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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 March 31, 2020 OR2021
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)

Delaware47-4219082
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
9480 South Dixie Highway
Miami, Florida
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:
Title of each classTrading Symbol(s)Name of each exchange on which registered
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 every Interactive Data File required to be submitted 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 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 filerAccelerated filer
Non-accelerated filerSmaller 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 May 1, 2020,4, 2021, there were 38,034,71139,143,088 shares of the registrant’s common stock, $0.0001 par value per share, outstanding. The registrant has no other class of common stock outstanding.


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INTERNATIONAL MONEY EXPRESS, INC.
INDEX TO FINANCIAL STATEMENTS
Page
PART 1 - FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II - OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to certain events that could have an effect on our future performance, including but without limitation, statements regarding our plans, objectives, financial performance, business strategies, expectations for our business and the business of the Company.
These statements relate to expectations concerning matters that are not historical fact and may include the words or phrases such as “would,” “will,” “should,” “expects,” “believes,” “anticipates,” “continues,” “could,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “forecasts,” “intends,” “assumes,” “estimates,” “approximately,” “shall,” “our planning assumptions,” “future outlook” and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Except for historical information, matters discussed in this Form 10-Q are forward-looking statements. These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, as well as macroeconomic conditions, and are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those currently anticipated. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Accordingly, there is no assurance that our expectations will, in fact, occur or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements. Some factors that could cause actual resultsor contribute to differ and could materially adversely affect our business, financial condition, results of operations, cash flows and liquiditysuch differences include, but are not limited to:
to, the ability to maintain the listing of our common stock on Nasdaq;following:
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:
the COVID-19 pandemic, responses thereto and the economic and market effects thereof, including unemployment levels and increased capital marketmarkets volatility;
competition in the markets in which we operate;
volatility in foreign exchange rates that could affect the volume of consumer remittance activity and/or affect our foreign exchange related gains and losses;
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;
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;
new technology or competitors that disrupt the current ecosystem by introducing digital platforms;
our ability to satisfy our debt obligations and remain in compliance with our credit facility requirements;
interest rate risk from elimination of LIBORthe London Inter-bank Offered Rate (“LIBOR”) as a benchmark interest rate;
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;
international political factors or implementation of tariffs, border taxes or restrictions on remittances or transfers of money out of the United States;States and Canada;
changes in U.S. tax laws and unfavorable outcomes of tax positions we take;laws;
political instability, currency restrictions and volatility in countries in which we operate or plan to operate;
consumer fraud and other risks relating to customers’ authentication;
weakness in U.S. or international economic conditions;
change or disruptionchanges in international migration patterns;immigration laws and their enforcement;
our ability to protect our brand and intellectual property rights;
our ability to retain key personnel; and
other economic, business and/or competitive factors, risks and uncertainties, including those described in the section entitled “Risk Factors”Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10-K for the year ended December 31, 2019.2020.
All forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are only made as of the date of this Quarterly Report on Form 10-Q. 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.otherwise.
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PART 1 – FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
March 31, 2020December 31, 2019March 31, 2021December 31, 2020
ASSETSASSETS(unaudited)ASSETS(unaudited)
Current assets:Current assets:Current assets:
CashCash$101,838  $86,117  Cash$55,087 $74,907 
Accounts receivable, net of allowance of $873 and $759, respectively38,156  39,754  
Prepaid wires7,912  18,201  
Accounts receivable, net of allowance of $1,580 and $1,503, respectivelyAccounts receivable, net of allowance of $1,580 and $1,503, respectively66,789 55,017 
Prepaid wires, netPrepaid wires, net89,127 53,281 
Prepaid expenses and other current assetsPrepaid expenses and other current assets2,908  4,155  Prepaid expenses and other current assets3,588 3,521 
Total current assetsTotal current assets150,814  148,227  Total current assets214,591 186,726 
Property and equipment, netProperty and equipment, net13,055  13,282  Property and equipment, net13,831 13,021 
GoodwillGoodwill36,260  36,260  Goodwill36,260 36,260 
Intangible assets, netIntangible assets, net25,642  27,381  Intangible assets, net19,140 20,430 
Deferred tax asset, net359  741  
Other assetsOther assets1,388  1,415  Other assets2,981 3,036 
Total assetsTotal assets$227,518  $227,306  Total assets$286,803 $259,473 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:Current liabilities:Current liabilities:
Current portion of long-term debt, netCurrent portion of long-term debt, net$7,044  $7,044  Current portion of long-term debt, net$7,682 $7,044 
Accounts payableAccounts payable10,298  13,401  Accounts payable11,181 12,771 
Wire transfers and money orders payable39,878  40,197  
Wire transfers and money orders payable, netWire transfers and money orders payable, net41,967 41,746 
Accrued and other liabilitiesAccrued and other liabilities22,207  23,074  Accrued and other liabilities26,682 22,380 
Total current liabilitiesTotal current liabilities79,427  83,716  Total current liabilities87,512 83,941 
Long-term liabilities:Long-term liabilities:Long-term liabilities:
Debt, netDebt, net85,862  87,623  Debt, net93,179 80,579 
Deferred tax liabilities, netDeferred tax liabilities, net548 692 
Total long-term liabilitiesTotal long-term liabilities85,862  87,623  Total long-term liabilities93,727 81,271 
Commitments and contingencies, see Note 12
Commitments and contingencies, see Note 13Commitments and contingencies, see Note 1300
Stockholders' equity:
Common stock $0.0001 par value; 230,000,000 shares authorized, 38,035,279 and 38,034,389 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively.  
Stockholders’ equity:Stockholders’ equity:
Common stock $0.0001 par value; 230,000,000 shares authorized, 38,362,788 and 38,217,125 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.Common stock $0.0001 par value; 230,000,000 shares authorized, 38,362,788 and 38,217,125 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.
Additional paid-in capitalAdditional paid-in capital55,412  54,694  Additional paid-in capital61,640 59,310 
Retained earningsRetained earnings6,864  1,176  Retained earnings43,937 34,960 
Accumulated other comprehensive (loss) income(51) 93  
Total stockholders' equity62,229  55,967  
Total liabilities and stockholders' equity$227,518  $227,306  
Accumulated other comprehensive lossAccumulated other comprehensive loss(17)(13)
Total stockholders’ equityTotal stockholders’ equity105,564 94,261 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$286,803 $259,473 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(in thousands, except for share data, unaudited)
Three Months Ended
March 31,
Three Months Ended
March 31,
2020201920212020
Revenues:Revenues:Revenues:
Wire transfer and money order fees, netWire transfer and money order fees, net$67,095  $58,451  Wire transfer and money order fees, net$80,912 $67,095 
Foreign exchange gain, netForeign exchange gain, net9,554  9,402  Foreign exchange gain, net13,049 9,554 
Other incomeOther income602  496  Other income616 602 
Total revenuesTotal revenues77,251  68,349  Total revenues94,577 77,251 
Operating expenses:Operating expenses:Operating expenses:
Service charges from agents and banksService charges from agents and banks52,227  45,569  Service charges from agents and banks63,372 52,227 
Salaries and benefitsSalaries and benefits7,359  7,597  Salaries and benefits9,875 7,359 
Other selling, general and administrative expensesOther selling, general and administrative expenses5,337  5,723  Other selling, general and administrative expenses5,505 5,337 
Depreciation and amortizationDepreciation and amortization2,690  3,152  Depreciation and amortization2,335 2,690 
Total operating expensesTotal operating expenses67,613  62,041  Total operating expenses81,087 67,613 
Operating incomeOperating income9,638  6,308  Operating income13,490 9,638 
Interest expenseInterest expense1,870  2,071  Interest expense1,339 1,870 
Income before income taxesIncome before income taxes7,768  4,237  Income before income taxes12,151 7,768 
Income tax provisionIncome tax provision2,080  1,081  Income tax provision3,174 2,080 
Net incomeNet income5,688  3,156  Net income8,977 5,688 
Other comprehensive (loss) income(144)  
Other comprehensive lossOther comprehensive loss(4)(144)
Comprehensive incomeComprehensive income$5,544  $3,164  Comprehensive income$8,973 $5,544 
Earnings per common share:Earnings per common share:Earnings per common share:
Basic and dilutedBasic and diluted$0.15  $0.09  Basic and diluted$0.23 $0.15 
Weighted-average common shares outstanding:Weighted-average common shares outstanding:Weighted-average common shares outstanding:
BasicBasic38,035,014  36,182,783  Basic38,239,130 38,035,014 
DilutedDiluted38,038,674  36,195,463  Diluted38,846,906 38,038,674 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except for share data, unaudited)
Three Months EndedThree Months Ended March 31, 2021
Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated Other
Comprehensive
(Loss) Income
Total
Stockholders'
Equity
Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesAmountSharesTotal
Stockholders’
Equity
Balance, December 31, 201938,034,389  $ $54,694  $1,176  $93  $55,967  
Balance, December 31, 2020Balance, December 31, 202038,217,125$$59,310 $34,960 $(13)$94,261 
Net incomeNet income—  —  —  5,688  —  5,688  Net income— — 8,977 — 8,977 
Issuance of common stock:Issuance of common stock:Issuance of common stock:
Exercise of stock optionsExercise of stock options890  —  (4) —  —  (4) Exercise of stock options144,632— 1,434 — — 1,434 
Fully vested sharesFully vested shares1,031— — — — — 
Share-based compensationShare-based compensation—  —  722  —  —  722  Share-based compensation— 896 — — 896 
Adjustment from foreign currency translation, netAdjustment from foreign currency translation, net—  —  —  —  (144) (144) Adjustment from foreign currency translation, net— — — (4)(4)
Balance, March 31, 202038,035,279  $ $55,412  $6,864  $(51) $62,229  
Balance, March 31, 2021Balance, March 31, 202138,362,788$$61,640 $43,937 $(17)$105,564 

Three Months EndedThree Months Ended March 31, 2020
Common StockAdditional
Paid-in Capital
Accumulated
Deficit
Accumulated Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity
Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesAmountSharesTotal
Stockholders’
Equity
Balance, December 31, 201836,182,783  $ $61,889  $(17,418) $(2) $44,473  
Adoption of revenue recognition accounting pronouncement—  —  —  (1,015) —  (1,015) 
Balance, December 31, 2019Balance, December 31, 201938,034,389$$54,694 $1,176 $93 $55,967 
Net incomeNet income—  —  —  3,156  —  3,156  Net income— — 5,688 — 5,688 
Issuance of common stock:Issuance of common stock:
Exercise of stock optionsExercise of stock options890— (4)— — (4)
Share-based compensationShare-based compensation—  —  626  —  —  626  Share-based compensation— 722 — — 722 
Adjustment from foreign currency translation, netAdjustment from foreign currency translation, net—  —  —  —    Adjustment from foreign currency translation, net— — — (144)(144)
Balance, March 31, 201936,182,783  $ $62,515  $(15,277) $ $47,248  
Balance, March 31, 2020Balance, March 31, 202038,035,279$$55,412 $6,864 $(51)$62,229 



