.01) $(0.01)
Diluted  (0.01)  0.01   (0.01)  (0.01)

(1)This number excludes an aggregate of up to 16,104,738 shares and 16,127,226 shares subject to possible redemption at June 30, 2018 and 2017, respectively.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
2
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
  
Six Months Ended
June 30,
 
  2018  2017 
Cash Flows from Operating Activities:      
Net loss $(79,686) $(40,145)
Adjustments to reconcile net loss to net cash used in operating activities:        
Interest earned on held-to-maturity securities held in Trust Account  (1,193,551)  (402,131)
Changes in operating assets and liabilities:        
Prepaid expenses and other current assets  (97,134)  (56,239)
Accrued expenses  267,267   22,503 
Income taxes payable  (256,369)  109,457 
Net cash used in operating activities  (1,359,473)  (366,555)
         
Cash Flows from Investing Activities:        
Investment of cash in Trust Account  —   (175,000,000)
Cash deposited into Trust Account  (25,592)  — 
Cash withdrawn from Trust Account  684,143   — 
Net cash provided by (used) in investing activities  658,551   (175,000,000)
         
Cash Flows from Financing Activities:        
Proceeds from sale of Units, net of underwriting discounts paid  —   171,940,000 
Proceeds from sale of Placement Units  —   4,200,000 
Proceed from issuance of common stock to Initial Stockholders  —   3,311 
Advances from related party  275,000   — 
Proceeds from promissory note – related party  115,000   — 
Repayment of promissory note – related party  —   (231,846)
Payment of offering costs  —   (463,778)
Net cash provided by financing activities  390,000   175,447,687 
         
Net Change in Cash  (310,922)  81,132 
Cash – Beginning of period  362,581   82,614 
Cash – Ending of period $51,659  $163,746 
         
Non-Cash investing and financing activities:        
Deferred underwriting fees charged to additional paid in capital $—  $9,190,000 
Deferred legal fees charged to additional paid in capital $—  $25,000 
Initial classification of common stock subject to possible redemption $—  $161,314,270 
Change in value of common stock subject to possible redemption $(79,680) $(42,010)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
3
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018
(Unaudited)
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

International Money Express, Inc. (formerly known as FinTech Acquisition Corp. II) (the “Company”), was incorporated in Delaware on May 28, 2015 as a blank check company. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business transaction, one or more operating businesses or assets (a “Business Combination”). In connection with the acquisition (the “Acquisition”) of Intermex Holdings II, Inc. (“Intermex”) (see Note 7), the Company formed two wholly-owned subsidiaries, FinTech II Merger Sub Inc., which was incorporated in Delaware in November 2017 (“Merger Sub I”), and FinTech II Merger Sub 2 LLC, which was formed in Delaware in November 2017 (“Merger Sub II”). Both Merger Sub I and Merger Sub II did not have any activity as of June 30, 2018. The Company has neither engaged in any operations nor generated operating revenues to date.

At June 30, 2018, the Company had not yet commenced operations. All activity through June 30, 2018 relates to the Company’s formation and its initial public offering of 17,500,000 units (the “Initial Public Offering”), the sale of 420,000 units (the “Placement Units”) in a private placement to the Company’s sponsor, FinTech Investors Holding II, LLC (the “Sponsor”), and Cantor Fitzgerald & Co., the representative of the underwriters for the Initial Public Offering (“Cantor”), identifying a target company for a Business Combination and activities in connection with the Acquisition, described in Note 7.  The Business Combination was consummated on July 26, 2018.  In connection with the consummation of the Business Combination, the Company changed its name from “FinTech Acquisition Corp. II” to “International Money Express, Inc.”

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unauditedCompany’s interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows.related notes are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments consisting of a(including normal recurring nature, which areadjustments) and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim financial statements are not necessarily indicative of the financial position, operating results and cash flowsthat may be reported for the periods presented.

The accompanying unauditedentire year. Certain information and footnote disclosures required by GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC on March 15, 2018, which contains the audited financial statements and related notes thereto. The financial information as of December 31, 2017 is derived from the audited financial statements presentedthereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 2018.

Accounting Pronouncements

The interim resultsFinancial Accounting Standards Board (“FASB”) issued guidance, Revenue from Contracts with Customers, which amended the existing accounting standards for revenue recognition. Refer to Note 3 for additional discussion on the adoption of this standard on January 1, 2019.

The FASB issued amended guidance, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the condensed consolidated statements of cash flows. The amendments are aimed at reducing the existing diversity in practice. The Company adopted this guidance in the first quarter of 2019 applying a retrospective approach for each period presented. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

The FASB issued guidance, Leases, to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous accounting rules. The guidance requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. This guidance is required to be adopted by the Company beginning in the first quarter of 2020 and must be applied using a modified retrospective approach. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements.

The FASB issued amended guidance, Intangibles – Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment. The amended standard simplifies how an entity tests goodwill by eliminating Step 2 of the goodwill impairment test related to measuring an impairment charge. Instead, impairment will be recorded for the amount that the carrying amount of a reporting unit exceeds its fair value. This new guidance is effective for the Company beginning in the first quarter of 2021. The adoption of this guidance is not expected to have a material impact on the consolidated financial statements.

The FASB issued guidance, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, regarding the measurement of credit losses for certain financial instruments. The new standard replaces the incurred loss model with a current expected credit loss (“CECL”) model. The CECL model is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company is required to adopt the new standard beginning in the first quarter of 2022. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements.

NOTE 2 – FINTECH MERGER

Reclassifications

Certain reclassifications have been made to prior-year amounts to conform with current presentation.

FinTech Merger

As discussed in Note 1, on July 26, 2018 Intermex and FinTech consummated the Merger, which was accounted for as a reverse recapitalization. Immediately prior to the Merger, FinTech’s shareholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 4.9 million shares of FinTech for gross redemption payments of $49.8 million. Subsequent to this redemption, there were 18.9 million outstanding shares. The aggregate consideration paid in the Merger by FinTech to the Intermex shareholders consisted of approximately (i) $102.0 million in cash and (ii) 17.2 million shares of FinTech common stock. In accounting for the reverse recapitalization, the net cash proceeds received in the third quarter of 2018 from FinTech amounted to $5.0 thousand as shown in the table below (in thousands):

11
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Cash balance available to Intermex prior to the consummation of the Merger $110,726 
Less:    
Intermex Merger costs paid from acquisition proceeds at closing  (9,062)
Cash consideration to Intermex shareholders  (101,659)
Net cash proceeds from reverse recapitalization $5 
     
Cash balance available to Intermex prior to the consummation of the Merger $110,726 
Less:    
Cash consideration to Intermex shareholders  (101,659)
Other FinTech assets acquired and liabilities assumed in the Merger:    
Prepaid expenses  76 
Accrued liabilities  (136)
Deferred tax assets  982 
Net equity infusion from FinTech $9,989 

Cash consideration to Intermex shareholders includes the payout of all vested Incentive Units issued to employees of the Company as discussed in Note 10.

After the completion of the Merger on July 26, 2018, there were 36.2 million shares of International Money Express, Inc. common stock outstanding, warrants to purchase 9 million shares of common stock and 3.4 million shares reserved for issuance under the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (See Note 10).

Transaction Costs

Direct costs related to the Merger were expensed as incurred and included as “transaction costs” in the condensed consolidated statements of operations and comprehensive income. Transaction costs included all internal and external costs directly related to the Merger, consisting primarily of legal, consulting, accounting, advisory and financing fees and certain incentive bonuses directly related to the Merger. Transaction costs for the three and six months ended June 30, 2018 amounted to $2.6 million and $4.0 million, respectively.

NOTE 3 – REVENUE RECOGNITION STANDARD

On January 1, 2019, the Company adopted the new accounting standard, Revenue from Contracts with Customers, as amended, which modified the existing accounting standards for revenue recognition. The guidance establishes that an entity should recognize revenue to depict the transfer of promised goods or services, that is, the satisfaction of performance obligations, to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance establishes a five-step model to determine when revenue recognition is appropriate. The Company adopted the guidance using the modified retrospective approach recording the cumulative effect of initially applying the new guidance as an adjustment to the opening balance of accumulated deficit in the condensed consolidated balance sheet, amounting to $1.0 million, net of tax, with a corresponding increase to deferred revenue liability, included within accrued and other liabilities in the condensed consolidated balance sheet. In accordance with the modified retrospective approach, the comparative information has not been restated and continues to be reported under the accounting standards in effect for that period.

12
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

For the three and six months ended June 30, 2019, the Company recognized $82.7 million and $151.0 million in revenues from contracts with customers, respectively. There are not indicativeno significant initial costs incurred to obtain contracts with customers. However, the Company’s loyalty program provides that for each money transfer completed customers earn points, which can be redeemed at a later time under the terms of the resultsloyalty program. Therefore, a portion of the initial consideration is recorded as deferred revenue (See Note 6). Prior to be expectedthe implementation of the standard, the Company used the incremental cost method to account for the year ending December 31, 2018 orloyalty program; therefore, a liability for anythe cost associated with the company’s future interim periods.obligation to its customers was created and the loyalty program expense was recorded within Service charges from agents and banks in the consolidated statements of operations and comprehensive income. Under the new guidance, loyalty program expense is recorded as contra revenue. The loyalty program reserve balance as of January 1, 2019 of $0.6 million was credited to accumulated deficit as this became part of the beginning balance of the new deferred revenue liability.

PrinciplesBased on our assessment of Consolidationthe new standard, except for the loyalty program discussed above, we have determined that our revenues include only one performance obligation, which is to collect the consumer’s money and make funds available for payment, generally on the same day, to a designated recipient in the currency requested.

The accompanyingCompany also offers several other services, including money orders and check cashing, for which revenue is derived by a fee per transaction. For substantially all of the Company’s revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss and has the ability to establish transaction prices.

NOTE 4 – OTHER PREPAID EXPENSES AND CURRENT ASSETS

Other prepaid expenses and current assets consisted of the following (in thousands):

  
June 30,
2019
  
December 31,
2018
 
       
Prepaid insurance $190  $300 
Prepaid fees  807   719 
Notes receivable
  502   451 
Other prepaid expenses and current assets
  761   1,701 
  $2,260  $3,171 

NOTE 5 – GOODWILL AND OTHER INTANGIBLE ASSETS

Intangible assets on the condensed consolidated balance sheets of the Company consist of agent relationships, trade name, developed technology and other intangible assets. Agent relationships, trade name and developed technology are all amortized over 15 years using an accelerated method that correlates with the projected realization of the benefit. Other intangibles primarily relate to the acquisition of certain agent locations or company-owned stores, which are amortized straight line over 10 years. The determination of our other intangible fair values includes several assumptions that are subject to various risks and uncertainties. Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties. A change in the conditions, circumstances or strategy of the Company may result in a need to recognize an impairment charge.

13
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following table presents the changes in goodwill and other intangible assets (in thousands):

  Goodwill  Other Intangibles 
Balance at December 31, 2018 $36,260  $36,395 
Acquisition of agent locations  -   335 
Amortization expense  -   (4,672)
Balance at June 30, 2019 $36,260  $32,058 

NOTE 6 – ACCRUED AND OTHER LIABILITIES

Accrued and other liabilities consisted of the following (in thousands):

  
June 30,
2019
  
December 31,
2018
 
       
Payables to agents $9,962  $8,972 
Accrued compensation  1,419   2,344 
Accrued bank charges  978   983 
Accrued loyalty program reserve  -   621 
Accrued interest  1,226   1,009 
Accrued legal fees  50   920 
Accrued taxes  1,467   745 
Deferred revenue loyalty program liability  2,322   - 
Other  1,851   761 
  $19,275  $16,355 

The following table shows the changes in the deferred revenue loyalty program liability (in thousands):

Balance, December 31, 2018 $- 
Adoption of ASC 606  1,976 
Revenue deferred during the period  1,378 
Revenue recognized during the period  (1,032)
Balance, June 30, 2019 $2,322 

NOTE 7 – DEBT

Debt consisted of the following (in thousands):

  
June 30,
2019
  
December 31,
2018
 
       
Revolving credit facility $35,000  $30,000 
Term loan  99,598   90,000 
   134,598   120,000 
Less: Current portion of long-term debt (1)
  (5,767)  (3,936)
Less: Debt origination costs  (2,687)  (2,738)
  $126,144  $113,326 

(1)
Current portion of long-term debt is net of debt origination costs of $0.6 million at June 30, 2019 and December 31, 2018.

