24. RELATED PARTY TRANSACTIONS

The Company has identified the following related party transactions for the three months ended March 31, 2020 and 2019. The transactions are listed by related party and, unless otherwise noted in the text of the description, the amounts are disclosed in the tables at the end of this section.

A. The Bancorp, Inc. (“TBBK”)

TBBK is identified as a related party because Daniel G. Cohen is chairman of TBBK.

As part of the Company’s broker-dealer operations, the Company from time to time purchases securities from third parties and sells those securities to TBBK. The Company may purchase securities from TBBK and ultimately sell those securities to third parties. In either of the cases listed above, the Company includes the trading revenue earned (i.e. the gain or loss realized, or commission earned) by the Company for the entire transaction in the amounts disclosed as part of net trading in the table at the end of this section.

From time to time, the Company will enter into repos with TBBK as its counterparty. As of March 31, 2020 and December 31, 2019, the Company had no repos with TBBK. For the three months ending March 31, 2020, and 2019, the Company incurred no interest expense related to repos with TBBK as its counterparty.

B. Daniel G. Cohen/Cohen Bros. Financial, LLC (“CBF”)/ EBC 2013 Family Trust (“EBC”)

On December 30, 2019, Daniel G. Cohen contributed 370,881 shares of IMXI common stock to the Operating LLC. In exchange for these shares, the Operating LLC issued 12,549,273 newly issued units of membership interests in the Operating LLC and 12,549,273 shares of newly issued Series F Preferred Stock. The Company included the value of the IMXI common stock in other investments at fair value. See note 11.

In December 2019, the Company acquired a 45% interest in CK Capital Partners B.V. (“CK Capital”). The Company purchased this interest for $18 (of which $17 was from an entity controlled by Daniel G. Cohen). In addition, the Company also acquired a 10% interest in Amersfoot Office Investment I Cooperatief U.A. (“AOI”), a real estate holding company, for $1 from entities controlled by Daniel G. Cohen. CK Capital is a private company incorporated in the Netherlands and provides asset and investment advisory services relating to real estate holdings. See note 11.

CBF has been identified as a related party because (i) CBF is a non-controlling interest holder of the Company and (ii) CBF is wholly owned by Daniel G. Cohen. On September 29, 2017, CBF also invested $8,000 of the $10,000 total investment in the Company’s Redeemable Financial Instrument – DGC Trust / CBF pursuant to the CBF Investment Agreement. The Company incurred interest expense on this instrument, which is disclosed as part of interest expense incurred in the table at the end of this section. In October 2019, a payment of $1,500 was made by the Company to CBF which reduced the redeemable financial instrument balance. See notes 16 and 17.

EBC has been identified as a related party because Daniel G. Cohen is a trustee of EBC and has sole voting power with respect to all shares of the Company held by EBC. In September 2013, EBC, as an assignee of CBF, made a $4,000 investment in the Company. The Company issued $2,400 in principal amount of the 2013 Convertible Notes and $1,600 of Common Stock to EBC. See note 20 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. On September 25, 2019, the 2013 Convertible Notes were amended and restated by the 2019 Senior Notes. See note 17. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the table at the end of this section.

C. The Edward E. Cohen IRA

On August 28, 2015, $4,386 in principal amount of the 2013 Convertible Notes originally issued to Mead Park Capital in September 2013 was purchased by the Edward E. Cohen IRA of which Edward E. Cohen is the benefactor. Edward E. Cohen is the father of Daniel G. Cohen. On September 25, 2019, the 2013 Convertible Notes were amended and restated by the 2019 Senior Notes. See note 17 for a description of amendments related to the 2019 Senior Notes and 2013 Convertible Notes. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the tables at the end of this section. The 2019 Senior Notes were fully repaid on February 3, 2020. See note 17 and note 20 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

D. JKD Investor

The JKD Investor is an entity owned by Jack J. DiMaio, the vice chairman of the board of directors and vice chairman of the Operating LLC’s board of managers, and his spouse. On October 3, 2016, JKD Investor invested $6,000 in the Operating LLC. Additional investments were made in January 2017 and January 2019 in the amounts of $1,000 and $1,268 respectively. See note 16. The interest expense incurred on this investment is disclosed in the table at the end of this section.

On January 31, 2020, JKD Investor purchased $2,250 of the 2020 Senior Notes. See note 17. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the tale at the end of this section.

