S-4 1 fs42018_fintechacquistion2.htm REGISTRATION STATEMENT

As filed with the Securities and Exchange Commission on March 27, 2018

Registration No. 333-           

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

 

FINTECH ACQUISITION CORP. II

(Exact name of registrant as specified in its charter)

 

Delaware   6770   47-4219082
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification No.)

 

2929 Arch Street, Suite 1703

Philadelphia, PA 19104-2870

(215) 701-9555

 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

2929 Arch Street, Suite 1703
Philadelphia, PA 19104-2870
Attn: James J. McEntee, III
President and Chief Financial Officer

(215) 701-9555

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:
Mark E. Rosenstein, Esq.
Derick S. Kauffman, Esq.
Ledgewood
Two Commerce Square
2001 Market Street, Suite 3400
Philadelphia, Pennsylvania 19103
(215) 731-9450 – Phone
(215) 735-2513 – Facsimile

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the Merger Agreement to consummate the proposed mergers are satisfied or waived.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer:  Accelerated filer:
Non-accelerated filer:  ☒ (Do not check if a smaller reporting company)  Smaller reporting company:  ☐ 
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

 

 

 

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of securities to be registered   Amount to be
Registered(1)
    Proposed
maximum offering price
per share
    Proposed
maximum
aggregate
offering price
   Amount of registration fee 
Common Stock, par value $0.0001   16,598,281    N/A   $0(2)  $0 
Total   16,598,281        $0   $0 

 

(1) Relates to common stock, $0.0001 par value per share, of the registrant issuable to Interwire Topco, LLC, the sole stockholder of Intermex Holdings II, Inc. (“Intermex”), in the proposed transaction pursuant to which the registrant will acquire Intermex through the merger of a direct wholly owned subsidiary of the registrant with and into Intermex with Intermex continuing as the initial surviving entity, immediately followed by the merger of the initial surviving entity with and into a direct wholly owned subsidiary of the registrant with such subsidiary continuing as the surviving entity and a wholly owned subsidiary of the registrant (collectively, the “Merger”). The amount of common stock of the registrant to be registered is based on an estimated 16,598,281 shares of the registrant’s common stock that are expected to be issued pursuant to the Merger.
(2) Based upon the estimated value of 10 shares of Intermex common stock canceled in connection with the Merger calculated in accordance with Rule 457(f) of the Securities Act of 1933, as amended, less cash consideration of $92,000,000 in accordance with Rule 457(f)(3). Intermex is a private company and no market exists for its securities.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

 

The information in this proxy statement/prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED MARCH 27, 2018

 

FINTECH ACQUISITION CORP. II

2929 Arch Street, Suite 1703

Philadelphia, Pennsylvania 19104

 

PRELIMINARY PROXY STATEMENT/PROSPECTUS FOR SPECIAL MEETING IN LIEU OF

2018 ANNUAL MEETING OF STOCKHOLDERS AND PROSPECTUS FOR
16,598,281 SHARES OF COMMON STOCK OF FINTECH ACQUISITION CORP. II

 

Dear FinTech Acquisition Corp. II Stockholders:

 

On December 19, 2017, FinTech Acquisition Corp. II, which we refer to as we, us, our, FinTech or the Company, FinTech II Merger Sub Inc., our direct wholly owned subsidiary, which we refer to as Merger Sub 1, FinTech II Merger Sub 2 LLC, our direct wholly owned subsidiary, which we refer to as Merger Sub 2, Intermex Holdings II, Inc., which we refer to as Intermex, and SPC Intermex Representative LLC, which we refer to as SPC Intermex Representative, entered into an Agreement and Plan of Merger, which we refer to as the Merger Agreement, pursuant to which we will acquire Intermex by the merger of Merger Sub 1 with and into Intermex with Intermex continuing as the initial surviving entity, immediately followed by the merger of Intermex with and into Merger Sub 2 with Merger Sub 2 continuing as the surviving entity and a wholly owned subsidiary of the Company, which we refer to collectively as the Merger.

 

At the special meeting in lieu of the 2018 annual meeting of stockholders, which we refer to as the special meeting, our stockholders will be asked to consider and vote upon a proposal, which we refer to as the Merger Proposal, to approve the Merger and adopt the Merger Agreement. If the Merger is completed, Interwire Topco, LLC, which we refer to as Interwire LLC, the sole stockholder of Intermex, will exchange its shares of Intermex common stock for a combination of cash and shares of our common stock. The aggregate consideration to be paid in the Merger will consist of (i) $92,000,000 in cash, (ii) an estimated 16,598,281 shares of our common stock based on Intermex’s current capitalization and assuming the Merger is completed on June 30, 2018, and (iii) an amount (as determined in accordance with the Merger Agreement) equal to any excess cash at Intermex at the time of the closing of the Merger in the form of additional shares of our common stock and/or, at our option, up to $10 million of such amount in cash. The number of shares of the common stock consideration will be based on a $10.00 per share value for our common stock. The amount of cash and common stock to be issued as consideration in the Merger is subject to adjustment as set forth in the Merger Agreement. Pursuant to the Merger Agreement, the aggregate Merger consideration will be delivered to SPC Intermex Representative or its designees on behalf of Interwire LLC. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

 

Our stockholders will also be asked to consider and vote upon proposals (a) to approve and adopt amendments to our amended and restated certificate of incorporation, which we refer to as our charter, to (i) increase our authorized common stock (“Proposal 2”), (ii) create an additional class of directors so that there will be three classes of directors with staggered terms of office, and make certain related changes (“Proposal 3”), and (iii) provide for additional changes, principally including changing our name from “FinTech Acquisition Corp. II” to “International Money Express, Inc.” and removing provisions applicable only to special purpose acquisition companies (“Proposal 4”), each of which Proposal Nos. 2 through 4 we refer to as a charter Proposal and collectively the charter Proposals, (b) to approve, for purposes of complying with applicable NASDAQ listing rules, the issuance of more than 20% of our issued and outstanding common stock and the resulting change of control in connection with the Merger, which we refer to as the NASDAQ Proposal, (c) to approve and adopt the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (an equity-based incentive plan), a copy of which is attached to this proxy statement/prospectus as Annex B, which we refer to as the Incentive Plan Proposal, (d) to elect three directors to serve on our Board of Directors until the 2020 annual meeting of stockholders, and until their respective successors are duly elected and qualified or until their earlier resignation, removal or death, which we refer to as the Director Election Proposal, and (e) to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes received to pass the resolution to approve the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal and the Director Election Proposal, which we refer to as the Adjournment Proposal. A copy of our proposed second amended and restated certificate of incorporation incorporating the charter Proposals, which we refer to as our proposed charter, is attached as Annex C to this proxy statement/prospectus. Each of these proposals is more fully described in this proxy statement/prospectus.

 

 

 

 

Our common stock, units and warrants are currently listed on The NASDAQ Capital Market under the symbols “FNTE,” “FNTEU” and “FNTEW,” respectively. We will apply to continue the listing of our common stock and warrants on The NASDAQ Capital Market under the symbols “[●]” and “[●],” respectively, upon the closing of the Merger.

 

Pursuant to our charter, we are providing holders of the shares of common stock included in the units issued in our initial public offering, which we refer to as our public stockholders, with the opportunity, upon the closing of the Merger and subject to the limitations described in this proxy statement/prospectus, to redeem their shares of our common stock for cash equal to their pro rata share of the aggregate amount on deposit in our trust account (as of two business days prior to the consummation of the Merger). For illustrative purposes, based on funds in our trust account of approximately $175.6 million on February 28, 2018, stockholders would have received a redemption price of approximately $10.03 per share of our common stock. Public stockholders may elect to redeem their shares even if they vote for the Merger Proposal.

 

 We are providing this proxy statement/prospectus and the accompanying proxy card to our stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. The special meeting will be held at [●] [AM./P.M.] Eastern Time on [●], 2018 at [●]. Whether or not you plan to attend the special meeting, we urge you to read this proxy statement/prospectus (including the annexes) carefully, including the section entitled “Risk Factors” beginning on page 30.

 

 Your vote is very important, regardless of the number of shares of our common stock you own. To ensure your representation at the special meeting, please take time to vote by following the instructions contained in this proxy statement/prospectus and on your proxy card. Please vote promptly whether or not you expect to attend the special meeting. Submitting a proxy now will not prevent you from being able to vote in person at the special meeting.

 

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the special meeting. If you fail to return your proxy card and do not attend the special meeting in person, if you abstain from voting, or if you hold your shares in “street name” through a broker or other nominee and fail to give such nominee voting instructions (a “broker non-vote”), it will have the same effect as a vote “AGAINST” the Merger Proposal and the charter Proposals but will have no effect on the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal or the Adjournment Proposal. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote in person, obtain a proxy from your broker or bank.

 

The Merger Proposal is conditioned on the approval of Proposal 2 and the NASDAQ Proposal. In addition, (i) Proposal 2 is conditioned on the approval of the Merger Proposal and the NASDAQ Proposal, (ii) each of Proposal 3, Proposal 4 and the Incentive Plan Proposal is conditioned on the approval of the Merger Proposal, Proposal 2 and the NASDAQ Proposal, and (iii) the NASDAQ Proposal is conditioned on the Merger Proposal and Proposal 2. Neither the Director Election Proposal nor the Adjournment Proposal is conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that if either the Merger Proposal or the NASDAQ Proposal is not approved by our stockholders, or if any other proposal is not approved by our stockholders and we and Intermex do not waive the applicable closing condition under the Merger Agreement, then the Merger will not be consummated.

 

 

 

 

Our board of directors unanimously recommends that our stockholders vote “FOR” the Merger Proposal and “FOR” the other proposals presented in this proxy statement/prospectus. In considering the recommendation of our board of directors, you should keep in mind that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of our stockholders generally. For additional information, see the section entitled “Proposal No. 1—The Merger Proposal—Interests of Certain Persons in the Merger.”

 

    Sincerely,
   
    /s/ Daniel G. Cohen
    Daniel G. Cohen
    Chief Executive Officer and Director

 

This proxy statement/prospectus is dated [●], 2018, and is first being mailed to our stockholders on or about [●], 2018.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE MERGER, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

 

 

 

FINTECH ACQUISITION CORP. II

 

2929 Arch Street, Suite 1703 

Philadelphia, Pennsylvania 19104

 

NOTICE OF SPECIAL MEETING IN LIEU OF 2018 ANNUAL MEETING 

OF STOCKHOLDERS OF FINTECH ACQUISITION CORP. II 

To Be Held on [●], 2018

 

To the Stockholders of FinTech Acquisition Corp. II:

 

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2018 annual meeting of stockholders, which we refer to as the special meeting, of FinTech Acquisition Corp. II, a Delaware corporation, will be held on [●], 2018, at [●] [A.M./P.M.], Eastern Time, at [●]. You are cordially invited to attend the special meeting which will be held to consider and vote upon the following matters:

 

(1) The Merger Proposal—to consider and vote upon a proposal to approve the Merger and adopt the Merger Agreement;

 

(2) The charter Proposals—to consider and vote upon proposed amendments to our charter to (i) increase our authorized common stock (referred to herein as Proposal 2), (ii) create an additional class of directors so that there will be three classes of directors with staggered terms of office, and to make certain related changes (referred to herein as Proposal 3), and (iii) provide for additional changes, principally including changing our corporate name from “FinTech Acquisition Corp. II” to “International Money Express, Inc.” and removing provisions applicable only to special purpose acquisition companies (referred to herein as Proposal 4);

 

(3) The NASDAQ Proposal—to consider and vote upon a proposal to approve, for purposes of complying with applicable NASDAQ listing rules, the issuance of more than 20% of our issued and outstanding common stock and the resulting change of control in connection with the Merger;

 

(4) The Incentive Plan Proposal—to consider and vote upon a proposal to adopt the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan, which we refer to as the Omnibus Plan;

 

(5) The Director Election Proposal—to consider and vote upon a proposal to elect three Class I directors to serve on our board of directors until the 2020 annual meeting of stockholders, and until their respective successors are duly elected and qualified or until their earlier resignation, removal or death; and

 

(6) The Adjournment Proposal—to consider and vote upon a proposal to approve the adjournment of the special meeting by the chairman thereof to a later date, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal and the Director Election Proposal.

 

These items of business are described in the accompanying proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of our common stock at the close of business on [●], 2018 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting.

 

All FinTech stockholders are cordially invited to attend the special meeting in person. To ensure your representation at the special meeting, however, we urge you to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a stockholder of record, you may also cast your vote in person at the special meeting. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the special meeting. If you fail to return your proxy card and do not attend the special meeting in person, if you abstain from voting, or if you hold your shares in “street name” through a broker or other nominee and fail to give such nominee voting instructions (a “broker non-vote”), it will have the same effect as a vote “AGAINST” the Merger Proposal and the charter Proposals but will have no effect on the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal or the Adjournment Proposal. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote in person, obtain a proxy from your broker or bank. Public stockholders may elect to redeem their public shares even if they vote “FOR” the Merger Proposal.

 

 

 

 

The Merger Proposal is conditioned on the approval of Proposal 2 and the NASDAQ Proposal. In addition, (i) Proposal 2 is conditioned on the approval of the Merger Proposal and the NASDAQ Proposal, (ii) each of Proposal 3, Proposal 4 and the Incentive Plan Proposal is conditioned on the approval of the Merger Proposal, Proposal 2 and the NASDAQ Proposal, and (iii) the NASDAQ Proposal is conditioned on the Merger Proposal and Proposal 2. Neither the Director Election Proposal nor the Adjournment Proposal is conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus. It is important for you to note that if either the Merger Proposal or the NASDAQ Proposal is not approved by our stockholders, or if any other proposal is not approved by our stockholders and we and Intermex do not waive the applicable closing condition under the Merger Agreement, then the Merger will not be consummated.

 

After careful consideration, our board of directors has determined that the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal are fair to and in the best interests of FinTech and our stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the Merger Proposal and “FOR” the other proposals presented in the accompanying proxy statement/prospectus. In considering the recommendation of our board of directors, you should keep in mind that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of our stockholders generally. For additional information, see the section in the accompanying proxy statement/prospectus entitled “Proposal No. 1—The Merger Proposal—Interests of Certain Persons in the Merger.”

 

A complete list of FinTech stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at the principal executive offices of FinTech for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

 

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly voted.

 

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the annexes thereto) for a more complete description of the Merger and related transactions and each of our proposals. Whether or not you plan to attend the special meeting, we urge you to read the accompanying proxy statement/prospectus (including the annexes) carefully, including the section entitled “Risk Factors” beginning on page 30 thereof. If you have any questions regarding the accompanying proxy statement/prospectus or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC at (800) 662-5200 if you are a stockholder or collect at (203) 658-9400 if you are a broker or bank.

 

Philadelphia, Pennsylvania   By Order of the Board of Directors,
   
[●], 2018   /s/ Daniel G. Cohen
    Daniel G. Cohen
    Chief Executive Officer and Director

  

 

 

 

TABLE OF CONTENTS

 

FREQUENTLY USED TERMS 1
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS 3
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS 14
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF FINTECH 22
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF INTERMEX 23
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 25
COMPARATIVE PER SHARE DATA 27
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 28
RISK FACTORS 30
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 57
SPECIAL MEETING OF FINTECH STOCKHOLDERS 63
PROPOSAL NO. 1—THE MERGER PROPOSAL 67
PROPOSAL NO. 2—AUTHORIZATION TO INCREASE OUR AUTHORIZED CAPITAL 100
PROPOSAL NO. 3—CLASSIFICATION OF THE BOARD OF DIRECTORS 102
PROPOSAL NO. 4—APPROVAL OF ADDITIONAL AMENDMENTS TO OUR CHARTER IN CONNECTION WITH THE MERGER 104
PROPOSAL NO. 5—THE NASDAQ PROPOSAL 108
PROPOSAL NO. 6—THE INCENTIVE PLAN PROPOSAL 109
PROPOSAL NO. 7—THE DIRECTOR ELECTION PROPOSAL 115
PROPOSAL NO. 8—THE ADJOURNMENT PROPOSAL 116
Material U.S. Federal Income Tax Consequences 117
INFORMATION ABOUT FINTECH 122
FINTECH’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 131
INFORMATION ABOUT INTERMEX 134
INTERMEX’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 151
MANAGEMENT FOLLOWING THE MERGER 172
DESCRIPTION OF SECURITIES 179
BENEFICIAL OWNERSHIP OF SECURITIES 185
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 188
PRICE RANGE OF SECURITIES AND DIVIDENDS 191
LEGAL MATTERS 192
EXPERTS 192
APPRAISAL RIGHTS 192
DELIVERY OF DOCUMENTS TO STOCKHOLDERS 192
TRANSFER AGENT AND REGISTRAR 192
SUBMISSION OF STOCKHOLDER PROPOSALS 192
FUTURE STOCKHOLDER PROPOSALS 192
WHERE YOU CAN FIND MORE INFORMATION 193
INDEX TO FINANCIAL STATEMENTS F-1
   
ANNEX A – AGREEMENT AND PLAN OF MERGER A-1
ANNEX B – OMNIBUS EQUITY COMPENSATION PLAN B-1
ANNEX C – SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION C-1
ANNEX D – OPINION OF BTIG, LLC D-1
ANNEX E – NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER E-1

 

i

 

FREQUENTLY USED TERMS

 

Unless otherwise stated or unless the context otherwise requires, the terms we, us, our, the Company and FinTech refer to FinTech Acquisition Corp. II, and the terms combined company and post-combination company refer to FinTech Acquisition Corp. II and Intermex Holdings II, Inc. following the consummation of the Merger. Furthermore, in this document:

 

Cantor” means Cantor Fitzgerald & Co., the underwriter for our IPO.

 

Company common stock” or “our common stock” means common stock, par value $0.0001 per share, of FinTech.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

founder shares” means the 5,973,333 shares of our common stock issued to the initial stockholders prior to our IPO.

 

Holdings” means Intermex Holdings, Inc., a Delaware corporation and wholly owned subsidiary of Intermex.

 

initial stockholders” or “initial holders” means our Sponsor, Daniel G. Cohen, Betsy Z. Cohen, DGC Family FinTech Trust, Swarthmore Trust of 2016, James J. McEntee, III, Shami Patel, Jeremy Kuiper, Hepco Family Trust, Plamen Mitrikov, Cohen Sponsor Interests II, LLC and Cohen and Company LLC, each of whom holds founder shares.

 

Intermex” means Intermex Holdings II, Inc., a Delaware corporation.

 

Intermex legacy stockholders” means the members of Interwire LLC.

 

Interwire LLC” means Interwire Topco, LLC, a Delaware limited liability company and the sole stockholder of Intermex.

 

IPO” means our initial public offering, consummated on January 25, 2017, in which we sold 17,500,000 public units at $10.00 per unit.

 

Merger” means the acquisition of Intermex by FinTech through the merger of Merger Sub 1 with and into Intermex with Intermex being the initial surviving entity, immediately followed by the merger of the initial surviving entity with and into Merger Sub 2 with Merger Sub 2 continuing as the surviving entity and a wholly owned subsidiary of the Company pursuant to the Merger Agreement.

 

Merger Agreement” means the Agreement and Plan of Merger, dated as of December 19, 2017, as it may be amended, by and among FinTech, Merger Sub 1, Merger Sub 2, Intermex and SPC Intermex Representative.

 

Merger Sub 1” means FinTech II Merger Sub Inc., a Delaware corporation and direct wholly-owned subsidiary of FinTech.

 

Merger Sub 2” means FinTech II Merger Sub 2 LLC, a Delaware limited liability company and direct wholly owned subsidiary of FinTech.

 

Merger Sub Shares” means shares of common stock, par value $0.01 per share, of Merger Sub 1.

 

Omnibus Plan” means the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (an equity-based incentive plan) attached to this proxy statement/prospectus as Annex B.

 

placement shares” means the 420,000 shares of Company common stock included in the placement units purchased separately in the private placement by our Sponsor and Cantor.

 

placement units” means the 420,000 units purchased by our Sponsor and Cantor in the private placement, each placement unit consisting of one placement share and one half of one placement warrant.

 

 1 

 

placement warrants” means the 210,000 warrants included in the placement units purchased by our Sponsor and Cantor in the private placement, each of which is exercisable for one share of Company common stock in accordance with its terms.

 

private placement” means the private sale of 420,000 units purchased by our Sponsor and Cantor that occurred simultaneously with the consummation of our IPO for a purchase price of $10.00 per placement unit for a total purchase price of $4.2 million.

 

proposed charter” means the proposed second amended and restated certificate of incorporation of FinTech, which will become the Company’s certificate of incorporation upon the approval of the charter Proposals, the Merger Proposal, the NASDAQ Proposal and the Incentive Plan Proposal and the consummation of the Merger. A copy of the proposed charter is attached hereto as Annex C.

 

public shares” means the 17,500,000 shares of our common stock included in the units issued in our IPO.

 

public stockholders” means holders of public shares, including our initial stockholders to the extent our initial stockholders hold public shares, provided that our initial stockholders will be considered “public stockholders” only with respect to any public shares held by them.

 

public warrants” means the 8,750,000 warrants included in the units issued in our IPO, each of which is exercisable for one share of our common stock in accordance with its terms.

 

Securities Act” means the Securities Act of 1933, as amended.

 

SPC Intermex Representative” means, SPC Intermex Representative LLC, a Delaware limited liability company and the representative of Interwire LLC under the Merger Agreement.

 

special meeting” means the special meeting in lieu of the 2018 annual meeting of stockholders of FinTech that is the subject of this proxy statement/prospectus.

 

Sponsor” means FinTech Investor Holdings II, LLC, a Delaware limited liability company and one of our initial stockholders.

 

 2 

 

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

 

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting, including with respect to the proposed Merger. The following questions and answers do not include all the information that may be important to you. Whether or not you plan to attend the special meeting, we urge you to read this proxy statement/prospectus (including the annexes) carefully, including the section entitled “Risk Factors” beginning on page 30.

 

Q: Why am I receiving this proxy statement/prospectus?

 

A: Our stockholders are being asked to consider and vote upon a proposal to approve the Merger and adopt the Merger Agreement, among other proposals. We have entered into the Merger Agreement with Intermex which provides for our acquisition of Intermex pursuant to the merger of Merger Sub 1 with and into Intermex with Intermex continuing as the initial surviving entity, immediately followed by the merger of the initial surviving entity with and into Merger Sub 2 with Merger Sub 2 continuing as the surviving entity and a wholly owned subsidiary of the Company. Pursuant to the Merger Agreement, the aggregate consideration to be paid in the Merger will consist of (i) $92,000,000 in cash, (ii) an estimated 16,598,281 shares of our common stock based on Intermex’s current capitalization and assuming the Merger is completed on June 30, 2018, and (iii) an amount (as determined in accordance with the Merger Agreement) equal to any excess cash at Intermex at the time of the closing of the Merger in the form of additional shares of our common stock and/or, at our option, up to $10 million of such amount in cash. The number of shares of our common stock to be issued as consideration in the Merger will be based on a $10.00 per share value for our common stock. The amount of cash and common stock to be issued as consideration in the Merger is subject to adjustment as set forth in the Merger Agreement. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.
   
  Our common stock, units and warrants are currently listed on The NASDAQ Capital Market under the symbols “FNTE,” “FNTEU” and “FNTEW,” respectively. We will apply to continue the listing of our common stock and warrants on The NASDAQ Capital Market under the symbols “[●]” and “[●],” respectively, upon the closing of the Merger. At the closing, each of our units that are not already trading separately will separate into its component share of common stock and one half of one warrant to purchase one share of our common stock.
   
  This proxy statement/prospectus and its annexes contain important information about the proposed Merger and the other matters to be acted upon at the special meeting. Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its annexes, which we urge you to do.

 

Q: What is being voted on at the special meeting?

 

A:

Our stockholders are being asked to vote on the following proposals:

 

Proposal 1—The Merger Proposal— A proposal to approve and adopt the Merger and the Merger Agreement;

 

Proposals 2, 3 and 4—The charter Proposals—Proposals to amend our charter to (i) increase our authorized common stock (Proposal 2), (ii) add an additional class of directors so that there will be three classes of directors with staggered terms of office, and to make certain related changes (Proposal 3), and (iii) provide for additional changes, principally changing our corporate name from “FinTech Acquisition Corp. II” to “International Money Express, Inc.” and removing provisions applicable only to special purpose acquisition companies (Proposal 4);

 

Proposal 5—The NASDAQ Proposal—A proposal to approve, for purposes of complying with applicable NASDAQ listing rules, the issuance of more than 20% of our issued and outstanding common stock and the resulting change of control in connection with the Merger;

 

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Proposal 6—The Incentive Plan Proposal—A proposal to adopt the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan; and  

 

Proposal 7—The Director Election Proposal—A proposal to elect three directors to serve on our Board of Directors until the 2020 annual meeting of stockholders, and until their respective successors are duly elected and qualified or until their earlier resignation, removal or death; and  

 

Proposal 8—The Adjournment Proposal—A proposal to approve the adjournment of the special meeting to a later date, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal and the Director Election Proposal.

 

Q: Are the proposals conditioned on one another?

 

A: The Merger Proposal is conditioned on the approval of Proposal 2 and the NASDAQ Proposal. In addition, (i) Proposal 2 is conditioned on the approval of the Merger Proposal and the NASDAQ Proposal, (ii) each of Proposal 3, Proposal 4 and the Incentive Plan Proposal is conditioned on the approval of the Merger Proposal, Proposal 2 and the NASDAQ Proposal, and (iii) the NASDAQ Proposal is conditioned on the Merger Proposal and Proposal 2. Neither the Director Election Proposal nor the Adjournment Proposal is conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that if either the Merger Proposal or the NASDAQ Proposal is not approved by our stockholders, or if any other proposal is not approved by our stockholders and we and Intermex do not waive the applicable closing condition under the Merger Agreement, then the Merger will not be consummated.

 

Q: Why is FinTech providing stockholders with the opportunity to vote on the Merger?

 

A: Our charter requires that we provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination in conjunction with either a tender offer or a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than pursuant to a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Merger Proposal in order to provide our public stockholders with the opportunity to redeem their public shares in connection with the closing of the Merger.