On November 7, 2018 and further amended on December 7, 2018, the Company entered into a new financing agreement (the “Credit Agreement”) with, among others, certain of its domestic subsidiaries as borrowers and a group of banking institutions. The Credit Agreement provides for a $35 million revolving credit facility, a $90 million term loan facility and an up to $30 million incremental facility. The Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The proceeds of the Credit Agreement were used to repay existing indebtedness, for working capital purposes and to pay fees and expenses in connection with the transaction. The maturity date of the Credit Agreement is November 7, 2023.

14
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

On March 25, 2019, the Company entered into an Increase Joinder No. 1 to the Credit Agreement (the “Increase Joinder”), which was accounted for as a debt modification, under which the Company received $12 million from the incremental facility on April 29, 2019. The proceeds of the Increase Joinder were primarily used to pay for the cash portion of the Tender Offer (the “Offer”) to purchase warrants (See Note 10) during the second quarter of 2019.

Interest on the term loan facility and revolving credit facility under the Credit Agreement is determined by reference to either LIBOR or a “base rate”, in each case plus an applicable margin of 4.50% per annum for LIBOR loans or 3.50% per annum for base rate loans. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum. The effective interest rates as of June 30, 2019 for the term loan and revolving credit facility were 7.82% and 8.34%, respectively.

The principal amount of the term loan facility, including the Increase Joinder, must be repaid in consecutive quarterly installments of 5.0% in year 1, 7.5% in years 2 and 3, 10.0% in years 4 and 5, in each case on the last day of each quarter, commencing in March 2019 with a final payment at maturity. The loans under the Credit Agreement may be prepaid at any time without premium or penalty.

The Credit Agreement contains covenants that limit the Company’s and its subsidiaries’ ability to, among other things, grant liens, incur additional indebtedness, make acquisitions or investments, dispose of certain assets, make dividends and distributions, change the nature of their businesses, enter into certain transactions with affiliates or amend the terms of material indebtedness.

The Credit Agreement also contains financial statements includecovenants which require the accountsCompany to maintain a quarterly minimum fixed charge coverage ratio of 1.25:1.00 and a quarterly maximum consolidated leverage ratio of 3.25:1.00.

The obligations under the Credit Agreement are guaranteed by the Company and certain domestic subsidiaries of the Company and secured by liens substantially all of the assets of the loan parties, subject to certain exclusions and limitations.

NOTE 8 – FAIR VALUE MEASUREMENTS

The Company determines fair value in accordance with the provisions of FASB guidance, Fair Value Measurements and Disclosures, which defines fair value as an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-level fair value hierarchy that prioritizes the inputs used to measure fair value was established. There are three levels of inputs used to measure fair value. Level 1 relates to quoted market prices for identical assets or liabilities. Level 2 relates to observable inputs other than quoted prices included in Level 1. Level 3 relates to unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s non-financial assets measured at fair value on a nonrecurring basis include the goodwill and other intangibles. The Company’s cash is representative of fair value as these balances are comprised of deposits available on demand. Accounts receivable, prepaid wires, accounts payable and wire transfers and money orders payable are representative of their fair values because of the short turnover of these items.

15
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The Company’s financial instruments that are not measured at fair value on a recurring basis include its wholly-owned subsidiaries.revolving credit facility and term loan. The fair value of the term loan, which approximates book value, is estimated by discounting the future cash flows using a current market interest rate. The estimated fair value of the revolving credit facility would approximate face value given the payment schedule and interest rate structure, which approximates current market interest rates.

NOTE 9 – RELATED PARTY TRANSACTIONS

Prior to the Merger, Intermex paid a monthly management fee of $65 thousand, plus reimbursement of expenses, to a related party for management services, which was included in other selling, general and administrative expenses on the Company’s condensed consolidated statements of operations and comprehensive income. There were no amounts payable to or receivable from related parties included in the condensed consolidated balance sheets at June 30, 2019 and December 31, 2018. Upon closing of the Merger on July 26, 2018 (See Note 2), the management fee agreement with the related party was terminated.

NOTE 10 – STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

After the completion of the Merger on the Closing Date, there were 36.2 million shares of the Company’s common stock outstanding and outstanding warrants to purchase approximately 9 million shares of common stock. As of the Closing Date, the former stockholders of Intermex owned approximately 48.3% and the former stockholders of FinTech owned approximately 51.7% of the combined company’s outstanding common stock. At June 30, 2019, the Company was authorized to issue 230 million shares of common stock and had 38.0 million shares of common stock issued and outstanding at $0.0001 par value per common share.

Equity Warrants

Prior to the Merger, FinTech issued 8.8 million public warrants (“Public Warrants”) and 0.2 million private placement warrants (“Placement Warrants”)(combined are referred to as the “Warrants”). The Company assumed the Warrants upon the change of control event. As a result of the Merger, the Warrants issued by FinTech were no longer exercisable for shares of FinTech common stock but instead were exercisable for common stock of the Company. All other features of the Warrants remained unchanged. There were no cash obligations for the Company pertaining to these Warrants.

Each whole Warrant entitled the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. The Warrants became exercisable 30 days after the completion of the Merger and were to expire five years after that date, or earlier upon redemption or liquidation.

On March 28, 2019, the Company commenced a Tender Offer (the “Offer”) to purchase the Warrants. In connection with the Offer, the Company offered the holders of the Warrants a combination of 0.201 shares of its common stock and $1.12 in cash (the “Exchange Consideration”) for each Warrant tendered and exchanged pursuant to the Offer. Concurrently with the Offer, the Company solicited consents from holders of the Warrants to amend the Warrant Agreement dated January 19, 2017 (the “Warrant Agreement”), to permit the Company to require that each outstanding Warrant be converted into a combination of 0.181 shares of our Common Stock and $1.00 in cash, without interest (the “Conversion Consideration”), which Conversion Consideration was approximately 10% less than the Exchange Consideration applicable to the Offer. Approximately 99.51% of the outstanding Warrants were validly tendered and not withdrawn in the Offer.  On April 29, 2019, the Company entered into Amendment No. 1 to the Warrant Agreement and, on or about May 20, 2019, exchanged all remaining untendered Warrants for the Conversion Consideration.

16
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Between April and May of 2019, the Company issued an aggregate of approximately 1.8 million shares of common stock and paid approximately $10.0 million in cash in exchange for the Warrants tendered in the Offer as well as the Warrants converted at the Conversion Consideration, resulting in a total of approximately 38.0 million shares of common stock outstanding following the issuance. For the three and six months ended June 30, 2019, the Company incurred approximately $0.4 million and $0.9 million, respectively, in professional and legal fees related to the Offer, which are included in other selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

International Money Express, Inc. 2018 Omnibus Equity Compensation Plan

In connection with the Merger, the stockholders of FinTech approved the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan”). There are 3.4 million shares reserved for issuance under the 2018 Plan, of which stock options to purchase 2.8 million shares of common stock and restricted stock units in respect of 21.2 thousand shares of common stock were granted to employees and independent directors of the Company in connection with the completion of the transactions at the Closing Date.

The value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. The option pricing model requires the input of highly subjective assumptions, including the grant date fair value of our common stock, expected volatility, expected forfeitures and risk-free interest rates. To determine the grant date fair value of the Company’s common stock, we use the closing market price of our common stock at the grant date. We also use an expected volatility based on the historical volatilities of a group of guideline companies and the “simplified” method for calculating the expected life of our stock options. We have elected to account for forfeitures as they occur. The risk-free interest rates are obtained from publicly available U.S. Treasury yield curve rates.

Share-based compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. The stock options issued under the 2018 Plan have 10-year terms and vest in four equal annual installments beginning one year after the date of the grant. The Company recognized compensation expense for stock options of $0.6 million and $1.3 million for the three and six months ended June 30, 2019, respectively, which is included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. No stock options were vested during the six months ended June 30, 2019; therefore no stock options were exercisable as of June 30, 2019. The weighted-average grant date fair value for the stock options to purchase 2.8 million shares of common stock granted was $3.47 per share. As of June 30, 2019, there were 2.8 million non-vested stock options and unrecognized compensation expense of $7.4 million is expected to be recognized over a weighted-average period of 3.10 years.

A summary of the stock option activity during the six months ended June 30, 2019 is presented below:



Number of
Options


Weighted-Average
Exercise Price


Weighted-Average
Remaining Contractual
Term (Years)


Weighted-Average
Grant Date
Fair Value

Outstanding at December 31, 2018  
2,881,219
  
$
10.00
   
9.60
  
$
3.47
 
Granted  
45,000
   
11.01
       
3.71
 
Exercised  
-
   
-
       
-
 
Forfeited  
(148,500
)
  
10.58
       
3.67
 
Expired  
-
   
-
       
-
 
Outstanding at June 30, 2019  
2,777,719
  
$
9.99
   
9.10
  
$
3.46
 

17
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The restricted stock units issued under the 2018 Plan to the Company’s independent directors vest on the one-year anniversary from the grant date. The Company recognized compensation expense for restricted stock units of $53 thousand and $105 thousand for the three and six months ended June 30, 2019, respectively, which is included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. There were no forfeited or vested restricted stock units during the three and six months ended June 30, 2019. As of June 30, 2019, there was $17 thousand of unrecognized compensation expense for the restricted stock units.

Incentive Units

Interwire LLC, the former parent company of Intermex, issued Class B, C and D incentive units to employees of the Company (collectively “incentive units”). As these units were issued as compensation to the Company’s employees, the expense was recorded by the Company. In connection with the Merger, on the Closing Date, all unvested incentive units for Class B, C and D became fully vested and were immediately recognized as share-based compensation expense in the third quarter of 2018. Share-based compensation expense recognized related to these incentive units and included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income, amounted to $0.5 million and $0.7 million for the three and six months ended June 30, 2018, respectively. Subsequent to the Merger, all incentive units ceased to exist.

NOTE 11 – INCOME PER SHARE
Basic income per share is calculated by dividing net income for period by the weighted average number of common shares outstanding for the period. In computing dilutive income per share, basic income per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards, including common stock options, restricted stock and warrants.
Below are basic and diluted net income per share for the periods indicated (in thousands, except for share data):



Three Months Ended
June 30,


Six Months Ended
June 30,

  2019  2018  2019  2018 
             
Net income for basic and diluted income per common share $7,074  $1,844  $10,230  $1,304 
                 
Shares:                
Weighted-average common shares outstanding – basic  37,505,598   17,227,682   36,847,845   17,227,682 
Effect of dilutive securities:                
Restricted stock  17,762   -   15,221   - 
Stock options  19,762   -   9,881   - 
Warrants  51,029   -   25,515   - 
Weighted-average common shares outstanding – diluted  37,594,151   17,227,682   36,898,462   17,227,682 
                 
Net income per common share - basic and diluted $0.19  $0.11  $0.28  $0.08 

The computation of diluted weighted-average common shares outstanding above excludes 117,500 options to purchase shares of the Company’s common stock because, under the treasury stock method, the inclusion of these would be anti-dilutive.

18
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 12 – INCOME TAXES

A reconciliation between the income tax provision at the U.S. statutory tax rate and the Company’s income tax provision on the condensed consolidated statements of operations and comprehensive income is below (in thousands, except for tax rates):

  
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
  2019  2018  2019  2018 
    
Income before income taxes $9,676  $2,668  $13,913  $1,920 
US statutory tax rate  21%  21%  21%  21%
Income tax expense at statutory rate
  2,032   560   2,922   403 
                 
State tax expense, net of federal
  545   157   795   116 
Foreign tax rates different from US statutory rate
  11   26   15   33 
Non-deductible expenses  19   90   28   72 
Credits  (5)  -   (9)  - 
Other  -   (9)  (68)  (8)
Total tax provision $2,602  $824  $3,683  $616 

Effective income tax rates for interim periods are based upon our current estimated annual rate. The Company’s effective income tax rate varies based upon an estimate of taxable earnings as well as on the mix of taxable earnings in the various states and countries in which we operate. Changes in the annual allocation and apportionment of the Company’s activity among these jurisdictions results in changes to the effective rate utilized to measure the Company’s deferred tax assets and liabilities.

