International Money Express, Inc. annual report, FY2016

Filing identity and reporting period

Important mismatch: The supplied filing is for FinTech Acquisition Corp. II, not International Money Express, Inc. It is a Form 10-K for the fiscal year ended December 31, 2016, with comparative figures for May 28, 2015 (inception) through December 31, 2015. The filing describes a blank-check company formed to pursue a business combination; it had not begun operating or generated significant revenue by year-end.

Financial results and position

The 2016 assets included $387,922 of deferred offering costs, not cash. The statements report no operating revenue or profit, and margins are not meaningful. No interest-bearing third-party debt is reported; the related-party note was non-interest-bearing and was repaid after year-end when the IPO closed. The filing reports no clear standalone liquidity ratio or business operating metrics.

Changes and subsequent financing

Compared with the partial 2015 inception period, the reported loss declined by $566 and operating cash use increased by $322. The periods are not full-year comparable. The company collected $25,000 of stockholder notes receivable in 2016 and incurred offering costs ahead of its subsequent IPO.

After year-end, on January 25, 2017, the company completed a public offering of 17.5 million units at $10 each, for $175 million gross proceeds, and a private placement of 420,000 units for $4.2 million. The filing says $175 million was placed in a trust account. These transactions are subsequent events, not 2016 operating results.

Outlook, risks, and unusual items

• The company had until January 25, 2019—24 months after the IPO—to complete a business combination. It had not identified a target in the supplied filing; completion was not assured.
• Nasdaq rules required a target or targets with fair market value of at least 80% of the trust balance, subject to stated adjustments. Public shareholders generally could redeem shares in connection with a combination; if no combination was completed by the deadline, the company would wind up and distribute trust funds to public shareholders.
• Trust assets could face third-party claims despite the company’s efforts to obtain claim waivers. The CEO’s stated protection against certain claims might not be sufficient to meet any resulting obligations.
• A $9.19 million deferred underwriting fee and $25,000 deferred legal fee were contingent on a combination or liquidation as described in the filing. The deferred underwriting fee was payable only if a business combination closed.
• Warrants could expire worthless if no combination was completed. The filing also describes redemption, transfer, and exercise restrictions on founder and placement securities.
• The independent auditor gave an unqualified opinion on the financial statements, but expressly did not opine on internal control effectiveness. The company identified itself as an emerging growth company and elected the extended transition period for new accounting standards.

Most important facts to verify

1. Confirm the issuer: this document names FinTech Acquisition Corp. II, not International Money Express, Inc.
2. Confirm the requested reporting period and filing source; the audited statements cover 2016 and the 2015 inception period, not an operating remittance business.
3. Verify the post-year-end IPO, trust balance, offering costs, and related-party note repayment against subsequent filings.
4. Review the business-combination deadline, redemption and liquidation terms, trust-claim protections, and deferred fees.
5. The cover page indicates “No” to whether the registrant filed all required reports during the preceding 12 months; verify the filing-status context and any related SEC records.