 

Q: What will happen in the Merger?

 

A: At the closing of the Merger, Merger Sub 1 will merge with and into Intermex with Intermex continuing as the initial surviving entity, immediately followed by the merger of the initial surviving entity with and into Merger Sub 2 with Merger Sub 2 continuing as the surviving entity and a wholly owned subsidiary of the Company. Interwire LLC, the sole stockholder of Intermex, will exchange its shares of Intermex common stock for a combination of shares of our common stock and cash as consideration in the Merger. Upon consummation of the Merger, we will change our name to International Money Express, Inc., Intermex will change its name to Intermex Holding Corp. and Merger Sub 2, the surviving entity, will change its name to                    .

 

 

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Q: What equity stake will current FinTech stockholders and Interwire LLC or its designees hold in the Company immediately following the closing of the Merger?

 

A: We anticipate that, upon completion of the Merger, assuming that none of our stockholders exercise redemption rights and that an aggregate of 16,598,281 shares of our common stock will be issued as partial consideration in the Merger, our existing stockholders will hold in the aggregate approximately 58.4% of our outstanding common stock (43.2% held by our public stockholders and 15.1% held by the initial stockholders) and Interwire LLC and its designees will hold approximately 41.6% of our outstanding common stock. If 5,000,000 shares of our common stock are redeemed for cash, which assumes the maximum redemption of our shares while still providing for a minimum of $125 million of cash in the trust account after giving effect to payments to redeeming stockholders, upon completion of the Merger, our existing stockholders will hold in the aggregate approximately 52.5% of our outstanding common stock (35.2% held by our public stockholders and 17.2% held by the initial stockholders) and Interwire LLC and its designees will hold approximately 47.5% of our outstanding common stock. These ownership percentages do not take into account (1) any warrants to purchase our common stock that will be outstanding following the Merger, (2) any equity awards that may be issued under our proposed Omnibus Plan following the Merger or (3) any adjustments to the Merger Consideration pursuant to the Merger Agreement. If the actual facts are different than these assumptions (which is likely), the ownership percentages held by each of our existing stockholders, Cantor and Interwire LLC and its designees will be different.
   
  See the section entitled “Summary—Impact of the Merger on FinTech’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

Q: Will FinTech obtain new financing in connection with the Merger?

 

A: No. We anticipate that Intermex’s existing credit facility will remain in place following the Merger. For a summary of the material terms of Intermex’s credit facilities, see the section entitled “Information about Intermex—Intermex Credit Facilities” for more information.

 

Q: What conditions must be satisfied to complete the Merger?

 

A: There are a number of closing conditions in the Merger Agreement, including that our stockholders have approved the Merger and adopted the Merger Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Merger, see the section entitled “Proposal No. 1—The Merger Proposal—The Merger Agreement – Conditions to Closing of the Merger.”

 

Q: Why is FinTech proposing the charter Proposals?

 

A: We are asking our stockholders to approve these proposals to amend our charter in connection with the Merger and the terms of the Merger Agreement. The proposed charter amendments that we are asking our stockholders to approve provide for (1) an increase in the number of authorized shares of our common stock so that we will have sufficient authorized shares to issue as consideration in the Merger and to reserve for issuance under the Omnibus Plan, if such plan is approved, and for future issuances of common stock, (2) the creation of an additional class of directors so that there will be three classes of directors with staggered terms of office and (3) additional changes, principally the change of our name to “International Money Express, Inc.” and the removal of provisions in our charter applicable only to special purpose acquisition corporations. Pursuant to the Merger Agreement, approval of the charter Proposals is a condition to consummation of the Merger. In addition, the Merger Proposal is conditioned on approval of Proposal 2.

  

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Q: Why is FinTech proposing the NASDAQ Proposal?

 

A: We are proposing the NASDAQ Proposal in order to comply with NASDAQ Listing Rules 5635(a) and (b), which require stockholder approval of the issuance of shares of stock in certain transactions that results in (1) the issuance of 20% or more of the voting power outstanding or shares of common stock outstanding before such issuance of stock and (2) a change of control. Pursuant to the Merger Agreement, based on Intermex’s current capitalization and assuming a closing date of June 30, 2018, we anticipate issuing an aggregate of 16,598,281 shares of our common stock, subject to adjustment as set forth in the Merger Agreement, to Interwire LLC as partial consideration in the Merger. Because the issuance of such shares of our common stock (1) will constitute more than 20% of our outstanding common stock and more than 20% of outstanding voting power prior to such issuance and (2) will result in a change of control of FinTech, we are required to obtain stockholder approval of such issuance pursuant to NASDAQ Listing Rules 5635(a) and (b). In addition, the Merger Proposal is conditioned on approval of the NASDAQ Proposal.
   
Q: Why is FinTech proposing the Incentive Plan Proposal?

 

A: The purpose of the Omnibus Plan is to provide eligible employees, directors and consultants the opportunity to receive stock-based incentive awards in order to encourage such persons to contribute materially to the growth of the combined company and align their economic interests with those of our stockholders. NASDAQ Listing Rule 5635(c) requires that we obtain stockholder approval of certain equity compensation plans. Accordingly, we are proposing the Incentive Plan Proposal to request such stockholder approval of the Omnibus Plan. In addition, pursuant to the Merger Agreement, approval of the Incentive Plan Proposal is a condition to consummation of the Merger.

 

Q: What happens if I sell my shares of Company common stock before the special meeting?

 

A: The record date for the special meeting is [●], 2018, and is earlier than the date on which we expect the Merger to be completed. If you transfer your shares of common stock after the record date, but before the special meeting, unless the transferee obtains a proxy from you to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares because you will no longer be able to deliver them for cancellation upon consummation of the Merger. If you transfer your shares of our common stock before the record date, you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in our trust account.

 

Q: What constitutes a quorum at the special meeting?

 

A: A quorum will be present at the special meeting if a majority of the shares of our common stock outstanding and entitled to vote at the special meeting is represented at the meeting in person or by proxy. If a stockholder fails to vote his, her or its shares in person or by proxy, or if a broker fails to vote in person or by proxy shares held by it in nominee name, such shares will not be counted for the purposes of establishing a quorum. If a stockholder who holds his, her or its shares in “street name” through a broker or other nominee fails to give voting instructions to such broker or other nominee (a “broker non-vote”) on all of the proposals set forth in this proxy statement/prospectus, such shares will not be counted for the purposes of establishing a quorum. An abstention from voting, shares represented at the special meeting in person or by proxy but not voted on one or more proposals, or a broker non-vote, so long the stockholder has given the broker or other nominee voting instructions on at least one of the proposals in this proxy statement/prospectus, will each count as present for the purposes of establishing a quorum. In the absence of a quorum, the chairman of the special meeting may adjourn the special meeting. As of the record date for the special meeting, the presence in person or by proxy of 11,946,667 shares of our common stock is required to achieve a quorum.

 

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Q: What vote is required to approve the proposals presented at the special meeting?

 

A:

The approval of the Merger Proposal requires the affirmative vote of holders of a majority of the outstanding shares of our common stock, or 11,946,667 shares of our common stock. Accordingly, a stockholder’s failure to vote by proxy or to vote in person at the special meeting, an abstention from voting or a broker non-vote will each have the same effect as a vote “AGAINST” the Merger Proposal.

 

The approval of each charter Proposal requires the affirmative vote of holders of a majority of the outstanding shares of our common stock. Accordingly, a stockholder’s failure to vote in person or by proxy, a broker non-vote or an abstention on a charter Proposal will have the same effect as a vote “AGAINST” such proposal.

 

The approval of each of the NASDAQ Proposal, the Incentive Plan Proposal and the Adjournment Proposal require the affirmative vote of holders of a majority of the total votes cast on such proposal. In order to be elected as a director as described in the Director Election Proposal, a nominee must receive a plurality of all the votes cast at the special meeting, which means that the nominees with the most votes are elected. Accordingly, neither a stockholder’s failure to vote in person or by proxy, a broker non-vote nor an abstention will be considered a “vote cast,” and thus will have no effect on the outcome of the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal or the Adjournment Proposal.

 

Q: May the initial stockholders, FinTech’s directors, officers, advisors or their respective affiliates purchase shares in connection with the Merger?

 

A: At any time prior to the special meeting, our initial stockholders, directors, officers, advisors or their respective affiliates may purchase shares of our common stock on the open market, and may purchase shares in privately negotiated transactions from stockholders who vote, or indicate an intention to vote, against the Merger Proposal, or who have elected or redeem, or indicate an intention to redeem, their shares in connection with the Merger. Any such privately negotiated purchases may be effected at purchase prices that are in excess of fair market value or in excess of the per-share pro rata portion of the trust account. Our initial stockholders, directors, officers, advisors and their respective affiliates may also enter into transactions with stockholders and others to provide them with incentives to acquire shares of our common stock, to vote their shares in favor of the Merger Proposal or to not redeem their shares in connection with the Merger. While the exact nature of such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such persons against potential loss in value of their shares, including the granting of put options and the transfer to such persons of shares or warrants for nominal value. Our initial stockholders, directors, officers or their respective affiliates will not effect any such purchases when they are in possession of any material non-public information relating to FinTech or Intermex, during a restricted period under Regulation M under the Exchange Act or in a transaction which would violate Section 9(a)(2) or Rule 10(b)-5 under the Exchange Act.

 

Q: How many votes do I have at the special meeting?

 

A: Our stockholders are entitled to one vote at the special meeting for each share of our common stock held of record as of [●], 2018, the record date for the special meeting. As of the close of business on the record date, there were 23,893,333 outstanding shares of our common stock.

 

Q: How will the initial stockholders and FinTech’s directors and officers vote?

 

A:

In connection with our IPO, we entered into an agreement with each of our initial stockholders, our executive officers and our directors, pursuant to which they agreed to vote any shares of our common stock owned by them in favor of a proposed initial business combination. As of the date of this proxy statement/prospectus, our initial stockholders, executive officers and directors own approximately 26.6% of our issued and outstanding shares of common stock, including all of the founder shares. None of our initial stockholders, executive officers or directors have entered into agreements, and are not currently in negotiations, to purchase or sell shares prior to the record date.

 

In addition, simultaneously with the execution of the Merger Agreement, certain of our initial stockholders, executive officers and directors entered into a Voting Agreement with us and Intermex, which we refer to as the Voting Agreement, pursuant to which the parties thereto agreed to vote any shares of our common stock owned by them (representing as of the date hereof approximately 26.6% of the outstanding shares of our common stock) in favor of the Merger Proposal and other proposals described in this proxy statement/prospectus and presented at the special meeting.

 

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Q: What interests do FinTech’s current officers and directors have in the Merger?

 

A: Our directors and executive officers have interests in the Merger that are different from or in addition to (and which may conflict with) the interests of our stockholders including the following:

 

  our Sponsor, officers and directors will hold our common stock following the Merger, subject to lock-up agreements;

 

  our Sponsor, officers and directors will hold placement warrants to purchase shares of our common stock;

 

  our Sponsor, officers and certain of our directors paid an aggregate of $3,928,311 for their founder shares, placement shares and placement warrants and that such securities should have a significantly higher value at the time of the Merger and will have little or no value if we do not complete the Merger;

 

  our Sponsor, officers and directors have waived their redemption rights with respect to their founder shares, placement shares and public shares in connection with the Merger, and have waived their redemption and liquidation rights with respect to their founder shares and placement shares if we are unable to complete a business combination by January 25, 2019;

 

  if we are unable to complete a business combination by January 25, 2019, our Chief Executive Officer will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities to which we owe money for services rendered or contracted for or products sold to us, but only if such a vendor or target business has not executed such a waiver;
     
  our Sponsor has agreed to loan us funds in an amount up to $1.1 million for working capital requirements and to finance transaction costs in connection with an initial business combination, and any amounts outstanding under this loan will not be repaid if we are unable to complete a business combination by January 25, 2019;

 

  the initial stockholders will have the collective right to appoint a board observer of the combined company; and

 

  the continued indemnification of our current directors and officers and the continuation of directors’ and officers’ liability insurance after the Merger.

 

These interests may influence our directors in making their recommendation that you vote in favor of the Merger Proposal and the other proposals set forth in this proxy statement/prospectus.

 

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Q: What happens if I vote against the Merger Proposal?

 

A: If the Merger Proposal is not approved and we do not otherwise consummate an alternative business combination by January 25, 2019, we will be required to dissolve and liquidate our trust account by returning the then remaining funds in such account to the public stockholders.

 

Q: Do I have redemption rights?

 

A: If you are a holder of public shares, you may redeem your public shares for cash equal to a pro rata share of the aggregate amount on deposit in the trust account as of two business days prior to the consummation of the Merger (including any portion of the interest earned thereon which was not previously used or distributed to us for working capital purposes or to pay dissolution expenses or taxes), upon the consummation of the Merger. You must affirmatively vote “FOR” or “AGAINST” the Merger Proposal in order to exercise redemption rights. A public stockholder, together with any of his, her or its affiliates or any other person with whom such holder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding public shares. Our initial stockholders and Cantor have waived their redemption rights with respect to their founder shares and placement shares in connection with the Merger, and our initial stockholders have also waived their redemption rights with respect to any public shares they hold in connection with the Merger. All such shares held by our initial stockholders and Cantor will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, based on funds in the trust account of approximately $175.6 million on February 28, 2018, the estimated per share redemption price would have been approximately $10.03. Additionally, shares properly tendered for redemption will only be redeemed if the Merger is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the trust account (including any portion of the interest earned thereon which was not previously used or distributed to us for working capital purposes or to pay dissolution expenses or taxes) upon our liquidation.

 

Q: Do the initial stockholders or FinTech’s directors and officers have redemption rights in connection with the Merger?

 

A: No. Our initial stockholders, directors and officers have waived their redemption rights with respect to their founder shares, placement shares and public shares in connection with the Merger.

 

Q: Will how I vote affect my ability to exercise redemption rights?

 

A: Yes. You may exercise your redemption rights whether you vote your shares of our common stock “FOR” or “AGAINST” the Merger Proposal or any other proposal described in this proxy statement/prospectus. However, you must affirmatively vote “FOR” or “AGAINST” the Merger Proposal in order to exercise redemption rights.

 

Q: How do I exercise my redemption rights?

 

A: In order to exercise your redemption rights, you must (i) affirmatively vote either “FOR” or “AGAINST” the Merger Proposal; (ii) check the box on the enclosed proxy card to elect redemption; and (iii) prior to 5:00 p.m., Eastern Time on [●], 2018 (two business days before the special meeting), (x) submit a written request, which includes the name of the beneficial owner of the shares to be redeemed, to our transfer agent that we redeem your public shares for cash, and (y) deliver your stock to our transfer agent physically or electronically through Depository Trust Company, or DTC. The address of Continental Stock Transfer & Trust Company, our transfer agent, is listed under the question “Who can help answer my questions?” below.

 

Any demand for redemption, once made, may be withdrawn at any time until the date of the special meeting. If you deliver your shares for redemption to our transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that our transfer agent return the shares to you (physically or electronically). You may make such request by contacting our transfer agent at the address listed under the question “Who can help answer my questions?” below.

 

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Q: What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A: The U.S. federal income tax consequences of exercising your redemption rights depend on your particular facts and circumstances. See the section entitled “Material U.S. Federal Income Tax Consequences—Exercise of Redemptions Rights.” You are urged to consult with your own tax advisor regarding the tax consequences of exercising your redemptions rights.

 

Q: If I am a FinTech warrant holder, can I exercise redemption rights with respect to my warrants?

 

A: No. The holders of our warrants have no redemption rights with respect to our warrants or any shares of our common stock underlying our warrants.

 

Q: Do I have appraisal rights if I object to the proposed Merger?

 

A: No. There are no appraisal rights available to holders of our common stock in connection with the Merger.

 

Q: What happens to the funds held in the trust account upon consummation of the Merger?

 

A: If the Merger is consummated, the funds held in the trust account will be released to us, and those funds will be used to pay or fund (i) the portion of Merger consideration payable in cash pursuant to the Merger Agreement, (ii) the redemption price for shares of our common stock redeemed by our stockholders who properly exercise redemption rights, (iii) up to $9.2 million in deferred underwriting compensation payable to Cantor as the underwriters of our IPO, (iv) fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees, and other professional fees) that were incurred by or on behalf of the Company, Merger Sub 1, Merger Sub 2 and Intermex in connection with the Merger and the other transactions contemplated by the Merger Agreement, (v) the repayment of loans from our Sponsor in an aggregate amount not to exceed $1.1 million for working capital purposes and to pay expenses to identify an acquisition target and consummate the Merger and related transactions (see the section entitled “Certain Relationships and Related Transactions—FinTech Related Person Transactions” for additional information), and (vi) general corporate purposes of the combined company, which may include, but not be limited to, working capital for operations, repayment of indebtedness, capital expenditures and future acquisitions.

 

Q: What happens if the Merger is not consummated?

 

A:

There are certain circumstances under which the Merger Agreement may be terminated. See the section entitled “Proposal No. 1—The Merger Proposal—The Merger Agreement—Termination” for information regarding the parties’ specific termination rights.

 

If, as a result of the termination of the Merger Agreement or otherwise, we are unable to complete the Merger or another business combination transaction by January 25, 2019, our charter provides that we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem all public shares then outstanding at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to us for working capital purposes, the payment of taxes or dissolution expenses, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

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  We expect that the amount of any distribution our public stockholders will be entitled to receive upon our dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Merger, subject in each case to our obligations under Delaware law to provide for claims of creditors and other requirements of applicable law. Holders of our founder shares and placement shares have waived any right to any liquidation distribution with respect to those shares.
   
  In the event of liquidation, there will be no distribution with respect to our outstanding warrants. Accordingly, the warrants will expire worthless.

 

Q: When is the Merger expected to be completed?

 

A:

We currently anticipate that the Merger will be consummated within [] days following the special meeting, provided that all other conditions to the consummation of the Merger have been satisfied or waived in accordance with the Merger Agreement. In any event, we expect the closing of the Merger to occur, on or prior to June 30, 2018.

 

For a description of the conditions to the consummation of the Merger, see the section entitled “Proposal No. 1—The Merger Proposal — Conditions to Closing of the Merger.”

 

Q: What do I need to do now?

 

A: Whether or not you plan to attend the special meeting, we urge you to read this proxy statement/prospectus (including the annexes) carefully, including the section entitled “Risk Factors” beginning on page 30, and to consider how the Merger will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q: How do I vote?

 

A: If you were a holder of record of our common stock on [●], 2018, the record date for the special meeting, you may vote in person at the special meeting or any adjournment thereof, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided to you by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly represented and voted at the special meeting. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote in person, obtain a proxy from your broker, bank or nominee.

 

Q: What will happen if I abstain from voting or fail to vote at the special meeting?

 

A: At the special meeting, if you abstain from voting with respect to a particular proposal, your shares will be counted as present for purposes of establishing a quorum. For purposes of approving the proposals, failure to vote or an abstention will each have the same effect as a vote “AGAINST” each of the Merger Proposal and the charter Proposals. A failure to vote or an abstention will have no effect on the outcome of each of the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal.

 

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Q: What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A: Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented at the special meeting or any adjournment thereof.

 

Q: If I am not going to attend the special meeting in person, should I return my proxy card instead?

 

A: Yes. Whether you plan to attend the special meeting or not, please read this proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q: If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A: No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe the proposals presented at the special meeting will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. If you do not provide instructions with your proxy, your bank, broker, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a bank, broker, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will be counted as present for the purpose of determining the existence of a quorum at the special meeting so long as a stockholder has given the broker or other nominee voting instructions on at least one of the proposals set forth in this proxy statement/prospectus. However, broker non-votes will not be counted as “votes cast” at the special meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

Q: May I change my vote after I have mailed my signed proxy card?

 

A: Yes. You may change your vote by sending a later-dated, signed proxy card to our transfer agent at the address listed under “Who can help answer my questions?” below so that it is received by the transfer agent prior to the special meeting, or attend the special meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to our chief financial officer, which must be received by our chief financial officer prior to the special meeting.

 

Q: What should I do if I receive more than one set of voting materials?

 

A: You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q: Who will solicit and pay the cost of soliciting proxies?

 

A: We will pay the cost of soliciting proxies for the special meeting. We have engaged Morrow Sodali LLC, which we refer to as Morrow, to assist in the solicitation of proxies for the special meeting. We will pay Morrow a fee of $22,500 plus a per call fee for any incoming or outgoing stockholder calls for such services, which fee also includes Morrow acting as the inspector of elections at the special meeting. We will reimburse Morrow for reasonable out-of-pocket expenses and will indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. We will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of our common stock for their expenses in forwarding soliciting materials to beneficial owners of our common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

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Q: Who can help answer my questions?

 

A: If you have questions about the proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact:

 

James J. McEntee, III, President and Chief Financial Officer

FinTech Acquisition Corp. II

2929 Arch Street, Suite 1703

Philadelphia, Pennsylvania 19104

Tel: (215) 735-1498

Email: jmce@stbwell.com 

 

You may also contact our proxy solicitor at:

 

Morrow Sodali LLC

470 West Avenue

Stamford, Connecticut 06902 

Tel: (800) 662-5200 or banks and brokers can call collect at (203) 658-9400 

Email: FNTE.info@morrowsodali.com

 

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

 

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

 

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our transfer agent prior to the special meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

 

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attn: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

 13 

 

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

 

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that may be important to you. To better understand the proposals to be considered at the special meeting, including the Merger Proposal, whether or not you plan to attend the special meeting, we urge you to read this proxy statement/prospectus (including the annexes) carefully, including the section entitled “Risk Factors” beginning on page 30. See also the section entitled “Where You Can Find More Information.”

 

Unless otherwise specified, all share amounts and share calculations: (i) assume no exercise of redemption rights by our public stockholders, (ii) assume that an aggregate of 16,598,281 shares of our common stock will be issued to Interwire LLC, the sole stockholder of Intermex, as partial consideration in the Merger, based on Intermex’s current capitalization and an assumed closing date of June 30, 2018, and (iii) do not include (a) any warrants to purchase our common stock that will be outstanding following the Merger, (b) any equity awards that may be issued under our proposed Omnibus Plan following the Merger or (c) any adjustments to the merger consideration contemplated by the Merger Agreement. 

 

Parties to the Merger

 

FinTech Acquisition Corp. II

 

We are a Delaware special purpose acquisition company formed in May 2015 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

Our securities are traded on The NASDAQ Capital Market under the ticker symbols “FNTE,” “FNTEU” and “FNTEW.” We will apply to continue the listing of our common stock and warrants on The NASDAQ Capital Market under the symbols “[●]” and “[●],” respectively, upon the closing of the Merger. Following the Merger, we expect to change our name to International Money Express, Inc.

 

The mailing address of our principal executive office is 2929 Arch Street, Suite 1703, Philadelphia, Pennsylvania 19104, and our telephone number is (215) 735-1498.

 

FinTech II Merger Sub Inc.

 

Merger Sub 1, a Delaware corporation, is a direct wholly-owned subsidiary formed by us on November 16, 2017 to consummate the Merger. In the Merger, Merger Sub 1 will merge with and into Intermex, with Intermex being the surviving entity. Interwire LLC, the sole stockholder of Intermex, will exchange its shares of Intermex common stock for a combination of cash and shares of our common stock as consideration in the Merger. Following the Merger, Intermex will change its name to Intermex Holding Corp.

 

The mailing address of Merger Sub 1’s principal executive office is 2929 Arch Street, Suite 1703, Philadelphia, Pennsylvania 19104, and its telephone number is (215) 735-1498.

 

FinTech II Merger Sub 2 LLC

 

Merger Sub 2, a Delaware limited liability company, is a direct wholly owned subsidiary formed by us on November 16, 2017 to consummate the Merger. In the Merger, Merger Sub 2 will merge with and into Intermex Holding Corp., with Merger Sub 2 being the surviving entity. Following the Merger, Merger Sub 2 will change its name to                    .

 

The mailing address of Merger Sub 2’s principal executive office is 2929 Arch Street, Suite 1703, Philadelphia, Pennsylvania 19104, and its telephone number is (215) 735-1498.

 

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Intermex Holdings II, Inc.

 

Intermex, a Delaware corporation, is a provider of money transfer services to Mexico, Guatemala and other countries in Latin America through a network of authorized agents located in retail establishments in the United States.

 

The mailing address of Intermex’s principal executive office is 9480 S. Dixie Hwy, Miami, Florida 33156 and its telephone number is (305) 671-8000.

 

SPC Intermex Representative LLC

 

SPC Intermex Representative, a Delaware limited liability company, was formed for the purpose of acting as the representative of Interwire LLC, the sole stockholder of Intermex, under the Merger Agreement.

 

The mailing address of SPC Intermex Representative’s principal executive office is 444 Madison Avenue, 25th Floor, New York, New York 10022, and its telephone number is (212) 235-0200.

 

The Merger Proposal

 

The Merger Agreement provides for the acquisition of Intermex pursuant to the merger of Merger Sub 1 with and into Intermex with Intermex continuing as the initial surviving entity, immediately followed by the merger of the initial surviving entity with and into Merger Sub 2 with Merger Sub 2 continuing as the surviving entity and a wholly owned subsidiary of the Company. The following summary of the Merger and the Merger Agreement is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus.

 

In the Merger, Interwire LLC, the sole stockholder of Intermex, will exchange its shares of Intermex common stock for a combination of cash and our common stock. The aggregate consideration to be paid in the Merger will consist of:

 

  $92,000,000 in cash, which we refer to as the Cash Merger Consideration;

 

  an estimated 16,598,281 shares of our common stock, which we refer to as the Common Stock Merger Consideration, based on Intermex’s current capitalization and assuming the Merger is completed on June 30, 2018; and
     
  an amount (as determined in accordance with the Merger Agreement) equal to any excess cash at Intermex at the time of the closing of the Merger in the form of additional shares of our common stock and/or, at our option, up to $10 million of such amount in cash.

