Filing summary
Entity and period: The supplied filing is FinTech Acquisition Corp. II’s unaudited Form 10-Q for the quarter ended March 31, 2017—not a filing for International Money Express, Inc. FinTech was a blank-check company formed to pursue a business combination and had not begun operating or generated operating revenue. Its IPO closed January 25, 2017.
Financial results and position
- Results: Q1 operating costs were $226,756; interest income was $61,666; net loss was $165,090, or $0.02 per basic and diluted share. The filing says there was no activity in Q1 2016, so no comparable-period results are presented.
- Cash flows: Operating activities used $297,117. Investing activities used $175.0 million, principally for the trust account; financing activities provided $175.45 million. Cash outside the trust account ended at $233,184.
- Assets and liquidity: Total assets were $175.38 million, including $175.06 million in trust-account cash and marketable securities and $319,974 in current assets. Trust investments were cash and U.S. Treasury bills.
- Liabilities and equity: Total liabilities were $9.23 million, principally $9.19 million of deferred underwriting fees, contingent on completing a business combination, plus $25,000 of deferred legal fees and $19,315 of accrued expenses. No long-term debt was reported. Common stock subject to possible redemption was presented as temporary equity at $161.15 million; stockholders’ equity was $5.00 million.
- Revenue and margins: The company reported no operating revenue; operating and profit margins are therefore not meaningful for an operating-business comparison.
Material developments, outlook, and risks
- The IPO sold 17.5 million units for $175 million gross; a concurrent private placement raised $4.2 million. The company placed $175 million in trust. Trust assets and interest were intended primarily to fund a business combination and eligible redemptions.
- Management had until January 25, 2019 to complete a business combination. If unsuccessful, the company was required to cease operations and redeem public shares from the trust, subject to the filing’s terms. Management stated there was no assurance a transaction would be completed.
- Public shareholders could redeem shares in connection with a business combination. The filing also describes potential third-party claims against trust assets and an officer’s limited indemnity, which might not be collectible. Warrants could expire worthless if no business combination occurs.
- The filing reports no material change to previously disclosed risk factors, no legal proceedings, and no material off-balance-sheet arrangements. Management judged interest-rate and other market risks limited given the permitted short-term U.S. Treasury investments.
- Management concluded disclosure controls were effective at a reasonable assurance level as of March 31, 2017; it reported no material change in internal control over financial reporting during the quarter.
Investor verification points
- Confirm the issuer: the source text identifies FinTech Acquisition Corp. II, not International Money Express, Inc.
- Reconcile deferred underwriting fees: the balance sheet and notes report $9.19 million, while the MD&A liquidity discussion states $9.01 million.
- Review the trust-account terms, redemption protections, January 25, 2019 deadline, and exposure to third-party claims.
- Check the IPO and private-placement share and warrant terms, including exercise price and potential dilution after a business combination.
- Assess the company’s ability to fund transaction and operating costs outside the trust account; the filing reports $233,184 of outside cash and a sponsor commitment for loans up to $1.1 million.