SEC filing summary
Issuer mismatch: The supplied filing is for FinTech Acquisition Corp. II, a blank-check company, not International Money Express, Inc. The filing describes a proposed acquisition of Intermex Holdings II, Inc.; it should not be treated as International Money Express’s own 2018 Q1 report.
Business context and reporting period
This unaudited Form 10-Q covers the three months ended March 31, 2018. FinTech Acquisition Corp. II had no operating business or revenue and was pursuing a business combination. It had until January 25, 2019 to complete one or face liquidation.
Financial performance and liquidity
- Revenue: None; the company reported no operating revenue.
- Results: Net loss was $29,241, versus $165,090 in Q1 2017. Operating costs were $413,173, compared with $226,756; trust-account interest income was $484,669, compared with $61,666. The 2018 period also included a $100,737 income-tax provision.
- Cash flow: Cash used in operating activities was $955,036, versus $297,117 in Q1 2017. Ending cash outside the trust was $59,507, down from $362,581 at year-end 2017.
- Trust and liquidity: Trust assets were $175.8 million at March 31, 2018, primarily U.S. Treasury securities. The company reported $198,601 in current assets and $716,667 in current liabilities.
- Debt and obligations: A $115,000 non-interest-bearing related-party loan was outstanding. Deferred underwriting fees of $9.19 million were payable only if a business combination closed; deferred legal fees were $25,000. The company reported no long-term debt or lease obligations.
Material changes, transaction, and risks
- Compared with Q1 2017, the net loss narrowed, primarily as trust-account interest income increased; operating costs also rose.
- The proposed Intermex merger consideration included $92 million cash, approximately 16.6 million FinTech shares, and potential additional consideration tied to Intermex excess cash. Closing conditions included stockholder approvals, regulatory conditions, and at least $125 million remaining in the trust after redemptions and deferred underwriting fees.
- Management said mandatory liquidation if no deal closed by January 25, 2019 raised substantial doubt about the company’s ability to continue as a going concern.
- Public shareholders could redeem shares in connection with a business combination. If no deal closed by the deadline, the company intended to redeem public shares and liquidate; warrants could expire worthless. Trust assets could also be exposed to third-party claims.
- No earnings guidance was provided. Management expected continued expenses related to public-company compliance and transaction diligence. The filing reported effective disclosure controls and no material change in internal control during the quarter.
Important facts for an investor to verify
- Confirm the intended issuer: this filing names FinTech Acquisition Corp. II, not International Money Express, Inc.
- Check subsequent filings for whether the Intermex transaction closed, its final terms, redemptions, and the resulting ownership and capitalization.
- Verify the status of the $115,000 sponsor loan, deferred fees, trust balance, and liquidation deadline in later filings.
- Review the issuer’s 2017 Form 10-K and the merger proxy materials for fuller risk disclosures and transaction conditions.