 

The number of shares of our common stock to be issued in the Merger will be based on a $10.00 per share value for our common stock. The Cash Merger Consideration and the number of shares of our common stock to be issued as Common Stock Merger Consideration are each subject to adjustment as set forth in the Merger Agreement. We refer to the Cash Merger Consideration and the Common Stock Merger Consideration together as the Merger Consideration.

 

We intend to fund the Cash Merger Consideration with the cash held in our trust account. To the extent not used to pay the Cash Merger Consideration, the redemption price for any properly redeemed shares of our common stock, or fees and expenses related to the Merger and the transactions contemplated by the Merger Agreement, the proceeds from the trust account will be used for general corporate purposes, which may include, but not be limited to, working capital for operations, repayment of indebtedness, capital expenditures and future acquisitions.

 

See the section entitled “Proposal No. 1—The Merger Proposal” for more information regarding the Merger and the Merger Proposal.

 

 15 

 

Opinion of BTIG to FinTech’s Board of Directors

 

In connection with the Merger, our financial advisor, BTIG, LLC, which we refer to as BTIG, delivered a written opinion, dated December 12, 2017, which we refer to as the Opinion, to our board of directors that, as of December 12, 2017, and subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in the Opinion, (i) the Merger Consideration to be paid by us in the Merger pursuant to the Merger Agreement was fair to us, from a financial point of view, and (ii) the fair market value of Intermex implied by the various financial analyses BTIG conducted in connection with the Opinion equaled or exceeded 80% of the amount held by us in trust for the benefit of our public stockholders (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account).

 

The full text of the Opinion, which describes the assumptions made, procedures followed, matters considered, limitations on the review undertaken and qualifications contained in such opinion, is attached to this proxy statement/prospectus as Annex D and is incorporated herein by reference. We urge you to read the Opinion carefully in its entirety. BTIG’s Opinion does not constitute a recommendation to any holder of shares of our common stock as to how such holder should vote or act with respect to the Merger Agreement or the Merger Proposal, whether such holder should exercise its redemption rights with respect to its shares of our common stock or as to any other matter.

 

Redemption Rights

 

Pursuant to our charter, holders of our public shares may elect to have their shares redeemed for cash at a redemption price per share calculated in accordance with our charter. As of February 28, 2018, this would have amounted to approximately $10.03 per share. If a holder of public shares properly exercises his, her or its redemption rights, then such holder will be exchanging his, her or its shares of our common stock for cash and will no longer own such shares. Holders of public shares must affirmatively vote either “FOR” or “AGAINST” the Merger Proposal in order to exercise redemption rights. See the section entitled “Special Meeting of FinTech Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash and not continue to own our common stock following consummation of the Merger.

 

Notwithstanding the foregoing, a holder of public shares, together with any of its affiliates or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from exercising redemption rights with respect to 20% or more of the public shares.

 

Neither the Merger will be consummated nor will any public share be redeemed if public stockholders redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 or that would cause us to have insufficient funds to pay the Cash Merger Consideration and other amounts payable under the Merger Agreement.

 

It is a condition to closing under the Merger Agreement that at least $125 million remain in the trust account after payment of all requested redemptions by our public stockholders. Any redemptions by our public stockholders will decrease the funds in the trust account available to us to consummate the Merger and the other transactions contemplated by the Merger Agreement.

 

Impact of the Merger on FinTech’s Public Float

 

We anticipate that, upon completion of the Merger, assuming that none of our stockholders exercise redemption rights and that an aggregate of 16,598,281 shares of our common stock will be issued as partial consideration in the Merger, (1) our initial stockholders will hold approximately 15.1% of our outstanding common stock, (2) our public stockholders will hold approximately 43.2% of our outstanding common stock, and (3) Interwire LLC and its designees will hold approximately 41.6% of our outstanding common stock. If 5,000,000 shares of our common stock are redeemed for cash, which assumes the maximum redemption of our shares while still providing for a minimum of $125 million of cash in the trust account after giving effect to payments to redeeming stockholders, upon completion of the Merger, (1) our initial stockholders will hold approximately 17.2% of our outstanding common stock, (2) our public stockholders will hold approximately 35.2% of our outstanding common stock, and (3) Interwire LLC and its designees will hold approximately 47.5% of our outstanding common stock. These ownership percentages do not take into account (1) any warrants to purchase our common stock that will be outstanding following the Merger, (2) any equity awards that may be issued under our proposed Omnibus Plan following the Merger, or (3) any adjustments to the Merger Consideration pursuant to the Merger Agreement. If any shares of our common stock are redeemed by our public stockholders in connection with the Merger, the percentage of our outstanding common stock held by our public stockholders will decrease and the percentage of our outstanding common stock held by each of our initial stockholders, Cantor and Interwire LLC and its designees will increase. Similarly, if the number of shares issued as Common Stock Merger Consideration is greater than our estimates, the percentage of our outstanding common stock held by our public stockholders, our initial stockholders and Cantor will decrease and the percentage of our outstanding common stock held by Interwire LLC and its designees will increase.

 

 16 

 

Board of Directors of FinTech Following the Merger

 

Upon consummation of the Merger, the Merger Agreement provides that our board of directors will increase in size from five to eight members. Each of our incumbent directors, Betsy Cohen, Daniel Cohen, Walter Beach, Shami Patel and Jeremy Kuiper, have advised us that they will resign from our board of directors upon closing of the Merger. Our board of directors intends to fill the vacancies created by such resignations and the increase in size of the board with the following newly appointed directors: Robert Lisy, Michael Purcell, Kurt Holstein, Adam Godfrey, Justin Wender, Robert Jahn, Stephen Paul and John Rincon. See the section entitled “Management Following the Merger” for additional information.

 

Following the completion of the Merger, we expect to be a controlled company within the meaning of the NASDAQ corporate governance requirements, and may elect not to comply with certain of such requirements, including the requirements that a majority of the board of directors consist of independent directors and that the nominating and governance committee and compensation committee be composed entirely of independent directors. These requirements will not apply to us as long as we remain a controlled company.

 

Regulatory Matters

 

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which we refer to as the HSR Act, and the related rules and regulations issued by the Federal Trade Commission, which we refer to as the FTC, certain transactions, including the Merger, may not be consummated until notifications have been given and specified information and documentary material have been furnished to the FTC and the United States Department of Justice, which we refer to as the DOJ, and the applicable waiting periods have expired or been terminated. The completion of the Merger is conditioned upon the expiration or early termination of the HSR Act waiting period. On January 10, 2018, we and Intermex filed our respective notification and report forms under the HSR Act with the DOJ and the FTC. The initial 30-day waiting period expired on February 9, 2018. See the section entitled “Proposal No. 1—The Merger Proposal—The Merger Agreement—Covenants of the Parties” for additional information.

 

Accounting Treatment

 

The Merger will be accounted for as a reverse merger. Intermex will be considered the “acquirer” and FinTech will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Interwire LLC and its designees expecting to control the majority of the relative voting rights of the combined company, Intermex comprising the ongoing operations of the combined company and Intermex’s senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of Intermex issuing stock for the net assets of FinTech, accompanied by a recapitalization. The net assets of FinTech will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger will be those of Intermex. 

 

Appraisal Rights

 

Appraisal rights are not available to our stockholders in connection with the Merger.

 

Reasons for the Merger

 

Our board of directors has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, has determined that the Merger Agreement and the transactions contemplated thereby, are fair to and in the best interests of the Company and our stockholders, and unanimously recommends that our stockholders vote “FOR” the Merger Proposal. For a description of the reasons considered by our board of directors in deciding to recommend adoption of the Merger Agreement, see the sections entitled “Proposal No. 1—The Merger Proposal—FinTech’s Board of Directors’ Reasons for the Approval of the Merger” and “Proposal No. 1—The Merger Proposal—Recommendation of the Board.” 

 

 17 

 

Proposals Related to the Company’s Proposed Second Amended and Restated Certificate of Incorporation

 

In connection with the Merger Proposal, and in order to allow us to complete the Merger, we are asking you to approve the following amendments to our charter:

 

—To amend our charter to increase our authorized common stock.

 

—To amend our charter to create an additional class of directors so that there will be three classes of directors with staggered terms of office, and to make certain related changes.

 

—To amend our charter to provide for additional changes, principally changing the Company’s corporate name from “FinTech Acquisition Corp. II” to “International Money Express, Inc.” and removing provisions applicable only to special purpose acquisition companies.

 

See the sections entitled “Proposal No. 2—Authorization to Increase our Authorized Capital,” “Proposal No. 3—Classification of the Board of Directors” and “Proposal No. 4—Approval of Additional Amendments to our Charter in Connection with the Merger” for more information.

 

The NASDAQ Proposal

 

In connection with the Merger Proposal, and in order to allow us to complete the Merger, we are asking you to approve, for purposes of complying with applicable NASDAQ listing rules, the issuance of more than 20% of our issued and outstanding common stock and the resulting change of control in connection with the Merger. See the section entitled “Proposal No. 5—The NASDAQ Proposal” for more information.

 

The Incentive Plan Proposal

 

Our proposed Omnibus Plan will be effective upon closing of the Merger, subject to approval by our stockholders at the special meeting. The proposed Omnibus Plan will reserve up to 3,761,516 shares of our common stock for issuance in accordance with the plan’s terms. The purpose of the Omnibus Plan is to provide eligible employees, directors and consultants the opportunity to receive stock-based incentive awards in order to encourage them to contribute materially to our growth and to align the economic interests of such persons with those of our stockholders. The summary of the Omnibus Plan above is qualified in its entirety by reference to the complete text of the Omnibus Plan, a copy of which is attached as Annex B to this proxy statement/prospectus. You are encouraged to read the Omnibus Plan in its entirety. See the section entitled “Proposal No. 6–The Incentive Plan Proposal” for more information.

 

The Director Election Proposal

 

We are asking you to consider and vote upon a proposal to elect three Class I directors to serve on our board of directors until the 2020 annual meeting of stockholders, and until their respective successors are duly elected and qualified or until their earlier resignation, removal or death. See the section entitled “Proposal No. 7—The Director Election Proposal” for more information.

 

The Adjournment Proposal

 

If, based on the tabulated vote, there are not sufficient votes at the time of the special meeting to permit us to approve the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal or the Director Election Proposal, the Adjournment Proposal allows us to adjourn the special meeting to a later date, if necessary, to permit further solicitation of proxies. See the section entitled “Proposal No. 8—The Adjournment Proposal” for more information.

 

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Quorum and Required Vote for Proposals for the Special Meeting

 

A quorum of our stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting if a majority of the shares of our common stock outstanding and entitled to vote at the special meeting is represented at the meeting in person or by proxy. An abstention from voting, shares represented at the special meeting in person or by proxy but not voted on one or more proposals or the failure of a stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee on one or more but less than all of the proposals set forth in this proxy statement/prospectus (a “broker non-vote”) will each count as present for the purposes of establishing a quorum. As of the date of this proxy statement/prospectus, our executive officers, directors and affiliates hold approximately 26.6% of our outstanding shares of common stock. All of such shares will be voted in favor of the Merger Proposal and other proposals described in this proxy statement/prospectus and presented at the special meeting.

 

The approval of the Merger Proposal requires the affirmative vote of holders of a majority of the outstanding shares of our common stock. Accordingly, a stockholder’s failure to vote by proxy or to vote in person at the special meeting, an abstention from voting or a broker non-vote will have the same effect as a vote “AGAINST” the Merger Proposal.

 

The approval of each charter Proposal requires the affirmative vote of holders of a majority of the outstanding shares of our common stock. Accordingly, a stockholder’s failure to vote in person or by proxy, a broker non-vote or an abstention on any of the charter Proposals will have the same effect as a vote “AGAINST” such proposal.

 

The approval of each of the NASDAQ Proposal, the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the total votes cast on such proposal. In order to be elected as a director as described in the Director Election Proposal, a nominee must receive a plurality of all the votes cast at the special meeting, which means that the nominees with the most votes are elected. Accordingly, neither a stockholder’s failure to vote in person or by proxy, a broker non-vote nor an abstention will be considered a “vote cast,” and thus will have no effect on the outcome of the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal or the Adjournment Proposal.

 

The Merger Proposal is conditioned on the approval of Proposal 2 and the NASDAQ Proposal. In addition, (i) Proposal 2 is conditioned on the approval of the Merger Proposal and the NASDAQ Proposal, (ii) each of Proposal 3, Proposal 4 and the Incentive Plan Proposal is conditioned on the approval of the Merger Proposal, Proposal 2 and the NASDAQ Proposal, and (iii) the NASDAQ Proposal is conditioned on the Merger Proposal and Proposal 2. Neither the Director Election Proposal nor the Adjournment Proposal is conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that if either the Merger Proposal or the NASDAQ Proposal is not approved by our stockholders, or if any other proposal is not approved by our stockholders and we and Intermex do not waive the applicable closing condition under the Merger Agreement, then the Merger will not be consummated. If we do not consummate the Merger and fail to complete an initial business combination by January 25, 2019, we will be required to dissolve and liquidate our trust account by returning the then remaining funds in such account to the public stockholders.

 

Recommendation to FinTech Stockholders

 

Our board of directors believes that each of the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal to be presented at the special meeting is fair to and in the best interests of FinTech and our stockholders and unanimously recommends that our stockholders vote “FOR” each of the proposals.

 

 19 

 

Interests of Certain Persons in the Merger

 

When you consider the recommendation of our board of directors in favor of approval of these proposals, you should also consider that our directors and officers have interests in the Merger that are different from or in addition to (and which may conflict with) your interests as a stockholder, including the following:

 

  our Sponsor, officers and directors will hold our common stock following the Merger, subject to lock-up agreements;

 

  our Sponsor, officers and directors will hold placement warrants to purchase shares of our common stock;

 

  our Sponsor, officers and certain of our directors paid an aggregate of $3,928,311 for their founder shares, placement shares and placement warrants and that such securities should have a significantly higher value at the time of the Merger and will have little or no value if we do not complete the Merger;

 

  our Sponsor, officers and directors have waived their redemption rights with respect to their founder shares, placement shares and public shares in connection with the Merger, and have waived their redemption and liquidation rights with respect to their founder shares and placement shares if we are unable to complete a business combination by January 25, 2019;
     
  if we are unable to complete a business combination by January 25, 2019, our Chief Executive Officer will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities to which we owe money for services rendered or contracted for or products sold to us, but only if such a vendor or target business has not executed such a waiver;
     
  our Sponsor has agreed to loan us funds in an amount up to $1.1 million for working capital requirements and to finance transaction costs in connection with an initial business combination, and any amounts outstanding under this loan will not be repaid if we are unable to complete a business combination by January 25, 2019;

 

 

the initial stockholders will have the collective right to appoint a board observer of the combined company; and

 

  the continued indemnification of our current directors and officers and the continuation of directors’ and officers’ liability insurance after the Merger.

 

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding us, our securities or Intermex, our Sponsor, directors, officers and their respective affiliates may purchase our securities on the open market, and may enter into agreements to purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Merger Proposal, or who have elected to redeem, or indicate an intention to redeem, their shares in connection with the Merger. Any such privately negotiated purchases may be effected at purchase prices that are in excess of fair market value or in excess of the per-share pro rata portion of the trust account. Our initial stockholders, directors, officers, advisors and their respective affiliates may also enter into transactions with stockholders and others to provide them with incentives to acquire shares of our common stock or vote their shares in favor of the Merger Proposal. While the exact nature of such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such persons against potential loss in value of their shares, including the granting of put options and the transfer to such persons of shares or warrants for nominal value. Our initial stockholders, directors, officers or their respective affiliates will not effect any such purchases when they are in possession of any material non-public information relating to us or Intermex, during a restricted period under Regulation M under the Exchange Act or in a transaction which would violate Section 9(a)(2) or Rule 10(b)-5 under the Exchange Act.

 

 20 

 

The purpose of such purchases and other transactions would be to increase the likelihood that the Merger Proposal is approved and to decrease the likelihood that holders will request redemption of public shares and cause us to have insufficient funds to pay the Cash Merger Consideration and other amounts required under the Merger Agreement. Entering into any such arrangements may have a depressive effect on the price our common stock. For example, if as a result of these arrangements an investor or holder purchases shares for nominal value, the investor or holder may be more likely to sell such shares immediately following the closing of the Merger for a price below market value.

 

If such transactions are effected, the consequence could be to cause the Merger Proposal to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert disproportionate influence over the approval of the Merger Proposal and other proposals to be presented at the special meeting and would likely increase the chances that such proposals would be approved.

 

As of the date of this proxy statement/prospectus, no such agreements to sell or purchase shares prior to the record date have been entered into with any such investor or holder. We will file a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that are not described in this proxy statement/prospectus and that would affect the vote on the Merger Proposal.

 

Risk Factors

 

In evaluating the proposals set forth in this proxy statement/prospectus, whether or not you plan to attend the special meeting, we urge you to read this proxy statement/prospectus (including the annexes) carefully, including the section entitled “Risk Factors” beginning on page 30.

 

 21 

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF FINTECH

 

The following table sets forth selected historical consolidated FinTech financial information. Our balance sheet data as of December 31, 2017, 2016 and 2015 and income statement data for the years ended December 31, 2017 and 2016 and for the period from May 28, 2015 (inception) to December 31, 2015 are derived from our audited consolidated financial statements included elsewhere in this proxy statement/prospectus.

 

The following information is only a summary and should be read in conjunction with our consolidated financial statements and related notes contained elsewhere in this proxy statement/prospectus and information discussed under “FinTech’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of our future performance. 

 

   Year Ended
December 31,
2017
   Year Ended
December 31,
2016
   Period from May 28, 2015 (inception) through December 31,
2015
 
             
Income Statement Data:            
Formation and operating costs  $1,131,812   $1,621   $2,187 
Interest income   1,383,186    -    - 
Provision for income taxes   (436,721)   -    - 
Net loss   (185,347)   (1,621)   (2,187)
Net loss per share               
Basic and Diluted   (0.02)   (0.00)   (0.00)

 

   As of December 31, 
   2017   2016   2015 
             
Balance Sheet Data:            
Cash  $362,581   $82,614   $- 
Cash and securities held in Trust Account   175,883,186    -    - 
Total assets   176,259,327    470,536    - 
Common stock subject to redemption   161,127,060    -    - 
Total stockholders’ equity (deficit)   5,000,008    21,192    (2,187)

 

   Year Ended
December 31,
2017
   Year Ended
December 31,
2016
   Period from May 28, 2015 (inception) through December 31,
2015
 
             
Cash Flow Data:            
Net cash used in operating activities  $(667,720)  $(622)  $(300)
Net cash used in investing activities   (174,500,000)   -    - 
Net cash provided by financing activities   175,447,687    83,236    300 

 

 22 

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF INTERMEX

 

The following table sets forth selected historical consolidated financial information of Intermex Holdings, Inc. (“Holdings”), Intermex’s direct wholly owned subsidiary, as of the dates and for the periods presented. The selected historical consolidated financial information for Holdings as of December 31, 2017, 2016 and 2015 and for the Successor Period 2017 and Predecessor Periods 2017, 2016 and 2015 has been derived from Holdings’ audited financial statements for such periods, audited by BDO USA, LLP, independent registered public accountants, included elsewhere in this proxy statement/prospectus. On February 1, 2016, Holdings entered into an Agreement and Plan of Merger pursuant to which Interwire LLC, an affiliate of Stella Point Capital, acquired 100% of the outstanding capital stock of Holdings, the surviving corporation in a merger with a subsidiary of Interwire LLC that was formed for purposes of the transaction, which we refer to as the Stella Point acquisition. In connection with the closing of the Stella Point acquisition, Holdings’ assets and liabilities were adjusted to fair value on the closing date of the transaction, February 1, 2017. As a result of the Stella Point acquisition and changes due to the impact of purchase accounting, Holdings’ financial statement presentations herein distinguish between a predecessor period (“Predecessor”), for periods prior to the closing of the Stella Point acquisition, and a successor period (“Successor”), subsequent to the closing of such transaction. We refer to the period from January 1, 2017 through January 31, 2017 as the “2017 Predecessor Period” and the period from February 1, 2017 through December 31, 2017 as the “2017 Successor Period”. The financial information for Holdings as of December 31, 2014 and 2013 and for the periods ended December 31, 2014 and 2013 has been derived from Holdings’ unaudited financial statements for such periods not included elsewhere in this proxy statement/prospectus. The unaudited selected historical data as of and for the years ended December 31, 2014 and 2013 have not been restated and as such are not comparable to the selected historical data as of and for the Predecessor years ended December 31, 2016 and 2015, the 2017 Successor Period and the 2017 Predecessor Period. The financial statements for the Predecessor years ended December 31, 2016 and 2015 have been restated as disclosed in the financial statements and related notes contained elsewhere in this proxy statement/prospectus. You should read the following selected historical consolidated financial information in conjunction with the section entitled “Intermex’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes contained elsewhere in this proxy statement/prospectus.

 

   Successor Company   Predecessor Company 
   Period from February 1, 2017 to December 31, 2017   Period from January 1, 2017 to January 31, 2017   Year Ended December 31, 2016   Year Ended December 31, 2015   Year Ended December 31, 2014   Year Ended December 31, 2013 
                  Unaudited   Unaudited 
Income Statement Data:                        
Revenues  $201,039,131   $14,425,343   $165,394,491   $124,199,313   $98,311,096   $82,777,400 
Operating expenses (a)   199,230,246    19,333,395    142,370,764    110,015,475    90,611,351    78,822,418 
Operating income (loss) (a)   1,808,885    (4,908,052)   23,023,727    14,183,838    7,699,745    3,954,982 
Interest expense   11,447,936    613,742    9,540,046    4,234,371    1,789,497    2,122,246 
(Loss) income before taxes (a)   (9,639,051)   (5,521,794)   13,483,681    9,949,467    5,910,248    1,832,736 
Provision for income tax expense (benefit) (b)   534,402    (2,203,373)   4,083,655    4,191,643    (20,151,815)   101,191 
 Net (loss) income (c)   (10,173,453)   (3,318,421)   9,400,026    5,757,824    26,062,063    1,731,545 

 

    Successor Company     Predecessor Company  
    As of
December 31,
2017
    As of
December 31,
2016
    As of
December 31,
2015
    As of
December 31,
2014
    As of
December 31,
2013
 
                      Unaudited     Unaudited  
Balance Sheet Data:                              
Cash   $ 59,155,618     $ 37,601,096     $ 18,925,469     $ 19,266,715     $ 9,197,254  
Total assets (d)     216,052,911       118,773,952       89,802,448       70,178,022       39,825,419  
Total liabilities     180,150,792       115,515,409       60,829,369       27,590,665       22,233,440  
Total stockholder’s equity (d)     35,902,119       3,258,543       28,973,079       42,587,357       17,591,979  

 

(a) Restated to reduce amortization of intangible assets by $1,811,599 and $1,842,587 for the years ended December 31, 2016 and 2015, respectively.

 

(b) Restated to increase provision for income tax expense by $701,611 and $713,612 for the years ended December 31, 2016 and 2015, respectively.

 

(c) The impact of restatements in (a) and (b) to net loss (income) amounted to $1,109,988 and $1,128,975 for the years ended December 31, 2016 and 2015, respectively.

 

(d) The cumulative impact of the amortization correction reduced total assets and total stockholder’s equity by $1,323,989 and $2,433,927 as of December 31, 2016 and 2015, respectively.

 

 23 

 

   Successor Company   Predecessor Company 
   Period from February 1, 2017 to December 31, 2017   Period from January 1, 2017 to January 31, 2017   Year Ended December 31, 2016   Year Ended December 31, 2015   Year Ended December 31, 2014   Year Ended December 31, 2013 
                  Unaudited   Unaudited 
Cash Flow Data:                        
Net cash provided by operating activities  $7,416,703   $8,652,067   $22,395,778   $4,465,445   $10,599,258   $4,342,758 
Net cash used in investing activities   (5,275,160)   (249,382)   (3,012,110)   (2,064,577)   (2,437,394)   (1,360,797)
Net cash provided by (used in) financing activities   12,926,670    (2,000,000)   (558,157)   (3,018,807)   1,904,579    (9,027,330)

  

   Successor Company   Predecessor Company 
   Period from
February 1, 2017 to
December 31,
   Period from
January 1, 2017 to
January 31,
   Year Ended
December 31,
   Year Ended
December 31,
   Year Ended
December 31,
   Year Ended
December 31,
 
(in thousands)  2017   2017   2016   2015   2014   2013 
                  Unaudited   Unaudited 
Non-GAAP data                              
Adjusted EBITDA  $31,072   $2,309   $27,101   $18,761   $12,549   $9,101 

 

The following table presents the reconciliation of Adjusted EBITDA to Net (Loss) Income, the closest GAAP measure.

 

  

Successor
Company

   Predecessor Company 
   Period from
February 1, 2017 to
December 31,
   Period from
January 1, 2017  to January 31,
   Year Ended
December 31,
   Year Ended
December 31,
   Year Ended
December 31,
   Year Ended
December 31,
 
(in thousands)  2017   2017   2016   2015   2014   2013 
                   Unaudited   Unaudited 
Net (loss) income  $(10,173)  $(3,318)  $9,400   $5,758   $26,062   $1,732 
                               
Adjusted for:                              
Interest expense   11,448    614    9,540    4,234    1,789    2,122 
Provision for income tax expense (benefit)   534    (2,203)   4,084    4,192    (20,152)   101 
Depreciation and amortization   16,645    382    2,530    2,453    4,257    4,227 
EBITDA   18,454    (4,525)   25,554    16,637    11,956    8,182 
Transaction costs   8,706    3,917    901    1,609    -    - 
Incentive units plan   1,846    -    -    -    -    - 
Change in control adjustment for stock options   -    2,813    -    -    -    - 
Management fee   715    -    -    -    -    - 
One-time adjustment - bank fees   642    -    -    -    -    - 
One-time incentive bonus   514    -    -    -    -    - 
Other charges and expenses   195    104    646    515    593    919 
Adjusted EBITDA  $31,072   $2,309   $27,101   $18,761   $12,549   $9,101 

 

Refer to the section entitled “Intermex’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion regarding Adjusted EBITDA.