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Three Months Ended March 31,Three Months Ended March 31,
2020201920212020
Cash flows from operating activities:Cash flows from operating activities:Cash flows from operating activities:
Net incomeNet income$5,688  $3,156  Net income$8,977 $5,688 
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash (used in) provided by operating activities:Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortizationDepreciation and amortization2,690  3,152  Depreciation and amortization2,335 2,690 
Share-based compensationShare-based compensation722  626  Share-based compensation896 722 
Provision for bad debts737  360  
Provision for credit lossesProvision for credit losses162 737 
Debt origination costs amortizationDebt origination costs amortization188  175  Debt origination costs amortization200 188 
Deferred income tax provision (benefit), net382  (213) 
Deferred income tax (benefit) provision, netDeferred income tax (benefit) provision, net(144)382 
Loss on disposal of property and equipmentLoss on disposal of property and equipment57  51  Loss on disposal of property and equipment65 57 
Total adjustmentsTotal adjustments4,776  4,151  Total adjustments3,514 4,776 
Changes in operating assets and liabilities:Changes in operating assets and liabilities:Changes in operating assets and liabilities:
Accounts receivableAccounts receivable744  (51,223) Accounts receivable(11,938)744 
Prepaid wires9,271  19,494  
Prepaid wires, netPrepaid wires, net(36,163)9,271 
Prepaid expenses and other assetsPrepaid expenses and other assets1,240  769  Prepaid expenses and other assets(59)1,240 
Wire transfers and money orders payables758  50,505  
Accounts payable and accrued other liabilities(3,697) 2,363  
Net cash provided by operating activities18,780  29,215  
Wire transfers and money orders payable, netWire transfers and money orders payable, net548 758 
Accounts payable and accrued and other liabilitiesAccounts payable and accrued and other liabilities2,715 (3,697)
Net cash (used in) provided by operating activitiesNet cash (used in) provided by operating activities(32,406)18,780 
Cash flows from investing activities:Cash flows from investing activities:Cash flows from investing activities:
Purchases of property and equipmentPurchases of property and equipment(901) (1,193) Purchases of property and equipment(1,930)(901)
Acquisition of agent locations—  (250) 
Net cash used in investing activitiesNet cash used in investing activities(901) (1,443) Net cash used in investing activities(1,930)(901)
Cash flows from financing activities:Cash flows from financing activities:Cash flows from financing activities:
Repayments under revolving loan, net—  (15,000) 
Repayments of term loan(1,915) (1,125) 
Net cash used in financing activities(1,915) (16,125) 
Repayments of term loan facilityRepayments of term loan facility(1,915)(1,915)
Borrowings under revolving credit facility, netBorrowings under revolving credit facility, net15,000 
Proceeds from exercise of optionsProceeds from exercise of options1,434 
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities14,519 (1,915)
Effect of exchange rate changes on cashEffect of exchange rate changes on cash(243) 63  Effect of exchange rate changes on cash(3)(243)
Net increase in cash15,721  11,710  
Net (decrease) increase in cashNet (decrease) increase in cash(19,820)15,721 
Cash, beginning of the period86,117  73,029  
Cash, beginning of periodCash, beginning of period74,907 86,117 
Cash, end of the period$101,838  $84,739  
Cash, end of periodCash, end of period$55,087 $101,838 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands, unaudited)
Three Months Ended March 31,Three Months Ended March 31,
2020201920212020
Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:
Cash paid for interestCash paid for interest$1,685  $2,895  Cash paid for interest$1,138 $1,685 
Cash paid for income taxesCash paid for income taxes$832  $—  Cash paid for income taxes$75 $832 
Supplemental disclosure of non-cash financing activity:Supplemental disclosure of non-cash financing activity:Supplemental disclosure of non-cash financing activity:
Issuance of common stock for cashless exercise of optionsIssuance of common stock for cashless exercise of options$ $—  Issuance of common stock for cashless exercise of options$$

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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INTERNATIONAL MONEY EXPRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 – BUSINESS AND ACCOUNTING POLICIES
International Money Express, Inc. (the “Company” or “us” or “we”) operates as a money transmitter primarily between the United States of America (“U.S.United States” or “U.S.”) and Canada to Mexico, Guatemala and other countries in Latin America, Africa and AfricaAsia through a network of authorized agents located in various unaffiliated retail establishments and 34 Company-operated stores throughout the United States and Canada.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The pandemic has had and continues to have a significant effect on economic conditions in the United States of America, as the efforts of federal, state, local and foreign governments to react to the public health crisis with mitigation measures have created and continue to cause significant uncertainties in the U.S. and 33 company-operated stores.global economy. The extent to which the COVID-19 pandemic affects our business, operations and financial results depends, and will continue to depend, on numerous evolving factors that we may not be able to accurately predict. Although the Company’s operations continued effectively despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our financial condition, results of operations and cash flows is dependent on future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our customers, which remain uncertain and cannot be predicted at this time. If the global response to contain the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, the Company could experience a material adverse effect on its financial condition, results of operations and cash flows.

The condensed consolidated financial statements of the Company include Intermex Holdings, Inc., its wholly-owned indirect subsidiary, Intermex Wire Transfer, LLC (“LLC”), Intermex Wire Transfers de Guatemala, S.A. (“Intermex Guatemala”) - 99.8%100% 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 accounting principles generally accepted in the United States of America (“GAAP”). All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements.

The Company’s interim condensed consolidated financial statements and related notes are unaudited. In the opinion of management, all adjustments (including normal recurring adjustments) and disclosures necessary for a fair presentation of these interim financial statements have been included. The results reported in these interim financial statements are not necessarily indicative of the results that may be reported for the entire 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 consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Risks and Uncertainties
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of the outbreak of a new strain of coronavirus (“COVID-19”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally and national, state and local governments in the jurisdictions where we operate and serve our customers imposed emergency restrictions to mitigate the spread of the virus.
Although governmental authorities took measures that may restrict the normal course of business of the Company, sending and paying agents as well as consumers and their beneficiaries, which may have a material adverse effect on the operations and financial condition of the Company, these changes had only a limited effect on the Company’s financial condition, results of operations and cash flows for the quarterly period ended March 31, 2020.
The Company and our sending agents are considered essential businesses under current federal guidance; however, the Company’s business is dependent upon the willingness and ability of its employees, network of agents and consumers to conduct money transfer services and the ultimate effects of the economic disruption caused by the pandemic and responses thereto. Although the Company’s operations continued effectively despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our customers, which are uncertain and cannot be predicted at this time. If the global response to contain the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows.
Accounting Pronouncements

The Financial Accounting Standards Board (“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 guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

The FASB issued amended guidance, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amended standard requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement if those costs would be capitalized by the customers in a software licensing arrangement. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

The FASB issued guidance, Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

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The FASB issued guidance, Leases (Topic 842), 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 GAAP. The guidance requires that a lessee recognizes 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 currently required to be adopted by the Company on January 1, 2021 and may be applied2022 using either the earliest period adjustment method or the modified
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retrospective approach. The adoption ofCompany is currently evaluating the impact this guidance is not expected towill have a material impact on the condensed 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 on January 1, 2021. The adoption of this guidance is not expected to have a material impact on the condensed 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 currently required to adopt the new standardguidance on January 1, 2023. The Company is currently evaluating the impact this guidance will have on the condensed consolidated financial statements.

The FASB issued guidance, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This accounting standards update provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This new guidance may be adopted by the Company no later than December 1, 2022, with early adoption permitted. The potential adoption of this guidance is not expected to have a material impact on the condensed consolidated financial statements.

NOTE 2 – REVENUES
The Company recognized revenues from contracts with customers for the three months ended March 31, 2021 and 2020, and 2019, the followingas follows (in thousands):
Three Months Ended
March 31,
20202019
Wire transfer and money order fees$67,316  $58,658  
Discounts and promotions(221) (207) 
Wire transfer and money order fees, net67,095  58,451  
Foreign exchange gain, net9,554  9,402  
Other income602  496  
Total revenues$77,251  $68,349  

Three Months Ended March 31,
20212020
Wire transfer and money order fees$81,216 $67,316 
Discounts and promotions(304)(221)
Wire transfer and money order fees, net80,912 67,095 
Foreign exchange gain, net13,049 9,554 
Other income616 602 
Total revenues$94,577 $77,251 

There are no significant initial costs incurred to obtain contracts with customers. However,customers, although the Company has a loyalty program under which customers earn 1 point for each wire transfer completed. Points can be redeemed for a discounted wire transaction fee or a foreign exchange rate.rate that is more favorable to the customer. The discountscustomer benefits vary by country, and the earned points expire if the customer has not initiated and completed an eligible wire transfer transaction within the immediately preceding 180 day180-day period. In addition, earned points will expire 30 days after the end of the program. Therefore, becauseBecause the loyalty program benefits represent a future performance obligation, a portion of the initial consideration is recorded as deferred revenue loyalty program (see Note 6)7) and a corresponding loyalty program expense is recorded as contra revenue. Revenue from this performance obligation is recognized upon customers redeeming points or upon expiration of any points outstanding.

Except for the loyalty program discussed above, our revenues include only 1 performance obligation, which is to collect the consumer’scustomer’s money and make funds available for payment, generally on the same day, to a designated recipient in the currency requested.

The Company also offers several other services, including money orders and check cashing, for which revenue is derived from a fee per transaction. For substantially all of the Company’s revenues, the Company acts as principal in the transactions and reports revenue on a gross basis, because 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.

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NOTE 3 – ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE, NET OF ALLOWANCE
Accounts Receivable

Accounts receivable represents outstanding balances from sending agents for pending wire transfers or money orders from our customers. The outstanding balance, net of allowance for credit losses, consists of the following (in thousands):

March 31, 2021December 31, 2020
Accounts receivable$68,369 $56,520 
Allowance for credit losses(1,580)(1,503)
Accounts receivable, net$66,789 $55,017 

Notes Receivable

The Company had notes receivable, net of allowance for credit losses, from sending agents as follows (in thousands):

March 31, 2021December 31, 2020
Notes receivable, current$570 $710 
Allowance for credit losses(204)(244)
Net current$366 $466 
Notes receivable, long-term$763 $816 
Allowance for credit losses(274)(295)
Net long-term$489 $521 

The net current portion is included in prepaid expenses and other current assets (see Note 4), and the net long-term portion is included in other assets in the condensed consolidated balance sheets. The notes have interest rates ranging from 0% to 16% per annum. At March 31, 2021 and December 31, 2020, there were $1.3 million and $1.5 million, respectively, of notes collateralized by personal guarantees from the sending agents and assets from their businesses in case of a default by the agent.

The maturities of notes receivable at March 31, 2021 are as follows (in thousands):
Unpaid Principle
Balance
Under 1 year$570 
Between 1 and 2 years516 
Between 2 and 3 years247 
Total$1,333 

Allowance for Credit Losses

The changes in the allowance for credit losses related to accounts receivable and notes receivable are as follows (in thousands):

Three Months Ended March 31,
20212020
Beginning balance$2,042 $1,236 
Provision162 737 
Charge-offs(265)(629)
Recoveries119 133 
Ending Balance$2,058 $1,477 


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The allowance for credit losses allocated by financial instrument category is as follows (in thousands):

March 31, 2021December 31, 2020
Accounts receivable$1,580 $1,503 
Notes receivable478 539 
Allowance for credit losses$2,058 $2,042 

NOTE 34 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following (in thousands):
March 31, 2020December 31, 2019
Prepaid insurance$347  $404  
Prepaid fees1,006  1,211  
Notes receivable792  648  
Prepaid taxes—  1,025  
Other prepaid expenses and current assets763  867  
$2,908  $4,155  

March 31, 2021December 31, 2020
Prepaid insurance$365 $465 
Prepaid fees and services1,644 1,452 
Notes receivable, net of allowance366 466 
Assets pending settlement208 218 
Prepaid income taxes103 
Prepaid expenses and current assets - other1,005 817 
$3,588 $3,521 

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NOTE 45 – GOODWILL AND INTANGIBLE ASSETS
Intangible assets on the condensed consolidated balance sheets of the Company consist of goodwill, 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. The agent relationships intangible represents the network of independent sending agents; trade name refers to the Intermex name, branded on all agent locations and well recognized in the market; and developed technology includes the state-of-the-art system that the Company has continued to develop and improve upon over the past 20 years. Other intangible assets primarily relate to the acquisition of certain agent locations or company-operatedCompany-operated stores, which are amortized on a straight line basis over 10 years. The determination of our 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. See below for further discussion on impairment.uncertainties, and no impairment charges were determined necessary to be recognized during the three months ended March 31, 2021.