As presented in the income tax reconciliation above, the tax provision recognized on the condensed consolidated statements of operations and comprehensive income was impacted by state taxes, non-deductible expenses such as share-based compensation expense, transaction costs and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate.

On December 22, 2017, the U.S. enacted tax reform legislation known as H.R. 1, commonly referred to as the “Tax Cuts and Jobs Act” (the “Act”), resulting in significant intercompany balances and transactionsmodifications to existing law. All changes to the tax code that were effective as of January 1, 2018 have been eliminatedapplied by the Company in consolidation.computing its income tax expense for the three and six months ended June 30, 2019 and 2018. Additional guidance issued by the U.S. Treasury Department, the IRS and other standard-setting bodies may materially impact the provision for income taxes and effective tax rate in the period in which the guidance is issued.

Emerging growth companyIn 2018, FinTech Acquisition Corp II was notified by the IRS that its 2017 federal income tax return was selected for examination. The Company has complied with all information requests to date. As of June 30, 2019, no amounts for tax, interest, or penalties have been paid or accrued as a result of this examination or any other uncertain tax positions.

19
INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Leases

The Company is a party to leases for office space and company-operated stores. Rent expense under all operating leases, included in other selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income, amounted to $0.5 million for the three months ended June 30, 2019 and 2018, and $1.0 million and $0.9 million for the six months ended June 30, 2019 and 2018, respectively.

In April 2018, the Company renegotiated its corporate lease to extend the term through November 2025. At June 30, 2019, future minimum rental payments required under operating leases for the remainder of 2019 and thereafter are as follows (in thousands):

2019 $727 
2020  1,314 
2021  1,144 
2022  939 
2023  869 
Thereafter  1,438 
  $6,431 

Litigation

The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is the opinion of the Company’s management, based upon the information available at this time, that the expected outcome of these matters, both individually or in the aggregate, will not have a material adverse effect on either the results of operations or financial condition of the Company.

Contingencies

The Company operates in 50 U.S. states, two U.S. territories and three other countries. Money transmitters and their agents are under regulation by State and Federal laws. Violations may result in civil or criminal penalties or a prohibition from providing money transfer services in a particular jurisdiction. It is the opinion of the Company’s management, based on information available at this time, that the expected outcome of regulatory matters will not have a material adverse effect on either the results of operations or financial condition of the Company.

Regulatory Requirements

Certain domestic subsidiaries of the Company are subject to maintaining minimum tangible net worth and liquid assets (eligible securities) to cover the amount outstanding of wire transfers and money orders payable. As of June 30, 2019, the Company’s subsidiaries were in compliance with these two requirements.

20
Index
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and related Notes included in this Quarterly Report on Form 10-Q and our Audited Consolidated Financial Statements and related Notes and MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2018. This MD&A contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q. See “Special Note Regarding Forward-Looking Statements” for additional factors relating to such statements, and see “Risk Factors” in our documents we have filed or furnished with the SEC for a discussion of certain risk factors applicable to our business, financial condition and results of operations. Past operating results are not necessarily indicative of operating results in any future periods.

Overview

We are a rapidly growing and leading money remittance services company focused primarily on the U.S. to the Latin America and the Caribbean (“LAC”) corridor, which includes Mexico, Central and South America and the Caribbean. We utilize our proprietary technology to deliver convenient, reliable and value-added services to our customers through a broad network of sending and paying agents. Our remittance services, which include a comprehensive suite of ancillary financial processing solutions and payment services, are available in 50 states, Washington D.C. and Puerto Rico, where customers can send money to beneficiaries in 17 LAC countries and four countries in Africa. Our services are accessible in person through over 100,000 sending and paying agents and company-operated stores, as well as online and via Internet-enabled mobile devices.

Money remittance services to Latin America, primarily Mexico and Guatemala, are the primary source of our revenue. These services involve the movement of funds on behalf of an originating customer for receipt by a designated beneficiary at a designated receiving location. Our remittances to Latin America are primarily generated in the United States by customers with roots in Latin American and Caribbean countries, many of whom do not have an existing relationship with a traditional full-service financial institution capable of providing the services we offer. We provide these customers with flexibility and convenience to help them meet their financial needs. Other customers who use our services may have access to traditional banking services, but prefer to use our services based on reliability, convenience and value. We generate money remittance revenue from fees paid by our customers (i.e., the senders of funds), which we share with our sending agents in the originating country and our paying agents in the destination country. Remittances paid in local currencies that are not pegged to the U.S. dollar also earn revenue through our daily management of currency exchange spreads.

Our money remittance services enable our customers to send and receive funds through our extensive network of locations in the United States that are primarily operated by third-party businesses, which we refer to as agents, and a small number of company-operated stores. In addition, our services are offered digitally through Intermexonline.com and via Internet-enabled mobile devices. We currently operate in the United States, Mexico, Guatemala, Canada and 19 additional countries. Since January 2015 through June 30, 2019, we have grown our agent network by more than 123% and increased our remittance transactions volume by approximately 144%. In the three and six months ended June 30, 2019, we processed approximately 7.4 million and 13.5 million remittances, respectively, representing approximately 20% and 22% growth in transactions, respectively, as compared to the same periods in 2018.

As a non-bank financial institution, we are regulated by the Department of Treasury, the Internal Revenue Service, FinCEN, the CFPB, the Department of Banking and Finance of the State of Florida and additionally by the various regulatory institutions of those states where we hold an operating license. We are duly registered as an MSB with FinCEN, the financial intelligence unit of the U.S. Department of the Treasury. We are also subject to a wide range of regulations in the United States and other countries, including anti-money laundering laws and regulations; financial services regulations; currency control regulations; anti-bribery law; money transfer and payment instrument licensing laws; escheatment laws; privacy, data protection and information security laws; and consumer disclosure and consumer protection laws.

Key Factors and Trends Affecting our Business

Various trends and other factors have affected and may continue to affect our business, financial condition and operating results, including:

competition in the markets in which we operate;

cyber-attacks or disruptions to our information technology, computer network systems and data centers;

our ability to maintain agent relationships on terms consistent with those currently in place;

21
our ability to maintain banking relationships necessary for us to conduct our business;

credit risks from our agents and the financial institutions with which we do business;

bank failures, sustained financial illiquidity, or illiquidity at our clearing, cash management or custodial financial institutions;

our ability to meet our debt obligations and remain in compliance with our credit facility requirements;

interest rate risk from elimination of LIBOR as a benchmark interest rate;

new technology or competitors that disrupt the current ecosystem;

our success in developing and introducing new products, services and infrastructure;

customer confidence in our brand and in consumer money transfers generally;

our ability to maintain compliance with the regulatory requirements of the jurisdictions in which we operate or plan to operate;

consumer fraud and other risks relating to customer authentication;

international political factors or implementation of tariffs, border taxes or restrictions on remittances or transfers of money out of the United States;

changes in tax laws and unfavorable outcomes of tax positions we take;

political instability, currency restrictions and devaluation in countries in which we operate or plan to operate;

weakness in U.S. or international economic conditions;

change or disruption in international migration patterns;

our ability to protect our brand and intellectual property rights;

our ability to retain key personnel; and

changes in foreign exchange rates which could impact consumer remittance activity.

Throughout 2018 and 2019, Latin American political and economic conditions have remained unstable, as evidenced by high unemployment rates in key markets, currency reserves, currency controls, restricted lending activity, weak currencies and low consumer confidence, among other factors. Specifically, continued political and economic unrest in parts of Mexico and Guatemala contributed to volatility. Our business has generally been resilient during times of economic instability as money remittances are essential to many recipients, with the funds used by the receiving party for their daily needs. However, long-term sustained appreciation of the Mexican Peso or Guatemalan Quetzal as compared to the U.S. Dollar could negatively affect our revenues and profitability.

Money remittance businesses such as ours have continued to be subject to strict legal and regulatory requirements, and we continue to focus on and regularly review our compliance programs. In connection with these reviews, and in light of regulatory complexity and heightened attention of governmental and regulatory authorities related to cybersecurity and compliance activities, we have made, and continue to make, enhancements to our processes and systems designed to detect and prevent cyber-attacks, consumer fraud, money laundering, terrorist financing and other illicit activity, along with enhancements to improve consumer protection, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and similar regulations outside the United States. In coming periods, we expect these enhancements will continue to result in changes to certain of our business practices and may result in increased costs.

We maintain a regulatory compliance department, under the direction of our experienced Chief Administrative and Compliance Officer, whose foremost responsibility is to monitor transactions, detect suspicious activity, maintain financial records and train our employees and agents. An independent third-party consulting firm periodically reviews our policies and procedures to ensure the efficacy of our anti-money laundering and regulatory compliance program.

22
The market for money remittance services is very competitive. Our competitors include a small number of large money remittance providers, financial institutions and banks as well as a large number of small niche money remittance service providers that serve select regions. We compete with larger companies such as Western Union, MoneyGram and EuroNet and a number of other smaller MSB entities. We generally compete for money remittance agents on the basis of value, service, quality, technical and operational differences, commission structure and marketing efforts. We sell credible solutions to our agents, not discounts or higher commissions, as is typical for the industry. We compete for money remittance customers on the basis of trust, convenience, service, efficiency of outlets, value, technology and brand recognition.

We expect to encounter increasing competition as new technologies emerge that enable customers to send and receive money through a variety of channels, but we do not expect adoption rates to be as significant in the near term for the customer segment we serve. Regardless, we continue to innovate in the industry by differentiating our money remittance business through programs to foster loyalty among agents as well as customers and have expanded our channels through which our services are accessed to include online and mobile offerings in preparation for customer adoption and new customer acquisition.

We qualify as an “emerging growth company,” as defined in Section 2(a)company” pursuant to the provisions of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it mayenacted on April 5, 2012. An “emerging growth company” can take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging“emerging growth companies including, but not limited to, not being required to comply withcompanies.” These provisions include:

an exemption from the auditor attestation requirementsrequirement of Section 404 of the Sarbanes-Oxley Act reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptionsthe assessment of the emerging growth company’s internal control over financial reporting;

an exemption from the requirementsadoption of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until they would apply to private companies (that is, those that have not hadcompanies; and

an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a Securities Act registration statement declared effective or do not have a class of securities registered undersupplement to the Exchange Act) areauditor’s report in which the auditor would be required to comply withprovide additional information about the new or revisedaudit and the financial accounting standards. The JOBS Act provides that a company can elect to opt outstatements of the extended transition period and comply withissuer.

We will remain an “emerging growth company” until the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies,earliest of: (i) the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparisonlast day of the Company’s consolidated financial statements with another public companyfiscal year during which is neither an emerging growth company nor an emerging growth company which has opted outwe had total annual gross revenues of using$1.07 billion or more; (ii) the extended transition period difficult or impossible becauselast day of the potential differences in accounting standards used.
4
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018
(Unaudited)
Usefiscal year following the fifth anniversary of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements andfirst sale of our common stock pursuant to an effective registration statement; (iii) the reported amounts of income and expensedate on which we have, during the reporting periods.previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed a “large accelerated filer,” which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30.

Making estimates requires managementOn December 22, 2017, the U.S. enacted tax reform legislation known as H.R. 1, commonly referred to exerciseas the “Tax Cuts and Jobs Act” (the “Act”), resulting in significant judgment. It is at least reasonably possiblemodifications to existing law. All changes to the tax code that were effective as of January 1, 2018 were applied by the estimate ofCompany in computing its income tax expense for the effect of a condition, situation or set of circumstances that existed atyear ended December 31, 2018. Additional guidance issued by the date ofU.S. Treasury Department, the consolidated financial statements, which management considered in formulating its estimate, could changeIRS and other standard-setting bodies may materially impact the provision for income taxes and effective tax rate in the near term due to one or more future confirming events. Accordingly,period in which the actual results could differ significantly from those estimates.

Cash and cash equivalentsguidance is issued.

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2018 and December 31, 2017.

Cash and held-to-maturity securities held in Trust Account

At June 30, 2018 and December 31, 2017, the assets held in the Trust Account were held in cash and U.S. Treasury Bills.