 

 24 

 

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined balance sheet as of December 31, 2017 combines the audited historical consolidated statement of financial position of Holdings as of December 31, 2017 with the audited historical consolidated balance sheet of FinTech as of December 31, 2017, giving effect to the Merger as if it had been consummated as of that date.

 

The following unaudited pro forma condensed combined income statement for the year ended December 31, 2017 combines the audited historical consolidated statement of operations and comprehensive income of Holdings for the year ended December 31, 2017 with the audited consolidated historical statement of operations of FinTech for the year ended December 31, 2017, giving effect to the Merger as if it had occurred on January 1, 2017.

 

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption into cash of FinTech’s public shares:

 

Scenario 1 – Assuming no redemption into cash: This presentation assumes that no FinTech stockholders exercise redemption rights with respect to their public shares upon consummation of the Merger; and
   
Scenario 2 – Assuming redemption of 5,000,000 FinTech public shares into cash: This presentation assumes that FinTech public stockholders exercise their redemption rights with respect to a maximum of 5,000,000 public shares upon consummation of the Merger at a redemption price of $10.00 per share. The maximum redemption amount is derived from the $125,000,000 minimum cash required to be released from FinTech’s trust account after giving effect to payments to redeeming stockholders.

 

The historical financial information has been adjusted to give pro forma effect to events that are related and/or directly attributable to the Merger, are factually supportable and are expected to have a continuing impact on the results of the combined company. The adjustments presented to the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the Merger.

 

The historical financial statements of FinTech and Holdings have been prepared in accordance with accounting principles generally accepted in the United States of America, which we refer to as GAAP.

 

The historical financial information of Holdings was derived from the audited financial statements of Holdings as of December 31, 2017 for the pro forma balance sheet and the pro forma income statement results for Holdings were derived by combining the 2017 Successor Period and the 2017 Predecessor Period for the twelve months ended December 31, 2017, which are included elsewhere in this proxy statement/prospectus. The historical financial information of FinTech was derived from the audited financial statements of FinTech for the years ended December 31, 2017 and 2016 and for the period from May 28, 2015 (inception) through December 31, 2015, which are included elsewhere in this proxy statement/prospectus. This information should be read together with Holdings’ and FinTech’s audited financial statements and related notes, “Intermex’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “FinTech’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement/prospectus.

 

 25 

 

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies actually been combined as of January 1, 2017. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies actually been combined as of January 1, 2017 or the future results that the combined company will experience. Intermex and FinTech have not had any historical relationship prior to the Merger. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

Selected Unaudited Pro Forma Financial Information

 

   Holdings   FinTech   Pro Forma
Combined
Assuming No
Redemptions
into Cash
   Pro Forma
Combined
Assuming
Maximum
Redemptions
into Cash
 
Statement of Operations Data – Year ended December 31, 2017                
Revenues  $215,464,474   $   $215,464,474   $215,464,474 
Operating expenses   218,563,641    1,131,812    216,759,709    216,759,709 
Operating loss   (3,099,167)   (1,132,812)   (1,295,235)   (1,295,235)
Net loss   (13,491,874)   (185,347)   (8,815,563)   (8,815,563)
Net loss per common share – basic and diluted        (0.02)   (0.22)   (0.25)
                     
Balance Sheet Data – As of December 31, 2017                    
Total current assets  $119,105,872   $376,141   $182,051,199   $132,051,199 
Total assets   216,052,911    176,259,327    278,998,238    228,998,238 
Total current liabilities   72,624,330    917,259    70,678,437    70,678,437 
Total liabilities   180,150,792    10,132,259    178,204,899    178,204,899 
Total stockholder’s equity   35,902,119    5,000,008    100,793,339    50,793,339 

 

 26 

 

COMPARATIVE PER SHARE DATA

 

The following table sets forth the per share data of FinTech and Holdings on a stand-alone basis and the unaudited pro forma condensed combined per share data for the year ended December 31, 2017 after giving effect to the Merger, assuming (1) no holders of our common stock exercise their right to have their shares redeemed upon the consummation of the Merger and (2) assuming holders of 5,000,000 shares of our common stock exercise their right to have their shares redeemed upon the consummation of the Merger.

 

You should read the information in the following table in conjunction with the selected historical consolidated financial information included elsewhere in this proxy statement/prospectus, and the historical consolidated financial statements of FinTech and Holdings and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited FinTech and Holdings pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus.

 

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of FinTech and Intermex would have been had the companies been combined during the period presented.

 

   Holdings   FinTech   Pro Forma
Combined
Assuming No
Redemptions
into Cash
   Pro Forma
Combined
Assuming
Maximum
Redemptions
into Cash
 
     
Year Ended December 31, 2017                
Net loss  $(13,491,874)  $(185,347)  $(8,815,563)  $(8,815,563)
Stockholders’ equity at December 31, 2017   35,902,119    5,000,008    100,793,339    50,793,339 
Weighted average shares outstanding – basic and diluted        7,594,116    40,305,103    35,305,103 
Basic and diluted net loss per share        (0.02)   (0.22)   (0.25)
Stockholders’ equity per share – basic and diluted – at December 31, 2017        0.66    2.50    1.44 

  

 27 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Statements contained in this proxy statement/prospectus, and in any document incorporated by reference in this proxy statement/prospectus, that reflect our current views with respect to future events and financial performance, business strategies, expectations for our business and the business of the combined company, and the timing and ability for us to complete the Merger and any other statements of a future or forward-looking nature, constitute “forward-looking statements” for the purposes of federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. The information included in this proxy statement/prospectus in relation to Intermex has been provided by Intermex and its management, and forward-looking statements include statements relating to Intermex’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “will,” “approximately,” “shall” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus, and in any document incorporated by reference in this proxy statement/prospectus, may include, for example, statements about the benefits of the Merger and the future financial performance of the combined company following the Merger.

 

The forward-looking statements contained in this proxy statement/prospectus, and in any document incorporated by reference in this proxy statement/prospectus, are based on our current expectations and beliefs concerning future developments and their potential effects on us and/or Intermex. You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement/prospectus. We cannot assure you that future developments affecting us and/or Intermex will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control or the control of Intermex) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our and/or Intermex’s assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:

 

  the timing to complete the Merger;

 

  the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

  the outcome of any legal proceedings that may be instituted against us or Intermex in connection with the Merger and related transactions;

 

  the inability to complete the Merger and the other transactions contemplated by the Merger Agreement due to the failure to obtain the requisite approval of our stockholders, or satisfy the other conditions to closing in the Merger Agreement;

 

  the ability to obtain or maintain the listing of our common stock on NASDAQ following the Merger;

 

  the risk that the proposed Merger disrupts Intermex’s current operations as a result of the announcement and consummation of the transactions described herein;

 

  the ability to recognize the anticipated benefits of the Merger, which may be affected by, among other things, competition, and the ability of the combined business to grow and manage growth profitably;

 

 28 

 

  costs related to the Merger;

 

  changes in applicable laws or regulations;

 

  the possibility that we or Intermex may be adversely affected by other economic, business and/or competitive factors;
     
  factors relating to the business, operations and financial performance of Intermex, including:

 

  o

competition in the markets in which Intermex operates;

     
  o Intermex’s ability to maintain agent relationships on terms consistent with those currently in place;
     
  o Intermex’s ability to maintain banking relationships necessary to conduct its business;
     
  o

credit risks from Intermex’s agents and the financial institutions with which Intermex does business;

     
  o bank failures, sustained financial market illiquidity, or illiquidity at Intermex’s clearing, cash management or custodial financial institutions;
     
  o new technology or competitors that disrupt the current ecosystem;
     
  o disruptions to Intermex’s information technology, computer network systems and data centers;
     
  o Intermex’s success in developing and introducing new products, services and infrastructure;
     
  o customer confidence in Intermex’s brand and in consumer money transfers generally;
     
  o Intermex’s ability to maintain compliance with the regulatory requirements in the jurisdictions in which it operates or plans to operate;
     
  o international political factors or implementation of tariffs, border taxes or restrictions on remittances or transfers of money out of the United States;
     
  o changes in tax laws and unfavorable outcomes of tax positions Intermex takes;
     
  o political instability, currency restrictions and devaluation in countries in which Intermex operates or plans to operate;
     
  o

weakness in U.S. or international economic conditions;

     
  o change or disruption in international migration patterns;
     
  o

Intermex’s ability to protect its brand and intellectual property rights;

 

  o Intermex’s ability to retain key personnel; and

 

  other economic, business and/or competitive factors, risks and uncertainties, including those described in the section entitled “Risk Factors” beginning on page 30.

 

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

 29 

 

RISK FACTORS

 

Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, and in any document incorporated by reference in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus. We, Intermex and the combined company may face additional risks and uncertainties that are not presently known to us and/or Intermex, or that we and/or Intermex currently deem immaterial, which may also impair the business of the combined company following the Merger. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included in this proxy statement/prospectus. 

 

Risks Relating to Intermex’s Business

 

The following risk factors apply to the business and operations of Intermex and its consolidated subsidiaries and will also apply to the business and operations of the combined company following the completion of the Merger. As used in this section the terms “we,” “us” and “our” refer to Intermex and the combined company, as applicable.

 

If we lose key agents, our business with key agents is reduced or we are unable to maintain our agent network under terms consistent with those currently in place, our business, financial condition and results of operations could be adversely affected.

 

Most of our revenue is earned through our agent network. If agents decide to leave our network, our revenue and profits could be adversely affected. Agent loss may occur for a number of reasons, including competition from other money remittance providers, an agent’s dissatisfaction with its relationship with us or the revenue earned from the relationship, or an agent’s unwillingness or inability to comply with our standards or legal requirements, including those related to compliance with anti-money laundering regulations, anti-fraud measures or agent monitoring. Agents may also generate fewer transactions or reduce locations for reasons unrelated to our relationship with them, including increased competition in their business, general economic conditions, regulatory costs or other reasons. In addition, we may not be able to maintain our agent network under terms consistent with those already in place. Larger agents may demand additional financial concessions, which could increase competitive pressure. The inability to maintain our agent contracts on terms consistent with those already in place could adversely affect our business, financial condition and results of operations.

 

We face intense competition, and if we are unable to continue to compete effectively, our business, financial condition and results of operations could be adversely affected.

 

The markets in which we operate are highly competitive, and we face a variety of competitors across our businesses, some of which have larger and more established customer bases and substantially greater financial, marketing and other resources than we have. We compete in a concentrated industry, with a small number of large competitors such as Western Union, MoneyGram and EuroNet and a large number of small, niche competitors, including banks, card associations, web-based services, payment processors, informal remittance systems, consumer money remittance companies and others. Our services are differentiated by features and functionalities, including trust, convenience, service, efficiency of outlets, value, technology and brand recognition. Distribution channels such as online, account based and mobile solutions continue to evolve and impact the competitive environment for money remittances.

 

Our future growth depends on our ability to compete effectively. For example, if our services do not offer competitive features and functionalities, we may lose customers to our competitors, which could adversely affect our business, financial condition and results of operations. In addition, if we fail to price our services appropriately relative to our competitors, consumers may not use our services, which could adversely affect our business and financial results. For example, transaction volume where we face intense competition could be adversely affected by increasing pricing pressures between our money remittance services and those of some of our competitors, which could reduce margins and adversely affect our financial results. We have historically implemented and will likely continue to implement price adjustments from time to time in response to competition and other factors. If we reduce prices in order to more effectively compete, such reductions could adversely affect our financial results in the short term and may also adversely affect our financial results in the long term if transaction volumes do not increase sufficiently.

 

 30 

 

If customer confidence in our business or in consumer money remittance providers generally deteriorates, our business, financial condition, results of operations and cash flows could be adversely affected.

 

Our business is built on customer confidence in our brand and our ability to provide convenient, reliable and value added money remittance services. Erosion in customer confidence in our business, or in consumer money remittance service providers as a means to transfer money, could adversely impact transaction volumes which would in turn adversely impact our business, financial condition and results of operations.

 

A number of factors could adversely affect customer confidence in our business, or in consumer money remittance providers generally, many of which are beyond our control, and could have an adverse impact on our results of operations. These factors include:

 

  the quality of our services and our customer experience, and our ability to meet evolving customer needs and preferences;

 

  failure of our agents to deliver services in accordance with our requirements;

 

  reputational concerns resulting from actual or perceived events, including those related to fraud or consumer protection or other matters;

 

  changes or proposed changes in laws or regulations, or regulator or judicial interpretation thereof, that have the effect of making it more difficult or less desirable to transfer money using consumer money remittance service providers, including additional customer due diligence, identification, reporting, and recordkeeping requirements;

 

 

actions by federal, state or foreign regulators that interfere with our ability to remit customers’ money reliably; for example, attempts to seize money remittance funds, imposition of tariffs or limits on our ability to, or that prohibit us from, remitting money in the corridors in which we operate;

 

  federal, state or foreign legal requirements, including those that require us to provide customer or transaction data, and other requirements or to a greater extent than is currently required;

 

  any interruption or downtime in our systems, including those caused by fire, natural disaster, power loss, telecommunications failure, terrorism, vendor failure, unauthorized entry and computer viruses or disruptions in our workforce; and

 

  any attack or breach of our computer systems or other data storage facilities resulting in a compromise of personal data.

 

A significant portion of our customers are migrants. Consumer advocacy groups or governmental agencies could consider migrants to be disadvantaged and entitled to protection, enhanced consumer disclosure, or other different treatment. If consumer advocacy groups are able to generate widespread support for actions that are detrimental to our business, then our business, financial condition, results of operations and cash flows could be adversely affected.

 

 31 

 

Weakness in economic conditions, in both the U.S. and international markets, could adversely affect our business, financial condition and results of operations.

 

Our money remittance business relies in part on the overall strength of economic conditions as well as international migration patterns. Consumer money remittance transactions and international migration patterns are affected by, among other things, employment opportunities and overall economic conditions. Additionally, consumers tend to be employed in industries such as construction, information, manufacturing, agriculture and certain service industries that tend to be cyclical and more significantly impacted by weak economic conditions than other industries. This may result in reduced job opportunities for our customers in the United States or other countries that are important to our business, which could adversely affect our business, financial condition and results of operations. In addition, increases in employment opportunities may lag other elements of any economic recovery.

 

Our agents may have reduced sales or business as a result of weak economic conditions. As a result, our agents could reduce their number of locations or hours of operation, or cease doing business altogether.

 

If general market conditions in the United States or international economies important to our business were to deteriorate, our business, financial condition and results of operations could be adversely impacted. Additionally, if our consumer transactions decline or international migration patterns shift due to deteriorating economic conditions, we may be unable to timely and effectively reduce our operating costs or take other actions in response, which could adversely affect our business, financial condition and results of operations.

 

A significant change or disruption in international migration patterns could adversely affect our business, financial condition and results of operations.

 

Our business relies in part on international migration patterns, as individuals move from their native countries to countries with greater economic opportunities or a more stable political environment. A significant portion of money remittance transactions are initiated by immigrants or refugees sending money back to their native countries. Changes in immigration laws that discourage international migration and political or other events (such as war, terrorism or health emergencies) that make it more difficult for individuals to migrate or work abroad could adversely affect our money remittance volume or growth rate. Sustained weakness in global economic conditions could reduce economic opportunities for migrant workers and result in reduced or disrupted international migration patterns. Reduced or disrupted international migration patterns in the United States or Latin America are likely to reduce money remittance transaction volumes and therefore have an adverse effect on our business, financial condition and results of operations. Furthermore, significant changes in international migration patterns could adversely affect our business, financial condition and results of operations.

 

The current U.S. presidential administration and others have proposed certain actions that could have an adverse effect on our business.

 

Our business relies on the free flow of funds along our remittance corridors, including between the United States and Mexico and Guatemala. U.S. President Donald J. Trump, certain members of the U.S. House of Representatives, and key U.S. administrative officials and policy makers have suggested renegotiation of the North American Free Trade Agreement (“NAFTA”) and the implementation of tariffs, border taxes or other measures. Any such proposals, such as a tax, tariff or restriction on remittances or transfers of money out of the United States could have a material adverse impact on our business, financial condition or results of operations.

 

If we fail to successfully develop and timely introduce new and enhanced services or if we make substantial investments in an unsuccessful new service or infrastructure change, our business, financial condition and results of operations could be adversely affected.

 

Our future growth will depend, in part, on our ability to continue to develop and successfully introduce new and enhanced methods of providing money remittance that keep pace with competitive introductions, technological changes and the demands and preferences of our agents, consumers and the financial institutions with which we conduct our business. Distribution channels such as online, account based and mobile solutions continue to evolve and impact the competitive environment for money remittance. If alternative payment mechanisms become widely substituted for our current services, and we do not develop and offer similar alternative payment mechanisms successfully and on a timely basis, our business, financial condition and results of operations could be adversely affected. We may make future acquisitions and investments or enter into strategic alliances to develop new technologies and services or to implement infrastructure changes to further our strategic objectives, strengthen our existing businesses and remain competitive. Such acquisitions, investments and strategic alliances, however, are inherently risky, and we cannot guarantee that such investments or strategic alliances will be successful. If such acquisitions, investments and strategic alliances are not successful, they could have a material adverse effect on our business, financial condition and results of operations.

 

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An inability by us or our agents to maintain adequate banking relationships may adversely affect our business, financial condition and results of operations.

 

We buy and sell a number of global currencies and maintain a network of settlement accounts to facilitate the timely funding of money remittances and foreign exchange trades. Our relationships with clearing, check processing, trading and exchange rate and cash management banks are critical to an efficient and reliable remittance network. An inability on our part to maintain existing or establish new banking relationships sufficient to enable us to conduct our business could adversely affect our business, financial condition and results of operations. There can be no assurance that we will be able to establish and maintain adequate banking relationships.

 

If we cannot maintain sufficient relationships with large U.S. and international banks that provide these services, we would be required to implement alternative cash management procedures, which may result in increased costs. Relying on local banks in each country could alter the complexity of our treasury operations, degrade the level of automation, visibility and service we currently receive from banks and affect patterns of settlement with our agents. This could result in an increase in operating costs and an increase in the amount of time it takes to concentrate agent remittances and to deliver agent payables, potentially adversely impacting our cash flow, working capital needs and exposure to local currency value fluctuations.

 

A significant percentage of our banking relationships are concentrated in a few banks and if we lose one such relationship, our business, financial condition and results of operations could be adversely affected.

 

A substantial portion of the transactions that we conduct with and through banks are concentrated in a few banks, notably Wells Fargo, Bank of America and US Bank. Because of the current concentration of our major banking relationships, if we lose such a banking relationship, which could be the result of many factors including, but not limited to, changes in regulation, our business, financial condition and results of operations could be adversely affected.

 

A significant portion of our paying agents are concentrated in a few large banks and financial institutions or large retail chains and if we lose such a paying agent, our business, financial condition and results of operations could be adversely affected.

 

A substantial portion of our paying agents are concentrated in a few large banks and financial institutions and large retail chains. Because of the current concentration of our paying agents in a few institutions, if we lose such an institution as a paying agent, which could be the result of many factors including, but not limited to, changes in regulation, our business, financial condition and results of operations could be adversely affected.

 

Major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions, could adversely affect our business, financial condition and results of operations.

 

We face certain risks in the event of a sustained deterioration of domestic or international financial market liquidity, as well as in the event of sustained deterioration in the liquidity, or failure, of our clearing, cash management and custodial financial institutions. In particular:

 

We may be unable to access funds in our deposit accounts and clearing accounts on a timely basis to pay money remittances and make related settlements to agents. Any resulting need to access other sources of liquidity or short-term borrowing would increase our costs. Any delay or inability to pay money remittances or make related settlements with our agents could adversely impact our business, financial condition and results of operations.
  
In the event of a major bank failure, we could face major risks to the recovery of our bank deposits used for the purpose of settling with our agents. A substantial portion of our cash, cash equivalents and are either held at banks that are not subject to insurance protection against loss or exceed the deposit insurance limit.
  
We may be unable to borrow from financial institutions or institutional investors on favorable terms, or at all, which could adversely impact our ability to pursue our growth strategy and fund key strategic initiatives.

 

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If financial liquidity deteriorates, there can be no assurance we will not experience an adverse effect, which may be material, on our ability to access capital and on our business, financial condition and results of operations.

 

Changes in banking industry regulation and practice could make it more difficult for us and our agents to maintain depository accounts with banks, which would harm our business.

 

The banking industry, in light of increased regulatory oversight, is continually examining its business relationships with companies that offer money remittance services and with retail agents that collect and remit cash collected from end consumers. Certain major national and international banks have withdrawn from providing service to money remittance services businesses. Should our existing relationship banks decide to not offer depository services to companies engaged in processing money remittance transactions, or to retail agents that collect and remit cash from end customers, our ability to complete money remittances, and to administer and collect fees from money remittance transactions, could be adversely impacted.

 

We and our agents are considered Money Service Businesses in the United States under the Bank Secrecy Act.

 

U.S. regulators are increasingly taking the position that Money Service Businesses, as a class, are high risk businesses. In addition, the creation of anti-money laundering laws has created concern and awareness among banks of the negative implications of aiding and abetting money laundering activity. As a result, banks may choose not to provide banking services to Money Services Businesses in certain regions due to the risk of additional regulatory scrutiny and the cost of building and maintaining additional compliance functions. In addition, certain foreign banks have been forced to terminate relationships with Money Services Businesses by U.S. correspondent banks. As a result, we have been denied access to retail banking services in certain markets by banks that have sought to reduce their exposure to Money Services Businesses and not as a result of any concern related to our compliance programs. If we or our agents are unable to obtain sufficient banking relationships, we or they may not be able to offer our services in a particular region, which could adversely affect our business, financial condition and results of operations.

 

We face credit risks from our agents and financial institutions with which we do business.

 

The majority of our business is conducted through independent agents that provide our services to consumers at their business locations. Our agents receive the proceeds from the sale of our money remittances, and we must then collect these funds from the agents. If an agent becomes insolvent, files for bankruptcy, commits fraud or otherwise fails to remit money remittance proceeds to us, we must nonetheless complete the money remittance on behalf of the consumer.

 

Moreover, we have made, and may make in the future, secured or unsecured loans to agents under limited circumstances or allow agents to retain our funds for a period of time before remitting them to us. As of December 31, 2017, we had credit exposure to a total of 56 agents of $1.1 million in the aggregate.

 

We monitor the creditworthiness of our agents and the financial institutions with which we do business on an ongoing basis. There can be no assurance that the models and approaches we use to assess and monitor the creditworthiness of our agents and these financial institutions will be sufficiently predictive, and we may be unable to detect and take steps to timely mitigate an increased credit risk.

 

In the event of an agent bankruptcy, we would generally be in the position of creditor, possibly with limited security or financial guarantees of performance, and we would therefore be at risk of a reduced recovery. We are not insured against credit losses, except in circumstances of agent theft or fraud. Significant credit losses could have a material adverse effect on our business, financial condition and results of operations.

 

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We have identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.

 

Prior to the Merger, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. We have identified two “material weaknesses” in our internal control over financial reporting. As defined in the standards established by the Public Company Accounting Oversight Board of the United States, or PCAOB, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

 

The material weaknesses identified were (1) a weakness in management review of deferred taxes, which resulted in an overstatement of the valuation allowance on deferred taxes, and (2) a weakness in management review of acquisition accounting, which resulted in an error in the method of amortization applied to acquired intangible assets.  

 

We are in the process of evaluating our internal controls systems to allow management to report on our internal controls.  Upon completion of the process of evaluating our internal controls, we may identify significant deficiencies and material weaknesses. As a public company, we will be required to report, among other things, control deficiencies that constitute a “material weakness” or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial reporting.

 

Consumer fraud could adversely affect our business, financial condition and results of operations.

 

Criminals are using increasingly sophisticated methods to engage in illegal activities such as identity theft, fraud and paper instrument counterfeiting. As we make more of our services available online and via Internet-enabled mobile devices, we subject ourselves to new types of consumer fraud risk because requirements relating to consumer authentication are more complex with internet services and such other technologies. Additionally, it is possible that our agents could engage in fraud against consumers. We use a variety of tools to protect against fraud; however, these tools may not always be successful. Allegations of fraud may result in fines, settlements, litigation expenses and reputational damage.

 

The industry is under increasing scrutiny from federal, state and local regulators in connection with the potential for consumer fraud. If consumer fraud levels involving our services were to rise, it could lead to regulatory intervention and reputational and financial damage, as well as the risk of government enforcement actions and investigations, reduced use and acceptance of our services or increased compliance costs, causing a material adverse impact on our business, financial condition and results of operations.

 

Retaining our chief executive officer and other key executives and finding and retaining qualified personnel is important to our continued success, and any inability to attract and retain such personnel could harm our operations.

 

The development and implementation of our strategy has depended in large part on our chief executive officer and director, Robert Lisy. The retention of Mr. Lisy is important to our continued success. Our success depends to a large extent upon our ability to attract and retain key employees. Qualified individuals with experience in our industry are in high demand. Our chief information officer (CIO) has designed and implemented key portions of our proprietary software and is crucial to the success of our business. In addition, legal or enforcement actions against compliance and other personnel in the money remittance industry may affect our ability to attract and retain key employees and directors. We have recently hired Tony Lauro as our new chief financial officer and are in the process of making regulatory notices and registrations in connection with his hire. This process may involve more extensive background investigations by our regulators than were performed by us prior to hiring him. While we do not expect any issues with respect to Mr. Lauro’s hiring process, it is possible that one or more of the states in which we operate may object to Mr. Lauro serving as our chief financial officer. The lack of management continuity or the loss of one or more members of our executive management team could harm our business and future development. A failure to attract and retain key personnel including operating, marketing, financial and technical personnel, could also have a material adverse impact on our business, financial condition and results of operations.

 

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A breach of security in the systems on which we rely could adversely affect our business, financial condition and results of operations.