The following table presents the changes in goodwill and intangible assets (in thousands):
GoodwillIntangibles
Balance at December 31, 2019$36,260  $27,381  
Amortization expense—  (1,739) 
Balance at March 31, 2020$36,260  $25,642  

Due
GoodwillIntangibles
Balance at December 31, 2020$36,260 $20,430 
Amortization expense(1,290)
Balance at March 31, 2021$36,260 $19,140 

Amortization expense related to the COVID-19 pandemic that has resulted in a deterioration in macro-economic conditions and stock market volatility, the Company performed a qualitative assessment on goodwill to determine whether a quantitative test was necessary. Although our fair value measurements include some significant inputs, such as the Company’s forecasted revenues and assumed turnover of agent locations, that may have or will be affected by the pandemic, we believe that as of March 31, 2020, the effects of the pandemic have not had a negative impact on the Company’s financial condition, results of operations and cash flows. As a result, there are currently no indicators that the fair value of the Company’s goodwill is below its carrying amount based on our qualitative assessment. Therefore, at March 31, 2020, we determined that a quantitative test was not necessary.
For our finite-lived intangibles, we also assessed whether there were events or changes in circumstances that indicated that the carrying amounts of our intangible assets may not be recoverable. Similar to our goodwill assessment above, we believe thatfor the next five years and thereafter is as of March 31, 2020, the effects of the COVID-19 pandemic have not had a negative impact on the company’s financial condition, results of operations and cash flows. As a result, there are currently no indicators that could require an impairment test. Therefore, the carrying amounts of our intangibles are recoverable at this time.follows (in thousands):
We will continue to monitor this evolving pandemic to determine the need, if any, to further evaluate for impairment our goodwill and intangible assets.
2021$3,871 
20223,997 
20232,989 
20242,270 
20251,717 
Thereafter4,296 
$19,140 

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NOTE 56 – WIRE TRANSFERS AND MONEY ORDERS PAYABLE, NET
Wire transfers and money orders payable, net consisted of the following (in thousands):
March 31, 2020December 31, 2019
Wire transfers payable$13,719  $16,058  
Customer voided wires payable12,542  10,937  
Money orders payable13,617  13,202  
$39,878  $40,197  

March 31, 2021December 31, 2020
Wire transfers payable, net$9,473 $11,806 
Customer voided wires payable13,711 13,374 
Money orders payable18,783 16,566 
$41,967 $41,746 

Customer voided wires payable consist of wire transfers that were not completed because the recipient did not collect the funds within 30 days and the sender has not claimed the funds and, therefore, are considered unclaimed property. Unclaimed property laws of each state in the United States in which we operate, the District of Columbia, and Puerto Rico require us to track certain information for all of our money remittances and payment instruments and, if the funds underlying such remittances and instruments are unclaimed at the end of an applicable statutory abandonment period, require us to remit the proceeds of the unclaimed property to the appropriate jurisdiction. Applicable statutory abandonment periods range from three to seven years.
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NOTE 67 – ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities consisted of the following (in thousands):
March 31, 2020December 31, 2019
Commissions payable to sending agents$10,632  $10,124  
Accrued legal settlement (see Note 12)2,925  3,250  
Accrued salaries and benefits1,616  2,374  
Accrued bank charges1,168  976  
Accrued interest15  17  
Accrued legal fees—  120  
Accrued other professional fees540  655  
Accrued taxes2,102  2,345  
Deferred revenue loyalty program2,491  2,495  
Other718  718  
$22,207  $23,074  

March 31, 2021December 31, 2020
Commissions payable to sending agents$13,295 $12,500 
Accrued salaries and benefits2,745 2,957 
Accrued bank charges1,562 1,170 
Accrued legal fees75 
Accrued other professional fees711 826 
Accrued taxes4,408 1,276 
Deferred revenue loyalty program2,819 2,750 
Other1,142 826 
$26,682 $22,380 

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

Balance, December 31, 20192020$2,4952,750 
Revenue deferred during the period438454 
Revenue recognized during the period(442)(385)
Balance, March 31, 20202021$2,4912,819 

NOTE 78 – DEBT
Debt consisted of the following (in thousands):
March 31, 2020December 31, 2019
Term loan$95,129  $97,044  
Less: Current portion of long-term debt (1)
(7,044) (7,044) 
Less: Debt origination costs(2,223) (2,377) 
$85,862  $87,623  

March 31, 2021December 31, 2020
Revolving credit facility$15,000 $
Term loan facility87,468 89,383 
102,468 89,383 
Less: Current portion of long-term debt (1)
(7,682)(7,044)
Less: Debt origination costs(1,607)(1,760)
$93,179 $80,579 
(1)Current portion of long-term debt is net of debt origination costs of approximately $0.6 million both at March 31, 20202021 and December 31, 2019.2020.

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The Company and certain of its domestic subsidiaries as borrowers (the “Loan Parties”) haveentered into a financing agreement (as amended, the “Credit Agreement”) with 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 of which $12 million was utilized in the second quarter of 2019. The Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The maturity date of the Credit Agreement is November 7, 2023. As of March 31, 2020 and December 31, 2019, there were 0 outstanding amounts drawn on the revolving credit facility.

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 for the periodthree months ended March 31, 20202021 for the term loan facility and revolving credit facility were 6.80%5.32% and 2.27%0.96%, respectively.

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

The Credit Agreement contains financial covenants that 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.

The Credit Agreement also 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.
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TheIn addition, the Credit Agreement also contains financial covenants that requireestablishes certain restrictions on payment of dividends or cash distributions other than for certain purposes, including the following: i) to pay cash dividends to the Company in an amount necessary to maintaincover reasonable and customary corporate and operating expenses, ii) to purchase, redeem or otherwise acquire warrants, right or options on the Company’s common stock of an aggregate amount of up to $10 million plus the Available Amount (as defined in the Credit Agreement), iii) to repurchase the Company’s common stock from current or former employees in an aggregate amount of up to $5 million per calendar year, and iv) other restricted payments in an aggregate amount not to exceed $5 million plus the Available Amount.

As a quarterly minimum fixed charge coverage ratioresult of 1.25:1.00the restrictions described above, among others, substantially all of the Company’s subsidiaries’ net assets as of March 31, 2021 and a quarterly maximum consolidated leverage ratio of 3.25:1.00.December 31, 2020 are considered restricted net assets.

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

NOTE 89 – 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.value and for disclosure purposes. Level 1 relates to quoted market prices for identical assets or liabilities.liabilities in active markets. 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 goodwill and intangibles assets. The determination of our intangible fair values includes several assumptions and inputs (Level 3) that are subject to various risks and uncertainties. Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties. All other financial assets (see Note 4 for further discussion). and liabilities are carried at amortized cost.

The Company’s cash isbalances are representative of their fair valuevalues as these balances are comprised of deposits available on demand. AccountsThe carrying amounts of 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.

The Company’s financial instruments that are not measured at fair value on a recurring basisliabilities include its 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.

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NOTE 910 – SHARE-BASED COMPENSATION
The Company's 2018International Money Express, Inc. Omnibus Equity Compensation Plans

On June 26, 2020, at the 2020 Annual Meeting of Stockholders, the Company’s stockholders approved the International Money Express, Inc. 2020 Omnibus Equity Compensation Plan (the “2018“2020 Plan”), which provides for the granting of stock-based incentive awards, including stock options, and restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and performance stock units (“PSUs”) to employees and independent directors of the Company. There are 3.4 million shares of the Company’s common stock available for issuance under the 2020 Plan, including 0.4 million shares that were available for grant under the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan” and together with the 2020 Plan, the “Plans”). As of March 31, 2020, there were 3.32021, 2.9 million shares reservedremained available for issuancefuture awards under the 2020 Plan. The 2018 Plan.Plan was terminated effective June 26, 2020.

Stock Options

The value of each option grant is estimated on the grant date using the Black-Scholes option pricing model (“BSM”). The option pricing model requires the input of highly subjective assumptions, including the grant date fair value of our common stock, expected volatility, risk-free interest rates, expected term and expected dividend yield. 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 volatility of the Company'sCompany’s common stock and the “simplified” method for calculating the expected life of our stock options as the options are “plain vanilla” and we do not have any significant historical post-vesting activity. 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 PlanPlans have 10-year terms and vest in 4 equal annual installments beginning one year after the date of the grant. During the three months ended March 31, 2020, 11.3 thousand of stock options vested. NaN stock options vested during the three months ended March 31, 2019. The Company recognized compensation expense for stock options of approximately $0.6 million for both the three months ended March 31, 20202021 and 2019,2020, which is included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. As of March 31, 2020,2021, there were 3.02.5 million outstanding stock options and unrecognized compensation expense of $6.9$5.2 million is expected to be recognized over a weighted-average period of 2.61.7 years.
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A summary of the stock option activity under the Plans during the three months ended March 31, 20202021 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, 20192,905,219  $10.51  8.74$3.58  
Granted160,000  $9.51  $3.34  
Exercised(11,250) $9.91  $3.43  
Forfeited(54,875) $12.80  $4.19  
Outstanding at March 31, 20202,999,094  $10.42  8.55$3.56  
Exercisable at March 31, 2020628,055  $9.97  8.35$3.45  

Number of
Options
Weighted-Average
Exercise Price
Weighted-Average
Remaining Contractual
Term (Years)
Weighted-Average
Grant Date
Fair Value
Outstanding at December 31, 20202,714,902 $10.97 8.19$4.03 
Granted$$
Exercised(144,632)$9.91 $3.55 
Forfeited(44,500)$10.08 $4.48 
Outstanding at March 31, 20212,525,770 $11.05 7.79$4.11 
Exercisable at March 31, 20211,005,569 $10.19 7.41$3.56 

Restricted Stock Units and Share Awards

The RSUs issuedgranted under the 2018 PlanPlans to the Company’s employees generally vest in 4 equal annual installments beginning one year after the date of the grant, while RSUs issued to the Company’s independent directors vest on the one-year year anniversary from the grant date. The Company recognized compensation expense for restricted stock unitsRSUs of $96.2 thousandapproximately $0.2 million and $52.5 thousand$0.1 million for the three months ended March 31, 20202021 and 2019,2020, respectively, which is included in salaries and benefits in the condensed consolidated statements of operations
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and comprehensive income. There were no granted, forfeited or vested RSUsAs of March 31, 2021, unrecognized compensation expense of approximately $2.3 million is expected to be recognized over a weighted-average period of 2.3 years.

A summary of the RSU activity during the three months ended March 31, 2021 is presented below:

Number of RSUsWeighted-Average
Grant Price
Nonvested at December 31, 202040,881 $13.38 
Granted158,705 $14.17 
Forfeited(7,500)$14.49 
Nonvested at March 31, 2021192,086 $13.99 

Under the 2020 Plan, effective October 1, 2020, the Lead Independent Director and 2019.Chairs of the Committees of the Board of Directors are granted, in aggregate, $64.0 thousand in awards of fully vested shares of the Company’s common stock, payable on a quarterly basis at the end of each quarter in payment of fees earned in such capacities. During the three months ended March 31, 2021, 1,031 fully vested shares were granted to the Lead Independent Director and Chairs of the Committees of the Board of Directors.