Common stock subject to possible redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Prior to the consummation of the Merger the Company’s common stock featured certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2018 and December 31, 2017, 16,104,738 and 16,112,706 shares of common stock subject to possible redemption, respectively, are presented as temporary equity, outside of the stockholders’ equity section on the Company’s condensed consolidated balance sheet.

Offering costs

Offering costs consist principally of legal, accounting and underwriting costs incurred that were directly related to the Initial Public Offering. Offering costs amounting to $12,912,088 were charged to stockholders’ equity upon completion of the Initial Public Offering.

Income taxes

The Company complies with the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2018 and December 31, 2017. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
5
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018
(Unaudited)

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net income (loss) per common share

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Shares of common stock subject to possible redemption at June 30, 2018 and 2017 have been excluded from the calculation of basic income (loss) per share since such shares, if redeemed, only participate in their pro rata share of the earnings on the assets held in the trust account (the “Trust Account”). The Company has not considered the effect of warrants to purchase 8,960,000 shares of common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants was contingent upon the occurrence of future events, including the consummation of a Business Combination. Diluted net income per share for the three months ended June 30, 2017 includes the effect of 21,321,280 shares of common stock.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times, may exceed the Federal depository insurance coverage of $250,000. At June 30, 2018 and December 31, 2017, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Fair value of financial instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature.

Recently issued accounting standards

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

3. RELATED PARTY TRANSACTIONS

Founder Shares

On May 28, 2015, the Company issued an aggregate of 5,298,333 shares of common stock to the Sponsor and certain other stockholders of the Company (the “Initial Stockholders” and, with respect to the shares of common stock issued, the “Founder Shares”) for an aggregate purchase price of $25,000. In January 2017, the Company issued an additional 701,667 Founder Shares for an aggregate purchase price of $3,311. As such, total Founder Shares of 6,000,000 included an aggregate of up to 760,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively own 25% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ election to exercise their over-allotment option to purchase 2,200,000 Units on January 25, 2017 and waiver of the remainder of their over-allotment option, 733,333 Founder Shares were no longer subject to forfeiture and 26,667 Founder Shares were forfeited. Accordingly, a total of 5,973,333 Founder Shares were outstanding as of June 30, 2018 and December 31, 2017.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor has committed to loan the Company funds as may be required up to a maximum of $1,100,000 (“Working Capital Loans”), which will be repaid upon the consummation of a Business Combination. However, if the Company does not consummate a Business Combination, the Company may use funds held outside the Trust Account to repay the Working Capital Loans; however, no proceeds from the Trust Account may be used for such repayment, other than interest income earned thereon in an amount, when taken together with amounts released to the Company for working capital purposes, that does not exceed $500,000. If such funds are insufficient to repay the Working Capital Loans, the unpaid amounts would be forgiven. Any part or all of the Working Capital Loans may be converted into additional warrants at $0.75 per one-half of one warrant (warrants to purchase a maximum of 733,333 whole shares if the full $1,100,000 is loaned and that amount is converted into warrants) of the post-Business Combination entity at the option of the Sponsor. The warrants would be identical to the warrants included in the Private Units (the “Placement Warrants”). There were Working Capital Loans outstanding as of June 30, 2018 and December 31, 2017 in the amount of $390,000 and $0, respectively. As of June 30, 2018, $275,000 of the Working Capital Loans are classified as advances from related party in the accompanying condensed balance sheet and $115,000 of the Working Capital Loans are classified as promissory note – related party in the accompanying condensed balance sheet. Upon the closing of the Business Combination on July 26, 2018, the Working Capital Loans were settled in cash for an aggregate amount of $390,000.
6
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018
(Unaudited)
4. COMMITMENTS AND CONTINGENCIES

Registration Rights

 Pursuant to a registration rights agreement entered into on January 19, 2017, the holders of the shares of common stock issued to certain of the Company’s initial stockholders (the “Founder Shares”), Placement Units (including any securities contained therein) and the warrants that may be issued upon conversion of the Working Capital Loans (and any shares of common stock issuable upon the exercise of the Placement Warrants or the warrants issued upon conversion of the Working Capital Loans) are entitled to certain customary registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements. In connection with the Acquisition, the Company entered into a new registration agreement and the existing registration rights agreement was terminated.

Underwriting Agreement

The underwriters in our Initial Public Offering were paid a cash underwriting discount of two percent (2.0%) of the gross proceeds of the Initial Public Offering, or $3,060,000. In addition, the underwriters are entitled to a deferred fee of (i) five percent (5.0%) of the gross proceeds of the Initial Public Offering, excluding any amounts raised pursuant to the overallotment option, and (ii) seven percent (7.0%) of the gross proceeds of the Units sold in the Initial Public Offering pursuant to the overallotment option, or an aggregate of $9,190,000. Upon the Closing on July 26, 2018, the deferred fee owed to the underwriters was settled in cash from the amounts held in the Trust Account in the amount of $8.9 million.

Deferred Legal Fees

The Company was obligated to pay its attorneys a deferred legal fee of $25,000 upon consummation of a Business Combination or dissolution of the Company if a Business Combination was not completed within the Combination Period. Accordingly, the Company recorded $25,000 as deferred legal fees payable in the accompanying condensed consolidated balance sheet at June 30, 2018 and December 31, 2017. Upon the Closing on July 26, 2018, the deferred legal fee was settled in cash from the amounts held in the Trust Account.

5. STOCKHOLDERS’ EQUITY

Preferred Stock — As of June 30, 2018, the Company was authorized to issue 5,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At June 30, 2018 and December 31, 2017, there were no shares of preferred stock issued or outstanding.

Common Stock — The Company is authorized to issue 35,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each common share. At June 30, 2018 and December 31, 2017, there were 7,788,595 and 7,780,627 shares of common stock issued and outstanding, respectively (excluding 16,104,738 and 16,112,706 shares of common stock subject to possible redemption, respectively). On July 20, 2018, the Company’s stockholders approved an increase in the number of authorized shares to 200,000,000 shares of common stock.

Warrants — In its Initial Public Offering completed on January 25, 2017, the Company sold 17,500,000 Units at a purchase price of $10.00 per Unit. Each Unit consisted of one share of the Company’s common stock and one-half of one whole warrant (each, a “Public Warrant”) to purchase one share of the Company’s common stock exercisable at $11.50. Following the Closing, the Public warrants have been separated from the shares of common stock and trade separately. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on August 25, 2018; provided that in each case the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if the Company’s common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under the Securities Act, the Company, at its option, may require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement. The Public Warrants will expire on July 26, 2023 or earlier upon redemption or liquidation.
7
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018
(Unaudited)

Simultaneous with the Initial Public Offering, the Sponsor and Cantor purchased an aggregate of 420,000 Placement Units at a purchase price of $10.00 per Unit. Each Placement Unit consists of one share of common stock and one-half of one warrant (each, a ���Placement Warrant”) to purchase one share of the Company’s common stock exercisable at $11.50. The Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Placement Warrants and the common stock issuable upon the exercise of the Placement Warrants is not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

Additionally, the Placement Warrants will be non-redeemable so long as they are held by the Sponsor, Cantor or their permitted transferees. If the Placement Warrants are held by someone other than the Sponsor, Cantor or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. In addition, for as long as the Placement Warrants are held by Cantor or its designees or affiliates, they may not be exercised after five years from the effective date of the registration statement for the Initial Public Offering.

The Company may redeem the Public Warrants (except as described above with respect to the Placement Warrants):

●in whole and not in part;
●at a price of $0.01 per warrant;
●
upon a minimum of 30 days’ prior written notice of redemption;
●
if, and only if, the last sale price of the Company’s common stock equals or exceeds $24.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
●if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.

6. FAIR VALUE MEASUREMENTS

The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with Accounting Standards Codification (“ASC”) 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying condensed consolidated balance sheet and adjusted for the amortization or accretion of premiums or discounts.

Cash held in the Trust Account amounted to $261,580 and $6,050 at June 30, 2018 and December 31, 2017, respectively.
8
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018
(Unaudited)
The gross holding gains and fair value of held-to-maturity securities at June 30, 2018 and December 31, 2017 were as follows:

 Held-To-Maturity Amortized Cost  
Gross
Holding
Gains
(Losses)
  Fair Value 
June 30, 2018 U.S. Treasury Securities (Mature on 7/12/2018) $176,156,606  $10,556  $176,167,162 
               
December 31, 2017 U.S. Treasury Securities (Mature on 1/18/2018) $175,877,136  $(80,806) $175,796,330 

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about the Company’s assets at fair value as of June 30, 2018 and December 31, 2017, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description Level 
June 30,
2018
 
December 31,
2017
 
Assets:       
Held-to-maturity securities held in Trust Account 1  $176,167,162  $175,796,330 

7. MERGER

On July 26, 2018 (the “Closing Date”), International Money Express, Inc. (formerly FinTech Acquisition Corp. II) consummated the previously announced transactions contemplated by the Merger Agreement, dated as of December 19, 2017,merger by and among FinTech, Merger Sub 1, a wholly-owned subsidiary of FinTech, Merger Sub 2, a wholly-owned subsidiary of FinTech, Intermex Holdings, and SPC Intermex. The Merger Agreement provided for the acquisition of Intermex by FinTech pursuant to the merger of Intermex with and into Merger Sub 1 (the “First Merger”), with Intermex continuing as the surviving entity, and immediately following the consummation of the First Merger, the merger of Intermex with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving entity (such merger together with the First Merger, the “Merger”).

As a result of the Merger, each outstanding share of Intermex common stock (“Intermex Common Stock”) converted into the right to receive a combination of cash and shares of the Company’s common stock, as calculated pursuant to the terms of the Merger Agreement.

In connection with the Closing,closing of the aggregate consideration paid byMerger, FinTech changed its name to International Money Express, Inc.

The Merger was accounted for as a reverse recapitalization where FinTech was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the facts that, following the Merger, the former stockholders of Intermex Holdings control the majority of the voting rights in respect of the board of directors of the Company, Intermex Holdings’ comprising the ongoing operations of the Company and Intermex Holdings’ senior management comprising the senior management of the Company. Accordingly, the Merger was treated as the equivalent of Intermex Holdings issuing stock for the net assets of FinTech, accompanied by a recapitalization. The net assets of FinTech were stated at historical cost, with no goodwill or other intangible assets resulting from the Merger. The consolidated assets, liabilities and results of operations prior to the Closing Date of the Merger are those of Intermex Holdings, and FinTech’s assets, liabilities and results of operations were consolidated with Intermex Holdings beginning on the Closing Date. The shares and corresponding capital amounts included in common stock and additional paid-in capital, pre-merger, have been retroactively restated as shares reflecting the exchange ratio in the Merger consisted of (i) $102,000,000 in cash ($2,000,000 of which was placed in escrow at closing as security for working capital adjustments) and (ii) 17.2 million shares of the Company’s common stock. The cash consideration was funded from the cash held in the Company’s Trust Account after permitted redemptions.
9
INTERNATIONAL MONEY EXPRESS, INC.
(formerly known as FINTECH ACQUISITION CORP. II)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018
(Unaudited)Merger.

The Merger was approved by FinTech’s stockholders at the Special Meeting of FinTech Stockholders held on July 20, 2018. In connection with the Closing,closing of the CompanyMerger, FinTech redeemed a total of 4,938,2324.9 million shares of its common stock at a redemption price of $10.086957 per share, pursuant to the terms of the Company’s amended and restated certificate of incorporation, resulting in a total payment to redeemingredeemed stockholders of $49,811,734.approximately $49.8 million. The aggregate consideration paid in the Merger consisted of approximately (i) $102.0 million in cash and (ii) 17.2 million shares of FinTech common stock.

Upon consummation
23
After the completion of the Merger,transactions on the Closing Date, there were 36.2 million shares of International Money Express, Inc. outstanding common stock, warrants to purchase 9 million shares of common stock (“Warrants”) and 3.4 million shares reserved for issuance under the International Money Express, Inc. 2018 Equity Compensation Plan, of which stock options to purchase 2.8 million shares of common stock and restricted stock units in respect of 21.2 thousand shares of common stock were granted to employees and independent directors of the Company in connection with the completion of the transaction. As of the Closing Date, the former stockholders of Intermex owned approximately 48.3% and the former stockholders of FinTech owned approximately 51.7%, respectively, of the combined Company’s outstanding common stock.

