International Money Express, Inc. — Q2 2018 Form 10-Q
Reporting period: Three and six months ended June 30, 2018. The financial statements report the pre-merger results of FinTech Acquisition Corp. II, a blank-check company—not Intermex’s operating results. The merger with Intermex closed on July 26, 2018, after the quarter ended.
Financial results and liquidity
| Metric | Q2 2018 | Q2 2017 | Six months 2018 | Six months 2017 |
|---|---|---|---|---|
| Operating revenue | $0 | $0 | $0 | $0 |
| Operating costs | $614,652 | $106,063 | $1,027,825 | $332,819 |
| Interest income | $708,882 | $340,465 | $1,193,551 | $402,131 |
| Net income (loss) | $(50,445) | $124,945 | $(79,686) | $(40,145) |
| Basic earnings (loss) per share | $(0.01) | $0.02 | $(0.01) | $(0.01) |
- Cash flow: Six-month operating cash use was $1.36 million, versus $0.37 million in 2017. Investing activities provided $0.66 million; financing activities provided $0.39 million. Cash outside the trust account fell to $51,659 from $362,581 at year-end 2017.
- Assets and liabilities at June 30: Total assets were $176.58 million, including $176.42 million in trust-account cash and Treasury securities. Total liabilities were $10.53 million, including $9.19 million of deferred underwriting fees. Current liabilities were $1.32 million, including $390,000 of related-party advances and notes.
- Debt and margins: The company reported no long-term debt or lease obligations. Operating margins are not meaningful because it had no operating revenue.
Changes, transaction, and outlook
- Compared with Q2 2017, Q2 2018 operating costs rose by about $509,000 and interest income rose by about $368,000; the company moved from net income to a net loss. For the first half, the net loss widened by about $40,000.
- On July 26, 2018, the company acquired Intermex. Merger consideration was $102 million cash, including $2 million placed in escrow for working-capital adjustments, plus 17.2 million common shares. The cash was funded from the trust account after redemptions.
- At closing, 4,938,232 shares were redeemed for $49.81 million. The company also paid the $390,000 related-party loans in cash and settled $8.9 million of deferred underwriting fees and the $25,000 deferred legal fee from trust funds.
- Management provided no operating guidance. It noted that pre-merger results are not indicative of future results and anticipated increased public-company compliance and transaction-related expenses. The trust account was used substantially to complete the merger and fund redemptions.
- Management reported effective disclosure controls at June 30, 2018, no material changes in internal control, no legal proceedings, and no material changes to the previously disclosed risk factors. It cited forward-looking-statement risks and uncertainty in estimates; no specific contingent loss value is stated.
Investor facts to verify
- Review post-merger filings for Intermex’s operating revenue, profitability, cash flow, debt, and liquidity; these quarter-end statements do not provide those operating results.
- Verify the final merger funding and post-closing cash and debt balances, including the working-capital escrow and transaction-related payments.
- Assess dilution from the 17.2 million merger shares, remaining public shares, and warrants, including warrant exercise and registration terms.
- Confirm subsequent-period performance and any updates to risks or contingencies; this filing gives no forward financial guidance.