Restricted Stock Awards

The RSAs issued under the Plans to the Company’s employees vest in 4 equal annual installments beginning one year after the date of grant. The Company recognized compensation expense for RSAs granted of $23.1 thousand for the three months ended March 31, 2021, which is included in salaries and benefits in the condensed consolidated statement of operations and comprehensive income. NaN compensation expense was recognized for the three months ended March 31, 2020. As of March 31, 2020,2021, there was $113.8 thousand$1.2 million of unrecognized compensation expense for the restrictedRSAs, which is expected to be recognized over a weighted-average period of 2.5 years.

A summary of the RSA activity during the three months ended March 31, 2021 is presented below:

Number of RSAsWeighted-Average
Grant Price
Nonvested at December 31, 2020$
Granted88,215 $14.17 
Vested$
Forfeited$
Nonvested at March 31, 202188,215 $14.17 

Performance Stock Units

PSUs granted to the Company’s employees vest subject to attainment of performance criteria during the service period established by the Compensation Committee. Each PSU represents the right to receive one share of common stock, units.and the actual number of shares issuable upon vesting is determined based upon performance compared to financial performance targets. The PSUs vest based on the achievement of certain revenue parameters for a period of two years combined with a service period of three years. Compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied. The Company recognized compensation expense for PSUs of $63.6 thousand for the three months ended March 31, 2021, which is included in salaries and benefits in the condensed consolidated statement of operations and comprehensive income. There was 0 compensation expense recognized for the
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three months ended March 31, 2020. As of March 31, 2021, there was $2.4 million of unrecognized compensation expense for the PSUs, which is expected to be recognized over a weighted-average period of 2.8 years.

A summary of the PSU activity during the three months ended March 31, 2021 is presented below:

Number of PSUsWeighted-Average
Remaining Contractual
Term (Years)
Weighted-Average
Grant Price
Nonvested at December 31, 2020— $
Granted171,500 $14.17 
Vested$
Forfeited$
Nonvested at March 31, 2021171,500 9.92$14.17 

NOTE 1011 – EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income for the periodyear by the weighted average number of common shares outstanding for the period. In computing dilutive earnings per share, basic earnings per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards, including common stock options, RSUs, RSAs and RSUs.PSUs.

Below are basic and diluted earnings per share for the periods indicated (in thousands, except for share data):
Three Months Ended
March 31,
20202019
Net income for basic and diluted earnings per common share$5,688  $3,156  
Shares:
Weighted-average common shares outstanding – basic38,035,014  36,182,783  
Effect of dilutive securities:
RSUs3,477  12,680  
Stock options183  —  
Weighted-average common shares outstanding – diluted38,038,674  36,195,463  
Earnings per common share – basic and diluted$0.15  $0.09  

Three Months Ended
March 31,
20212020
Net income for basic and diluted earnings per common share$8,977 $5,688 
Shares:
Weighted-average common shares outstanding – basic38,239,130 38,035,014 
Effect of dilutive securities:
RSUs26,242 3,477 
Stock options573,770 183 
RSAs2,574 
PSUs5,190 
Weighted-average common shares outstanding – diluted38,846,906 38,038,674 
Earnings per common share – basic and diluted$0.23 $0.15 

As of March 31, 2021 and 2020, there were 0.6 million and 3.0 million options, respectively, excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.
As of March 31, 2019, there were 2.8 million options and 9.0 million warrants underlying shares of Company stock excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive. In April 2019, the Company executed a tender offer for all warrants, subsequent to which all warrants ceased to exist.
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NOTE 1112 – INCOME TAXES
A reconciliation between the income tax provision at the USU.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
March 31,
20202019
Income before income taxes$7,768  $4,237  
US statutory tax rate21 %21 %
Income tax expense at statutory rate1,631  890  
State tax expense, net of federal400  250  
Foreign tax rates different from U.S. statutory rate32   
Non-deductible expenses11   
Other (72) 
Total tax provision$2,080  $1,081  

Three Months Ended
March 31,
20212020
Income before income taxes$12,151 $7,768 
U.S statutory tax rate21 %21 %
Income tax expense at statutory rate2,552 1,631 
State tax expense, net of federal678 400 
Foreign tax rates different from U.S. statutory rate17 32 
Non-deductible expenses62 11 
Other(135)
Total tax provision$3,174 $2,080 

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 impactedaffected by state taxes, non-deductible expenses, share-based compensation expenses and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate.
In January 2020, Intermex Holdings II, Inc., the Company's parent company prior to the 2018 merger, was notified by the IRS that its 2017 federal income tax return was selected for examination. The Company has complied with all information requested to date. As of March 31, 2020 and December 31, 2019, 0 amounts for tax, interest, or penalties have been paid or accrued as a result of this examination.
On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CaresCARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effects of COVID-19. The CARES Act provides various tax law changes in response to the COVID-19 pandemic, including increasing the ability to deduct interest expense, providing for deferral on tax deposits, and amending certain provisions of the previously enacted Tax Cuts and Jobs Act. After considering the provisions of the CARES Act, the Company does not expectdetermined that the CARES Act willdid not have a material effect on its annual effective tax rate and the income tax provision for the year ending Decemberthree months ended on March 31, 2020.2021.

NOTE 1213 – COMMITMENTS AND CONTINGENCIES
Leases

The Company is a party to leases for office space, warehouses and company-operatedCompany-operated store locations. 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 approximately $0.6 million and $0.5 million for boththe three month periodsmonths ended March 31, 2021 and 2020, and 2019.respectively.

At March 31, 2020,2021, future minimum rental payments required under operating leases for the remainder of 20202021 and thereafter are as follows (in thousands):
2020$1,149  
20211,316  
20221,096  
2023882  
2024776  
Thereafter662  
$5,881  

2021$1,162 
20221,278 
2023970 
2024814 
2025697 
Thereafter
$4,921 
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Contingencies and Legal Proceedings

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 and the stage of the proceedings, that it is not possible to determine the probability of loss or estimate of damages, and therefore, the Company has not established a reserve for any of these proceedings, except for the matter related to a complaint filed under the Telephone Consumer Protection Act of 1991 (the “TCPA claim”) described below.proceedings.
On May 30, 2019, Stuart Sawyer filed a putative class action complaint in the United States District Court for the Southern District of Florida asserting a claim under the TCPA, 47 U.S.C. § 227, et seq., based on allegations that since May 30, 2015, the Company had sent text messages to class members’ wireless telephones without their consent. Following a mediation held on October 7, 2019, the Company and the plaintiff entered into a term sheet providing the general terms for the settlement of the action, which was memorialized in a definitive Settlement Agreement on March 16, 2020 subject to subsequent Court approval. The Settlement Agreement provides for resolution of Mr. Sawyer's TCPA claims and the claims of a class of similarly situated individuals, as defined in the complaint, who received text messages from the Company during the period May 30, 2015 through October 7, 2019, and for the creation of a $3.25 million settlement fund that will be used to pay all class member claims, class counsel's fees and the costs of administering the settlement.
The Settlement Agreement also established procedures for the notification of claimants and the processing of claims. The settlement fund will be managed by a duly-appointed settlement administrator which will be authorized to communicate with class members, process claims and make payments from the fund in accordance with the terms of the Settlement Agreement and the final judgment in the case. No amount of the settlement fund will revert to the Company; instead, any unclaimed funds will be sent to a consumer advocacy organization approved by the Court.
The remaining balance of the amount payable under the Settlement Agreement of approximately $2.9 million is included in accrued and other liabilities in the condensed consolidated balance sheet as of March 31, 2020.
The Company operates in all U.S.50 states in the United States, 2 U.S. territories and 3 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 examinations will not have a material adverse effect on either the results of operations or financial condition of the Company.

Regulatory Requirements

Pursuant to applicable licensing laws, certain domestic subsidiaries of the Company are required to maintain minimum tangible net worth and liquid assets (eligible securities) to cover the amount outstanding of wire transfers and money orders payable. As of March 31, 2020,2021, the Company’s subsidiaries were in compliance with these two requirements.
NOTE 13 – SUBSEQUENT EVENTS
The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date the condensed consolidated financial statements are issued. Except for the matter discussed below, there were no other subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.
On April 20, 2020, the Company received funds under the Paycheck Protection Program (the “Program”) in the amount of $3.5 million. Although the Company believes that it met all eligibility criteria for a loan under the Program at the time of its application, subsequent to receiving the funds, the Small Business Administration (“SBA”), in consultation with the Department of the Treasury (“Treasury”), provided additional guidance to address public, borrower and lender questions concerning the eligibility criteria under the Program. Based on this subsequent guidance provided by the SBA and Treasury, the Company returned the funds received under the Program on April 29, 2020.
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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations ("(“MD&A"&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, as well as 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, 2019.2020. This Quarterly Report on Form 10-Q 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, including risks related to the COVID-19 pandemic described in Pt. II, Item 1A, “Risk Factors” belowFactors,” which isare incorporated in the MD&A by reference. See “Special Note Regarding Forward-Looking Statements” for additional factors relating to such statements, and see “Risk Factors” in the documents that we have filed with or furnished to 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.

Recent Developments
COVID-19 Update
During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The pandemic has significantly affectedhad and continues to have a significant effect on economic conditions in the U.S.United States of America (“United States” or “U.S.”), accelerating duringas the first halfefforts of March and continuing into April, as federal, state, local and foreign governments reactedto react to the public health crisis with mitigation measures creatinghave created and continue to cause significant uncertainties in the U.S. and global economy. The extent to which the coronavirusCOVID-19 pandemic affects our business, operations and financial results depends, and will continue to depend, on numerous evolving factors that we may not be able to accurately predict. Due to heightened uncertainty relatingpredict such as further government and health authorities restrictions and progress in and effectiveness of vaccination efforts in the United States or in the countries in which we operate and conduct business.

In response to the effects of the COVID-19 pandemic, on our business operations, including the duration and impact on overall customer demand, we withdrew our 2020 guidance.
Our top priority has been to take appropriate actions to protect the health and safety of our employees. We have adjusted standard operating procedures within our business operations to ensure continued worker safety, and are continually monitoring evolving health guidelines and responding to changes as appropriate. These procedures include reconfiguring facilities to reduce employee density, expanded and more frequent cleaning within facilities, implementation of appropriate and mandated distancing programs, employee temperature monitoring and requiring use of certain personal protective equipment at our U.S. headquarters and call centers in Mexico and Guatemala. We have also implemented a mandatory work-at-home program for the foreseeable future forAs of March 31, 2021, all of our administrative officesfacilities are open and employees in all countries where we operate. We have also significantly limited the addition of new employees, eliminated all travel, actedoperating with adjustments to limit discretionary spendingensure social distancing and temporarily closed our 33 company-operated stores (which represented only 2.3% of our total revenue in 2019). facial covering requirements established by state and local regulations.

Notwithstanding the operational challenges created by these measures, our business continues to function and, to date, our customer service has not been adversely affected in any material respect. To the extent the business disruption continues for an extended period, additional cost management actions may be considered. Despite these efforts, the COVID-19 pandemic continues to pose the risk that we or our employees, sending and paying agents, as well as consumers and their beneficiaries, are or may be preventedbecome further restricted from conducting business activities, partially or completely, for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities or imposed by our management, or that the pandemic may otherwise interrupt or impair business activities.
These changes had only a limited effect on
Although certain measures that restrict the Company’s financial resultsnormal course of operations of businesses and consumers were still in place for the quarterly periodthree months ended March 31, 2020. We have seen a slight year over year decrease in our volume of transactions since2021, the beginning of the pandemic, which we continue to monitor. The economic effects of the pandemic also caused increased foreign exchange volatility particularly with respect to the Mexican peso, which has created additional operational challenges, although the overall effect on our results of operations has been positive.
The Company and our sending agents are considered essential businesses under current federal guidance. However,governmental guidance and such measures did not have a material adverse effect on the Company’s financial condition, results of operations and cash flows for the three months ended March 31, 2021. Notwithstanding the foregoing, the Company’s business is dependent upon the willingness and ability of its employees, network of agents and consumers to conduct money transfer services and the ultimate effects of the economic disruption caused by the pandemic and responses thereto. Although the Company’s operations continued effectively despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our financial condition, results of operations and cash flows is dependent onsubject to future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our customers, which areremain uncertain and cannot be predicted at this time. If the global response to contain and remedy the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows.