E. DGC Trust

DGC Trust was established by Daniel G. Cohen, chairman of the Company’s board of directors and chairman of the Operating LLC board of managers. Daniel G. Cohen does not have any voting or dispositive control of securities held in the interest of the trust. The Company considers DGC Trust a related party because it was established by Daniel G. Cohen.

On December 30, 2019, the DGC Trust contributed 291,480 shares of IMXI common stock with a fair value of $3,428 to the Operating LLC. In exchange for these shares, the Operating LLC issued to the DGC Trust 9,880,268 newly issued units of membership interests in the Operating LLC and the Company issued to the DGC Trust 9,880,268 shares of newly issued Series F Preferred Stock. The Company included the value of the shares of IMXI common stock in other investments, at fair value. See note 18.

In March 2017, the 2017 Convertible Note was issued to the DGC Trust. The Company incurred interest expense on the 2017 Convertible Note, which is disclosed as part of interest expense incurred in the table at the end of this section.

On September 29, 2017, the DGC Trust invested $2,000 of the $10,000 total investment in the Company’s Redeemable Financial Instrument – DGC Trust / CBF pursuant to the DGC Trust Investment Agreement. See notes 19 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and note 16 herein. Interest incurred on this instrument is disclosed in the tables at the end of this section.

F. FinTech Acquisition Corp. III

In December 2018, the Operating LLC entered into an agreement with FinTech Acquisition Corp. III whereby the Company will provide certain accounting and administrative services. FinTech Acquisition Corp. III is considered a related party because Daniel G. Cohen is the chief executive officer of FinTech Acquisition Corp, III and Betsy Cohen is the chairman of the board of directors of FinTech Acquisition Corp. III. Income earned on this arrangement is disclosed in the tables below.

G. FinTech Investor Holdings II, LLC

FinTech Investor Holdings II, LLC is considered a related party because Daniel G. Cohen is the manager of the entity.

In July 2018, the Operating LLC acquired publicly traded shares of FinTech Acquisition Corp. II from an unrelated third party for a total purchase price of $2,513. In connection with this purchase, the Operating LLC agreed with FinTech Investor Holdings II, LLC to not redeem these shares in advance of the merger between FinTech Acquisition Corp. II and Intermex Holdings II, LLC. In exchange for this agreement to not redeem these shares prior to the merger, as well as the outlay of capital to purchase the publicly traded shares of FinTech Acquisition Corp. II, the Operating LLC received unregistered, restricted shares of common stock of FinTech Acquisition Corp. II from FinTech Investor Holdings II, LLC. In connection with the merger, FinTech Acquisition Corp. II changed its name to International Money Express, Inc.

H. Duane Morris, LLP (“Duane Morris”)

Duane Morris is an international law firm and serves as legal counsel to the Company. Duane Morris is considered a related party because a partner at Duane Morris is a member of the same household as a director of the Company. Expense incurred by the Company for services provided by Duane Morris are included within professional fees and operating expense in the consolidated statements of operations and comprehensive income and are disclosed in the table below.

I. FinTech Masala, LLC

FinTech Masala, LLC is a related party because Betsy Cohen is the mother of Daniel G. Cohen and is a member of FinTech Masala, LLC. Daniel G. Cohen is also a member of FinTech Masala, LLC. The Company has engaged Betsy Cohen on behalf of FinTech Masala, LLC as a consultant to provide certain services related to the Insurance SPAC. The Company agreed to pay a consultant fee of $1 per month, which commenced July 1, 2019 and shall continue until the earlier of (i) the date that is thirty days following the closing of the Insurance SPAC’s initial Business Combination and (ii) the date on which the Company or Betsy Cohen terminates the consulting agreement. Betsy Cohen made a $2 investment in the Sponsor Entities in March 2019, which is included as a component of non-controlling interest in the consolidated balance sheet. The expense incurred by the Company for the consulting services provided by FinTech Masala, LLC are included within professional fees and operating expense in the consolidated income statement and are disclosed in the table below.

The Company has a sublease agreement for certain office space with FinTech Masala, LLC (formerly Bezuco Capital, LLC). The Company received payments under this agreement. The payments are recorded as a reduction in rent expenses. This sublease agreement commenced on August 1, 2018. It has an annual term that auto-renews if not cancelled earlier. It can be cancelled by either party upon 90 days’ notice. The income earned on this sublease is included as a reduction in rent expense in the consolidated statements of income and are disclosed in the tables below.