On March 28, 2019, the Company commenced a Tender Offer (the “Offer”) to purchase the Warrants. In connection with the Offer, the Company offered the holders of the Warrants a combination of 0.201 shares of its common stock and $1.12 in cash (the “Exchange Consideration”) for each Warrant tendered and exchanged pursuant to the Offer. Concurrently with the Offer, the Company solicited consents from holders of the Warrants to amend the Warrant Agreement dated January 19, 2017 (the “Warrant Agreement”), to permit the Company to require that each outstanding Warrant be converted into a combination of 0.181 shares of our Common Stock and $1.00 in cash, without interest (the “Conversion Consideration”), which Conversion Consideration was approximately 10% less than the Exchange Consideration applicable to the Offer.  Approximately 99.51 % of the outstanding Warrants were validly tendered and not withdrawn in the Offer.  On April 29, 2019, the Company entered into a registration rights agreementAmendment No. 1 to the Warrant Agreement and, a shareholders agreement.on or about May 20, 2019, exchanged all remaining untendered Warrants for the Conversion Consideration.

8. SUBSEQUENT EVENTSBetween April and May of 2019, the Company issued an aggregate of approximately 1.8 million shares of common stock and paid approximately $10.0 million in cash in exchange for the Warrants tendered in the Offer as well as the Warrants converted for the Conversion Consideration, resulting in a total of approximately 38.0 million shares of Common Stock outstanding following the issuance.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The Company evaluates subsequent eventskey indicators of the financial condition and operating performance of our business are revenues, services charges from agents and banks, salaries and benefits and selling, general and administrative expenses. To help us assess our performance with these key indicators, we use Adjusted net income, Adjusted income per share and Adjusted EBITDA as non-GAAP financial measures. We believe these non-GAAP measures provide useful information to investors and expanded insight to measure our revenue and cost performance as a supplement to our U.S. GAAP consolidated financial statements. See the “Adjusted Net Income and Adjusted Income per Share” and “Adjusted EBITDA” sections below for reconciliations of these non-GAAP financial measures to our net income, the closest GAAP measure.

Revenues

Transaction volume is the primary generator of revenue in our business. Revenue on transactions that occur afteris derived primarily from transaction fees paid by customers to transfer money. Revenues per transaction vary based upon send and receive locations and the balance sheet date upamount sent. In certain transactions involving different send and receive currencies, we generate foreign exchange revenues based on the difference between the set exchange rate charged by us to the datesender and the rate available to us in the wholesale foreign exchange market.

Operating Expenses

Service Charges from Agents and Banks

Service charges and fees primarily consist of agent commissions and bank fees. Service charges and fees vary based on agent commission percentages and the amount of fees charged by the banks. Sending agents earn a commission on each transaction they process of approximately 50% of the transaction fee. Service charges and fees may increase if banks or payer organizations increase their fee structure. Service charges also vary based on the method the customer selects to send the transfer and payer organization that facilitates the condensed consolidated financial statements were issued. transaction.

Salaries and Benefits

Salaries and benefits include cash and share-based compensation associated with our corporate employees and sales team as well as employees at our company-operated stores. Corporate employees include management, customer service, compliance, information technology, finance and human resources. Our sales team, located throughout the United States, is focused on supporting and growing our sending agent network.

Other thanSelling, General and Administrative

General and administrative expenses primarily consist of fixed overhead expenses associated with our operations, such as describedinformation technology, rent expense, insurance, professional services, facilities maintenance and other similar types of expenses. A portion of these expenses relate to our 33 company-operated stores; however, the majority relate to the overall business and compliance for being a public company. Selling expenses include expenses such as advertising and promotion, provision for bad debt and expenses associated with increasing our network of agents. These expenses are expected to continue to increase in Notes 5line with increase in revenues.

24
Transaction Costs

We incurred transaction costs associated with the Merger. These costs included all internal and 7,external costs directly related to the Company did not identify any subsequent events that would have required adjustment or disclosuretransaction, consisting primarily of legal, consulting, accounting, advisory fees and certain incentive bonuses. Due to their significance, they are presented separately in theour condensed consolidated financial statements.

Depreciation and Amortization

Depreciation largely consists of depreciation of computer equipment and software that supports our technology platform. Amortization of intangible assets is primarily related to our agent relationships, trade name and developed technology.

Non-Operating Expenses

Interest Expense

Interest expense consists primarily of interest associated with our debt, which consisted of a term loan and revolving credit facility that were both refinanced on November 7, 2018 and subsequently amended on March 25, 2019. As of June 30, 2019 and December 31, 2018, the interest rates for the term loan and revolving credit facility related to our current Credit Agreement were 7.12% and 6.90%, and 7.34% and 7.01%, respectively. Interest on the term loan facility and revolving credit facility is determined by reference to either LIBOR or a “base rate”, in each case, plus an applicable margin of 4.50% per annum for LIBOR loans or 3.50% per annum for base rate loans. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum.

Income tax provision

Our income tax provision includes the expected benefit of all deferred tax assets, including our net operating loss carryforwards. With few exceptions, our net operating loss carryforwards will expire from 2029 through 2037 and are subject to annual utilization limitations; however, our current assessment is that no valuation allowance is required for any of our deferred tax assets. Our income tax provision has been impacted by non-deductible expenses, including shared-based compensation and transaction costs. The Act, enacted in December 2017, reduced our federal corporate tax rate from 34% to 21% beginning in 2018.

Net Income

Net income is determined by subtracting operating and non-operating expenses from revenues.

Segments

Our business is organized around one reportable segment that provides money transmittal services primarily between the United States and Latin America. This is based on the objectives of the business and how our chief operating decision maker, the CEO and President, monitors operating performance and allocates resources.

1025
Results of Operations

The following table summarizes key components of our results of operations for the periods indicated:

 

 
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
(in thousands) 2019  2018  2019  2018 
    
Revenues:            
Wire transfer and money order fees $70,490  $59,368  $128,941  $107,222 
Foreign exchange  11,623   10,585   21,025   18,316 
Other income  562   426   1,058   797 
Total revenues  82,675   70,379   151,024   126,335 
                 
Operating expenses:                
Service charges from agents and banks  54,622   46,323   100,191   84,260 
Salaries and benefits  7,597   7,441   15,194   13,673 
Other selling, general and administrative expenses
  5,337   4,184   11,061   8,185 
Transaction costs  -   2,553   -   4,014 
Depreciation and amortization  3,155   3,818   6,307   7,607 
Total operating expenses  70,711   64,319   132,753   117,739 
                 
Operating income  11,964   6,060   18,271   8,596 
                 
Interest expense  2,288   3,392   4,358   6,676 
                 
Income before income taxes  9,676   2,668   13,913   1,920 
                 
Income tax provision  2,602   824   3,683   616 
                 
Net income $7,074  $1,844  $10,230  $1,304 

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018

Revenues

Revenues for the above periods are presented below:

 
($ in thousands)

Three Months
Ended June 30,
2019
    
%
of
Revenues


Three Months
Ended June 30,
2018


%
of
Revenues

             
Revenues:            
Wire transfer and money order fees $70,490   85% $59,368   84%
Foreign exchange  11,623   14%  10,585   15%
Other income  562   1%  426   1%
Total revenues $82,675   100% $70,379   100%
Wire transfer and money order fees of $70.5 million for the three months ended June 30, 2019 increased by $11.1 million from $59.4 million for the three months ended June 30, 2018. This increase of $11.1 million was due to a 20% increase in transaction volume compared to the second quarter of 2018, largely due to the continued growth in our agent network, which has grown by 17% from June 2018 to June 2019.
Revenues from foreign exchange of $11.6 million for the three months ended June 30, 2019 increased by $1.0 million from $10.6 million for the three months ended June 30, 2018. This increase of $1.0 million was primarily due to higher transaction volume achieved by growth in our agent network.

26
Operating Expenses
Operating expenses for the above periods are presented below:
 ($ in thousands)  
Three Months
Ended June 30,
2019
    
%
of
Revenues
    
Three Months
Ended June 30,
2018
    
%
of
Revenues
  
             
Operating expenses:            
Service charges from agents and banks $54,622   66% $46,323   66%
Salaries and benefits  7,597   9%  7,441   11%
Other selling, general and administrative expenses
  5,337   7%  4,184   6%
Transaction costs  -   0%  2,553   4%
Depreciation and amortization  3,155   4%  3,818   5%
Total operating expenses $70,711   86% $64,319   92%
Service charges from agents and banks — Service charges from agents and banks were $54.6 million, or 66% of revenues, for the three months ended June 30, 2019 compared to $46.3 million, or 66% of revenues, for the three months ended June 30, 2018. The increase of $8.3 million was primarily due to a 20% increase in transaction volume largely related to the continued growth in our agent network, which has grown by 17% from June 2018 to June 2019.
Salaries and benefits — Salaries and benefits were $7.6 million for the three months ended June 30, 2019, an increase of $0.2 million from $7.4 million for the three months ended June 30, 2018. The increase of $0.2 million primarily consisted of increased wages and share-based compensation in connection with the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan.
Other selling, general and administrative expenses — Other selling, general and administrative expenses of $5.3 million for the three months ended June 30, 2019 increased by $1.1 million from $4.2 million for the three months ended June 30, 2018. The increase of $1.1 million primarily related to $0.9 million of legal and other professional fees associated with the Company’s SEC filings, including the Offer for the Company’s outstanding warrants.
Transaction costs — Transaction costs of $2.6 million for the three months ended June 30, 2018 include legal and other professional fees directly related to the Merger.
Depreciation and amortization — Depreciation and amortization of $3.2 million for the three months ended June 30, 2019 decreased by $0.6 million from $3.8 million for the three months ended June 30, 2018. This decrease of $0.6 million is primarily due to $0.8 million less amortization related to the trade name, developed technology and agent relationships during the second quarter of 2019 as these intangibles are being amortized on an accelerated basis, which will decline over time. This decrease was partially offset by an increase in depreciation of $0.2 million associated primarily with additional computer equipment to support our growing business and agent network.
Non-Operating Expenses
Interest expense — Interest expense was $2.3 million for the three months ended June 30, 2019, a decrease of $1.1 million from $3.4 million for the three months ended June 30, 2018. The decrease of $1.1 million was primarily due to a reduction in the interest rates paid under the Credit Agreement.
Income tax provision — Income tax provision was $2.6 million for the three months ended June 30, 2019, an increase of $1.8 million, from an income tax provision of $0.8 million for the three months ended June 30, 2018. The increase in the income tax provision included a $1.8 million increase in tax expense related to taxable income attributable to both federal and state taxes in the three months ended June 30, 2019.
Net Income
We had net income of $7.1 million for the three months ended June 30, 2019 compared to net income of $1.8 million for the three months ended June 30, 2018 due primarily to the same factors discussed above.

27
Adjusted Net Income and Adjusted Income per Share
Adjusted Net Income is defined as net income adjusted to add back certain charges and expenses, such as transaction costs, non-cash amortization resulting from push-down accounting, and non-cash compensation costs, as these charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.
We present Adjusted Net Income and Adjusted Income per Share because we believe they are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe they are helpful in highlighting trends in our operating results, because it excludes, among other things, certain results of decisions that are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the jurisdictions in which we operate and capital investments.
Adjusted Net Income is a non-GAAP financial measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flows or as a measure of liquidity. Non-GAAP financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to GAAP.
Adjusted Net Income for the three months ended June 30, 2019 was $9.6 million, representing an increase of $3.1 million, or 48%, from $6.5 million for the three months ended June 30, 2018. The increase in Adjusted Net Income was primarily due to the increase in revenues of $12.3 million and a decrease in interest expense, less the increase in service charges from agents and banks of $8.3 million as well as increases in other operating expenses to support the growth in our business and income taxes.
The following table presents the reconciliation of net income, our closest GAAP measure, to Adjusted Net Income.