Further quantification and discussion of these pandemic related effects, to the extent relevant and material, are included in the discussion of results of operations below.
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Overview
We are a rapidly growing and leading money remittance services company focused primarily on the United States to Latin America and the Caribbean (“LAC”) corridor, which includes Mexico, Central and South America and the Caribbean. In recent years, we expanded our services to allow remittances to Africa from the United States and also began offering sending services from Canada to Latin America and Africa. 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 all 50 states in the U.S., Washington D.C., Puerto Rico and 13 provinces in Canada, where customers can send money to beneficiaries in 17 LAC countries, fourseven countries in Africa and one countrytwo countries in Asia. Our services are accessible in person through over 100,000 independent sending and paying agents and company-operated34 Company-operated stores, as well as online and via Internet-enabled mobile devices. In 2019, we expanded our services to allow remittances to Africa from the United States and also began offering sending services from Canada to Latin America and Africa. Additionally, we have expanded our product and service portfolio to include online payment options, pre-paid debit cards and direct deposit payroll cards, which may present different cost, demand, regulatory and risk profiles relative to our core remittance business.

Money remittance services to LAC countries, 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 LAC countries 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. OtherWe believe many of our 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 can also earngenerate revenue throughif we are successful in our daily management of currency exchange spreads.

Our money remittance services enable our customers to send and receive funds through our broad network of locations in the United States and Canada that are primarily operated by third-party businesses, as well as 33 company-operated stores (currently closed as noted above).through our Company-operated stores. Transactions are processed and payment is collected by our agent (“sending agent(s)”) and those funds become available for pickup by the beneficiary at the designated destination, usually within minutes, at any Intermex payer location (“paying agent(s)”). We refer to our sending agents and our paying agents collectively as agents. 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 15 additional countries in LAC corridor, four countries in Africa and one in Asia. Since January 20192020 through March 31, 2020,2021, we have grown our sending agent network by more than 10% and increased our remittance transactions volume by approximately 17%13%. InFor the three months ended March 31, 2020, we processed2021, principal amount sent increased by approximately 7.0 million remittances, representing approximately 14% growth in transactions,30% as compared to the same period in 2019.2020 and total remittances processed were approximately 8.4 million, representing a 19% increase as compared to the same period in 2020.

As a non-bank financial institution in the United States, we are regulated by the Department of Treasury, the Internal Revenue Service, FinCEN, the Consumer Financial Protection Bureau, (“CFPB”), the Department of Banking and Finance of the State of Florida and additionally by the various regulatory institutions of those states in which we hold an operating license. We are duly registered as a Money Service Business (“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 laws; money transfer and payment instrument licensing laws; escheatment laws; privacy, data protection and information security laws, such as the Graham-Leach-Bliley Act (“GLBA”);Act; and consumer disclosure and consumer protection laws, such as the California Consumer Privacy Act (“CCPA”).Act.

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, but not limited to:

the COVID-19 pandemic, responses thereto and the economic and market effects thereof, including unemployment levels and increased capital market volatility;

competition in the markets in which we operate;

volatility in foreign exchange rates that could affect the volume of consumer remittance activity and/or affect our foreign exchange related gains and losses;

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;
our ability to maintain banking relationships necessary for us to conduct our business;
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credit risks from our agents and the financial institutions with which we do business;
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bank failures, sustained financial illiquidity, or illiquidity at our clearing, cash management or custodial financial institutions;

new technology or competitors that disrupt the current ecosystem by introducing digital platforms;

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

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

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;

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

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

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

consumer fraud and other risks relating to customer authentication;

weakness in U.S. or international economic conditions;

change or disruptionchanges in international migration patterns;immigration laws and their enforcement;

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

our ability to retain key personnel.

Throughout 20192020 and in the first quarter of 2020,2021, 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, andsome of which reflects the impact of the COVID-19 pandemic, among other factors. Specifically, continued political and economic unrest in parts of Mexico and some countries in South America 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 partyparties for their daily needs. However,needs; however, long-term sustained appreciation of the Mexican peso or Guatemalan quetzal as compared to the U.S. Dollardollar could negatively affect our revenues and profitability.

Money remittance businesses 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 activities, 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 directionresponsibility of our experienced Chief Administrative and Compliance Officer, whose foremost responsibilitywhich is to monitor transactions, detect and report suspicious activity, maintain financialappropriate records and train our employees and agents. An independent third-party consulting firm periodically reviews our policies and procedures and performs independent testing to ensureassess the efficacyeffectiveness of our anti-money laundering and regulatoryBank Secrecy Act compliance program. We also maintain a regulatory affairs and licensing department, under the direction of our Chief Regulatory Affairs Officer, whose responsibility is to manage regulatory affairs and licensing.

The market for money remittance services is very competitive. Our competitors include a small number of large money remittance providers, financial institutions, banks and 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. As a philosophy, we sell credible solutions to our sending agents, not discounts or higher commissions, as
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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.
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We have encountered and continue to expect to encounter increasing competition as new electronic platforms 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 forwhich are experiencing customer adoption.

We qualify as an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), enacted 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 growth companies.” These provisions include:

an exemption from the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act in the assessment of the emerging growth company’s internal control over financial reporting;

an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies; and

an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement tocommunication of Critical Audit Matters (“CAMs”) in the auditor’s report in which the auditor would be required to provide additional information aboutreport. A CAM is defined as any matter arising from the audit andof the financial statements ofthat was communicated or required to be communicated to the issuer.audit committee and that (1) relates to accounts or disclosures that are material to the financial statements; and (2) involves especially challenging, subjective, or complex auditor judgment.

We will remain an “emerging growth company” until the earlier of (1) the earliest of the last day of the fiscal year (a) following January 19, 2022, the fifth anniversary of us becoming a publicly-traded company, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be 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 last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. As of June 30, 2019,2020, the market value of our common stock that is held by non-affiliates approximated $214.8$307.5 million.

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 key indicators of the financial condition and operating performance of our business are revenues, service charges from agents and banks, salaries and benefits, andother selling, general and administrative expenses and net income. To help us assess our performance with these key indicators, we use Adjusted net income, Adjusted earnings 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 Earnings per Share” and “Adjusted EBITDA” sections below for reconciliations of these non-GAAP financial measures to net income and earnings per share, our closest GAAP measure.measures.

Revenues
Transaction volume is the primary generator of revenue in our business. Revenue on transactions is derived primarily from transaction fees paid by customers to transfer money. Revenues per transaction vary based upon send and receive locations and the amount sent. In certain transactions involving different send and receive currencies, we generate foreign exchange gains based on the difference between the set exchange rate charged by us to the sender 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 or sending agents use higher fee methods to remit the funds to us. Service charges also vary based on the method the customer selects to send the transfer and the payer organization that facilitates the 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-operatedCompany-operated stores. Corporate employees include management, customer service, compliance, information
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technology, operations, finance and human resources. Our sales team, located throughout the United States and Canada, is focused on supporting and growing our sending agent network. Share-based compensation is recognized as an expense on a straight-line basis over the requisite service period; unrecognized compensation expense related to options, restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and performance stock units (“PSUs”) of approximately $11.1 million is expected to be recognized over a weighted-average period of 2.1 years.

Other Selling, General and Administrative

General and administrative expenses primarily consist of fixed overhead expenses associated with our operations, such as information technology, telecommunications, rent, insurance, professional services, non-income taxes, facilities maintenance and other similar types of operating expenses. A portion of these expenses relate to our 33 company-operatedCompany-operated stores; however, the majority relate to the overall business and compliance requirements of a regulated publicly traded financial services company. Selling expenses include expenses such as advertising and promotion, provision for bad debtcredit losses and expenses associated with increasing our network of agents. These expenses are expected to continue to increase in line withat a slower pace than our increase in revenues.

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 consists of a term loan facility and a revolving credit facility. The effective interest rates for the three months ended March 31, 20202021 for the term loan and revolving credit facility were 6.80% and 2.27%, respectively. Interest on the term loan facility and revolving credit facility were 5.32% and 0.96%, respectively. Interest on the term loan and revolving credit facilities 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. After consideration of all evidence, both positive and negative, management has determined that no valuation allowance is required at March 31, 20202021 on the Company'sCompany’s U.S. federal or state deferred tax assets. However,assets; however, a valuation allowance of $73.3 thousand$0.2 million as of March 31, 20202021 has been recorded on deferred tax assets associated with Canadian net operating loss carryforwards. Our income tax provision has been impacted byreflects the effects of state taxes, non-deductible expenses, share-based compensation expenses, and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate.

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

Earnings per Share
Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding for each period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares and common share equivalents outstanding for each period. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock units, restricted stock and performance stock units have vested, using the treasury stock method.

Segments
Our business is organized around one reportable segment that provides money transmittal services primarily between the United States and Canada to Mexico, Guatemala and other countries in Latin America.America, Africa and Asia through a network of authorized agents located in various unaffiliated retail establishments and 34 Company-operated stores throughout the United States and Canada. 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.

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Results of Operations
The following table summarizes key components of our results of operations for the periods indicated:
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Three Months Ended
March 31,
Three Months Ended March 31,
(in thousands)20202019
(in thousands, except for share data)(in thousands, except for share data)20212020
Revenues:Revenues:Revenues:
Wire transfer and money order fees, netWire transfer and money order fees, net$67,095  $58,451  Wire transfer and money order fees, net$80,912 $67,095 
Foreign exchange gain, netForeign exchange gain, net9,554  9,402  Foreign exchange gain, net13,049 9,554 
Other incomeOther income602  496  Other income616 602 
Total revenuesTotal revenues77,251  68,349  Total revenues94,577 77,251 
Operating expenses:Operating expenses:Operating expenses:
Service charges from agents and banksService charges from agents and banks52,227  45,569  Service charges from agents and banks63,372 52,227 
Salaries and benefitsSalaries and benefits7,359  7,597  Salaries and benefits9,875 7,359 
Other selling, general and administrative expensesOther selling, general and administrative expenses5,337  5,723  Other selling, general and administrative expenses5,505 5,337 
Depreciation and amortizationDepreciation and amortization2,690  3,152  Depreciation and amortization2,335 2,690 
Total operating expensesTotal operating expenses67,613  62,041  Total operating expenses81,087 67,613 
Operating incomeOperating income9,638  6,308  Operating income13,490 9,638 
Interest expenseInterest expense1,870  2,071  Interest expense1,339 1,870 
Income before income taxesIncome before income taxes7,768  4,237  Income before income taxes12,151 7,768 
Income tax provisionIncome tax provision2,080  1,081  Income tax provision3,174 2,080 
Net incomeNet income$5,688  $3,156  Net income$8,977 $5,688 
Earnings per common share:Earnings per common share:
Basic and dilutedBasic and diluted$0.23 $0.15 

Three Months Ended March 31, 20202021 Compared to Three Months Ended March 31, 20192020
Revenues
Revenues for the above periods are presented below:
($ in thousands)Three Months
Ended March 31,
2020
%
of
Revenues
Three Months
Ended March 31,
2019
%
of
Revenues
Revenues:
Wire transfer and money order fees, net$67,095  87 %$58,451  85 %
Foreign exchange gain, net9,554  12 %9,402  14 %
Other income602  %496  %
Total revenues$77,251  100 %$68,349  100 %

($ in thousands)Three Months Ended March 31, 2021% of
Revenues
Three Months Ended March 31, 2020% of
Revenues
Revenues:
Wire transfer and money order fees, net$80,912 85 %$67,095 87 %
Foreign exchange gain, net13,049 14 %9,554 12 %
Other income616 %602 %
Total revenues$94,577 100 %$77,251 100 %

Wire transfer and money order fees, net of $80.9 million for the three months ended March 31, 2021 increased by $13.8 million from $67.1 million for the three months ended March 31, 2020 increased by $8.6 million from $58.5 million for the three months ended March 31, 2019.2020. This increase of $8.6$13.8 million was primarily due to a 17%19% increase in transaction volume compared to the first quarter of 2019,2020, largely due to the continued growth in our agent network, which has increased by 10%13% from March 20192020 to March 2020.2021.