 

We rely on a variety of technologies to provide security for our systems. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments, including improper acts by third parties, may result in a compromise or breach of the security measures we use to protect our systems. We obtain, transmit and store confidential consumer, employer and agent information in connection with some of our services. These activities are subject to laws and regulations in the United States and other jurisdictions. The requirements imposed by these laws and regulations, which often differ materially among the many jurisdictions, are designed to protect the privacy of personal information and to prevent that information from being inappropriately disclosed. Any security breaches in our computer networks, databases or facilities could lead to the inappropriate use or disclosure of personal information, which could harm our business and reputation, adversely affect consumers’ confidence in our or our agents’ business, result in inquiries and fines or penalties from regulatory or governmental authorities, cause a loss of consumers, subject us to lawsuits and subject us to potential financial losses. In addition, we may be required to expend significant capital and other resources to protect against these security breaches or to alleviate problems caused by these breaches. In 2012, we became aware of an internal fraud incident in which now former Intermex employees exploited a software vulnerability to transmit fraudulent wires totaling approximately $90,000. After an internal investigation shortly after the incident, the employees responsible for the fraudulent wires were removed from Intermex and a security consultant was retained to eliminate the vulnerability and implement mitigating controls. Our agents and third-party independent contractors may also experience security breaches involving the storage and transmission of our data as well as the ability to initiate unauthorized transactions. If users gain improper access to our, our agents’ or our third-party independent contractors’ computer networks or databases, they may be able to steal, publish, delete or modify confidential customer information or generate unauthorized money remittances. Such a breach could expose us to monetary liability, losses and legal proceedings, lead to reputational harm, cause a disruption in our operations, or make our consumers and agents less confident in our services, which could have a material adverse effect on our business, financial condition and results of operations.

 

Our business is particularly dependent on the efficient and uninterrupted operation of our information technology, computer network systems and data centers. Disruptions to these systems and data centers could adversely affect our business, financial condition and results of operations.

 

Our ability to provide reliable services largely depends on the efficient and uninterrupted operation of our computer network systems and data centers. Our business involves the movement of large sums of money and the management of data necessary to do so. The success of our business particularly depends upon the efficient and error-free handling of transactions and data. We rely on the ability of our employees and our internal systems and processes to process these transactions in an efficient, uninterrupted and error-free manner.

 

In the event of a breakdown, catastrophic event (such as fire, natural disaster, power loss, telecommunications failure or physical break-in), security breach, computer virus, improper operation, improper action by our employees, agents, consumers, financial institutions or third-party vendors or any other event impacting our systems or processes or our agents’ or vendors’ systems or processes, we could suffer financial loss, loss of consumers, regulatory sanctions, lawsuits and damage to our reputation or consumers’ confidence in our business. The measures we have enacted, such as the implementation of disaster recovery plans and redundant computer systems, may not be successful. We may also experience problems other than system failures, including software defects, development delays and installation difficulties, which would harm our business and reputation and expose us to potential liability and increased operating expenses. In addition, any work stoppages or other labor actions by employees who support our systems or perform any of our major functions could adversely affect our business.

 

In addition, our ability to continue to provide our services to a growing number of agents and consumers, as well as to enhance our existing services and offer new services, is dependent on our information technology systems. If we are unable to effectively manage the technology associated with our business, we could experience increased costs, reductions in system availability and loss of agents or consumers. Any failure of our systems in scalability, reliability and functionality could adversely impact our business, financial condition and results of operations.

 

 36 

 

Intermex and our agents are subject to numerous U.S. and international laws and regulations. Failure to comply with these laws and regulations could result in material settlements, fines or penalties, and changes in these laws or regulations could result in increased operating costs or reduced demand for our services, all of which may adversely affect our business, financial condition and results of operations.

 

We operate in a highly regulated environment, and our business is subject to a wide range of laws and regulations that vary from jurisdiction to jurisdiction. We are also subject to oversight by various governmental agencies, both in the United States and abroad. Lawmakers and regulators in the United States in particular have increased their focus on the regulation of the financial services industry. New or modified regulations and increased oversight may have unforeseen or unintended adverse effects on the financial services industry, which could affect our business, financial condition and results of operations.

 

The money transfer business is subject to a variety of regulations aimed at preventing money laundering and terrorism. We are subject to U.S. federal anti-money laundering laws, including the Bank Secrecy Act and the requirements of the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), which prohibit us from transmitting money to specified countries or to or from prohibited individuals. Additionally, we are subject to anti-money laundering laws in the other countries in which we operate. We are also subject to financial services regulations, money transfer licensing regulations, consumer protection laws, currency control regulations, escheat laws, privacy and data protection laws and anti-bribery laws. Many of these laws are constantly evolving, unclear and inconsistent across various jurisdictions, making compliance challenging. Subsequent legislation, regulation, litigation, court rulings or other events could expose us to increased program costs, liability and reputational damage.

 

We are considered a Money Services Business in the United States under the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001. As such, we are subject to reporting, recordkeeping and anti-money laundering provisions in the United States as well as many other jurisdictions. In the past few years there have been significant regulatory reviews and actions taken by U.S. and other regulators and law enforcement agencies against banks, Money Services Businesses and other financial institutions related to money laundering, and the trend appears to be greater scrutiny by regulators of potential money laundering activity through financial institutions. We are also subject to regulatory oversight and enforcement by The U.S. Department of the Treasury Financial Crimes Enforcement Network (“FinCEN”). Any determination that we have violated the anti-money-laundering laws could have an adverse effect on our business, financial condition and results of operations.

 

The Dodd-Frank Act increases the regulation and oversight of the financial services industry. The Dodd-Frank Act addresses, among other things, systemic risk, capital adequacy, deposit insurance assessments, consumer financial protection, interchange fees, derivatives, lending limits, thrift charters and changes among the bank regulatory agencies. The Dodd-Frank Act requires enforcement by various governmental agencies, including the Bureau of Consumer Financial Protection (the “CFPB”). Money transmitters such as us are subject to direct supervision by the CFPB and are required to provide additional consumer information and disclosures, adopt error resolution standards and adjust refund procedures for international transactions originating in the United States in a manner consistent with the Remittance Transfer Rule (a rule issued by the CFPB pursuant to the Dodd-Frank Act). In addition, the CFPB may adopt other regulations governing consumer financial services, including regulations defining unfair, deceptive, or abusive acts or practices, and new model disclosures. We could be subject to fines or other penalties if we are found to have violated the Dodd-Frank Act’s prohibition against unfair, deceptive or abusive acts or practices. The CFPB’s authority to change regulations adopted in the past by other regulators could increase our compliance costs and litigation exposure. Our litigation exposure may also be increased by the CFPB’s authority to limit or ban pre-dispute arbitration clauses. We may also be liable for failure of our agents to comply with the Dodd-Frank Act. The legislation and implementation of regulations associated with the Dodd-Frank Act have increased our costs of compliance and required changes in the way we and our agents conduct business. In addition, we are subject to periodic examination by the CFPB. These examinations may require us to change the way we conduct business or increase the costs of compliance.

 

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The United States and other countries periodically consider initiatives designed to lower costs of international remittances which, if implemented, may adversely impact our business, financial condition and results of operations.

 

In addition, we are subject to escheatment laws in the United States and certain foreign jurisdictions in which we conduct business. The concept of escheatment involves the reporting and delivery of property to states that is abandoned when its rightful owner cannot be readily located and/or identified. We are subject to the laws of various states in the United States which from time to time take inconsistent or conflicting positions regarding the requirements to escheat property to a particular state, making compliance challenging. In some instances, we escheat items to states pursuant to statutory requirements and then subsequently pay those items to consumers. For such amounts, we must file claims for reimbursement from the states.

 

Any violation by us of the laws and regulations set forth above could lead to significant settlements, fines or penalties and could limit our ability to conduct business in some jurisdictions. Our systems, employees and processes may not be sufficient to detect and prevent violations of the laws and regulations set forth above by our agents, which could also lead to us being subject to significant settlements, fines or penalties. In addition to these fines and penalties, a failure by us or our agents to comply with applicable laws and regulations also could seriously damage our reputation, result in diminished revenue and profit and increase our operating costs and could result in, among other things, revocation of required licenses or registrations, loss of approved status, termination of contracts with banks or retail representatives, administrative enforcement actions and fines, class action lawsuits, cease and desist orders and civil and criminal liability. The occurrence of one or more of these events could have a material adverse effect on our business, financial condition and results of operations.

 

In certain cases, regulations may provide administrative discretion regarding enforcement. As a result, regulations may be applied inconsistently across the industry, which could result in additional costs for us that may not be required to be incurred by our competitors. If we were required to maintain a price higher than most of our competitors to reflect our regulatory costs, this could harm our ability to compete effectively, which could adversely affect our business, financial condition and results of operations. In addition, changes in laws, regulations or other industry practices and standards, or interpretations of legal or regulatory requirements, may reduce the market for or value of our services or render our services less profitable or obsolete. Changes in the laws affecting the kinds of entities that are permitted to act as money remittance agents (such as changes in requirements for capitalization or ownership) could adversely affect our ability to distribute our services and the cost of providing such services. Many of our agents are in the check cashing industry. Any regulatory action that negatively impacts check cashers could also cause this portion of our agent base to decline. If onerous regulatory requirements were imposed on our agents, the requirements could lead to a loss of agents, which, in turn, could adversely affect our business, financial condition or results of operations.

 

Litigation or investigations involving us or our agents could result in material settlements, fines or penalties and may adversely affect our business, financial condition and results of operations.

 

We have been, and in the future may be, subject to allegations and complaints that individuals or entities have used our money remittance services for fraud-induced money transfers, as well as certain money laundering activities, which may result in fines, penalties, judgments, settlements and litigation expenses. We also are the subject from time to time of litigation related to our business. A putative class action complaint has been filed against us alleging violations of the federal TCPA. We have reached a settlement in principle and expect to finalize a settlement agreement and release in the next ten days.

 

Regulatory and judicial proceedings and potential adverse developments in connection with ongoing litigation may adversely affect our business, financial condition and results of operations. There may also be adverse publicity associated with lawsuits and investigations that could decrease agent and consumer acceptance of our services. Additionally, our business has been in the past, and may be in the future, the subject of class action lawsuits, regulatory actions and investigations and other general litigation. The outcome of class action lawsuits, regulatory actions and investigations and other litigation is difficult to assess or quantify but may include substantial fines and expenses, as well as the revocation of required licenses or registrations or the loss of approved status, which could have a material adverse effect on our business, financial position and results of operations or consumers’ confidence in our business. Plaintiffs or regulatory agencies in these lawsuits, actions or investigations may seek recovery of very large or indeterminate amounts, and the magnitude of these actions may remain unknown for substantial periods of time. The cost to defend or settle future lawsuits or investigations may be significant. In addition, improper activities, lawsuits or investigations involving our agents may adversely impact our business operations or reputation even if we are not directly involved.

 

 38 

 

Current and proposed data privacy and cybersecurity laws and regulations could adversely affect our business, financial condition and results of operations.

 

We are subject to requirements relating to data privacy and cybersecurity under U.S. federal, state and foreign laws. For example, the U.S. FTC routinely investigates the privacy practices of companies and has commenced enforcement actions against many, resulting in multi-million dollar settlements and multi-year agreements governing the settling companies’ privacy practices. If we are unable to meet such requirements, we may be subject to significant fines or penalties. Furthermore, certain industry groups require us to adhere to privacy requirements in addition to federal, state and foreign laws, and certain of our business relationships depend upon our compliance with these requirements. As the number of countries enacting privacy and related laws increases and the scope of these laws and enforcement efforts expands, we will increasingly become subject to new and varying requirements. Failure to comply with existing or future data privacy and cybersecurity laws, regulations and requirements, including by reason of inadvertent disclosure of personal information, could result in significant adverse consequences, including reputational harm, civil litigation, regulatory enforcement, costs of remediation, increased expenses for security systems and personnel, harm to our consumers and harm to our agents. These consequences could materially adversely affect our business, financial condition and results of operations. In addition, in connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing and pursuant to legal obligations and authorizations, we make information available to certain U.S. federal and state, as well as certain foreign, government agencies. In recent years, we have experienced increasing data sharing requests by these agencies, particularly in connection with efforts to prevent terrorist financing or reduce the risk of identity theft. During the same period, there has also been increased public attention to the corporate use and disclosure of personal information, accompanied by legislation and regulations intended to strengthen data protection, information security and consumer privacy. These regulatory goals may conflict, and the law in these areas is not consistent or settled. While we believe that we are compliant with our regulatory responsibilities, the legal, political and business environments in these areas are rapidly changing, and subsequent legislation, regulation, litigation, court rulings or other events could expose us to increased program costs, liability and reputational damage that could have a material adverse effect on our business, financial condition and results of operations.

 

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act or other similar anti-corruption laws.

 

Our operations in Latin America are subject to anti-corruption laws and regulations, including restrictions imposed by the U.S. Foreign Corrupt Practices Act (the “FCPA”). The FCPA and similar anti-corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials or employees of commercial enterprises for the purpose of obtaining or retaining business. We operate in parts of the world that have experienced corruption and, in certain circumstances, strict compliance with anti-corruption laws may conflict with local customs and practices. Because of the scope and nature of our operations, we experience a higher risk associated with the FCPA and similar anti-bribery laws than many other companies.

 

Our employees and agents interact with government officials on our behalf, including as necessary to obtain licenses and other regulatory approvals necessary to operate our business, employ expatriates and resolve tax disputes. We also have a number of contracts with third-party paying agents that are owned or controlled by foreign governments. These interactions and contracts create a risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of the FCPA or other similar laws. Under the FCPA and other similar laws, we may be held liable for unauthorized actions taken by our employees or agents.

 

In recent years, there have been significant regulatory reviews and actions taken by the United States and other regulators related to anti-bribery laws, and the trend appears to be greater scrutiny on payments to, and relationships with, foreign entities and individuals.

 

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Although we have implemented policies and procedures reasonably designed to ensure compliance with local laws and regulations as well as U.S. laws and regulations, including the FCPA, there can be no assurance that all of our employees and agents will abide by our policies. If we are found to be liable for violations of the FCPA or similar anti-corruption laws in other jurisdictions, either due to our own or others’ acts or inadvertence, we could suffer from substantial civil and criminal penalties, including fines, incarceration, prohibitions or limitations on the conduct of our business, the loss of our financing facilities and significant reputational damage, any of which could have a material and adverse effect on our results of business, financial condition or results of operations.

 

Government or regulatory investigations into potential violations of the FCPA or other similar laws by U.S. agencies could also have a material adverse effect on our results of business, financial condition and results of operations. Furthermore, detecting, investigating and resolving actual or alleged violations of the FCPA and other similar laws is expensive and can consume significant time and attention of our senior management.

 

We conduct money remittance transactions through agents in regions that are politically volatile or, in a limited number of cases, may be subject to certain OFAC restrictions.

 

We conduct money remittance transactions through agents in regions that are politically volatile or, in a limited number of cases, may be subject to certain OFAC restrictions. It is possible that our money remittance services or other services could be used in contravention of applicable law or regulations. Such circumstances could result in increased compliance costs, regulatory inquiries, suspension or revocation of required licenses or registrations, seizure or forfeiture of assets and the imposition of civil and criminal fees and penalties. In addition to monetary fines or penalties that we could incur, we could be subject to reputational harm that could have a material adverse effect on our business, financial condition and results of operations.

 

Changes in tax laws and unfavorable outcomes of tax positions we take could adversely affect our tax expense, liquidity and business and financial condition.

 

On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1) (the “Act”) was enacted. The Act contains significant changes to corporate taxation, including reduction of the corporate income tax rate from 35% to 21%, elimination of the corporate alternative minimum tax, limitation of the tax deduction for interest expense to 30% of U.S. “adjusted taxable income” (which will be roughly equivalent to EBITDA through December 31, 2022 and to EBIT thereafter), limitation of the deduction for future net operating losses, and elimination of future net operating loss carrybacks, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time and modification or elimination of many business deductions and credits. Notwithstanding the reduction in the corporate income tax rate, the overall impact of the Act is uncertain, and our business and financial condition could be adversely affected. Due to the timing of the Act and the complexity involved in applying the provisions of the Act, we have made a reasonable estimate of the effects and recorded provisional amounts as of December 31, 2017. The overall impact of the Act also depends on future interpretations and regulations that may be issued by the U.S. Treasury Department, and it is possible future guidance could adversely impact the company. Further, it is unclear how foreign governments and U.S. state and local jurisdictions will incorporate these federal law changes and such jurisdictions may enact tax laws in response to the Act that could result in further changes to global taxation and materially affect the company’s financial position and results of operations. At this time, the full extent of the impact of the Act on our financial statements cannot reasonably be estimated. Further, this proxy statement/prospectus does not discuss the Act or the manner in which it might affect holders of the combined company’s common stock. No assurance is given that the Act will not have an adverse effect on the market price of the combined company’s common stock after the Merger. In addition to the Act, developments in the tax laws of state and local and non-U.S. governments could have an adverse effect on the tax consequences to the combined company’s common stock. 

 

We file tax returns and take positions with respect to federal, state, local and international taxation, and our tax returns and tax positions are subject to review and audit by taxing authorities. An unfavorable outcome in a tax review or audit could result in higher tax expense, including interest and penalties, which could adversely affect our results of operations and cash flows. We establish reserves for material known tax exposures; however, there can be no assurance that an actual taxation event would not exceed our reserves.

 

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Our business and results of operations may be adversely affected by foreign political, economic and social instability risks, foreign currency restrictions and devaluation, and various local laws associated with doing business in Latin America.

 

We derive a substantial portion of our revenue from our money remittance transactions from the United States to Latin America corridor, particularly the corridors to Mexico and Guatemala, and we are exposed to certain political, economic and other uncertainties not encountered in U.S. operations, including increased risks of social unrest, strikes, drug cartel and gang-related violence, war, kidnapping of employees or agents, nationalization, forced negotiation or modification of contracts, difficulty resolving disputes and enforcing contract provisions, expropriation of assets, taxation policies, foreign exchange restrictions and restrictions on repatriation of income and capital, currency rate fluctuations, increased governmental ownership and regulation of the economy and markets in which we operate, and restrictive governmental regulation, bureaucratic delays, uncertain application of laws and regulations and general hazards associated with foreign sovereignty over certain areas in which operations are conducted. Latin American countries, in particular, have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and general economic and political instability. Additionally, as events in the Latin American region have demonstrated, negative economic or political developments in one country in the region can lead to or exacerbate economic or political instability elsewhere in the region. Consequently, actions or events in Latin America that are beyond our control could restrict our ability to operate there or otherwise adversely affect the profitability of those operations. Furthermore, changes in the business, regulatory or political climate in any of those countries, or significant fluctuations in currency exchange rates, could affect our ability to expand or continue our operations there, which could have a material adverse impact on our business, financial condition and results of operations. Further, our growth plans include potential expansion in the countries in which we currently operate, as well as, potentially, other countries in Latin America.

 

Additionally, the countries in which we operate may impose or tighten foreign currency exchange control restrictions, taxes or limitations with regard to repatriation of earnings and investments from these countries. If exchange control restrictions, taxes or limitations are imposed or tightened, our ability to receive dividends or other payments from affected jurisdictions could be reduced, which could have a material adverse effect on our business, financial condition and results of operations.

 

In addition, corporate, contract, property, insolvency, competition, securities and other laws and regulations in many of the countries in which we operate have been, and continue to be, substantially revised. Therefore, the interpretation and procedural safeguards of the new legal and regulatory systems are in the process of being developed and defined, and existing laws and regulations may be applied inconsistently. Also, in some circumstances, it may not be possible to obtain the legal remedies provided for under these laws and regulations in a reasonably timely manner, if at all.

 

Our ability to grow in international markets and our future results could be adversely affected by a number of factors, including:

 

changes in political and economic conditions and potential instability in certain regions, including in particular the recent civil unrest, terrorism and political turmoil in Latin America;
  
restrictions on money transfers to, from and between certain countries;
  
inability to recruit and retain paying agents and customers for new corridors;
  
currency exchange controls, new currency adoptions and repatriation issues;
  
changes in regulatory requirements or in foreign policy, including the adoption of domestic or foreign laws, regulations and interpretations detrimental to our business;
  

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possible increased costs and additional regulatory burdens imposed on our business;
  
the implementation of U.S. sanctions, resulting in bank closures in certain countries and the ultimate freezing of our assets;
  
burdens of complying with a wide variety of laws and regulations;
  
possible fraud or theft losses, and lack of compliance by international representatives in foreign legal jurisdictions where collection and legal enforcement may be difficult or costly;
  
inability to maintain or improve our software and technology systems;
  
reduced protection of our intellectual property rights;
  
unfavorable tax rules or trade barriers; and
  
inability to secure, train or monitor international agents.

 

If we are unable to adequately protect our brand and the intellectual property rights related to our existing and any new or enhanced services, or if we infringe on the rights of others, our business, prospects, financial condition and results of operations could be adversely affected.

 

The Intermex brand is critical to our business. We utilize trademark registrations in various countries and other tools to protect our brand. Our business would be harmed if we were unable to adequately protect our brand and the value of our brand was to decrease as a result.

 

We rely on a combination of patent, trademark and copyright laws and trade secret protection and confidentiality or license agreements to protect the intellectual property rights related to our services. We may be subject to third-party claims alleging that we infringe their intellectual property rights or have misappropriated other proprietary rights. We may be required to spend resources to defend such claims or to protect and police our own rights. Some of our legal rights in information or technology that we deem proprietary may not be protected by intellectual property laws, particularly in foreign jurisdictions. The loss of our intellectual property protection, the inability to secure or enforce intellectual property protection or to successfully defend against claims of intellectual property infringement or misappropriation could harm our business, prospects, financial condition and results of operation.

 

The processes and systems we employ may be subject to patent protection by other parties, and any claims could adversely affect our business and results of operations.

 

In certain countries, including the United States, patent laws permit the protection of processes and systems. We employ processes and systems in various markets that have been used in the industry by other parties for many years. We or other companies that use these processes and systems consider many of them to be in the public domain. If a person were to assert that it holds a patent covering any of the processes or systems we use, we would be required to defend ourselves against such claim. If unsuccessful, we may be required to pay damages for past infringement, which could be trebled if the infringement was found to be willful. We may also be required to seek a license to continue to use the processes or systems. Such a license may require either a single payment or an ongoing license fee. No assurance can be given that we will be able to obtain a license which is reasonable in fee and scope. If a patent owner is unwilling to grant such a license, or we decide not to obtain such a license, we may be required to modify our processes and systems to avoid future infringement.

 

The operation of retail locations create risks and may adversely affect our business, financial condition and results of operations.

 

We have company-owned retail locations for the sale of our services. We may be subject to additional laws and regulations that are triggered by our ownership of retail locations and our employment of individuals who staff our retail locations. There are also certain risks inherent in operating any retail location, including theft, personal injury and property damage and long-term lease obligations.

 

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Risk Relating to Our Indebtedness

 

Intermex has, and following completion of the Merger the combined company will have, a substantial amount of indebtedness, which may limit our operating flexibility and could adversely affect our business, financial condition and results of operations.

 

Intermex had approximately $115.8 million of indebtedness as of December 31, 2017, consisting of amounts outstanding under its senior secured credit facility. Following the Merger and unless the combined company repays any of such indebtedness, the combined company is expected to have outstanding indebtedness in approximately the same amount.

 

The indebtedness of the combined company following the Merger could have important consequences to our investors, including, but not limited to:

 

increasing the combined company’s vulnerability to, and reducing its flexibility to respond to, general adverse economic and industry conditions;
   
requiring the dedication of a substantial portion of the combined company’s cash flow from operations to servicing debt, including interest payments and quarterly excess cash flow prepayment obligations;
   
limiting the combined company’s flexibility in planning for, or reacting to, changes in its business and the competitive environment; and
   
limiting the combined company’s ability to borrow additional funds and increasing the cost of any such borrowing.

 

The interest rates in Intermex’s, and after the Merger, the combined company’s, credit facility are set based upon the London Interbank Offered Rate, an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market, which is subject to fluctuation. In addition, the interest rate margin applicable to our term loans and revolving loans can vary by 50 basis points depending on our net leverage level. An increase in interest rates would adversely affect the combined company’s profitability.

 

We are also subject to capital requirements imposed by various regulatory bodies in the jurisdictions in which we operate. We may need access to external capital to support these regulatory requirements in order to maintain our licenses and our ability to earn revenue in these jurisdictions. An interruption of our access to capital could impair our ability to conduct business if our regulatory capital falls below requirements.

 

Upon the occurrence of an event of default relating to the Intermex credit facility, the lenders could elect to accelerate payments due and terminate all commitments to extend further credit.

 

Under the combined company’s credit facility, upon the occurrence of an event of default, the lenders will be able to elect to declare all amounts outstanding under the credit agreement to be immediately due and payable and terminate all commitments to lend additional funds. If we are unable to repay those amounts, the lenders under the credit agreement could proceed to foreclose against the collateral of the combined company that secures that indebtedness. Intermex has granted the lenders a security interest in substantially all of its assets, including the assets of certain subsidiaries.

 

The combined company’s credit facility will contain restrictive covenants that may impair our ability to conduct business.

 

Intermex’s credit facility contains, and following the completion of the Merger the combined company’s credit facility will contain, operating covenants and financial covenants that may in each case limit management’s discretion with respect to certain business matters. Among other things, these covenants restrict our and our subsidiaries’ ability to grant additional liens, consolidate or merge with other entities, purchase or sell assets, declare dividends, incur additional debt, make advances, investments and loans, transact with affiliates, issue equity interests, modify organizational documents and engage in other business. Intermex must, and following the Merger we will be required to, comply with a minimum fixed charge coverage ratio, a maximum total net leverage ratio and a minimum asset coverage ratio. As a result of these covenants and restrictions, we will be limited in how we conduct our business and we may be unable to raise additional debt or other financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. Failure to comply with such restrictive covenants may lead to default and acceleration under our credit facility and may impair our ability to conduct business. We may not be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants, which may result in foreclosure of our assets.

 

See the section entitled “Information about Intermex—Intermex Credit Facilities” for more information.