J. Investment Vehicle and Other

EuroDekania

EuroDekania is considered a related party because it is an equity method investment of the Company. The Company had an investment in and a management contract with EuroDekania. Income earned or loss incurred on the investment is included as part of principal transactions and other income in the tables below. Revenue earned on the management contract is included as part of asset management in the tables below. EuroDekania liquidated in 2019.

SPAC Fund

The SPAC Fund is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a management contract with the SPAC Fund. Income earned or loss incurred on the investment is included as part of principal transactions and other income in the tables below. Revenue earned on the management contract is included as part of asset management in the tables below. As of March 31, 2020, the Company owned 2.53% of the equity of the SPAC Fund.

U.S. Insurance JV

U.S. Insurance JV is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a management contract with the U.S. Insurance JV. Income earned or loss incurred on the investment is included as part of principal transactions and other income in the tables below. Revenue earned on the management contract is included as part of asset management and are shown in the tables below. As of March 31, 2020, the Company owned 4.66% of the equity of the U.S. Insurance JV.

Insurance SPAC

The Insurance SPAC is a related party as it is an equity method investment of the Sponsor Entities, which are consolidated by the Company. As of March 31, 2020, the Sponsor Entities owned 26.5% of the equity in the Insurance SPAC. Income earned, or loss incurred on equity method investments is included in the tables below. The Operating LLC and the Insurance SPAC entered into an administrative services agreement, dated March 19, 2019, pursuant to which the Operating LLC and the Insurance SPAC agreed that, commencing on the date that the Insurance SPAC’s securities were first listed on the Nasdaq Capital Market through the earlier of the Insurance SPAC’s consummation of a Business Combination and its liquidation, the Insurance SPAC will pay the Operating LLC $10 per month for certain office space, utilities, secretarial support, and administrative services. Revenue earned by the Company from the administrative services agreement is included as part of principal transactions and other income in the tables below. The Company agreed to lend the Insurance SPAC $750 for operating and acquisition related expenses. No amounts have been lent to date under this facility. See note 11.

CK Capital and AOI

CK Capital and AOI are related parties as they are equity method investments of the Company. In December 2019, the Company acquired a 45% interest in CK Capital. The Company purchased this interest for $18 (of which $17 was from an entity controlled by Daniel G. Cohen). In addition, the Company also acquired a 10% interest AOI, a real estate holding company, for $1 from entities controlled by Daniel G. Cohen. See Note 11.

The following tables display the routine transactions recognized in the statements of operations from the identified related parties that are described above.


	Related Party Transactions
	(Dollars in Thousands)

		Three Months Ended
		March 31, 2020		March 31, 2019
Net trading
TBBK	$	-	$	2

Asset management
EuroDekania		-		86
SPAC Fund		(47)		31
U.S. Insurance JV		90		80
	$	43	$	197
Principal transactions and other income
EuroDekania		-		291
FinTech Acquisition Corp.		3		3
Insurance SPAC		30		4
SPAC Fund		(59)		24
U.S. Insurance JV		(167)		39
	$	(193)	$	361
Income (loss) from equity method affiliates
AOI		(30)		-
CK Capital		230		-
Insurance SPAC		(307)		(8)
	$	(107)	$	(8)

Operating expense (income)
Duane Morris		319		101
FinTech Masala, LLC		(11)		(6)
	$	308	$	95
Interest expense (income)
CBF		528		119
DGC Trust		533		390
EBC		72		47
Edward E. Cohen IRA		48		87
JKD Investor		484		278
	$	1,665	$	921

The following related party transactions are non-routine and are not included in the tables above.

K. Directors and Employees

The Company has entered into employment agreements with Daniel G. Cohen and Joseph W. Pooler, Jr., its chief financial officer. The Company has entered into its standard indemnification agreement with each of its directors and executive officers.

The Company maintains a 401(k) savings plan covering substantially all of its employees. The Company matches 50% of employee contributions for all participants not to exceed 3% of their salary. Contributions made on behalf of the Company were $98 and $91 for the three months ended March 31, 2020, and 2019, respectively.

The Company leases office space from Zucker and Moore, LLC. Zucker and Moore, LLC is partially owned by Jack DiMaio, Jr., the vice chairman of the Company’s board of directors. The Company recorded $24 of rent expense related to this office space for the three months ended March 31, 2020 and 2019.