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Revenues from foreign exchange gain, net of $13.0 million for the three months ended March 31, 2021 increased by $3.4 million from $9.6 million for the three months ended March 31, 2020 increased by $0.2 million from $9.4 million for the three months ended March 31, 2019.2020. This increase was primarily due to higher transaction volume achieved by growth in our agent network and principala higher average amount sent by our customers taking advantage of the devaluation of the Mexican peso, particularly in the month of March 2020. This was offset by higher volume of cancellations in the month of March 2020, potentially as a result of increased foreign exchange volatility resulting fromin the economic effectsMexican peso during the first quarter of the pandemic.2021.
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Operating Expenses
Operating expenses for the above periods are presented below:
($ in thousands)Three Months
Ended March 31,
2020
%
of
Revenues
Three Months
Ended March 31,
2019
%
of
Revenues
Operating expenses:
Service charges from agents and banks$52,227  68 %$45,569  67 %
Salaries and benefits7,359  10 %7,597  11 %
Other selling, general and administrative expenses5,337  %5,723  %
Depreciation and amortization2,690  %3,152  %
Total operating expenses$67,613  88 %$62,041  91 %

($ in thousands)Three Months Ended March 31, 2021% of
Revenues
Three Months Ended March 31, 2020% of
Revenues
Operating expenses:
Service charges from agents and banks$63,372 67 %$52,227 68 %
Salaries and benefits9,875 10 %7,359 10 %
Other selling, general and administrative expenses5,505 %5,337 %
Depreciation and amortization2,335 %2,690 %
Total operating expenses$81,087 86 %$67,613 88 %

Service charges from agents and banks — Service charges from agents and banks were $52.2$63.4 million or 68% of revenues, for the three months ended March 31, 20202021 compared to $45.6$52.2 million or 67% of revenues, for the three months ended March 31, 2019.2020. The increase of $6.6$11.2 million was primarily due to the increase in transaction volume.volume described above.

Salaries and benefits — Salaries and benefits wereof $9.9 million for the three months ended March 31, 2021 increased by $2.5 million from $7.4 million for the three months ended March 31, 2020, a decrease2020. The increase of $0.2 million from $7.6 million for the three months ended March 31, 2019. The decrease of $0.2$2.5 million is primarily due to $0.4$1.6 million decrease in commissionsincreased wages to support the continued growth of our business, a $0.7 million increase in commission expense offset by afor our sales representatives and $0.2 million increase in wages, largelyshare-based compensation as a result of new awards granted in management and other areas to support our growing operations.March 2021.

Other selling, general and administrative expenses — Other selling, general and administrative expenses of $5.5 million for the three months ended March 31, 2021 increased by $0.2 million from $5.3 million for the three months ended March 31, 2020 decreased by $0.42020.

The increase was the result of:

$0.4 million from $5.7 million for the three months ended March 31, 2019. The decrease of $0.4 million is primarily- increase in advertising and promotion expense due to $0.9a change in marketing strategy;
$0.3 million of legal and other professional expenses during the three months ending March 31, 2019 related to fees associated with the Company’s SEC filings, including a tender offer for warrants that did not reoccur in 2020. This decrease was offset by an increase of $0.3 million in- higher rent, property taxes and other operating expensesexpenses; and $0.2
$0.1 million in- higher IT related expenses duringincurred to sustain our business expansion.

These increases were partially offset by:

$0.6 million - reduction in provision for credit losses, as the three months ended March 31, 2020 incurred to sustain our business expansion. In addition, bad debt expense was approximately $0.7 million for the three months ended March 31, 2020 and $0.4 million for the three months ended March 31, 2019 as write-offs were higher in the first quarter of 2020include certain losses resulting from the deterioration of the creditworthiness of a small number of sending agents during the beginning of the quarter rather than the result of sending agents beingthat were adversely affected by the COVID-19 pandemic.

Depreciation and amortization — Depreciation and amortization of $2.3 million for the three months ended March 31, 2021 decreased by $0.4 million from $2.7 million for the three months ended March 31, 2020 decreased by $0.5 million from $3.2 million for the three months ended March 31, 2019.2020. This decrease is mainly due to $0.6$0.5 million less amortization related to our trade name, developed technology and agent relationships during the first quarter of 20202021, as these intangibles are being amortized on an accelerated basis, which declines over time. This decrease was partially offset by an increase in depreciation of $0.1 million associated primarily with additional computer equipment to support our growing business and sending agent network.

Non-Operating Expenses
Interest expense — Interest expense wasof $1.3 million for the three months ended March 31, 2021 decreased by $0.6 million from $1.9 million for the three months ended March 31, 2020, a decrease of $0.2 million from $2.1 million for the three months ended March 31, 2019.2020. The decrease of $0.2 million was primarily due to a reduction in market interest rates paid under the Credit Agreement (as defined below) and a less intensive use oflower drawings under the revolving credit facility.

Income tax provision — Income tax provision was $3.2 million for the three months ended March 31, 2021, which represents an increase of $1.1 million from an income tax provision of $2.1 million for the three months ended March 31, 2020, an increase of $1.0 million from an income tax provision of $1.1 million for the three months ended March 31, 2019.2020. The increase in the income tax provision was mainly due to $0.9 million increase attributable to higher taxable income and $0.1 million of non-deductible expenses and other items.resulting from higher revenues.

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Net Income
We reported net income of $9.0 million for the three months ended March 31, 2021 compared to net income of $5.7 million for the three months ended March 31, 2020, compared to net incomewhich resulted in an increase of $3.2$3.3 million for the three months ended March 31, 2019 due primarily to the same factors discussed above. 

Non-GAAP Financial Measures
We use Adjusted Net Income, and Adjusted Earnings per Share
and Adjusted Net Income is definedEBITDA to evaluate our performance, both internally and as net income adjusted to add backcompared with our peers, because these measures exclude certain charges and expenses, suchitems that may not be indicative of our core operating results, as non-cash amortization resulting from push-down accounting,well as items that can vary widely among companies within our industry. For example, non-cash compensation costs and other items set forthcan be subject to volatility from changes in the table below, as these charges and expenses are not considered a partmarket price per share of our core business operationscommon stock or variations in the value and are not an indicatornumber of ongoing, future company performance.shares granted, and amortization of intangible assets is subject to acquisition activity, which varies from period to period and amortization of intangibles expense is primarily related to the effects of push down accounting resulting from acquisitions.
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Index
Adjusted Earnings per Share is calculated by dividing Adjusted Net Income by GAAP weighted-average common shares outstanding (basic and diluted).
We present Adjusted Net Income and Adjusted Earnings per Sharethese non-GAAP financial measures because in addition to the use of these metrics by management as described above, we believe they are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further,Furthermore, we believe they are helpful in highlighting trends in our operating results because they exclude, among other things, certainby focusing on our core operating results of decisions thatand are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the jurisdictionsuseful to evaluate our performance in which we operate and capital investments.
conjunction with our GAAP financial measures. Adjusted Net Income, is aAdjusted Earnings per Share and Adjusted EBITDA are non-GAAP financial measuremeasures and should not be considered as an alternative to operating income, or net income or earnings per share 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 measures.

Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business because it excludes, among other things, the effects of certain transactions 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.

In particular, Adjusted EBITDA is subject to certain limitations, including the following:

Adjusted EBITDA does not reflect interest expense, or the amounts necessary to service interest or principal payments on our Credit Agreement;

Adjusted EBITDA does not reflect income tax provision (benefit), and because the payment of taxes is part of our operations, tax provision 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 share-based 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 adjust for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA, as well as our other non-GAAP financial measures, only as supplemental information.

Adjusted Net Income and Adjusted Earnings per Share

Adjusted Net Income is defined as net income adjusted to add back certain charges and expenses, such as non-cash amortization of intangible assets resulting from push-down accounting, which will recur in future periods until these assets have been fully amortized, non-cash compensation costs, litigation settlements and other items set forth in the table below, 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 Earnings per Share - Basic and Diluted is calculated by dividing Adjusted Net Income by GAAP weighted-average common shares outstanding (basic and diluted).

Adjusted Net Income for the three months ended March 31, 20202021 was $7.6$10.6 million, representing an increase of $1.8$3.0 million, or 30.0%40.0%, from Adjusted Net Income of $5.8$7.6 million for the three months ended March 31, 2019.2020. The increase in Adjusted Net Income was
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Index
primarily due to the increase in revenues of $8.9$17.3 million, offset primarily by an increase in service charges from agents and banks of $6.6$11.2 million due to higher transaction volume.

The following table presents the reconciliation of Net Income, our closest GAAP measure, to Adjusted Net Income:
Three Months Ended March 31,
(in thousands, except for per share data)20202019
Net Income$5,688  $3,156  
Adjusted for:
Share-based compensation, 2018 Plan (a)722  626  
Offering costs (b)—  513  
TCPA settlement (c)23  —  
Other employee severance (d)—  106  
Other charges and expenses (e)147  59  
Amortization of intangibles (f)1,711  2,312  
Income tax benefit related to adjustments (g)(695) (942) 
Adjusted Net Income$7,596  $5,830  
Adjusted Earnings per Share
Basic and diluted$0.20  $0.16  
Weighted-average common shares outstanding
Basic38,035,014  36,182,783  
Diluted38,038,674  36,195,463  

Three Months Ended March 31,
(in thousands, except for per share data)20212020
Net Income$8,977 $5,688 
Adjusted for:
Share-based compensation (a)896 722 
TCPA settlement (b)— 23 
Other charges and expenses (c)117 147 
Amortization of intangibles (d)1,262 1,711 
Income tax benefit related to adjustments (e)(619)(695)
Adjusted Net Income$10,633 $7,596 
Adjusted Earnings per Share
Basic$0.28 $0.20 
Diluted$0.27 $0.20 
Weighted-average common shares outstanding
Basic38,239,130 38,035,014 
Diluted38,846,906 38,038,674 

(a)Stock options and restricted stockEquity awards were granted to employees and independent directors of the Company. The Company recorded $0.7 million and $0.6 million of expense related to these equity instruments during the three months ended March 31, 2020 and 2019, respectively.
(b)The Company incurred $0.5 million of expenses during the three months ended March 31, 2019 for professional and legal fees in connection with a tender offer for the Company’s warrants.
(c)Represents legal fees related tofor the settlement of a class action lawsuit related to the TCPA.
(d)Represents $0.1 million of severance costs incurred during the three months ended March 31, 2019 related to departmental changes.
(e)(c)Includes loss on disposal of fixed assets and foreign currency (gains) losses.
(f)(d)Represents the amortization of certain intangible assets that resulted from the application of push-down accounting.
(g)(e)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. Relevant tax-deductible adjustments include all adjustments to net income.
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Index
Adjusted Earnings per Share - Basic for the three months ended March 31, 20202021 was $0.20$0.28, representing an increase of $0.04,$0.08, or 25%40%, compared to $0.16$0.20 for the three months ended March 31, 2019.2020.