 

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Risks Relating to FinTech and the Merger

 

Following the consummation of the Merger, our only significant asset will be ownership of Intermex’s business through our 100.0% ownership interest in Merger Sub 2. If Intermex’s business is not profitably operated, Merger Sub 2 may be unable to pay us dividends or make distributions to enable us to pay any dividends on our common stock or satisfy our other financial obligations.

 

Following the consummation of the Merger, we will have no direct operations and no significant assets other than the ownership of Merger Sub 2, which will operate Intermex’s business. We will depend on profits generated by Intermex’s business for distributions, debt repayment and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company, and to pay any dividends with respect to our capital stock. Legal and contractual restrictions in agreements governing the indebtedness of the combined company, as well as the financial condition and operating requirements of the combined company, may limit our ability to receive distributions from Merger Sub 2 and the Intermex business following the Merger.

  

Provisions in our charter and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management.

 

Our charter contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

 

In addition, while we expect to opt out of Section 203 of the DGCL, our charter will contain similar provisions providing that we may not engage in certain "business combinations" with any "interested stockholder" for a three-year period following the time that the stockholder became an interested stockholder, unless:

 

prior to such time, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; 

 

upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or

 

at or subsequent to that time, the business combination is approved by our board of directors and by the affirmative vote of holders of at least two-thirds of our outstanding voting stock that is not owned by the interested stockholder.

 

These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of the combined company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take corporate actions other than those you desire.

 

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Our charter will designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us.

 

Our charter will provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising under the DGCL or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine. By becoming a stockholder in the combined company, you will be deemed to have notice of and have consented to the provisions of our charter related to choice of forum. The choice of forum provision in our charter may limit our stockholders' ability to obtain a favorable judicial forum for disputes with us.

 

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

 

Following the Merger, the price of our securities may fluctuate significantly due to the market’s reaction to the Merger and general market and economic conditions. An active trading market for our securities following the Merger may never develop or, if it develops, it may not be sustained.

 

NASDAQ may not list our securities on its exchange, and if they are listed we may be unable to satisfy listing requirements in the future, which could limit investors’ ability to effect transactions in our securities and subject us to additional trading restrictions.

 

As a result of the proposed Merger, NASDAQ rules require that we apply to continue the listing of our common stock and warrants. While we will apply to have our common stock and warrants listed on NASDAQ upon consummation of the Merger, we must meet NASDAQ’s initial listing requirements. We may be unable to meet those requirements. Even if our securities are listed on NASDAQ following the Merger, we may be unable to maintain the listing of our securities in the future.

 

If we fail to meet the initial listing requirements and NASDAQ does not list our securities on its exchange, or if we are delisted, there could be significant material adverse consequences, including: 

 

  a limited availability of market quotations for our securities;

 

  a limited amount of news and analyst coverage for the combined company; and

 

  a decreased ability to obtain capital or pursue acquisitions by issuing additional equity or convertible securities.

 

We will incur significant costs and obligations as a result of being a public company.

 

As a privately held company, Intermex has not been required to comply with many corporate governance and financial reporting practices and policies required of a publicly traded company. As a publicly traded company, the combined company will incur significant legal, accounting and other expenses that Intermex was not required to incur in the past. These expenses will increase once the combined company is no longer an “emerging growth company” as defined under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure for public companies, including Dodd Frank, the Sarbanes-Oxley Act, regulations related hereto and the rules and regulations of the SEC and NASDAQ, have increased the costs and the time that must be devoted to compliance matters. We expect these rules and regulations will increase our legal and financial costs and lead to a diversion of management time and attention from revenue-generating activities.

 

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For as long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” We may remain an “emerging growth company” for up to five years from our IPO or until such earlier time that we have more than $1.0 billion in annual revenues, have more than $700.0 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. To the extent we choose not to use exemptions from various reporting requirements under the JOBS Act, or if we no longer can be classified as an “emerging growth company,” we expect that we will incur additional compliance costs, which will reduce our ability to operate profitably.

 

As an “emerging growth company,” we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.

 

As an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”, including not being required to obtain an assessment of the effectiveness of our internal controls over financial reporting from our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards, which we have elected to do.

  

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active market for our common stock, our share price may be more volatile and the price at which our securities trade could be less than if we did not use these exemptions.

 

If we do not develop and implement all required accounting practices and policies, we may be unable to provide the financial information required of a United States publicly traded company in a timely and reliable manner.

 

As Intermex is a privately held company, it has not been required to adopt all of the financial reporting and disclosure procedures and controls required of a United States publicly traded company. We expect that the implementation of all required accounting practices and policies and the hiring of additional financial staff will increase the operating costs of the combined company and could require the management of the combined company to devote significant time and resources to such implementation. If we fail to develop and maintain effective internal controls and procedures and disclosure procedures and controls, we may be unable to provide financial information and required SEC reports that are timely and reliable. Any such delays or deficiencies could harm us, including by limiting our ability to obtain financing, either in the public capital markets or from private sources and damaging our reputation, which in either cause could impede our ability to implement our growth strategy. In addition, any such delays or deficiencies could result in our failure to meet the requirements for continued listing of our common stock on NASDAQ.

 

We may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interest in us and may depress the market price of our common stock.

 

We may issue additional shares of common stock or other equity securities in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or grants under the Omnibus Plan without stockholder approval in a number of circumstances.

 

Our issuance of additional common stock or other equity securities could have one or more of the following effects:

 

  our existing stockholders’ proportionate ownership interest in us will decrease;

 

  the amount of cash available per share, including for payment of dividends in the future, may decrease;

 

  the relative voting strength of each previously outstanding share of common stock may be diminished; and

 

  the market price of our common stock may decline.

 

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If the combined company’s performance following the Merger does not meet market expectations, the price of our securities may decline.

 

If the combined company’s performance following the Merger does not meet market expectations, the price of our common stock may decline from the price of our common stock prior to the closing of the Merger. The market value of our common stock at the time of the Merger may vary significantly from the price on the date the Merger Agreement was executed, the date of this proxy statement/prospectus, or the date on which our stockholders vote on the Merger. Because the number of shares of our common stock issued as consideration in the Merger will not be adjusted to reflect any changes in the market price of our common stock, the value of the shares of our common stock issued in the Merger may be higher or lower than the value of the same number of shares of our common stock on earlier dates.

 

In addition, following the Merger, fluctuations in the price of our common stock could contribute to the loss of all or part of your investment. Prior to the Merger, there has not been a public market for Intermex’s stock, and trading in our common stock has not been active. Accordingly, the valuation ascribed to Intermex and our common stock in the Merger may not be indicative of the price that will prevail in the trading market following the Merger. If an active market for our common stock develops and continues, the trading price of our common stock following the Merger could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our common stock and our common stock may trade at prices significantly below the price you paid for them.

  

Factors affecting the trading price of our common stock following the Merger may include:

 

  actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

 

  changes in the market’s expectations about our operating results;

 

  success of competitors;

 

  our operating results failing to meet market expectations in a particular period;

 

  changes in financial estimates and recommendations by securities analysts concerning us or the money transfer services industry and market in general;

 

  operating and stock price performance of other companies that investors deem comparable to us;

 

  our ability to market new and enhanced products on a timely basis;

 

  changes in laws and regulations affecting our business;

 

  commencement of, or involvement in, litigation involving us;

 

  changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

 

  the volume of shares of our common stock available for public sale;

 

  any significant change in our board or management;

 

  sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and

 

  general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

 

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Broad market and industry factors may depress the market price of our common stock irrespective of our operating performance. The stock market in general and NASDAQ have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for financial technology stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our common stock also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

 

Even if we consummate the Merger, the public warrants may never be in the money, and they may expire worthless.

 

The exercise price for our warrants is $11.50 per share, which exceeds the market price of our common stock, which was $[●] per share based on the closing price on [●], 2018. There can be no assurance that the public warrants will ever be in the money prior to their expiration and, as such, the warrants may expire worthless. 

 

The terms of our warrants may be amended in a manner that may be adverse to the holders. The warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Our ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding public warrants is unlimited. Examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.

  

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

 

We have the ability to redeem outstanding warrants (excluding any placement warrants held by our Sponsor, Cantor or their permitted transferees) at any time after they become exercisable and prior to their expiration, at $0.01 per warrant, provided that the last reported sales price (or the closing bid price of our common stock in the event the shares of our common stock are not traded on any specific trading day) of the common stock equals or exceeds $24.00 per share on each of 20 trading days within the 30 trading-day period ending on the third business day prior to the date on which we send proper notice of such redemption, provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the warrants, we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force a warrant holder: (i) to exercise your warrants and pay the exercise price therefore at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, will be substantially less than the market value of your warrants.

 

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Warrants to purchase our common stock will become exercisable following the Merger, which could increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

 

Outstanding warrants to purchase an aggregate of 8,960,000 shares of our common stock will become exercisable on the 30th day following the closing of the Merger in accordance with the terms of the warrant agreement governing those securities. These warrants consist of 8,750,000 warrants originally included in the units issued in our IPO and 210,000 warrants included in the placement units. Each warrant entitles its holder to purchase one share of our common stock at an exercise price of $11.50 per share and will expire at 5:00 p.m., New York time, five years after the closing of the Merger or earlier upon redemption of our common stock or our liquidation. To the extent warrants are exercised, additional shares of our common stock will be issued, which will result in dilution to our then existing stockholders and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could depress the market price of our common stock.

 

Our stockholders will experience immediate dilution due to the issuance of common stock to Interwire LLC as consideration in the Merger. Having a minority share position likely reduces the influence that our current stockholders have on the management of the combined company.

 

Based on Intermex’s current capitalization and assuming a closing date of June 30, 2018, we anticipate issuing an aggregate of 16,598,281 shares of our common stock, subject to adjustment as set forth in the Merger Agreement, to Interwire LLC as partial consideration in the Merger. In addition, if the Incentive Plan Proposal is approved, assuming that 3,761,516 shares are authorized for issuance under the Omnibus Plan, we intend to issue options to purchase 3,097,719 shares of common stock to executives of the combined company following the Merger (See the section entitled “Proposal No. 4–The Incentive Plan Proposal–Overview”). We anticipate that, immediately following completion of the Merger, our existing stockholders will hold in the aggregate approximately 58.4% of our outstanding common stock (43.2% held by our public stockholders and 15.1% held by the initial stockholders), and Interwire LLC and its designees will hold approximately 41.6% of our outstanding common stock. These ownership percentages do not take into account:

 

  any warrants or options to purchase our common stock that will be outstanding following the Merger;

 

  any equity awards that may be issued under our proposed Omnibus Plan following the Merger, including the 3,097,719 options to be issued to Intermex executives, which number is subject to adjustment so that the number of options issued represents approximately 82.4% of the total number of shares authorized for issuance under the Omnibus Plan (See the section entitled "Proposal No. 6—The Incentive Plan Proposal—Summary of Material Terms of Omnibus Plan” for more information); or
     
  any adjustments to the Merger Consideration pursuant to the Merger Agreement.

 

If any shares of our common stock are redeemed in connection with the Merger, the percentage of our outstanding common stock held by our public stockholders will decrease and the percentages of our outstanding common stock held immediately following the closing of the Merger by each of our initial stockholders, Cantor and Interwire LLC and its designees will increase. See the section entitled “Summary—Impact of the Merger on FinTech’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information. To the extent that any of the outstanding warrants or options are exercised for shares of our common stock, or awards are issued under the proposed Omnibus Plan, our existing stockholders may experience substantial dilution. Such dilution could, among other things, limit the ability of our current stockholders to influence our management through the election of directors following the Merger.

 

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Our initial stockholders, directors and officers may have a conflict of interest in determining to pursue the acquisition of Intermex, since certain of their interests are different from or in addition to (and which may conflict with) the interests of our public stockholders, and such interests may have influenced their decisions to approve the Merger and recommend that our stockholders approve the Merger Proposal.

 

Our initial stockholders, officers and directors have interests in and arising from the Merger that are different from or in addition to, and which may conflict with, the interests of our public stockholders, which may result in a conflict of interest, including the following:

 

  our Sponsor, officers and directors will hold our common stock following the Merger, subject to lock-up agreements;

 

  our Sponsor, officers and directors will hold placement warrants to purchase shares of our common stock;

 

  our Sponsor, officers and certain of our directors paid an aggregate of $3,928,311 for their founder shares, placement shares and placement warrants and that such securities should have a significantly higher value at the time of the Merger and will have little or no value if we do not complete the Merger;

 

  our Sponsor, officers and directors have waived their redemption rights with respect to their founder shares, placement shares and public shares in connection with the Merger, and have waived their redemption and liquidation rights with respect to their founder shares and placement shares if we are unable to complete a business combination by January 25, 2019;

 

  if we are unable to complete a business combination by January 25, 2019, our Chief Executive Officer will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities to which we owe money for services rendered or contracted for, or products sold to us, but only if such a vendor or target business has not executed such a waiver;

 

 

the initial stockholders will have the collective right to appoint a board observer of the combined company; and

 

  our Sponsor has agreed to loan us funds in an amount up to $1,100,000 for working capital requirements and to finance transaction costs in connection with an initial business combination, and any amounts outstanding under this loan will not be repaid if we are unable to complete a business combination by January 25, 2019.

 

These interests may have influenced our directors in making their recommendation that you vote in favor of the Merger Proposal and the other proposals in this proxy statement/prospectus.

 

Our directors and officers have discretion in agreeing to changes or waivers to the terms of the Merger Agreement and related transactions, which may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our public stockholders’ best interest.

 

In the period leading up to the closing of the Merger, events may occur that, pursuant to the Merger Agreement, would require us to agree to amend the Merger Agreement, to consent to certain actions taken by Intermex or to waive rights to which we are entitled to under the Merger Agreement. These events could arise because of changes in Intermex’s business, a request by Intermex to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Intermex’s business and would entitle us to terminate the Merger Agreement. In any of such circumstances, it would be at our discretion, acting through our board of directors, to consent to such a request or action or waive such rights. The existence of the financial and personal interests of the directors described elsewhere in these risk factors may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for the public stockholders and what he or she may believe is best for himself or herself in determining whether or not to take the requested action or waive our rights. As of the date of this proxy statement/prospectus, we do not believe there will be any requests, actions or waivers that our directors and officers would be likely to make after stockholder approval of the Merger Proposal has been obtained. While certain changes could be made without further stockholder approval, we will circulate a new or amended proxy statement/prospectus and resolicit our stockholders if changes to the terms of the Merger and related transactions that would have a material impact on our stockholders are required prior to the vote on the Merger Proposal.

 

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Our initial stockholders have agreed to vote in favor of the Merger, regardless of how our public stockholders vote.

 

Unlike many other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders have agreed to vote any shares of our common stock owned by them in favor of the Merger. As of the date hereof, our initial stockholders hold approximately 26.6% of our issued and outstanding shares of common stock. Accordingly, it is more likely that the requisite stockholder approval will be received for the Merger than would be the case if our initial stockholders agreed to vote any shares of our common stock owned by them in accordance with the majority of the votes cast by our public stockholders.

 

We expect to incur significant, non-recurring costs in connection with consummating the Merger and related transactions.

 

We expect to incur significant, non-recurring costs in connection with consummating the Merger and related transactions. We will pay all fees, expenses and costs we incur or incurred on our behalf in connection with the Merger Agreement and the transactions contemplated thereby (including the Merger). Additionally, the Merger Agreement provides that if the Merger is consummated, we will pay all fees, expenses and costs incurred by Intermex or on Intermex’s behalf, subject to certain limited exceptions, in connection with the Merger Agreement and the transactions contemplated thereby (including the Merger). We currently estimate that transaction expenses will be approximately $21.3 million. In addition, we estimate that Intermex will incur an additional approximately $1.6 million in expenses that will be paid by the combined company.

 

If we are unable to complete the Merger with Intermex or another business combination by January 25, 2019, we will cease all operations except for the purpose of winding up our affairs, redeem our outstanding public shares and dissolve and liquidate. In such event, third parties may bring claims against us and, as a result, the proceeds held in the trust account could be reduced and the per-share liquidation price received by our stockholders could be less than $10.00 per share.

 

Our charter provides that we must complete the Merger or another business combination by January 25, 2019, or we must cease all operations except for the purposes of winding up, redeem our outstanding public shares and, subject to approval by our remaining stockholders and our board, dissolve and liquidate. In such event, third parties may bring claims against us for monies we owe for products or services provided to us. Although we have obtained waiver agreements from Intermex and from certain vendors and service providers that we have engaged and to which we owe money pursuant to which such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of our public stockholders. If we are unable to complete the Merger or another business combination within the required time period, Daniel G. Cohen, our Chief Executive Officer and a director, has agreed he will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities to which we owe money for services rendered or contracted for or products sold to us, but only if such a vendor or prospective target business does not execute such a waiver. However, he may not be able to meet such obligation. Therefore, the per-share distribution from the trust account in such a situation may be less than $10.00 due to such claims.

 

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share distribution from the trust account may be less than $10.00.

  

Our directors may decide not to enforce the indemnification obligations of Daniel G. Cohen, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

 

If proceeds in the trust account are reduced below $10.00 per public share and Daniel G. Cohen asserts that he is unable to satisfy his obligations or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against Mr. Cohen to enforce his indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against Mr. Cohen to enforce his indemnification obligations to us, it is possible that our independent directors, in exercising their business judgment, may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be less than $10.00 per share.

 

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Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them.

 

If we are unable to complete the Merger with Intermex or another business combination within the required time period, we must dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. We cannot assure you that we will properly assess all claims that may be potentially brought against us, nor can we assure you that third parties will not seek to recover from our stockholders amounts owed to them by us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of the date of distribution.

 

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after January 25, 2019, if we do not consummate the Merger, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Moreover, our board may be viewed as having breached its fiduciary duties to our creditors and/or having acted in bad faith, and thereby exposing the board and us to claims for punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us or you for these reasons.

 

Actions taken by the initial stockholders, our officers and directors to increase the likelihood of approval of the Merger Proposal and the other proposals presented in this proxy statement/prospectus could have a depressive effect on the price of our common stock.

 

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding us or our securities, the initial stockholders, our directors, officers and their respective affiliates may enter into agreements to purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Merger Proposal, or enter into transactions with such investors and others to provide them with incentives to acquire shares of our common stock or vote their shares in favor of the Merger Proposal. As of the date of this proxy statement/prospectus, one such arrangement has been made with an existing investor. While the exact nature of any other incentive arrangements that may be entered into in the future has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares owned by the initial stockholders for nominal value. The purpose of such purchases and other transactions would be to increase the likelihood that the Merger Proposal is approved and to decrease the likelihood that holders request redemption of public shares. Entering into any such arrangements may have a depressive effect on the price of our common stock. For example, if as a result of these arrangements an investor or holder purchases shares for nominal value, the investor or holder may be more likely to sell such shares immediately following the closing of the Merger for a price below market value.

 

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002, which could have a material adverse effect on our business.

 

Commencing with the Company’s annual report for the year ended December 31, 2017, we have and following the Merger, the combined company will be, required to provide management’s attestation on internal controls. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act are significantly more stringent than those required of Intermex as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to the combined company after the Merger. If we are not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and lead to a decrease in the market price of our common stock.

 

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Pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for so long as we are an “emerging growth company.”

 

Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting, and generally requires in the same report a report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until we are no longer an “emerging growth company.” We will be an “emerging growth company” until the earlier of (1) the last day of the fiscal year (a) following January 19, 2022, the fifth anniversary of our IPO, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. Accordingly, until we cease being an “emerging growth company” stockholders will not have the benefit of an independent assessment of the effectiveness of our internal control environment.

 

The unaudited pro forma financial information included in this proxy statement/prospectus may not be indicative of what our actual financial position or results of operations would have been.

 

The unaudited pro forma financial information in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Merger been completed on the dates indicated. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

 

Our ability to successfully effect the Merger and successfully operate the business thereafter will depend largely upon the efforts of certain key personnel, including the key personnel of Intermex, all of whom we expect to stay with the combined company following the Merger. The loss of such key personnel could adversely affect the operations and profitability of the post-combination business.

 

Our ability to recognize certain benefits of the Merger and successfully operate Intermex’s business following the Merger will depend upon the efforts of certain key personnel of Intermex. Although we expect all of such key personnel to remain with the combined company following the Merger, the unexpected loss of key personnel may adversely affect the operations and profitability of the combined company. In addition, our future success depends in part on our ability to identify and retain key personnel to succeed senior management. Furthermore, while we have closely scrutinized the skills, abilities and qualifications of the key Intermex personnel that will be employed by the combined company, our assessment may not prove to be correct. If such personnel do not possess the skills, qualifications or abilities we expect or those necessary to manage a public company, the operations and profitability of the combined company business may be negatively impacted.

 

The opinion of BTIG, our financial advisor does not reflect changes in circumstances between December 12, 2017, the date BTIG issued the opinion, and the closing of the Merger.

 

Our financial advisor, BTIG, rendered an opinion dated December 12, 2017, to our board of directors that, as of such date, and subject to and based on the considerations referred to in its opinion, (i) the Merger Consideration to be paid by us in the Merger pursuant to the Merger Agreement was fair to us, from a financial point of view, and (ii) the fair market value of Intermex implied by the various financial analyses BTIG conducted in connection with its opinion equaled or exceeded 80% of the amount held by us in trust for the benefit of our public stockholders (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account). The opinion was based on economic, market and other conditions in effect on, and the information made available to it as of, the date thereof.

 

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Changes in the operations and prospects of Intermex, general market and economic conditions and other factors on which BTIG’s opinion was based, may significantly alter the value of Intermex by the time the Merger is completed. The opinion does not speak as of the time the Merger will be completed or as of any date other than the date of such opinion. For a description of the opinion issued by BTIG to our board, please see the section entitled “Proposal No.1. The Merger Proposal—The Merger—Description of Fairness Opinion of BTIG.

  

Following the Merger, our ability to meet expectations and projections in any research or reports published by securities or industry analysts, or a lack of coverage by securities or industry analysts, could result in a depressed market price and limited liquidity for our common stock.

 

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. If no securities or industry analysts commence coverage of the combined company, our stock price would likely be less than that which would obtain if we had such coverage and the liquidity, or trading volume of our common stock may be limited, making it more difficult for a stockholder to sell shares at an acceptable price or amount. If any analysts do cover the combined company, their projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of research analysts covering us. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline.

 

Future sales of our common stock issued to Intermex legacy stockholders may reduce the market price of our common stock that you might otherwise obtain.

 

Under the Merger Agreement, Interwire LLC, the sole stockholder of Intermex, will exchange its shares of Intermex common stock for, among other things, an estimated  16,598,281 shares of our common stock, subject to adjustment as provided in the Merger Agreement. It is anticipated that Interwire LLC will distribute or cause to be distributed the merger consideration to its members, who we refer to as the Intermex legacy stockholders. Intermex legacy stockholders holding approximately 89.6% of the shares estimated to be issued to Interwire LLC as consideration in the Merger will, together with the combined company and certain of our initial stockholders, enter into a shareholders agreement, which we refer to as the Shareholders Agreement and will be restricted from transferring any shares of our common stock that they receive from Interwire LLC until the earlier of (i) such time as the number of shares of our common stock subject to the Shareholders Agreement represents less than 50% of the outstanding voting power of the combined company for a period of five consecutive business days, (ii) receipt of written consent from stockholders holding a majority of our common stock subject to the Shareholders Agreement and (iii) 15 months after the closing of the Merger, subject to certain limited exceptions. 

 

The Merger Agreement provides that, at the closing for the Merger, we will enter into a registration rights agreement with certain of our existing stockholders and certain of the Intermex legacy stockholders, which we refer to as the Registration Rights Agreement, with respect to the shares of our common stock currently held or that will be issued under the Merger Agreement. The Registration Rights Agreement will require us to, among other things, file a resale shelf registration statement on behalf of the stockholders promptly after the closing of the Merger, which we refer to as the Shelf Registration Statement. If the Shelf Registration Statement becomes unavailable once it is declared effective, the stockholders will have certain demand registration rights.

 

Upon expiration of the lockup period applicable to shares of our common stock held by the Intermex legacy stockholders or effectiveness of the Shelf Registration Statement, these parties may sell large amounts of our stock in the open market or in privately negotiated transactions. The registration and availability of such a significant number of shares of common stock for trading in the public market may increase the volatility in the price of our common stock or put significant downward pressure on the price of our common stock. In addition, the combined company may use shares of our common stock as consideration for future acquisitions, which could further dilute our stockholders.

 

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Because Stella Point will control a significant percentage of our common stock following the Merger, it may influence major corporate decisions of the combined company and its interests may conflict with the interests of other holders of our common stock.

 

Upon completion of the Merger and based on our estimates of the Common Stock Merger Consideration to be issued and including founders shares to be transferred to Interwire LLC in connection with the Merger, SPC Intermex, LP, an affiliate of Stella Point, will beneficially own approximately 30.4% of the voting power of our outstanding common stock. Through this beneficial ownership and the Shareholders Agreement, we anticipate Stella Point will control approximately 51.7% of the voting power of our outstanding common stock in respect of electing directors to the board of directors of the combined company. As a result of this control, Stella Point will be able to influence matters requiring approval by our stockholders and/or our board of directors, including the election of directors and the approval of business combinations or dispositions and other extraordinary transactions. Stella Point may also have interests that differ from the interests of other holders of our common stock and may vote in a way with which you disagree and which may be adverse to your interests. The concentration of ownership may have the effect of delaying, preventing or deterring a change of control of the combined company and may materially and adversely affect the market price of our common stock. In addition, Stella Point may in the future own businesses that directly compete with the business of the combined company. See the section entitled “Proposal No. 1 The Merger ProposalThe Merger AgreementOther AgreementsThe Shareholders Agreement” for more information. 

 

Under the Merger Agreement we have no right to seek indemnification from Interwire LLC following the Merger.

 

The representations, warranties and covenants made by Intermex in the Merger Agreement do not survive closing and are not subject to indemnification. As a result, if Intermex is found to have breached any of its representations, warranties or covenants contained in the Merger Agreement, other than those covenants that by their terms apply or are to be performed in whole or in part at or after the closing of the Merger, we will have no recourse against Interwire LLC, Intermex’s sole stockholder, other than for actual fraud.