  Three Months Ended June 30, 
(in thousands) 2019  2018 
       
Net income $7,074  $1,844 
Adjusted for:        
Transaction costs (a)  -   2,553 
Incentive units plan (b)  -   485 
Share-based compensation, 2018 Plan (c)  634   - 
Tender Offer Costs (d)  386   - 
Management fee (e)  -   195 
Transition expenses (f)  -   192 
Other employee severance (g)  66   - 
Other charges and expenses (h)  59   38 
Amortization of intangibles (i)  2,312   3,098 
Income tax benefit related to Adjustments (j)  (930)  (1,876)
Adjusted Net Income $9,601  $6,529 
         
Adjusted Income per Share        
Basic and diluted $0.26  $0.38 
         
Weighted-average  common shares outstanding        
Basic  37,505,598   17,227,682 
Diluted  37,594,151   17,227,682 
ITEM 2.(a)MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSRepresents direct costs for the three months ended June 30, 2018 related to the Merger, which were expensed as incurred and included as “transaction costs” in our condensed consolidated statements of operations and comprehensive income.
(b)In connection with the Stella Point acquisition, Class B, C and D incentive units were granted to our employees by Interwire LLC. The three months ended June 30, 2018 included an expense regarding these incentive units, which became fully vested and were paid out upon the closing of the Merger. As a result, employees no longer hold profits interests following the Merger.
(c)Stock options and restricted stock were granted to employees and independent directors of the Company in connection with the completion of the Merger. The Company recorded $0.6 million of expense related to these equity instruments during the three months ended June 30, 2019.
(d)The Company incurred $0.4 million of expenses during the three months ended June 30, 2019 for professional and legal fees in connection with the Offer for the Company’s outstanding warrants.
(e)Represents payments under our management agreement with Stella Point pursuant to which we paid a quarterly fee for certain advisory and consulting services. In connection with the Merger, this agreement was terminated.

28
(f)Represents costs related to managerial changes in connection with becoming a publicly traded company.
(g)Represents $0.1 million of severance costs incurred during the three months ended June 30, 2019 related to departmental changes.
(h)Both periods include loss on disposal of fixed assets and foreign currency (gains) losses.
(i)Represents the amortization of certain intangible assets that resulted from the application of pushdown accounting.
(j)Represents the current and deferred tax impact of the taxable adjustments to net income using the Company’s blended federal and state tax rate for each period. 

ReferencesAdjusted EBITDA
Adjusted EBITDA is defined as net income before depreciation and amortization, interest expense, income taxes, and also adjusted to add back certain charges and expenses, such as transaction costs and non-cash compensation costs, as these charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.
Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business. We present Adjusted EBITDA because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in this reportour industry. Further, we believe it is helpful in highlighting trends in our operating results, because it excludes, among other things, certain results of decisions that are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the jurisdictions in which we operate and capital investments.
Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to “we,” “us,” “our”operating income or net income as a measure of operating performance or cash flows or as a measure of liquidity. Non-GAAP financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to GAAP. Some of these limitations include the following:
Adjusted EBITDA does not reflect the significant interest expense, or the “Company” referamounts necessary to service interest or principal payments on our senior secured credit facility;
Adjusted EBITDA does not reflect income tax provision, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate;
Although depreciation and amortization are eliminated in the calculation of Adjusted EBITDA, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any costs of such replacements;
Adjusted EBITDA does not reflect the noncash component of employee compensation;
Adjusted EBITDA does not reflect the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations; and
Other companies in our industry may calculate Adjusted EBITDA or similarly titled measures differently than we do, limiting its usefulness as a comparative measure.
We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as supplemental information.
Adjusted EBITDA for the three months ended June 30, 2019 was $16.3 million, representing an increase of $3.0 million, or 23%, from $13.3 million for the three months ended June 30, 2018. The increase in Adjusted EBITDA was primarily due to the increase in revenues of $12.3 million less the increase in service charges from agents and banks of $8.3 million as well as increases in other operating expenses to support the growth in our business.
29
The following table presents the reconciliation of net income, our closest GAAP measure, to Adjusted EBITDA.

  Three Months Ended June 30, 
(in thousands) 2019  2018 
       
Net income $7,074  $1,844 
Adjusted for:        
Interest expense  2,288   3,392 
Income tax provision  2,602   824 
Depreciation and amortization  3,155   3,818 
EBITDA  15,119   9,878 
Transaction costs (a)  -   2,553 
Incentive units plan (b)  -   485 
Share-based compensation, 2018 Plan (c)  634   - 
Tender Offer costs (d)  386   - 
Management Fees (e)  -   195 
Transition Expenses (f)  -   192 
Other employee severance (g)  66   - 
Other charges and expenses (h)  59   38 
Adjusted EBITDA $16,264  $13,341 

(a)Represents direct costs for the three months ended June 30, 2018 related to the Merger, which were expensed as incurred and included as “transaction costs” in our condensed consolidated statements of operations and comprehensive income.
(b)In connection with the Stella Point acquisition, Class B, C and D incentive units were granted to our employees by Interwire LLC. The three months ended June 30, 2018 included an expense regarding these incentive units, which became fully vested and were paid out upon the closing of the Merger. As a result, employees no longer hold profits interests following the Merger.
(c)Stock options and restricted stock were granted to employees and independent directors of the Company in connection with the completion of the Merger. The Company recorded $0.6 million of expense related to these equity instruments during the three months ended June 30, 2019.
(d)The Company incurred $0.4 million of expenses during the three months ended June 30, 2019 for professional and legal fees in connection with the Offer for the Company’s outstanding warrants.
(e)Represents payments under our management agreement with Stella Point pursuant to which we paid a quarterly fee for certain advisory and consulting services. In connection with the Merger, this agreement was terminated.
(f)Represents costs related to managerial changes in connection with becoming a publicly traded company.
(g)Represents $0.1 million of severance costs incurred during the three months ended June 30, 2019 related to departmental changes.
(h)Both periods include loss on disposal of fixed assets and foreign currency (gains) losses.

30
Six Months Ended June 30, 2019 Compared to Six Months Ended June 30, 2018
Revenues
Revenues for the above periods are presented below:

($ in thousands) 
Six Months
Ended June 30,
2019
  
%
of
Revenues
  
Six Months
Ended June 30,
2018
  
%
of
Revenues
 
             
Revenues:            
Wire transfer and money order fees $128,941   85% $107,222   85%
Foreign exchange  21,025   14%  18,316   14%
Other income  1,058   1%  797   1%
Total revenues $151,024   100% $126,335   100%
 Wire transfer and money order fees of $128.9 million for the six months ended June 30, 2019 increased by $21.7 million from $107.2 million for the six months ended June 30, 2018. This increase of $21.7 million was primarily due to a 22% increase in transaction volume, largely due to the continued growth in our agent network, which has grown by 17% from June 2018 to June 2019.
Revenues from foreign exchange of $21.0 million for the six months ended June 30, 2019 increased by $2.7 million from $18.3 million for the six months ended June 30, 2018. This increase of $2.7 million was primarily due to higher transaction volume achieved by growth in our agent network.
Operating Expenses
Operating expenses for the above periods are presented below:
($ in thousands) 
Six Months
Ended June 30,
2019
  
%
of
Revenues
  
Six Months
Ended June 30,
2018
  
%
of
Revenues
 
             
Operating expenses:            
Service charges from agents and banks $100,191   66% $84,260   67%
Salaries and benefits  15,194   10%  13,673   11%
Other selling, general and administrative expenses
  11,061   7%  8,185   6%
Transaction costs  -   0%  4,014   3%
Depreciation and amortization  6,307   4%  7,607   6%
Total operating expenses $132,753   87% $117,739   93%
Service charges from agents and banks — Service charges from agents and banks were $100.2 million, or 66% of revenues, for the six months ended June 30, 2019 compared to $84.3 million, or 67% of revenues, for the six months ended June 30, 2018. The increase of $15.9 million was primarily due to a 22% increase in transaction volume largely related to the continued growth in our agent network, which has grown by 17% from June 2018 to June 2019.
Salaries and benefits — Salaries and benefits were $15.2 million for the six months ended June 30, 2019, an increase of $1.5 million from $13.7 million for the six months ended June 30, 2018. The increase of $1.5 million primarily consisted of $1.0 million in increased wages, largely in management and compliance areas associated with our transition to a publicly-traded company and to support our growing operations and a $0.5 million increase related to share-based compensation in connection with the International Money Express, Inc. (formerly known2018 Omnibus Equity Compensation Plan.
Other selling, general and administrative expenses — Other selling, general and administrative expenses of $11.1 million for the six months ended June 30, 2019 increased by $2.9 million from $8.2 million for the six months ended June 30, 2018. The increase primarily related to $1.7 million of legal and other professional fees associated with the Company’s SEC filings, including the Offer for the Company’s outstanding warrants, $0.5 million of insurance premiums, property taxes and other operating expenses, and $0.5 million in IT related expenses.
Transaction costs — Transaction costs of $4.0 million for the six months ended June 30, 2018 include legal and other professional fees directly related to the Merger.
Depreciation and amortization — Depreciation and amortization of $6.3 million for the six months ended June 30, 2019 decreased by $1.3 million from $7.6 million for the six months ended June 30, 2018. This decrease of $1.3 million is primarily due to $1.6 million less amortization related to the trade name, developed technology and agent relationships during the six months ended June 30, 2019 as FinTech Acquisition Corp. II). Referencesthese intangibles are being amortized on an accelerated basis, which will decline over time. This decrease was partially offset by an increase in depreciation of $0.3 million associated primarily with additional computer equipment to support our “management”growing business and agent network.
Non-Operating Expenses
Interest expense — Interest expense was $4.4 million for the six months ended June 30, 2019, a decrease of $2.3 million from $6.7 million for the six months ended June 30, 2018. The decrease of $2.3 million was primarily due to a reduction in the interest rates paid under the Credit Agreement.
Income tax provision — Income tax provision was $3.7 million for the six months ended June 30, 2019, an increase of $3.1 million, from an income tax provision of $0.6 million for the six months ended June 30, 2018. The increase in the income tax provision included a $3.1 million increase in tax expense related to taxable income attributable to both federal and state taxes in the six months ended June 30, 2019.
Net Income
We had net income of $10.2 million for the six months ended June 30, 2019 compared to net income of $1.3 million for the six months ended June 30, 2018 due primarily to the same factors discussed above.
Adjusted Net Income and Adjusted Income per Share
Adjusted Net Income for the six months ended June 30, 2019 was $15.4 million, representing an increase of $5.6 million, or 57%, from $9.8 million for the six months ended June 30, 2018. The increase in Adjusted net income was primarily due to the increase in revenues of $24.7 million and a decrease in interest expense, less the increase in service charges from agents and banks of $15.9 million as well as increases in other operating expenses to support the growth in our business and income taxes.
The following table presents the reconciliation of net income, our closest GAAP measure, to Adjusted Net Income.

  Six Months Ended June 30, 
(in thousands) 2019  2018 
       
Net income $10,230  $1,304 
Adjusted for:        
Transaction costs (a)  -   4,014 
Incentive units plan (b)  -   713 
Share-based compensation, 2018 Plan (c)  1,260   - 
Tender Offer Costs (d)  899   - 
Management fee (e)  -   390 
TCPA settlement (f)  -   192 
Transition expenses (g)  -   348 
Other employee severance (h)  172   - 
Other charges and expenses (i)  119   308 
Amortization of intangibles (j)  4,624   6,196 
Income tax benefit related to Adjustments (k)  (1,872)  (3,673)
Adjusted Net Income $15,432  $9,792 
         
Adjusted Income per Share        
Basic and diluted $0.42  $0.57 
         
Weighted-average common shares outstanding     
Basic  36,847,845   17,227,682 
Diluted  36,898,462   17,227,682 
(a)Represents direct costs for the six months ended June 30, 2018 related to the Merger, which were expensed as incurred and included as “transaction costs” in our condensed consolidated statements of operations and comprehensive income.
(b)In connection with the Stella Point acquisition, Class B, C and D incentive units were granted to our employees by Interwire LLC. The six months ended June 30, 2018 included an expense regarding these incentive units, which became fully vested and were paid out upon the closing of the Merger. As a result, employees no longer hold profits interests following the Merger.
(c)Stock options and restricted stock were granted to employees and independent directors of the Company in connection with the completion of the Merger. The Company recorded $1.3 million of expense related to these equity instruments during the six months ended June 30, 2019.
(d)The Company incurred $0.9 million of expenses during the six months ended June 30, 2019 for professional and legal fees in connection with the Offer for the Company’s outstanding warrants.
(e)Represents payments under our management agreement with Stella Point pursuant to which we paid a quarterly fee for certain advisory and consulting services. In connection with the Merger, this agreement was terminated.
(f)Represents payments related to the settlement of a lawsuit related to the TCPA, which included a $0.1 million settlement payment and $0.1 million in related legal fees.
(g)Represents costs related to managerial changes in connection with becoming a publicly-traded company.
(h)Represents $0.2 million of severance costs incurred during the six months ended June 30, 2019 related to departmental changes.
(i)Both periods include loss on disposal of fixed assets, foreign currency (gains) losses. The six months ended June 30, 2018 also include a one-time adjustment related to the Company’s loyalty programs of $0.2 million.
(j)Represents the amortization of certain intangible assets that resulted from the application of pushdown accounting.
(k)Represents the current and deferred tax impact of the taxable adjustments to net income using the Company’s blended federal and state tax rate for each period.

Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2019 was $27.0 million, representing an increase of $4.8 million, or 22%, from $22.2 million for the six months ended June 30, 2018. The increase in Adjusted EBITDA was primarily due to the increase in revenues of $24.7 million less the increase in service charges from agents and banks of $15.9 million as well as increases in other operating expenses to support the growth in our business.
The following table presents the reconciliation of net income, our closest GAAP measure, to Adjusted EBITDA.
  Six Months Ended June 30, 
(in thousands) 2019  2018 
       
Net income $10,230  $1,304 
Adjusted for:        
Interest expense  4,358   6,676 
Income tax provision  3,683   616 
Depreciation and amortization  6,307   7,607 
EBITDA  24,578   16,203 
Transaction costs (a)  -   4,014 
Incentive units plan (b)  -   713 
Share-based compensation, 2018 Plan (c)  1,260   - 
Tender Offer costs (d)  899   - 
Management Fees (e)  -   390 
TCPA Settlement (f)  -   192 
Transition expenses (g)  -   348 
Other employee severance (h)  172   - 
Other charges and expenses (i)  119   308 
Adjusted EBITDA $27,028  $22,168 
(a)Represents direct costs for the six months ended June 30, 2018 related to the Merger, which were expensed as incurred and included as “transaction costs” in our condensed consolidated statements of operations and comprehensive income.
(b)In connection with the Stella Point acquisition, Class B, C and D incentive units were granted to our employees by Interwire LLC. The six months ended June 30, 2018 included an expense regarding these incentive units, which became fully vested and were paid out upon the closing of the Merger. As a result, employees no longer hold profits interests following the Merger.
(c)Stock options and restricted stock were granted to employees and independent directors of the Company in connection with the completion of the Merger. The Company recorded $1.3 million of expense related to these equity instruments during the six months ended June 30, 2019.
(d)The Company incurred $0.9 million of expenses during the six months ended June 30, 2019 for professional fees in connection with the Offer for the Company’s outstanding warrants.
(e)Represents payments under our management agreement with Stella Point pursuant to which we paid a quarterly fee for certain advisory and consulting services. In connection with the Merger, this agreement was terminated.
(f)Represents payments related to the settlement of a lawsuit related to the TCPA, which included a $0.1 million settlement payment and $0.1 million in related legal fees.
(g)Represents costs related to managerial changes in connection with becoming a publicly-traded company.
(h)Represents $0.2 million of severance costs incurred during the six months ended June 30, 2019 related to departmental changes.
(i)Both periods include loss on disposal of fixed assets, foreign currency (gains) losses. The six months ended June 30, 2018 also includes a one-time adjustment related to the Company’s loyalty programs of $0.2 million.

Liquidity and Capital Resources

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We consider liquidity in terms of cash flows from operations and their sufficiency to fund our operating and investing activities. To meet our payment service obligations at all times we must have sufficient highly liquid assets and be able to move funds on a timely basis.

Our principal sources of liquidity are our cash generated by operating activities and supplemented with borrowings under our revolving credit facility. Our primary cash needs are for day to day operations, to pay interest and principal on our indebtedness, to fund working capital requirements and to make capital expenditures.

We expect to continue funding our liquidity requirements through internally generated funds and supplemented with borrowings under our revolving credit facility. We believe that our projected cash flows generated from operations, together with borrowings under our revolving credit facility are sufficient to fund our principal debt payments, interest expense, our working capital needs and our expected capital expenditures for the next twelve months.

On November 7, 2018 and further amended on December 7, 2018, the Company entered into a new financing agreement (the “Credit Agreement”) with, among others, certain of its domestic subsidiaries as borrowers, certain other domestic subsidiaries and a group of banking institutions. The Credit Agreement provides for a $35.0 million revolving credit facility, a $90.0 million term loan facility and up to a $30.0 million incremental facility. The Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The proceeds of the loans were used to repay existing indebtedness under the Senior Secured Credit Facility, for working capital purposes and to pay fees and expenses in connection with the transaction. The maturity date of the Credit Agreement is November 7, 2023.

On March 25, 2019, the Company entered into an Increase Joinder No 1 to the Credit Agreement (the “Increase Joinder”) under which the Company received $12 million from the incremental facility on April 29, 2019. The proceeds of the Increase Joinder were primarily used to pay for the cash portion of the Exchange Consideration and the Conversion Consideration pursuant to the Offer between April and May of 2019.

Interest on the term loan facility and revolving credit facility for the Credit Agreement is determined by reference to either LIBOR or a “base rate”, in each case plus an applicable margin of 4.50% per annum for LIBOR loans or 3.50% per annum for base rate loans. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum. The effective interest rates as of June 30, 2019 for the term loan and revolving credit facility were 7.82% and 8.34%, respectively.

The principal amount of the term loan facility for the Credit Agreement, including the Increase Joinder, must be repaid in consecutive quarterly installments of 5% in year 1, 7.5% in years 2 and 3, 10% in years 4 and 5, in each case on the last day of each quarter, commencing in March 2019 with a final payment at maturity. The loans under the Credit Agreement may be prepaid at any time without payment or penalty.

The Credit Agreement contains covenants that limit the Company’s and its subsidiaries’ ability to, among other things, grant liens, incur additional indebtedness, make acquisitions or investments, dispose of certain assets, make dividends and distributions, change the nature of their businesses, enter into certain transactions with affiliates or amend the terms of material indebtedness. The Credit Agreement allows for redemptions or acquisitions of the Company’s equity interests subject to certain dollar limitations.

 The Credit Agreement also contains financial covenants which require the Company to maintain a quarterly minimum fixed charge coverage ratio of 1.25:1.00 and a quarterly maximum consolidated leverage ratio of 3.25:1.00.

As of June 30, 2019, we were in compliance with the covenants of the Credit Agreement.

As of June 30, 2019, we had total indebtedness of $134.6 million, including $99.6 million of borrowings under the term loan facility and $35.0 million in borrowings under the revolving facility and excluding debt origination costs of $2.7 million. There were $18.0 million of additional borrowings available under these facilities as of June 30, 2019.

Our indebtedness could adversely affect our ability to raise additional capital, limit our ability to react to changes in the economy or our “management team” referindustry, expose us to interest rate risk and prevent us from meeting our officersobligations. See “Risk Factors—Risks Relating to Our Indebtedness—We have a substantial amount of indebtedness, which may limit our operating flexibility and directors, and references to the “Sponsor” refer to FinTech Investor Holdings II, LLC. The following discussion and analysis ofcould adversely affect our business, financial condition and results of operations shouldoperations” included in our Annual Report on Form 10-K for the year ended December 31, 2018.
Cash Flows
The following table summarizes the changes to our cash flows for the periods presented:
  Six Months Ended June 30, 
(in thousands) 2019  2018 
Statement of Cash Flows Data:      
Net cash provided by operating activities $32,086  $6,930 
Net cash used in investing activities  (2,663)  (2,238)
Net cash provided by (used in) financing activities  4,327   (2,425)
Effect of exchange rate changes on cash  105   (86)
Net increase in cash and restricted cash  33,855   2,181 
         
Cash and restricted cash, beginning of the period  73,029   59,795 
Cash and restricted cash, end of the period $106,884  $61,976 

Operating Activities
Net cash provided by operating activities was $32.1 million for the six months ended June 30, 2019, an increase of $25.2 million from net cash provided by operating activities of $6.9 million for the six months ended June 30, 2018. The increase included $15.2 million related to changes in working capital, as a result of additional cash generated by our operating results for the six months ended June 30, 2019, which were positively impacted by the further growth of the business.
Investing Activities
Net cash used in investing activities was $2.7 million for the six months ended June 30, 2019, an increase of $0.5 million from net cash used in investing activities of $2.2 million for the six months ended June 30, 2018.  This increase in cash used was primarily due to higher purchases of property and equipment during the six months ended June 30, 2019.
Financing Activities
Net cash provided by financing activities was $4.3 million for the six months ended June 30, 2019, which consisted of $12.0 million in borrowings under the Increase Joinder and $5.0 million in additional revolving credit line borrowings, net of $10.0 million related to payments made in connection with the Offer, the $2.4 million quarterly payments due on the term loan, as well as the payment of debt origination costs associated with the Increase Joinder. Net cash used in financing activities was $2.4 million for the six months ended June 30, 2018, which related to the quarterly payment due on the term loan.
Contractual Obligations
The following table includes aggregated information about contractual obligations that affect our liquidity and capital needs. At June 30, 2019, our contractual obligations over the next several periods were as follows:
(in thousands) Total  
Less than
1 year
  1 to 3 years  3 to 5 years  
More than
5 years
 
Debt, principal payments $134,598  $6,384  $16,600  $111,614  $- 
Interest payments  34,239   8,800   15,953   9,486   - 
Non-cancelable operating leases  6,431   1,403   2,261   1,713   1,054 
Total $175,268  $16,587  $34,814  $122,813   1,054 
Our condensed consolidated balance sheet reflects $131.9 million of debt as of June 30, 2019, as the principal payment obligations of $134.6 million are gross of unamortized debt origination costs. The above table reflects the principal and interest of the revolving credit facility and term loan under the Credit Agreement that will be readpaid through maturity using the rates in conjunctioneffect on June 30, 2019 and assuming no voluntary prepayments of principal.

Non-cancelable operating leases include various office leases, including our headquarters.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingent interests, certain derivative instruments and variable interest entities that either have, or are reasonably likely to have, a current or future material effect on our condensed consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect amounts reported in our condensed consolidated financial statements and related notes, as well as the notes thereto contained elsewhere in this report.related disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates its accounting policies, estimates and judgments on an on-going basis. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.

Special Note Regarding Forward-Looking Statements

This QuarterlyCritical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or otherwise complex. Our Critical Accounting Policies and Estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in our Annual Report on Form 10-Q includes “forward-looking statements” within10-K for the meaningyear ended December 31, 2018, for which there were no material changes, except as described below, included:

Revenue Recognition
Accounts Receivable and Allowance for Doubtful Accounts
Goodwill and Intangible Assets
Income Taxes

On January 1, 2019, the Company adopted the new accounting standard, Revenue from Contracts with Customers, as amended, which modified the existing accounting standards for revenue recognition. Refer to Note 3 of Section 27Aour condensed consolidated financial statements included in this filing for further information about the impact of the Securities Actadoption of 1933,this new accounting standard.

Recent Accounting Pronouncements

Refer to Note 1 of our unaudited condensed consolidated financial statements included in this filing for further information on recent accounting pronouncements.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

We manage foreign currency risk through the structure of the business and an active risk management process. We currently settle with our payers in Latin America primarily by entering into foreign exchange spot transactions with local and foreign currency providers (“counterparties”). The foreign currency exposure on our foreign exchange spot transactions is limited by the fact that all transactions are settled within two business days from trade date. However, foreign currency fluctuations may negatively impact our average exchange gain per transaction.

We are exposed to changes in currency rates as amended (the “Securities Act”)a result of our investments in foreign operations and Section 21Erevenues generated in currencies other than the U.S. dollar. Revenues and profits generated by international operations will increase or decrease because of changes in foreign currency exchange rates. This foreign currency risk is related primarily to our operations in Mexico and Guatemala. Revenues from these operations represent less than 3% of our consolidated revenues for the six months ended June 30, 2019 and 2018. Therefore, a 10% increase or decrease in these currency rates against the U.S. Dollar would result in a minimal change to our overall operating results.