Adjusted Earnings per Share - Diluted for the three months ended March 31, 2021 was $0.27, representing an increase of $0.07, or 35%, compared to $0.20 for the three months ended March 31, 2020.

The following table presents the reconciliation of GAAP Earnings per Share, our closest GAAP measure, to Adjusted Earnings per Share:
Three Months Ended March 31,
20202019
GAAP Earnings per Share - Basic and Diluted$0.15  $0.09  
Adjusted for:
Share-based compensation, 2018 Plan0.02  0.02  
Offering costs—  0.01  
TCPA settlementNM  —  
Other employee severance—  NM  
Other charges and expensesNM  NM  
Amortization of intangibles0.04  0.06  
Income tax benefit related to adjustments(0.02) (0.03) 
Adjusted Earnings per Share - Basic and Diluted$0.20  $0.16  

Three Months Ended March 31,
20212020
BasicDilutedBasic and Diluted
GAAP Earnings per Share$0.23 $0.23 $0.15 
Adjusted for:
Share-based compensation0.02 0.02 0.02 
TCPA settlement— — NM
Other charges and expensesNMNMNM
Amortization of intangibles0.03 0.03 0.04 
Income tax benefit related to adjustments(0.01)(0.01)(0.02)
Adjusted Earnings per Share$0.28 $0.27 $0.20 

NM - Per share amounts are not meaningful.
The table above may contain slight summation differences due to rounding.
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Index

Adjusted 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 non-cash compensation costs and other items set forth in the table below, 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 our 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 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 U.S. GAAP measures. Some of these limitations include the following:

Adjusted EBITDA does not reflect interest expense, or the amounts necessary to service interest or principal payments on our Credit Agreement;
Adjusted EBITDA does not reflect income tax provision (benefit), and because the payment of taxes is part of our operations, tax provision 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 share-based 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.
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Index
We adjust 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 March 31, 20202021 was $13.2$16.8 million, representing an increase of $2.4$3.6 million, or 22.8%27.4%, from $10.8$13.2 million for the three months ended March 31, 2019.2020. The increase in Adjusted EBITDA was primarily due to the increase in revenues of $8.9$17.3 million, offset primarily by an increase in service charges from agents and banks of $6.6$11.2 million due to an increase in transaction volume.

The following table presents the reconciliation of Net Income, our closest GAAP measure, to Adjusted EBITDA:
Three Months Ended March 31,
(in thousands)20202019
Net Income$5,688  $3,156  
Adjusted for:
Interest expense1,870  2,071  
Income tax provision2,080  1,081  
Depreciation and amortization2,690  3,152  
EBITDA12,328  9,460  
Share-based compensation, 2018 Plan (a)722  626  
Offering costs (b)—  513  
TCPA settlement (c)23  —  
Other employee severance (d)—  106  
Other charges and expenses (e)147  59  
Adjusted EBITDA$13,220  $10,764  

Three Months Ended March 31,
(in thousands)20212020
Net Income$8,977 $5,688 
Adjusted for:
Interest expense1,339 1,870 
Income tax provision3,174 2,080 
Depreciation and amortization2,335 2,690 
EBITDA15,825 12,328 
Share-based compensation (a)896 722 
TCPA settlement (b)— 23 
Other charges and expenses (c)117 147 
Adjusted EBITDA$16,838 $13,220 

(a)Stock options and restricted stockEquity awards were granted to employees and independent directors of the Company. The Company recorded $0.7 million and $0.6 million of expense related to these equity instruments during the three months ended March 31, 2020 and 2019, respectively.
(b)The Company incurred $0.5 million of expenses during the three months ended March 31, 2019 for professional and legal fees in connection with a tender offer for the Company’s warrants.
(c)Represents legal fees related tofor the settlement of a class action lawsuit related to the TCPA.
(d)Represents $0.1 million of severance costs incurred during the three months ended March 31, 2019 related to departmental changes.
(e)(c)Includes loss on disposal of fixed assets and foreign currency (gains) losses.

Liquidity and Capital Resources
We consider liquidity in terms of cash flows from operations and their sufficiency to fund business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. In particular, 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.

Notwithstanding the recent effects of the COVID-19 pandemic in the U.S. economy, we have funded and still expect to continue funding our liquidity requirements through internally generated funds, supplemented in the ordinary course, with borrowings under our revolving credit facility. While our operating cash flows may be affected by the economic conditions resulting from the pandemic and other factors, we maintain a strong cash balance position and have access to committed funding sources.sources, which we have used only on a limited and ordinary course basis during the three months ended March 31, 2021. Therefore, 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 at least the next twelve months. We will, however, continue to evaluate the nature and extent of these potential impacts to our business and liquidity and capital resources and take action, as necessary, to preserve adequate liquidity, such as limiting discretionary spending and re-prioritizing our capital projects, to ensure that our business can continue to operate during these uncertain times.

The Company and certain of its domestic subsidiaries as borrowers have(the “Loan Parties”) entered into a financing agreement (as amended, the “Credit Agreement”) with a group of banking institutions. The Credit Agreement providedprovides for a $35.0$35 million revolving credit facility, a $90.0$90 million term loan facility and an up to a $30.0$30 million incremental facility of which $12.0$12 million was utilized in the second quarter ofduring 2019. The Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The maturity date of the Credit Agreement is November 7, 2023.

As of March 31, 2021, we had total indebtedness of $102.5 million, consisting of $87.5 million of borrowings under the term loan facility, $15.0 million in borrowings under the revolving credit facility and excluding debt origination costs of $1.6 million. There were $38.0 million of additional borrowings available under these facilities as of March 31, 2021.
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Index

Interest on the term loan and revolving credit facilities of 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 for the three months ended March 31, 20202021 for the term loan facility and revolving credit facility were 6.80%5.32% and 2.27%0.96%, respectively.

The principal amount of the term loan facility under the Credit Agreement must be repaid in consecutive quarterly installments of 5% in year 1, 7.5% in years 2 and 3, and 10% in years 4 and 5, in each case on the last day of each quarter, which commenced 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 financial covenants that 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 March 31, 2021 and December 31, 2020, we were in compliance with the covenants of the Credit Agreement.

The Credit Agreement also 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

In addition, the Credit Agreement allowsestablishes certain restrictions on payment of dividends or cash distributions other than for redemptionscertain purposes, including the following: i) to pay cash dividends to the Company in an amount necessary to cover reasonable and customary corporate and operating expenses, ii) to purchase, redeem or acquisitionsotherwise acquire warrants, rights or options on the Company’s common stock of an aggregate amount of up to $10 million plus the Available Amount (as defined in the Credit Agreement), iii) to repurchase the Company’s common stock from current or former employees in an aggregate amount of up to $5 million per calendar year, and iv) other restricted payments in an aggregate amount not to exceed $5 million plus the Available Amount.

As a result of the restrictions described above, among others, substantially all of the Company’s equity interests subject to certain dollar limitations.
The Credit Agreement also contains financial covenants that 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 March 31, 2020, we were in compliance with the covenants of the Credit Agreement.
As of March 31, 2020, we had total indebtedness of $95.1 million, consisting of borrowings under the term loan facility, excluding debt origination costs of $2.2 million. There were $53.0 million of additional borrowings available under these facilitiesnet assets as of March 31, 2020.2021 and December 31, 2020 are considered restricted net assets.

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

Our indebtedness could adversely affect our ability to raise additional capital, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk and prevent us from meeting our obligations. See “Risk Factors—Risks Relating to Our Indebtedness—We have a substantial amount of indebtedness, which may limit our operating flexibility and could adversely affect our business, financial condition and results of operations” included in our Annual Report on Form 10-K for the year ended December 31, 2019.2020.

Cash Flows
The following table summarizes the changes to our cash flows for the periods presented:
Three Months Ended March 31
(in thousands)20202019
Statement of Cash Flows Data:
Net cash provided by operating activities$18,780  $29,215  
Net cash used in investing activities(901) (1,443) 
Net cash used in financing activities(1,915) (16,125) 
Effect of exchange rate changes on cash(243) 63  
Net increase in cash15,721  11,710  
Cash, beginning of the period86,117  73,029  
Cash, end of the period$101,838  $84,739  

Three Months Ended March 31,
(in thousands)20212020
Statement of Cash Flows Data:
Net cash (used in) provided by operating activities$(32,406)$18,780 
Net cash used in investing activities(1,930)(901)
Net cash provided by (used in) financing activities14,519 (1,915)
Effect of exchange rate changes on cash(3)(243)
Net (decrease) increase in cash(19,820)15,721 
Cash, beginning of period74,907 86,117 
Cash, end of period$55,087 $101,838 

Operating Activities
Net cash used in operating activities was $32.4 million for the three months ended March 31, 2021, a decrease of $51.2 million from net cash provided by operating activities wasof $18.8 million for the three months ended March 31, 2020, a decrease of $10.4 million from net cash provided by operating activities of $29.2 million for the three months ended March 31, 2019.2020. The decrease is a result of $13.6 million for changesadditional prefunding to our paying agents to fund wire activity during the Holy Week celebration in working capital items (which may vary due to timing of transmittal orders and payments),Latin America, offset by additional cash
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generated by our operating results for the three months ended March 31, 2020,2021, which benefited fromwere positively impacted by the further growth of the business.

Investing Activities
Net cash used in investing activities was $1.9 million for the three months ended March 31, 2021, representing an increase of $1.0 million from net cash used in investing activities of $0.9 million for the three months ended March 31, 2020,2020. This increase was due to higher purchases of property and equipment during the three months ended March 31, 2021 as a decreaseresult of $0.5 million from netour business expansion.

Financing Activities
Net cash used in investingprovided by financing activities of $1.4was $14.5 million for the three months ended March 31, 2019. This decrease2021, which primarily consisted of $15.0 million in cash used was primarily duea draw of our revolving credit facility in order to lower purchases of property and equipment and no acquisitions of agent locationsprefund our paying agents in preparation for wire activity during the three months ended March 31, 2020.Holy Week celebration in Latin America, and $1.4 million in proceeds from issuance of stock as a result of the exercise of options, offset by a $1.9 million scheduled quarterly payment due on the term loan facility.
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Financing Activities
Net cash used in financing activities was $1.9 million for the three months ended March 31, 2020, which consisted of $1.9 milliona scheduled quarterly repaymentspayment due on the term loan.loan facility.
Net cash used in financing activities was $16.1 million for the three months ended March 31, 2019, which consisted of $15.0 million in net revolving credit facility repayments and $1.1 million of quarterly repayment due on the term loan.
Contractual Obligations
The following table includes aggregated information about contractual obligations that affect our liquidity and capital needs. At March 31, 2020,2021, our contractual obligations over the next several periods were as follows:
(in thousands)TotalLess than
1 year
1 to 3 years3 to 5 yearsMore than
5 years
Debt, principal payments$95,129  $7,661  $18,515  $68,953  $—  
Interest payments16,715  5,243  9,122  2,350  —  
Non-cancelable operating leases5,881  1,489  2,310  1,617  465  
Total$117,725  $14,393  $29,947  $72,920  $465  

(in thousands)TotalLess than
1 year
1 to 3 years3 to 5 yearsMore than
5 years
Debt, principal payments$102,468 $8,300 $94,168 $— $— 
Interest payments9,684 4,064 5,620 — — 
Non-cancelable operating leases4,921 1,515 2,094 1,312 — 
Total$117,073 $13,879 $101,882 $1,312 $— 

Our condensed consolidated balance sheet reflects $92.9$100.9 million of debt as of March 31, 2020,2021, as the principal payment obligations of $95.1$102.5 million are gross of unamortized debt origination costs. The above table reflects the principal and interest of the revolverrevolving credit facility and term loan facility under the Credit Agreement that will be paid through the maturityterm of the debt using the rates in effect on March 31, 20202021 and assuming no voluntary prepayments of principal.