 

Our proposed charter renounces any expectancy in or right to be offered an opportunity to participate in certain transactions or matters that may be investment, corporate or business opportunities and that are presented to the Company or its officers, directors or stockholders.

 

Our proposed charter provides that, to the fullest extent permitted by Delaware law, neither (i) SPC Intermex, LP, an affiliate of Stella Point, any of its directors, principals, officers, employees or other representatives that may serve as our directors, officers or agents, and each of their affiliates (each, an “Excluded SPC Party”), nor (ii) any of our directors (other than any Excluded SPC Party) who are not officers or employees of the Company, and each of their affiliates (each, an “Excluded Director”), shall have any duty to refrain from (a) directly or indirectly engaging in any opportunity in which we, directly or indirectly, could have an interest or expectancy or (b) otherwise competing with us. Our proposed charter also renounces, to the fullest extent permitted by Delaware law, any interest or expectancy that we have in any opportunity in which any Excluded SPC Party engages, even if the opportunity is one in which we, directly or indirectly, could have had an interest or expectancy. To the fullest extent permitted by Delaware law, in the event that any Excluded SPC Party acquires knowledge of an opportunity that may be an opportunity for itself, himself or herself and for us, such party shall have no duty to communicate or present such opportunity to us and shall not be liable to us or any of our stockholders for breach of any fiduciary duty as our stockholder, director or officer solely for having pursued or acquired such opportunity or for offering or directing such opportunity to another person. Notwithstanding the foregoing, our proposed charter does not renounce any interest in any opportunity that is expressly offered to any Excluded Director solely in his or her capacity as one of our directors. To the fullest extent permitted by Delaware law, no business opportunity will be deemed to be a potential corporate opportunity for us unless we would be permitted to undertake the opportunity under our proposed charter, we have sufficient financial resources to undertake the opportunity and the opportunity would be in line with our business.

 

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Subsequent to the consummation of the Merger, the combined company may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

 

Although we have conducted a due diligence examination of Intermex, we cannot assure you that this examination revealed all material issues that may be present in Intermex’s business, or that factors outside of our and Intermex’s control will not later arise. As a result, we may be forced to later write down or write off assets, restructure the combined company’s operations, or incur impairment or other charges that could result in losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about the combined company or its securities. In addition, charges of this nature may cause us to be unable to obtain future financing on favorable terms or at all.

 

The combined company may be subject to securities litigation, which is expensive and could divert management attention.

 

Following the Merger, our share price may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. The combined company may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on business, financial condition, results of operations and prospects. Any adverse determination in litigation could also subject the combined company to significant liabilities.

  

Risk Relating to the Redemption

 

Public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from exercising redemption rights with respect to more than 20% of the public shares.

 

A public stockholder, together with any of its affiliates or any other person with whom it is acting in concert or as a “group,” will be restricted from exercising redemption rights with respect to more than 20% of the public shares. Accordingly, if you hold more than 20% of the public shares and the Merger Proposal is approved, you will not be able to exercise redemption rights with respect to the full amount of your shares and may be forced to hold the shares in excess of 20% or sell them in the open market. If the Merger is consummated, the value of such excess shares may not appreciate over time and the market price of our common stock may not exceed the per-share redemption price paid in connection with the Merger.

 

A stockholder’s decision as to whether to redeem his, her, its shares for a pro rata portion of the trust account may not put the stockholder in a better future economic position.

 

We can give no assurance as to the price at which a stockholder may be able to sell his, her or its public shares in the future following the completion of the Merger. Certain events following the consummation of any business combination, such as the Merger, may cause an increase in our share price, and may result in a lower value realized upon redemption than a stockholder might realize in the future had the stockholder not redeemed his, her or its shares. Similarly, if a stockholder does not redeem his, her or its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of the Merger, and the risk that the stockholder may not be able, in the future to sell his, her or its shares, for a greater amount than the redemption price described in this proxy statement/prospectus. A stockholder should consult his, her or its tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

 

If our stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of our common stock for a pro rata portion of the funds held in our trust account.

 

In order to exercise redemption rights, holders of public shares are required to, among other requirements, submit a request in writing and deliver their stock (either physically or electronically) to our transfer agent at least two business days prior to the special meeting. Stockholders electing to redeem their public shares will receive their pro rata portion of the amount on deposit in the trust account as of two business days prior to the anticipated consummation of the Merger. See the section entitled “Special Meeting of FinTech Stockholders—Redemption Rights” for additional information on how to exercise your redemption rights. If you do not timely submit your redemption request and deliver your common stock and comply with the other redemption requirements, you will not be entitled to redeem your common stock.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

FinTech is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Merger.

 

The following unaudited pro forma condensed combined balance sheet as of December 31, 2017 combines the audited historical consolidated statement of financial position of Holdings as of December 31, 2017 with the audited historical consolidated balance sheet of FinTech as of December 31, 2017, giving effect to the Merger as if it had been consummated as of that date.

 

The following unaudited pro forma condensed combined income statement for the year ended December 31, 2017 combines the audited historical consolidated statement of operations and comprehensive income of Holdings for the year ended December 31, 2017 with the audited historical consolidated statement of operations of FinTech for the year ended December 31, 2017, giving effect to the Merger as if it had occurred on January 1, 2017.

 

The historical financial information for Holdings was derived from the audited financial statements of Holdings as of December 31, 2017 for the pro forma balance sheet and the pro forma income statement results for Holdings were derived by combining the 2017 Successor Period and the 2017 Predecessor Period for the twelve months ended December 31, 2017, which are included elsewhere in this proxy statement/prospectus. The historical financial information of FinTech was derived from the audited financial statements of FinTech for the year ended December 31, 2017, which are included elsewhere in this proxy statement/prospectus. This information should be read together with Holdings’ and FinTech’s audited financial statements and related notes, “Intermex’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “FinTech’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement/prospectus.

 

Description of the Merger

 

Pursuant to the Merger Agreement, the aggregate consideration to be paid in the Merger will consist of an amount in cash equal to (i) $92,000,000, which is referred to as the Cash Merger Consideration, (ii) an estimated 16,598,281 shares of our common stock, which is referred to as the Common Stock Merger Consideration, and (iii) an amount (as determined in accordance with the Merger Agreement) equal to any excess cash at Intermex at the time of the closing of the Merger in the form of additional shares of our common stock and/or, at our option, up to $10 million of such amount in cash. The amount of cash and common stock to be issued as consideration in the Merger is subject to adjustment as set forth in the Merger Agreement. The Cash Merger Consideration and Common Stock Merger Consideration together are referred to as the Merger Consideration. 

  

The number of shares comprising the Common Stock Merger Consideration will be calculated in accordance with the terms of the Merger Agreement, and is estimated to be approximately 16,598,281 shares of our common stock. The aggregate number of shares of our common stock that will be issued in the Merger to Interwire LLC, the sole stockholder of Intermex, in exchange for its shares of Intermex common stock will be equal to (i) Estimated Equity Value (as defined in and calculated in accordance with the Merger Agreement) minus the Cash Merger Consideration divided by (ii) $10.00.

 

FinTech intends to fund the Cash Merger Consideration using the proceeds held in the trust account maintained for the benefit of its public stockholders, if any, after giving effect to the exercise by the public stockholders of their redemption rights. In addition, a portion of the remaining proceeds held in the trust account will be used to pay fees and expenses incurred by the Company and Intermex related to the Merger. Any remaining proceeds of the trust account will be used for general corporate purposes, which may include, but not be limited to working capital for operations, repayment of indebtedness, capital expenditures and future acquisitions.

 

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Accounting for the Merger

 

The Merger will be accounted for as a reverse merger in accordance with GAAP. Under this method of accounting, FinTech will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Interwire LLC and its designees expecting to control the majority of the relative voting rights of the combined company, Intermex comprising the ongoing operations of the combined company and Intermex’s senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of Intermex issuing stock for the net assets of FinTech, accompanied by a recapitalization. The net assets of FinTech will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger will be those of Intermex.

 

Basis for Pro Forma Presentation

 

The historical financial information has been adjusted to give pro forma effect to events that are related and/or directly attributable to the Merger, are factually supportable and are expected to have a continuing impact on the results of the combined company. The adjustments presented on the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the Merger.

 

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. Intermex and FinTech have not had any historical relationship prior to the Merger. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption into cash of FinTech public shares:

 

Scenario 1 – Assuming no redemptions into cash: This presentation assumes that no FinTech stockholders exercise redemption rights with respect to their common stock upon consummation of the Merger; and

 

Scenario 2 — Assuming redemption of 5,000,000 FinTech public shares into cash: This presentation assumes that FinTech public stockholders exercise their redemption rights with respect to a maximum of 5,000,000 public shares upon consummation of the Merger at a redemption price of $10.00 per share. The maximum redemption amount is derived from the $125,000,000 minimum cash required to be released from FinTech’s trust account after giving effect to payments to redeeming stockholders.

 

Included in the shares outstanding and weighted average shares outstanding as presented in the pro forma condensed combined financial statements are 16,598,281 shares of the Company’s common stock expected to be issued in the Merger to Interwire LLC, the sole stockholder of Intermex, in exchange for its shares of Intermex common stock.

 

As a result of the Merger, assuming that no stockholders of FinTech elect to redeem their shares for cash and without regard to any adjustments to the Common Stock Merger Consideration in accordance with the Merger Agreement, immediately following the closing of the Merger, it is anticipated that Interwire LLC and its designees will own approximately 41.6% of the common stock outstanding of the combined company, and the other FinTech stockholders will own approximately 58.4% of the outstanding common stock of the combined company, based on the number of shares of FinTech common stock outstanding as of December 31 2017. If 5,000,000 shares of common stock are redeemed into cash, which assumes the maximum redemption of FinTech’s shares and providing for a minimum of $125,000,000 cash required to be released from FinTech’s trust account after giving effect to payments to redeeming stockholders, Interwire LLC and its designees will own approximately 47.5% and the FinTech stockholders will own approximately 52.5% of FinTech’s common stock to be outstanding immediately after the Merger (in each case, not giving effect to any shares issuable to them upon exercise of their warrants).

 

The historical financial statements of FinTech and Holdings have been prepared in accordance with GAAP.

 

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PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF DECEMBER 31, 2017
(UNAUDITED)

 

           Scenario 1
Assuming No
Redemptions into Cash
   Scenario 2
Assuming Maximum Redemptions into Cash
 
   Holdings (A)   FinTech (B)   Pro Forma
Adjustments
   Pro Forma Balance Sheet   Pro Forma
Adjustments
   Pro Forma Balance Sheet 
Assets                        
Current assets:                        
Cash  $59,155,618   $362,581   $883,186(1)               
              175,000,000(2)               
              (21,314,000)(3)               
              (92,000,000)(5)  $122,087,385   $(50,000,000)(4)  $72,087,385 
Receivables, net   55,380,922    -    -    55,380,922    -    55,380,922 
Prepaid wires   3,668,946    -    -    3,668,946    -    3,668,946 
Prepaid expenses and other   900,386    13,560    -    913,946    -    913,946 
Total Current Assets   119,105,872    376,141    62,569,186    182,051,199    (50,000,000)   132,051,199 
Cash and marketable securities held in Trust Account   -    175,883,186    (883,186)(1)               
              (175,000,000)(2)   -    -    - 
Property and equipment, net   8,490,794    -    -    8,490,794    -    8,490,794 
Goodwill   36,259,666    -    -    36,259,666    -    36,259,666 
Intangible assets, net   48,741,032    -    -    48,741,032    -    48,741,032 
Deferred tax asset   1,748,854    -    -    1,748,854    -    1,748,854 
Other assets   1,706,693    -    -    1,706,693    -    1,706,693 
Total Assets  $216,052,911   $176,259,327   $(113,314,000)  $278,998,238   $(50,000,000)  $228,998,238 
Liabilities and Stockholders’ Equity                              
Current liabilities:                              
Wire transfers and money orders payable  $48,276,649   $-   $-   $48,276,649   $-   $48,276,649 
Accounts payable, accrued expenses and other current liabilities   20,434,245    917,259    (2,863,152)(3)   18,488,352    -    18,488,352 
Current portion of long-term debt   3,913,436    -    -    3,913,436    -    3,913,436 
Total Current Liabilities   72,624,330    917,259    (2,863,152)   70,678,437    -    70,678,437 
Debt   107,526,462    -    -    107,526,462    -    107,526,462 
Deferred underwriting fees   -    9,190,000    (9,190,000)(3)   -    -    - 
Deferred legal fees payable   -    25,000    (25,000)(3)   -    -    - 
Total Liabilities   180,150,792    10,132,259    (12,078,152)   178,204,899    -    178,204,899 
Commitments and Contingencies Common stock subject to redemption   -    161,127,060    (161,127,060)(4)   -    -    - 
Stockholders’ Equity Common stock   -    778    1,611                
              1,660    4,049    (500)(4)   3,549 
Additional paid-in capital   46,077,943    5,188,385    161,125,449(4)               
              (92,190,815)(5)   120,200,962    (49,999,500)(4)   70,201,462 
Accumulated other comprehensive loss   (2,371)   -    -    (2,371)   -    (2,371)
Accumulated deficit   (10,173,453)   (189,155)   (9,235,848)(3)               
              189,155(5)   (19,409,301)   -    (19,409,301)
Total Stockholders’ Equity   35,902,119    5,000,008    59,891,212    100,793,339    (50,000,000)   50,793,339 
Total Liabilities and Stockholders’ Equity  $216,052,911   $176,259,327   $(113,314,000)  $278,998,238   $(50,000,000)  $228,998,238 

 

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Pro Forma Adjustments to the Unaudited Condensed Combined Balance Sheet

 

(A) Derived from the consolidated balance sheet of Holdings as of December 31, 2017.

 

(B) Derived from the consolidated balance sheet of FinTech as of December 31, 2017.

 

(1) Represents the release of interest income from the trust account.

 

(2) Represents the release of cash from the investments held in the trust account.

 

(3) To reflect the payment of estimated legal, financial advisory and other professional fees related to the Merger.

 

(4) In scenario 1, which assumes no FinTech stockholders exercise their redemption rights, the common stock subject to redemption into cash amounting to $161,127,060 would be transferred to permanent equity. In scenario 2, which assumes the maximum number of shares are redeemed into cash by the FinTech stockholders, $50,000,000 of the common stock subject to redemption would be paid out in cash and the remaining balance of $111,127,060 would be transferred to permanent equity. The $50,000,000, or 5,000,000 shares of common stock, represents the maximum redemption amount providing for a minimum cash of $125,000,000 to be released from FinTech’s trust account after giving effect to payments to redeeming stockholders, based on a consummation of the Merger on December 31, 2017.

 

(5) To reflect recapitalization of Intermex through the contribution of all the share capital of Intermex to FinTech, the issuance of 16,598,281 shares of FinTech common stock and the elimination of the historical accumulated deficit of FinTech, the accounting acquiree.

 

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PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2017
(UNAUDITED)

 

           Scenario 1 Assuming No Redemptions into Cash   Scenario 2 Assuming Maximum Redemptions into Cash 
  
Holdings (A)
  
FinTech (B)
   Pro Forma Adjustments   Pro Forma Income Statement   Pro Forma Adjustments   Pro Forma Income Statement 
Total revenue  $215,464,474   $-   $-   $215,464,474   $-   $215,464,474 
Operating expenses
Service charges from agents and banks
   144,886,807    -    -    144,886,807    -    144,886,807 
Salaries and benefits   26,410,636    -    -    26,410,636    -    26,410,636 
Other selling, general and administrative expenses   17,616,942    1,131,812    (442,844)(1)   18,305,910    -    18,305,910 
Transaction costs   12,622,689    -    (2,492,900)(1)   10,129,789    -    10,129,789 
Depreciation and amortization   17,026,567    -    -    17,026,567    -    17,026,567 
Total operating expenses   218,563,641    1,131,812    (2,935,744)   216,759,709    -    216,759,709 
Operating loss   (3,099,167)   (1,131,812)   2,935,744    (1,295,235)   -    (1,295,235)
Other income (expense):                              
Interest income   -    1,383,186    (1,383,186)(2)   -    -    - 
Interest expense   (12,061,678)   -    -    (12,061,678)   -    (12,061,678)
Loss before income taxes   (15,160,845)   251,374    1,552,558    (13,356,913)   -    (13,356,913)
Provision (benefit) for income taxes   (1,668,971)   436,721    (3,309,100)(3)   (4,541,350)   -    (4,541,350)
Net loss  $(13,491,874)  $(185,347)  $4,861,658   $(8,815,563)  $-   $(8,815,563)
Weighted average shares outstanding, basic and diluted        7,594,116    32,710,987(4)   40,305,103    (5,000,000)(4)   35,305,103 
Basic and diluted net loss per share       $(0.02)       $(0.22)       $(0.25)

 

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Pro Forma Adjustments to the Unaudited Condensed Combined Income Statements

 

(A) Derived from the consolidated statements of operations and comprehensive income (loss) of Holdings for the year ended December 31, 2017.

 

(B) Derived from the consolidated statements of operations of FinTech for the year ended December 31, 2017.

 

(1) Represents an adjustment to eliminate direct, incremental costs of the Merger which are reflected in the historical financial statements of Holdings and FinTech in the amount of $2,492,900 and $442,844 as of December 31, 2017, respectively.

 

(2) Represents an adjustment to eliminate interest income on marketable securities held in the trust account as of the beginning of the period.

 

(3) To record normalized blended statutory income tax benefit rate of 34.0% for pro forma financial presentation purposes.

 

(4) Because the Merger is being reflected as if it had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Merger has been outstanding for the entire period presented. If the maximum number of shares are redeemed, this calculation is retroactively adjusted to eliminate such shares for the entire period. Weighted average common shares outstanding — basic and diluted are calculated as follows:

 

   Year Ended December 31, 2017 
  Scenario 1
Combined (Assuming No Redemptions into Cash)
   Scenario 2
Combined (Assuming Maximum
Redemptions into Cash)
 
Weighted average shares calculation, basic and diluted        
FinTech weighted average shares outstanding   7,594,116    7,594,116 
FinTech shares subject to redemption reclassified to equity   16,112,706    11,112,706 
FinTech shares issued in Merger   16,598,281    16,598,281 
Weighted average shares outstanding   40,305,103    35,305,103 
           
Percent of shares owned by Intermex holders   41.8%   47.7%
Percent of shares owned by FinTech   58.2%   52.3%
           
Weighted average shares calculation, basic and diluted          
Existing Intermex holders   16,848,281    16,848,281 
FinTech holders   23,456,822    18,456,822 
Weighted average shares, basic and diluted   40,305,103    35,305,103 

 

The computation of diluted loss per share excludes the effect of warrants to purchase 8,960,000 shares of common stock because the inclusion of any of these would be anti-dilutive.

 

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SPECIAL MEETING OF FINTECH STOCKHOLDERS

 

General

 

We are furnishing this proxy statement/prospectus to our stockholders as part of the solicitation of proxies by our board of directors for use at the special meeting in lieu of the 2018 annual meeting of stockholders to be held on [●], 2018, and at any adjournment or postponement thereof. This proxy statement/prospectus is first being furnished to our stockholders on or about [●], 2018.

 

Date, Time and Place of Special Meeting

 

The special meeting will be held at [●], Eastern Time, on [●], 2018, at the offices of [●], or such other date, time and place to which such meeting may be adjourned or postponed, for the purposes set forth in the accompanying notice.

 

Voting Power; Record Date

 

You will be entitled to vote or direct votes to be cast at the special meeting if you owned shares of our common stock at the close of business on [●], 2018, which is the record date for the special meeting. You are entitled to one vote for each share of our common stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that shares held beneficially by you are voted in accordance with your instructions. On the record date, there were 23,893,333 shares of our common stock outstanding, of which 17,500,000 are public shares, 420,000 are private placement shares held by our Sponsor and Cantor, and 5,973,333 are founder shares held by our initial stockholders.

 

Vote of FinTech Initial Stockholders

 

In connection with our IPO, we entered into an agreement with our initial stockholders, executive officers and directors pursuant to which they agreed to vote any shares of our common stock owned by them in favor of the Merger Proposal, and in connection with our entry into the Merger Agreement, certain of such stockholders and Intermex entered into the Voting Agreement pursuant to which such stockholders agreed, among other things, to vote in favor of the Merger Proposal. As of the date of this prospectus/proxy statement, our initial stockholders, executive officers and directors hold approximately 26.6% of the outstanding shares of our common stock.

 

Quorum and Required Vote for Proposals for the Special Meeting

 

A quorum will be present at the special meeting if a majority of the shares of our common stock outstanding as of the record date for the special meeting is represented at the meeting in person or by proxy. An abstention from voting, shares represented at the special meeting in person or by proxy but not voted on one or more proposals or a broker non-vote so long as the stockholder has given the broker or other nominee voting instructions on at least one proposal in this proxy statement/prospectus, will each count as present for the purposes of establishing a quorum. In the absence of a quorum, the chairman of the special meeting may adjourn the special meeting. As of the record date for the special meeting, the presence in person or by proxy of 11,946,667 shares of our common stock is required to achieve a quorum.

 

 The approval of the Merger Proposal requires the affirmative vote of holders of a majority of the outstanding shares of our common stock. Accordingly, a stockholder’s failure to vote in person or by proxy, a broker non-vote or an abstention will each have the same effect as a vote “AGAINST” the Merger Proposal.

 

The approval of each charter Proposal requires the affirmative vote of holders of a majority of the outstanding shares of our common stock.  Accordingly, a stockholder’s failure to vote in person or by proxy, a broker non-vote or an abstention will each have the same effect as a vote “AGAINST” each charter Proposal.

 

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The approval of each of the NASDAQ Proposal, the Incentive Plan Proposal and the Adjournment Proposal require the affirmative vote of holders of a majority of the total votes cast on such proposal. In order to be elected as a director as described in the Director Election Proposal, a nominee must receive a plurality of all the votes cast at the special meeting, which means that the nominees with the most votes are elected. Accordingly, neither a stockholder’s failure to vote in person or by proxy, a broker non-vote nor an abstention will be considered a “vote cast,” and thus will have no effect on the outcome of the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal or the Adjournment Proposal.

  

The Merger Proposal is conditioned on the approval of Proposal 2 and the NASDAQ Proposal. In addition, (i) Proposal 2 is conditioned on the approval of the Merger Proposal and the NASDAQ Proposal, (ii) each of Proposal 3, Proposal 4 and the Incentive Plan Proposal is conditioned on the approval of the Merger Proposal, Proposal 2 and the NASDAQ Proposal, and (iii) the NASDAQ Proposal is conditioned on the Merger Proposal and Proposal 2. Neither the Director Election Proposal nor the Adjournment Proposal is conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that if either the Merger Proposal or the NASDAQ Proposal is not approved by our stockholders, or if any other proposal is not approved by our stockholders and we and Intermex do not waive the applicable closing condition under the Merger Agreement, then the Merger will not be consummated. If we do not consummate the Merger and fail to complete an initial business combination by January 25, 2019, we will be required to dissolve and liquidate our trust account by returning the then remaining funds in such account to the public stockholders.

 

Recommendation to FinTech Stockholders

 

Our board of directors believes that each of the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal to be presented at the special meeting is fair to and in the best interests of us and our stockholders and unanimously recommends that our stockholders vote “FOR” each of the proposals.

 

When you consider the recommendation of our board of directors in favor of approval of the Merger Proposal, you should keep in mind that our directors and officers have interests in the Merger that are different from or in addition to (or which may conflict with) your interests as a stockholder. See the section entitled “Proposal No. 1—The Merger Proposal—Interests of Certain Persons in the Merger” for additional information.

 

Broker Non-Votes and Abstentions

 

Under the rules of various national and regional securities exchanges your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. We believe the proposals presented to our stockholders at the special meeting will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. If you do not provide instructions to your bank, broker or other nominee, it may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a bank, broker or nominee is not voting your shares is referred to as a “broker non-vote.”

 

An abstention from voting, shares represented at the special meeting in person or by proxy but not voted on one or more proposals and a broker non-vote will each count as present for the purposes of establishing a quorum. A stockholder’s failure to vote by proxy or to vote in person at the special meeting, an abstention from voting or a broker non-vote will each have the same effect as a vote “AGAINST” the Merger Proposal and the charter Proposals and will have no effect on the outcome of the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal or the Adjournment Proposal.

 

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Voting Your Shares

 

Each share of our common stock that you own in your name entitles you to one vote on each of the proposals for the special meeting. Your proxy card or cards show the number of shares of our common stock that you own. There are several ways to vote your shares of common stock:

 

  You can vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided to you by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly represented and voted at the meeting.   If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares of our common stock will be voted as recommended by our board of directors. Our board of directors recommends voting “FOR” the Merger Proposal, “FOR” the charter Proposals, “FOR” the NASDAQ Proposal, “FOR” the Incentive Plan Proposal, “FOR” the Director Election Proposal and “FOR” the Adjournment Proposal.
     
  You can attend the special meeting and vote in person even if you have previously voted by submitting a proxy as described above. You will be given a ballot when you arrive. However, if your shares of common stock are held in the name of your broker, bank or other nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or nominee has not already voted your shares of common stock.

  

Revoking Your Proxy

 

If you give a proxy, you may revoke it at any time before the special meeting or at such meeting by doing any one of the following:

 

  you may send another proxy card with a later date;

 

  you may notify James J. McEntee, III, our President and Chief Financial Officer, by telephone at (215) 735-1498, by email at jmce@stbwell.com or in writing to c/o FinTech Acquisition Corp. II, 2929 Arch Street, Suite 1703, Philadelphia, Pennsylvania  19104, before the special meeting that you have revoked your proxy; or

 

  you may attend the special meeting, revoke your proxy, and vote in person, as indicated above.

 

No Additional Matters May Be Presented at the Special Meeting

 

The special meeting has been called only to consider the approval of the Merger Proposal, the charter Proposals, the NASDAQ Proposal, the Incentive Plan Proposal, the Director Election Proposal and the Adjournment Proposal. Under our bylaws, other than procedural matters incident to the conduct of the special meeting, no other matters may be considered at the special meeting if they are not included in this proxy statement/prospectus.