The spot exchange rates as of June 30, 2019 and December 31, 2018 were 19.23 and 19.65 for the Mexico Peso/Dollar and 7.71 and 7.73 for the Guatemala Quetzal/Dollar, respectively. The average exchange rates for the six months ended June 30, 2019 and 2018 were 19.15 and 18.73 for the Mexico Peso/Dollar and 7.69 and 7.37 for the Guatemala Quetzal/Dollar, respectively. Long-term sustained appreciation of the Mexican peso or Guatemalan Quetzal as compared to the U.S. dollar could negatively affect our margins.

Interest Rate Risk

Interest on the term loan and revolving credit facility under the Credit Agreement is determined by reference to either LIBOR or a “base rate”, in each case, plus an applicable margin of 4.50% per annum for LIBOR loans or 3.50% per annum for base rate loans. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum. Since interest expense is subject to fluctuation, if interest rates increase, our debt service obligations on such variable rate indebtedness would increase even though the amount borrowed remained the same. Accordingly, an increase in interest rates would adversely affect our profitability.

As of June 30, 2019, we had $99.6 million in outstanding borrowings under the term loan. A hypothetical 1% increase or decrease in the interest rate on our indebtedness as of June 30, 2019 would have increased or decreased cash interest expense on our term loan by approximately $1.0 million per annum.

As of June 30, 2019, we had $35.0 million in outstanding borrowings under our revolving credit facility. A hypothetical 1% increase or decrease in the interest rate on our indebtedness as of June 30, 2019 would have increased or decreased cash interest expense on our revolving credit facility by approximately $0.4 million per annum.

Credit Risk

We maintain certain cash balances in various U.S. banks, which at times, may exceed federally insured limits. We have not incurred any losses on these accounts. In addition, we maintain various bank accounts in Mexico and Guatemala, which are not insured. We have not incurred any losses on these uninsured accounts. To manage our exposures to credit risk with respect to cash balances and other credit risk exposures resulting from our relationships with banks and financial institutions, we regularly review cash concentrations, and we attempt to diversify our cash balances among global financial institutions.

We are also exposed to credit risk related to receivable balances from sending agents. We perform a credit review before each agent signing and conduct ongoing analyses of sending agents and certain other parties we transact with directly. As of June 30, 2019, we also had $1.6 million outstanding of notes receivable from sending agents. Most of the notes are collateralized by personal guarantees from the sending agents and by assets from their businesses.

Our provision for bad debt was approximately $0.6 million for the six months ended June 30, 2019 (0.4% of total revenues) and $0.4 million for the six months ended June 30, 2018 (0.3% of total revenues) as recoveries were higher last year.

ITEM 4.
CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

As of June 30, 2018, we were a blank check company incorporated on May 28, 2015 as a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). We intend to use cash from the proceeds of our Initial Public Offering and the private placement of our Units that occurred simultaneously with the completion of the Initial Public Offering (the “Private Placement”), our capital stock, debt or a combination of cash, stock and debt to effectuate our initial Business Combination. The Business Combination was consummated on July 26, 2018.

Recent Developments

On July 26, 2018 (the “Closing Date”), we consummated the previously announced transactions contemplated by the Merger Agreement, dated as of December 19, 2017, which provides for the acquisition (the “Acquisition”) of Intermex by us pursuant to the Merger. See Note 7 to our Condensed Consolidated Financial Statements – Merger, for a description of the terms of the Merger Agreement.

As a result of the Merger on July 26, 2018, each outstanding share of Intermex Common Stock was converted into the right to receive a combination of cash and shares of our common stock, as calculated pursuant to the terms of the Merger Agreement.

In connection with the Closing, the aggregate consideration paid by us in the Merger consisted of (i) $102,000,000 in cash ($2,000,000 of which was placed in escrow at closing as security for working capital adjustments) and (ii) 17.2 million shares of our common stock. The cash consideration was funded from the cash held in our Trust Account after permitted redemptions.

Results of Operations

We have neither engaged in any operations nor generated any revenues as of June 30, 2018. Our only activities from inception to June 30, 2018 have been organizational activities, preparation for and consummation of our Initial Public Offering identifying a target company for a Business Combination and activities in connection with the Acquisition. We do not expect to generate any operating revenues prior to the completion of our initial Business Combination.

Upon the consummation of our Initial Public Offering on January 25, 2017, we deposited $175,000,000 of the gross proceeds of the Initial Public Offering and Private Placement into a trust account (the “Trust Account”). Funds in the Trust Account are invested in U.S. government treasury bills with a maturity of 180 days or less or money market funds investing solely in U.S. treasuries and meeting the conditions specified in Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Following our Initial Public Offering we have generated, and expect to continue to generate, non-operating income in the form of interest income on cash and marketable securities held in the Trust Account. We expect to incur increased operating expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses relating to an initial Business Combination.
For the three and six months ended June 30, 2018, we had a net loss of $50,445 and $79,686, respectively, which consists of operating costs of $614,652 and $1,027,825, respectively, and a provision for income taxes of $144,675 and $245,412, respectively, offset by interest income on cash and marketable securities held in the Trust Account of $708,882 and $1,193,551, respectively.

For the three months ended June 30, 2017, we had net income of $124,945, which consists of interest income on marketable securities held in the Trust Account of $340,465, offset by operating costs of $106,063 and a provision for income taxes of $109,457.

For the six months ended June 30, 2017, we had a net loss of $40,145, which consists of operating costs of $332,819, interest income on marketable securities held in the Trust Account of $402,131 and a provision for income taxes of $109,457.

Liquidity and Capital Resources

Until the consummation of the Initial Public Offering on January 25, 2017, our only source of liquidity was the sale of 6,000,000 shares (the “Founder Shares”) of our common stock (“Common Stock”) to our Sponsor and certain of our initial stockholders for an aggregate purchase price of $28,311, and monies loaned to us by our Sponsor to fund organizational costs and expenses in connection with our Initial Public Offering.  As of December 31, 2017, all such loans from the sponsor were repaid.

On January 25, 2017, we consummated the Initial Public Offering of 17,500,000 Units at a price of $10.00 per Unit generating gross proceeds of $175,000,000. Simultaneously with the closing of the Initial Public Offering, we sold an aggregate of 420,000 Units (the “Placement Units”) in the Private Placement for an aggregate purchase price of $4,200,000, or $10.00 per Unit, to the Sponsor (390,000 Units) and Cantor Fitzgerald & Co. (30,000 Units), the underwriter for the Initial Public Offering, pursuant to an exemption from registration contained in Section 4(a)(2) of the Securities Act. Each Placement Unit consists of one share of common stock and one-half of one warrant to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment (a “Placement Warrant”). Following the Initial Public Offering, $175,000,000 of the gross proceeds of the Initial Public Offering and the Private Placement were placed into the Trust Account.

As of June 30, 2018, we had cash of $51,659 held outside the Trust Account. At June 30, 2018, we had $928,157 of accounts payable, accrued expenses and income taxes payable, $275,000 in advances from a related party, $115,000 in promissory notes to a related party, $25,000 of deferred legal fees payable relating to the Initial Public Offering and $9,190,000 of deferred underwriting fees. As of June 30, 2018, the deferred underwriting fees were held in the Trust Account.

As of June 30, 2018, we had cash and marketable securities held in the Trust Account of $176,418,186 (including approximately $1,418,000 of interest income) consisting of U.S. treasury bills with a maturity of 180 days or less. Interest income on the balance in the Trust Account may be used by us for working capital purposes (not to exceed $500,000 in the aggregate) and to pay taxes or any dissolution expenses. Through June 30, 2018, we have withdrawn approximately $1,184,000 from the interest earned on the Trust Account.

For the six months ended June 30, 2018, cash used in operating activities was $1,359,473, consisting primarily of a net loss of $79,686, changes in operating assets and liabilities of $86,236 and interest earned on cash and marketable securities held in the Trust Account of $1,193,551.

For the six months ended June 30, 2017, cash used in operating activities was $366,555, consisting primarily of a net loss of $40,145 and interest earned on cash and marketable securities held in the Trust Account of $402,131. Changes in operating assets and liabilities provided $75,721 of cash for operating activities.

We used substantially all of the funds held in the Trust Account to complete our Business Combination on July 26, 2018. Funds held in the Trust Account were also used to fund the redemption of common stock.

Our Sponsor committed to loan us funds from time to time of up to a maximum of $1,100,000 to finance transaction costs in connection with an initial Business Combination and for working capital requirements following our Initial Public Offering. See Note 3 to our Condensed Consolidated Financial Statements - Related Party Transactions, for a description of the terms of this loan. As of June 30, 2018, $275,000 in advances were outstanding and $115,000 in loans were outstanding. Upon the closing of the Business Combination on July 26, 2018, the advances and loans were settled in cash.

Off-balance sheet financing arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Contractual obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
Critical Accounting Policies

The preparation of condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. The Company has identified the following critical accounting policy:
Net loss per common share

Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Shares of common stock subject to possible redemption at June 30, 2018 and 2017 have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. We have not considered the effect of warrants to purchase 8,960,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. Diluted net income per share for the three months ended June 30, 2017 includes the effect of 21,321,280 shares of common stock.
Recent accounting pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices and other market driven rates or prices. We were incorporated as a blank check company on May 28, 2015 as a Delaware corporation formed for the purpose of effecting a Business Combination with one or more businesses. As of June 30, 2018, we were not engaged in any substantive commercial business. Accordingly, as of June 30, 2018, we were not exposed to significant risks associated with foreign exchange rates, commodity prices, equity prices or other market driven rates or prices. Given our limited risk in our exposure to government securities and money market funds, we do not view the interest rate risk to be significant.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within an organization have been detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met.

As required by Rules 13a-1513a-15(e) and 15d-1515d-15(e) under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2018. 2019. Based uponon their evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective and operating to provide reasonable assurance that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, concluded that,as appropriate to allow timely decisions regarding required disclosure, as of June 30, 2018, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective at the reasonable assurance level.2019.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

1338
PART II. II – OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS

None.Reference is made to Note 13 – Commitments and Contingencies in the Unaudited Condensed Consolidated Financial Statements of International Money Express, Inc. contained elsewhere in this Quarterly Report on Form 10–Q for information regarding certain legal proceedings to which we are a party.

ITEM 1A.
RISK FACTORS

FactorsThere have been no material changes to our principal risks that could causewe believe are material to our actualbusiness, results to differ materiallyof operations and financial condition, from thosethe risk factors previously disclosed in this report are any of the risks described in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC.2018.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.
DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.
MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.
OTHER INFORMATION

None.

ITEM 6.
EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

39
EXHIBIT INDEX
Exhibit No.Document
 Description
Amendment No. 1 to Warrant Agreement, dated April 29, 2019, by and between the International Money Express, Inc. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 30, 2019).
Increase Joinder No. 1 to Credit Agreement, dated March 25, 2019, by and among International Money Express, Inc., as Holdings, International Money Express Sub 2, LLC, as Intermediate Holdings, Intermex Holdings, Inc., as the Term Borrower, Intermex Wire Transfer, LLC, as the Revolver Borrower, the other guarantors from time to time party thereto, the lenders from time to time party thereto and KeyBank National Association, as the Administrative Agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 30, 2019).
10.3Amendment No. 1 to the Registration Rights Agreement, dated July 29, 2019 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 30, 2019).
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002- Chief Executive Officer.
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002- Chief Financial Officer.
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)
32.1*
CertificationPursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
32.2*
CertificationSarbanes-Oxley Act of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
101.INS*XBRL Instance Document
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*XBRL Taxonomy Extension Schema Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document2002.

*Filed herewith
 
1440
SIGNATURES

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

Date: August 12, 2019
INTERNATIONAL MONEY EXPRESS, INC.
International Money Express, Inc.
   
August 14, 2018
By:
By:
/s/ Robert Lisy

Robert Lisy
 Name:Robert Lisy

Title:President and
Chief Executive Officer
and President (Principal Executive Officer)
   
Date: August 14, 2018
By:/s/ Tony Lauro II
12, 2019 Name:Tony Lauro II
Title:Chief Financial Officer
   
(PrincipalInternational Money Express, Inc.
By:
/s/ Tony Lauro II

Tony Lauro II

Chief Financial Officer)Officer


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