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

Off-Balance Sheet Arrangements
We are not a party to any material off-balance sheet arrangements, such as 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 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.

Critical 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-K for the year ended December 31, 2019,2020, for which there were no material changes, included the following:

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

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.

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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
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settled within two business days from trade date. However, foreignForeign currency fluctuations, however, may negatively impactaffect our average exchange gain per transaction.

In addition, included in wire transfer and money orders payable, net in our condensed consolidated balance sheets as of March 31, 20202021 and December 31, 2019,2020, there are $12.5$3.3 million and $10.9$7.6 million, respectively, of wires payable denominated in foreign currencies, primarily in Mexican pesos and Guatemalan quetzales.

Also, included in prepaid wires, net in our consolidated balance sheets as of March 31, 2021 and December 31, 2020, there are $84.7 million and $50.1 million, respectively, of prepaid wires denominated in foreign currencies, primarily Mexican pesos and Guatemalan quetzales.

We are also exposed to changes in currency rates as a result of our investments in foreign operations and revenues 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.our foreign subsidiaries. Revenues from our foreign subsidiaries represent less than 3%1% of our consolidated revenues for the three months ended March 31, 2020 and 2019, respectively.2021. Therefore, a 10% increase or decrease in these currency rates against the U.S. Dollardollar would result in a minimalde minimis change to our overall operating results.

The spot and average exchange rates for Mexico, Guatemala and Canada currencies to U.S. dollar are as follows:

20212020
Spot(1)
Average(2)
Spot(1)
Average(2)
U.S. dollar/Mexico Peso20.45 20.33 19.89 19.97 
U.S. dollar/Guatemala Quetzal7.70 7.74 7.79 7.66 
U.S. dollar/Canadian Dollar1.26 1.27 1.28 1.34 
(1)Spot exchange rates are as of March 31, 20202021 and December 31, 2019 were 23.75 and 18.86 for the Mexican peso/dollar, respectively, 7.67 and 7.69 for the Guatemalan quetzal/dollar, respectively, and 1.41 and 1.31 for the Canadian dollar/U.S. dollar, respectively. The average2020.
(2)Average exchange rates are for the three months ended March 31, 20202021 and 2019 were 19.97 and 19.19 for the Mexican peso/dollar and 7.66 and 7.71 for the Guatemalan quetzal/dollar, respectively. The average exchange rates for the Canadian dollar/U.S. dollar for the three months ended March 31, 2020 was 1.34; we commenced operations in Canada during the third quarter of 2019, therefore, information prior to this period has not been presented. 2020.

Long-term sustained appreciation of the Mexican peso or Guatemalan quetzal as compared to the U.S. dollar could negatively affect our margins.
During March 2020, we have experienced increased volatility in the Mexican peso/dollar rates related to economic effects of the COVID-19 pandemic, as well as actions taken by governments and central banks in response to the pandemic. We continue to expect an increase in volatility in foreign exchange rates and depreciation against the U.S. dollar, especially for the Mexican peso, during 2020. However, we cannot reasonably estimate the duration or extent of that volatility.
Interest Rate Risk
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. Because 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. Due to the economic effects of the COVID-19 pandemic, market interest rates have declined significantly, with the 10-year Treasury bond yield falling below 1.00% on March 3, 2020 and the 30-day LIBOR rate decreasing to 1.01% as of March 31, 2020, favorably affecting interest expense on the variable-rate portion of our debt during March 2020. We cannot predict, however, whether or for how long interest rates will remain at these low levels.

As of March 31, 2020,2021, we had $95.1$102.5 million in outstanding borrowings under the term loan.loan and revolving credit facility. A hypothetical 1% increase or decrease in the interest rate on our indebtedness as of March 31, 20202021 would have increased or decreased cash interest expense on our term loan facility by approximately $1.0$0.9 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, Guatemala and Canada, which are not insured. WeDuring the three months ended March 31, 2021, we have not incurred any losses on these uninsured accounts. To manage our exposuresexposure to credit risk with respect to cash balances and other credit risk exposuresexposure 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 March 31, 2020,2021, we also had $1.6$1.3 million outstanding of notes receivable from sending agents. Most of the notes are collateralized by personal guarantees from the
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sending agents and by assets from their businesses. Due to the COVID-19 pandemic, it is possible we could be adversely affected by credit losses, such as those related to our outstanding notes receivables from sending agents. At the date of this report, however, we are not aware of any significant exposure and are continuing to monitor our credit risk.

Our provision for bad debtcredit losses was approximately $0.2 million for the three months ended March 31, 2021 (0.2% of total revenues) and $0.7 million for the three months ended March 31, 2020 (1% of total revenues) and $0.4 million. The decrease in our provision for credit losses in the three months ended March 31, 2019 (0.5% of total revenues) as write-offs were higher in2021 is due to the three months ended
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March 31, 2020 provision including losses resulting from the deterioration of the creditworthiness of a small number of sending agents during the beginning of the quarter rather than the result of sending agents beingthat were adversely affected by the COVID-19 pandemic.
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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 designed to ensure that information required to be disclosed in our reports filed or submitted 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 President, 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-15(b) and 15d-15(b) under the Exchange Act, our Chief Executive Officer and President, and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2020.2021. Based on 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 President, and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure as of March 31, 2020.2021.

Changes in Internal Control Over Financial Reporting
Notwithstanding operational changes in response to the COVID-19 pandemic, duringDuring 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.

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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are subject to various claims, charges and litigation matters that arise in the ordinary course of business. We believe these actions are a normal incident of the nature and kind of business in which we are engaged. While it is not feasible to predict the outcome of these matters with certainty, we do not believe that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material and adverse effect on our business, financial condition and results of operations.
On May 30, 2019, Stuart Sawyer filed a putative class action complaint in the United States District Court for the Southern District of Florida asserting a claim under the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”), based on allegations that since May 30, 2015, the Company had sent text messages to class members’ wireless telephones without their consent. Following a mediation held on October 7, 2019, the Company and the plaintiff entered into a term sheet providing the general terms for the settlement of the action, which was memorialized in a definitive Settlement Agreement on March 16, 2020 subject to subsequent Court approval. The Settlement Agreement provides for resolution of Mr. Sawyer's TCPA claims and the claims of a class of similarly situated individuals, as defined in the complaint, who received text messages from the Company during the period May 30, 2015 through October 7, 2019, and for the creation of a $3.25 million settlement fund that will be used to pay all class member claims, class counsel's fees and the costs of administering the settlement.
The Settlement Agreement also established procedures for the notification of claimants and the processing of claims. The settlement fund will be managed by a duly-appointed settlement administrator which will be authorized to communicate with class members, process claims and make payments from the fund in accordance with the terms of the Settlement Agreement and the final judgment in the case. No amount of the settlement fund will revert to the Company; instead, any unclaimed funds will be sent to a consumer advocacy organization approved by the Court.
The remaining balance of the amount payable under the Settlement Agreement of approximately $2.9 million is included in accrued and other liabilities in the condensed consolidated balance sheet as of March 31, 2020.
Reference is also made to Note 1213 – 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 other legal proceedings to which we are a party.party, which information is incorporated by reference herein.

ITEM 1A. RISK FACTORS
Except as set forth below, thereThere have been no material changes to our principal risks that we believe are material to our business, results of operations and financial condition, from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 20192020 (the “2019“2020 Form 10-K”). Prospective investors are encouraged to consider the risks described in our 20192020 Form 10-K, our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q and in our 20192020 Form 10-K, and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.
Our financial condition, results of operations, business and cash flow may be negatively affected by a public health crises such as the recent coronavirus (COVID-19) pandemic.
We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases. During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption, including significant volatility in the capital markets. The extent to which the COVID-19 pandemic affects our business, operations, financial results and the trading price of our common stock will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; governmental and business actions that have been and continue to be taken in response to the pandemic (including mitigation efforts such as stay at home and other social distancing orders) and the impact of the pandemic on economic activity and actions taken in response (including stimulus efforts such as the Families First Coronavirus Act and the CARES Act).
A public health epidemic or pandemic, such as the COVID-19 pandemic, can have a material adverse effect on the demand for our money remittance services to the extent it impacts the markets in which we operate, and poses the risk that we or our employees, network of agents and consumers and their beneficiaries may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities, or that such epidemic may otherwise interrupt or impair business activities. In the first quarter of 2020 we have been subject, on a limited basis, to such shutdowns. We have adjusted standard operating procedures within our business operations to ensure the continued safety of our workers, are taking further actions to mitigate the impact of the pandemic on our business, and are continually monitoring evolving health guidelines, as well as market conditions, and responding to changes as appropriate. Despite these efforts, the COVID-19 pandemic continues to pose the risk that we or our employees, sending and paying agents, as well as consumers and their beneficiaries, may be prevented from conducting business
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activities, partially or completely, for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities or imposed by our management, or that the pandemic may otherwise interrupt or impair business activities.
Adjustments to our operating procedures as a result of the COVID-19 pandemic only had a limited effect on the Company’s financial condition, results of operations and cash flows for the quarterly period ended March 31, 2020, however, we continue to monitor a moderate trend of decreasing volume of transactions beginning in the second quarter of 2020. The Company and our sending agents are considered essential businesses under current federal guidance, however, the Company’s business is dependent upon the willingness and ability of its employees, network of agents and consumers to conduct money transfer services and the ultimate effects of the economic disruption caused by the pandemic and responses thereto. Although the Company’s operations continued effectively in the first quarter of 2020 despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our customers, which are uncertain and cannot be predicted at this time. If the global response to contain the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows.
In addition, to protect our workers, we are utilizing work from home measures. Despite our implementation of security measures, there is no guarantee that the data security and privacy safeguards we have put in place will be completely effective or that we will not encounter some of the common risks associated with employees accessing Company data and systems remotely.
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.

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ITEM 6. EXHIBITS
Exhibit No.Document
10.1
SettlementAmended and Restated Employment Agreement by and Release, dated March 16, 2020, among Stuart Sawyer, on behalf of himself and all Settlement Class Members,between Robert Lisy and Intermex Wire Transfer, LLC.Holdings, Inc., dated as of January 5, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 18, 2020)January 6, 2021).
Certification pursuant to Section 302 of the Sarbanes-Oxley Act - Chief Executive Officer
Certification pursuant to Section 302 of the Sarbanes-Oxley Act - Chief Financial Officer
Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.
Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350.
101*101.INSInline XBRL Instance Document - The following materials frominstance document does not appear in the Company’s Quarterly Report on Form 10-Q forinteractive data file because its XBRL tags are embedded within the quarter ended March 31, 2020, are formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Balance Sheets, (ii) the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) the Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Unaudited Condensed Consolidated Financial Statements.Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation Linkbase
101.DEFInline XBRL Taxonomy Extension Definition Linkbase
101.LABInline XBRL Taxonomy Extension Label Linkbase
101.PREInline XBRL Taxonomy Extension Presentation Linkbase
104*The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020,2021, formatted in iXBRL and contained inInline XBRL (included with the Exhibit 101.101 attachments).
Management contract or compensatory plan or arrangement.
*Filed herewith.
**Furnished herewith.
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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: May 7, 2020
International Money Express, Inc. (Registrant)
Date: May 10, 2021By:/s/ Robert Lisy
Robert Lisy
Chief Executive Officer and President
(Principal Executive Officer)
Date: May 7, 2020
International Money Express, Inc.
Date: May 10, 2021
By:/s/ Tony Lauro IIAndras Bende
Tony Lauro IIAndras Bende
Chief Financial Officer
(Principal Financial Officer)

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