 

Who Can Answer Your Questions About Voting

 

If you have any questions about how to vote or direct a vote in respect of your shares of our common stock, you may call Morrow Sodali LLC, our proxy solicitor, at (800) 662-5200 (toll free). Banks and Brokerage Firms may call collect at: (203) 658-9400.

 

Redemption Rights and Procedures

 

Pursuant to our charter, any holders of our public shares may demand that such shares be redeemed in exchange for a pro rata share of the aggregate amount on deposit in the trust account as of two business days prior to the consummation of the Merger. If demand is properly made and the Merger is consummated, these shares, immediately prior to the Merger, will cease to be outstanding and will represent only the right to receive a pro rata share of the aggregate amount on deposit in the trust account which holds the proceeds of our IPO (calculated as of two business days prior to the consummation of the Merger, less up to $500,000 for working capital expenses and less franchise and income taxes payable). For illustrative purposes, based on funds in the trust account of approximately $175.6 million on February 28, 2018, the estimated per share redemption price would have been approximately $10.03.

 

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In order to exercise your redemption rights, you must:

 

 

affirmatively vote “FOR” or “AGAINST” the Merger Proposal;

 

 

check the box on the enclosed proxy card to elect redemption;

 

  submit a request in writing that we redeem your public shares for cash. The request must identify the beneficial owner of the shares to be redeemed and must be sent to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

 

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attn: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

; and

 

  deliver your public shares either physically or electronically through DTC to our transfer agent at least two business days before the special meeting. Stockholders seeking to exercise redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

  

If you do not properly comply with the procedures and requirements to redeem your public shares described above, your shares will not be redeemed. Any demand for redemption, once made, may be withdrawn at any time until the date of the special meeting. If you delivered your shares for redemption to our transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that our transfer agent return the shares (physically or electronically). You may make such request by contacting our transfer agent at the phone number or address listed above prior to the date of the special meeting.

 

It is a condition to closing under the Merger Agreement that at least $125 million remain in the trust account after payment of all requested redemptions by our public stockholders. Any redemptions by our public stockholders will decrease the funds in the trust account available to us to consummate the Merger and related transactions.

 

Prior to exercising redemption rights, stockholders should verify the market price of our common stock as they may receive higher proceeds from the sale of their common stock in the public market than from exercising their redemption rights. We cannot assure you that you will be able to sell your shares of our common stock in the open market, even if the market price per share is higher than the redemption price, as there may not be sufficient liquidity in our common stock when you wish to sell your shares.

 

If you exercise your redemption rights, your shares of our common stock will cease to be outstanding immediately prior to the Merger and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the trust account. You will no longer own those shares and will have no right to participate in, or have any interest in, the future growth of the combined company following the Merger, if any. You will be entitled to receive cash for these shares only if you properly and timely demand redemption.

 

If the Merger is not approved and we do not consummate an initial business combination by January 25, 2019, we will be required to dissolve and liquidate our trust account by returning the then remaining funds in such account to the public stockholders and our warrants will expire worthless.

 

Appraisal Rights

 

Appraisal rights are not available to holders of shares of our common stock in connection with the Merger.

 

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PROPOSAL NO. 1—THE MERGER PROPOSAL

 

We are asking our stockholders to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby. Our stockholders should read carefully this proxy statement/prospectus in its entirety, including the subsection below entitled “—The Merger Agreement,” for more detailed information concerning the Merger and the terms and conditions of the Merger Agreement. We also urge our stockholders to read carefully the Merger Agreement in its entirety before voting on this proposal. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus.

 

Because we are holding a stockholder vote on the Merger, our charter provides that we may consummate the Merger only if it is approved by the affirmative vote of the holders of a majority of the then outstanding shares of our common stock.

 

The Merger Agreement

 

This section describes the material provisions of the Merger Agreement, but does not purport to describe all of the terms of the Merger Agreement. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A hereto, which is incorporated herein by reference. Stockholders and other interested parties are urged to read the Merger Agreement, carefully and in its entirety (and, if appropriate, with the advice of financial and legal counsel) because it is the primary legal document that governs the Merger.

 

The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement. The representations, warranties and covenants in the Merger Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that these schedules contain information that is material to an investment decision.

 

Structure of the Merger

 

On December 19, 2017, we entered into the Merger Agreement with Merger Sub 1, Merger Sub 2, Intermex and SPC Intermex Representative, which provides for, among other things, our acquisition of Intermex pursuant to the merger of Merger Sub 1 with and into Intermex with Intermex continuing as the initial surviving entity, immediately followed by the merger of the initial surviving entity with and into Merger Sub 2 with Merger Sub 2 continuing as the surviving entity and a wholly owned subsidiary of the Company. As a result of the Merger, each outstanding share of Intermex common stock will convert into the right to receive a combination of cash and shares of our common stock, in each case, as calculated pursuant to the terms of the Merger Agreement.

 

Merger Consideration

 

Pursuant to the Merger Agreement, the aggregate consideration to be paid in the Merger to Interwire LLC, the sole stockholder of Intermex, in exchange for its shares of Intermex common stock, will consist of:

 

  the Cash Merger Consideration, which will be an amount in cash equal to $92,000,000 ($2 million of which will be placed in escrow at closing as security for working capital adjustments) plus the cash portion, if any, of the amount described in the third bullet point below;

 

  the Common Stock Merger Consideration, which we estimate will consist of 16,598,281 shares of our common stock (based on a fixed price of $10.00 per share of our common stock) plus the additional shares, if any, issued in respect of the amount described in the third bullet point below; and  
     
  an amount (as determined in accordance with the Merger Agreement) equal to any excess cash at Intermex at the time of the closing of the Merger in the form of additional shares of our common stock and/or, at our option, up to $10 million of such amount in cash.

 

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At the closing, the Company shall deliver (i) the Common Stock Merger Consideration to SPC Intermex Representative or its designees on behalf of Interwire LLC electronically through book entry-delivery or, upon the written request of SPC Intermex Representative, in the form of one or more original stock certificates, (ii) the Cash Merger Consideration (less the $2 million placed in escrow) by wire transfer of immediately available funds to SPC Intermex Representative or its designees on behalf of Interwire LLC and (iii) $2 million to the escrow agent for deposit in the escrow account.

 

Cash Merger Consideration

 

Pursuant the Merger Agreement, the Cash Merger Consideration will be paid to SPC Intermex Representative or its designees on behalf of Interwire LLC, the sole stockholder of Intermex, as partial consideration in the Merger. We intend to fund the Cash Merger Consideration with proceeds held in the trust account maintained for the benefit of our public stockholders, if any, after giving effect to the exercise by our public stockholders of their redemption rights described below. In addition, a portion of the remaining proceeds held in the trust account will be used to pay fees and expenses incurred by the Company and Intermex related to the Merger. Any remaining proceeds of the trust account will be used for general corporate purposes, which may include, but not be limited to, working capital for operations, repayment of indebtedness, capital expenditures and future acquisitions.

  

Common Stock Merger Consideration

 

The aggregate number of shares of our common stock that we will issue to SPC Intermex Representative or its designees on behalf of Interwire LLC, the sole stockholder of Intermex, at the closing of the Merger will be equal to (i) Intermex’s Estimated Equity Value (calculated in accordance with the Merger Agreement, which calculation is described below) minus the Cash Merger Consideration, divided by (ii) $10.00.

  

The Estimated Equity Value of Intermex as of the Closing will be determined by starting with a base enterprise valuation of $350.0 million, increasing such valuation by the amount of cash and cash equivalents of Intermex as of 12:01 a.m. on the Closing Date (the “Reference Time”), increasing such valuation to the extent that the net working capital of Intermex as of the Reference Time is greater than $30,997,261 or decreasing such valuation to the extent that the net working capital of Intermex as of the Reference Time is less than $30,997,261, decreasing the amount of such valuation by the amount of indebtedness of Intermex as of the Reference Time, and increasing such valuation by the amount of Intermex’s transaction expenses as of the Reference Time which are not paid by the Company at closing. The Estimated Equity Value will be determined by Intermex (subject to any mutually acceptable updates proposed by the Company) based on estimates of the foregoing factors as of the Closing, subject to post-closing adjustments, provided that any post-closing adjustments will be payable in cash rather than shares of our common stock.

 

We currently expect that, based on Intermex’s current capitalization and assuming a June 30, 2018 closing date, at the closing of the Merger we will issue 16,598,281 shares of Company common stock to SPC Intermex Representative or its designees, on behalf of Interwire LLC, the sole stockholder of Intermex, having an aggregate value of approximately $165,982,810 based on the fixed price of $10.00 per share of our common stock contemplated by the Merger Agreement.

  

Closing and Effective Time of the Merger

 

We expect to consummate the Merger no later than five days following the satisfaction or waiver of the conditions described below under the subsection entitled “—Conditions to the Closing of the Merger.”

 

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Conditions to Closing of the Merger

 

The Merger Agreement sets forth the various conditions which must be satisfied or waived prior to consummation of the Merger. We cannot provide assurance as to when or if all of the conditions to the Merger will be satisfied or waived by the appropriate party. As of the date of this proxy statement/prospectus, we have no reason to believe that any of these conditions will not be satisfied.

  

Mutual Conditions

 

The respective obligations of the Company, Merger Sub 1, Merger Sub 2 and Intermex to effect the Merger and otherwise consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction, at or prior to the closing of the Merger, of certain conditions, including principally the following:

 

  No governmental authority shall have enacted, issued, promulgated, enforced or entered any order which is in effect and has the effect of making the Merger illegal, or otherwise restraining or prohibiting consummation of the Merger.

 

  The Company shall have received the requisite Company stockholder approval of the proposals contemplated by this proxy statement/prospectus, including approval of the Merger Agreement and the Merger.

 

  Interwire LLC shall have approved the Merger Agreement and the ancillary agreements thereto and consummation of the transactions contemplated by the Merger Agreement within two days of the execution of the Merger Agreement.

 

  The shares of Company common stock that constitute the Common Stock Merger Consideration shall have been approved for listing on NASDAQ.

 

  The Company and Intermex shall have made any filings required by the Hart-Scott Rodino Act and the applicable waiting period and any extensions thereof shall have expired or terminated.

 

  All specified third party consents required to be obtained in connection with the Merger and the other transactions contemplated by the Merger Agreement will have been obtained by the applicable party.

 

  The registration statement of which this proxy statement/prospectus forms a part shall have become effective.

 

Conditions to the Company’s and Merger Subs’ Obligations

 

The obligations of the Company and the Merger Subs to effect the Merger and otherwise consummate the transactions contemplated by the Merger Agreement are subject to the satisfaction (or waiver by the Company and the Merger Subs), at or prior to the closing of the Merger, of certain conditions, including principally the following:

 

  Intermex’s representations and warranties other than Intermex’s fundamental representations and warranties (in each case without giving effect to any qualification as to “material,” “materiality,” “material respects,” “Material Adverse Effect” or words of similar import or effect set forth therein) shall be true and correct in all respects as of the date of the Merger Agreement and as of the closing date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of the specified date), except where the failure of such representations and warranties to be true and correct would not have (and would not reasonably be expected to have) a Material Adverse Effect (as defined in the subsection entitled“—Material Adverse Effect” below).

 

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  Intermex’s fundamental representations and warranties (which relate to corporate organization, authorization, capitalization, Material Adverse Effect and brokers’ fees), shall be true and correct in all respects, in each case, as of the date of the Merger Agreement and as of the closing date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of the specified date).

 

  Intermex shall have performed or complied in all material respects with all agreements, covenants and conditions that Intermex is required to perform or comply with under the Merger Agreement on or prior to the closing date.

 

  Intermex shall have delivered to the Company a duly and properly executed certification of non-foreign status, in form and substance consistent with Treasury Regulations Section 1.1445-2(b).

  

  No Material Adverse Effect shall have occurred since the date of the Merger Agreement.
     
  Intermex shall have delivered to the Company duly executed counterpart signature pages of each of SPC Intermex Representative and the Escrow Agent to the Escrow Agreement described in the subsection entitled “—Ancillary Agreements—Escrow Agreement” below.
     
  Intermex shall have delivered to the Company a duly executed counterpart signature page of Interwire LLC to the Shareholders Agreement described in the subsection entitled “—Ancillary Agreements—Shareholders Agreement” below.

 

  The amount of indebtedness of Intermex and its subsidiaries immediately prior to the Closing shall not exceed an agreed amount.
     
  The aggregate amount of Intermex transaction expenses reimbursable by the Company shall not exceed an agreed amount.

 

Conditions to Intermex’s Obligations

 

The obligations of Intermex to effect the Merger and otherwise consummate the transactions thereby are subject to the satisfaction (or waiver by Intermex), at or prior to the closing of the Merger, of certain conditions, including principally the following:

 

  The representations and warranties of the Company and each Merger Sub other than their fundamental representations and warranties (in each case without giving effect to any qualification as to “material,” “materiality,” “material respects,” “Material Adverse Effect” or words of similar import or effect set forth therein) shall be true and correct in all respects as of the date of the Merger Agreement and as of the closing date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of the specified date), except where the failure of such representations and warranties to be true and correct would not have (and would not reasonably be expected to have) a Parent Material Adverse Effect.

  

  The fundamental representations and warranties of the Company and each Merger Sub (which relate to corporate organization, authorization, brokers’ fees, capitalization and pro-forma capitalization), shall be true and correct in all respects (other than those relating to capitalization and pro-forma capitalization, which may have de minimis deviations), in each case, as of the date of the Merger Agreement and as of the closing date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of the specified date).

 

  The Company and each Merger Sub shall have performed or complied in all material respects with all agreements, covenants and conditions that the Company and each Merger Sub are respectively required to perform or comply with under the Merger Agreement on or prior to the closing date.

 

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  Immediately prior to Closing, the Company shall be in compliance in all material respects with the reporting requirements applicable to it under the Exchange Act.

 

  The Company shall have delivered to Intermex a duly executed counterpart signature page to each of the Registration Rights Agreement and the Escrow Agreement.

 

  The Company, on behalf of each Company stockholder party to the Shareholders Agreement, shall have delivered to Intermex a duly executed counterpart signature page of each such signatory to the Shareholders Agreement.
  No Parent Material Adverse Effect shall have occurred since the date of the Merger Agreement.

 

  The aggregate amount of funds held in the trust account after giving effect to the redemptions of shares of our common stock in connection with the Merger, shall equal or exceed $125 million.

 

  The Company shall have made all necessary and appropriate arrangements with the trustee under the trust account to have all the funds contained therein disbursed to the Company at closing, all of the funds shall have been actually disbursed to the Company and there shall be no proceeding pending or threatened with respect to or against the trust account.
     
  The aggregate amount of the Company’s transaction expenses in connection with the Merger Agreement, and the transactions contemplated thereby, shall not exceed an agreed amount.

 

Material Adverse Effect

 

Under the Merger Agreement, an event, occurrence, fact, condition or change will be deemed to have a “Material Adverse Effect” on Intermex and its subsidiaries if, individually or in the aggregate, such events, occurrences, facts, conditions or changes, have had or would reasonably be expected to have a material adverse effect on (i) the business, results of operations, financial condition or assets of Intermex or (ii) the ability of Intermex to consummate the transactions contemplated by the Merger Agreement; provided, however, that no event, occurrence, fact, condition or change directly or indirectly arising out of or attributable to any of the following, either alone or in combination, will be taken into account in determining whether there has been a Material Adverse Effect under clause (i) above:

 

  general economic or political conditions or conditions generally affecting the capital, credit or financial markets;

 

  conditions generally affecting the industries in which Intermex and its subsidiaries operate;

 

  acts of war (whether or not declared), armed hostilities or terrorism or the escalation or worsening thereof;

 

  any failure of Intermex and its subsidiaries to meet financial projections, budgets or estimates (provided that the underlying causes of such failures (subject to the other provisions of the definition of Material Adverse Effect) shall not be excluded from the determination of whether there has been a Material Adverse Effect);

 

  any action required or permitted by the Merger Agreement, or any action taken (or not taken) with the written consent of or at the request of us or any Merger Sub;

 

  any changes in applicable laws or accounting rules or principles, including GAAP; or

 

  the announcement or execution of the Merger Agreement or the pendency or completion of the transactions contemplated by the Merger Agreement;

 

provided further, that any event, occurrence, fact, condition or change referred to in the first, second and sixth bullet points above shall be taken into account only to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on Intermex and its subsidiaries, taken as a whole, compared to other participants in the industries in which Intermex or any of its subsidiaries conducts its business (in which case only the incremental disproportionate effect shall be taken into account and only to the extent such change is not otherwise excluded from being taken into account by the exclusions described in the bullet points above).

 

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With respect to the Company, the term “Parent Material Adverse Effect” as used in the Merger Agreement is substantially similar to the term Material Adverse Effect as described above.

 

Representations and Warranties

 

Under the Merger Agreement, the Company and each Merger Sub made customary representations and warranties, including those relating to: organization, authorization, no conflicts, consents, brokers, SEC filings, capitalization, litigation, compliance with laws, NASDAQ listing, pro forma capitalization, transactions with related parties, board approval and stockholder vote, trust account, information supplied, financial capacity, taxes and organization of Merger Subs and disclaimer of other representations and warranties.

 

Under the Merger Agreement, Intermex and its subsidiaries made customary representations and warranties, including those relating to: organization and qualification; subsidiaries, authority, board approval, no conflicts, capitalization, financial statements, undisclosed liabilities, absence of certain changes or events, title to property, leased real property, condition of assets, intellectual property, privacy and data security, software and information technology, contracts, litigation, compliance with laws, permits, environmental matters, employee benefit matters, taxes, employee relations, transactions with related parties, insurance, brokers, employment contracts, compensation arrangements, officers and directors, top paying agents and depositary institutions, regulatory compliance, power of attorney, ownership of our common stock, books and records, licensing and disclaimer of other representations and warranties.

 

Covenants of the Parties

 

Conduct of Business Prior to the Merger

 

Intermex has agreed that from the date of the Merger Agreement until the closing of the Merger or termination of the Merger Agreement, subject to certain exceptions or unless we provide our prior written consent, Intermex will and will cause its subsidiaries to (i) operate its business in all material respects in the ordinary course of business consistent with past practice, (ii) use reasonable best efforts to preserve its properties, business, operations, organization (including officers and employees), goodwill and relationships with suppliers, customers, agents, lenders, regulators and any other persons having a material business relationship with Intermex or any of its subsidiaries and (iii) will not take any of the following actions or any action that would result in the following with respect to Intermex or any of its subsidiaries:

 

  any event, occurrence or development that has had, or would reasonably be expected to have a Material Adverse Effect;

 

  amendment of Intermex’s charter or by-laws or the organizational documents of Intermex’s subsidiaries;

 

  split, combination or reclassification of any shares of its capital stock;

 

  issuance, sale or other disposition of any equity security or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any equity security of it or its subsidiaries;

 

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  declaration or payment of any dividends or distributions on or in respect of any of its capital stock or  redemption, purchase or acquisition of its capital stock;

 

  material change in Intermex’s cash management practices and its policies, practices and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, prepayment of expenses, payment of accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

 

  material change in any method of accounting or accounting practice of Intermex, except as required by GAAP, securities laws and regulations or Public Company Accounting Oversight Board standards, or as otherwise disclosed in the notes to the Intermex financial statements;

 

  other than under and in accordance with the Intermex credit agreement, incurrence, assumption or guarantee of any indebtedness for borrowed money in excess of $250,000 by it or any of its subsidiaries except unsecured current obligations and liabilities incurred in the ordinary course of business consistent with past practice;

  

  except in the ordinary course of business or for write-offs required by GAAP, any transfer, assignment, sale or other disposition of any tangible or intangible asset shown or reflected on the balance sheet of Intermex or cancellation of any debts or entitlements, in each case, with a value in excess of $250,000 individually or $500,000 in the aggregate;

 

  transfer, assignment or grant of any exclusive license or sublicense of any material rights under or with respect to any Intermex intellectual property;

 

  any capital investment in any other person in each case in excess of $250,000 individually or $500,000 in the aggregate;

 

  any loan to any other person other than in the ordinary course of business consistent with past practice;
     
  acceleration, termination, material modification to or cancellation of any material contract to which Intermex is a party or by which it is bound;

 

  imposition of any material encumbrance upon any Intermex properties, capital stock or assets, tangible or intangible;

 

  (i) grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits in respect of its current or former employees, officers, directors or consultants, other than as provided for in any written agreements or as required by applicable law, (ii) change in the terms of employment for any employee or any termination of any employees for which the aggregate costs and expenses exceed $500,000, or (iii) action to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director or consultant;

 

  hiring or promoting any individual as or to be (as the case may be) an officer or hiring or promoting any employee below officer, except in the ordinary course of business consistent with past practice;
     
  adoption, modification or termination of any employment contract, Intermex benefit plan or collective bargaining agreement;

 

  any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders or current or former directors, officers and employees;

 

  entry into a new line of business that is unrelated to the current business or abandonment or discontinuance of an existing line of business;

 

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  except for the Merger, adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy law or consent to the filing of any bankruptcy petition against it under any similar law;

 

  purchase, lease or other acquisition of the right to own, use or lease any property or assets for an amount in excess of $250,000, individually (in the case of a lease, per annum) or $500,000 in the aggregate (in the case of a lease, for the entire term of the lease, not including any option term), except for purchases of inventory, services or supplies in the ordinary course of business consistent with past practice;

 

  acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any person or any division thereof;

 

  action by Intermex to make, change or rescind any tax election, amend any tax return or take any position on any tax return that would have the effect of materially increasing the tax liability or materially reducing any tax asset of the Company  in respect of any post-closing tax period; or

 

  any contract to do any of the foregoing.

  

Additional Company Covenants

 

The Merger Agreement contains additional customary covenants of the Company including covenants relating to the granting of access to information; the conduct of the Company’s business prior to closing; disbursement of funds in the trust account in connection with the Merger and other transactions contemplated by the Merger Agreement; obtaining a “tail” officers’ and directors’ liability insurance policy for the Company’s officers and directors; the post-closing board of directors of the combined company; and the appointment of certain Intermex executives as officers of the combined company. See the section entitled “Management Following the Merger” for additional information relating to the officers of the combined company following the Merger.

 

Additional Intermex Covenants

 

The Merger Agreement contains additional customary covenants of Intermex including covenants relating to the granting of access to information, preparation and delivery of its audited financial statements for certain prior fiscal years; seeking approval of the Merger Agreement from Interwire LLC; obtaining a “tail” officers’ and directors’ liability insurance policy for Intermex’s officers and directors (at the Company’s cost); and delivery of updated financial information.

  

Additional Mutual Covenants

 

The Merger Agreement contains additional customary mutual covenants of the parties relating to the preparation and delivery of this document; preparation and filing of any submissions under the HSR Act or required to be made under any applicable law; the procurement of applicable third party consents; public announcements with respect to the Merger and the other transactions contemplated by the Merger Agreement; the procurement and/or maintenance of insurance policies prior to and following the closing of the Merger; the filing of a Form 8-K and issuance of a press release relating to the closing of the Merger and related transactions; the filing of tax returns and other tax matters; exclusivity with respect to the acquisition of Intermex or the Company and the consideration of any alternative transactions; using reasonable best efforts to satisfy closing conditions under the Merger Agreement; and notifications of any inability to satisfy certain closing conditions under the Merger Agreement applicable to such party (a “Supplement Notification”).

 

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Board of Directors of the Company following the Merger

 

The Company’s board of directors following the Merger will include the individuals identified in the section of this proxy statement/prospectus entitled “Management Following the Merger”.

 

Termination

 

The Merger Agreement may be terminated at any time prior to the closing of the Merger:

 

  By mutual written consent of the Company and Intermex

 

  By either the Company or Intermex if:

 

  closing has not occurred on or before September 19, 2018 (the “Outside Date”), unless the failure to consummate the Merger by the Outside Date is attributable to a failure on the part of the party seeking to terminate the Merger Agreement to perform any material obligation of such party under the Merger Agreement, provided, that if on the Outside Date all conditions to closing other than the delivery of certain third party consents has been satisfied, either Intermex or the Company may extend the Outside Date to December 19, 2018;

 

  a governmental authority enacts, issues, promulgates or enforces any law that has become final and non-appealable which permanently restrains, enjoins or prohibits the Merger;

 

  the requisite Company stockholder approval of the proposals contemplated by this proxy statement/prospectus, including adoption of the Merger Agreement and approval of the Merger, is not obtained; or

 

  the holders of more than 90% of the shares of our common stock issued in our IPO exercise their right to redeem their shares of our common stock in connection with the Merger.

 

  By the Company if neither it nor any Merger Sub is in material breach of their obligations under the Merger Agreement and Intermex or any of its subsidiaries breaches any of their respective representations, warranties or covenants contained in the Merger Agreement, such breach is not cured within 30 days following written notice thereof and such breach would cause (i) Intermex not to perform or comply in all material respects with all agreements, covenants and conditions that  Intermex is required to perform or comply with under the Merger Agreement on or prior to the closing date, (ii) Intermex’s fundamental representations and warranties not to be true and correct in all respects, or (iii) any of Intermex’s other representation and warranties not to be true and correct in all respects (in each case without giving effect to any qualification as to “material,” “materiality,” “material respects,” “Material Adverse Effect” or words of similar import or effect set forth in such representations and warranties) except where the failure of such representations and warranties to be so true and correct would not have (and would not reasonably be expected to have) a Material Adverse Effect.

 

  By Intermex if neither it nor any of its subsidiaries is in material breach of their obligations under the Merger Agreement and the Company or any Merger Sub breaches any of their respective representations, warranties or covenants contained in the Merger Agreement, and such breach is not cured within 30 days following written notice thereof and such breach would cause (i) the Company or any Merger Sub not to perform or comply in all material respects with all agreements, covenants and conditions that the Company and such Merger Sub are respectively required to perform or comply with under the Merger Agreement on or prior to the closing date, (ii) the Company’s and Merger Subs’ fundamental representations and warranties not to be true and correct in all respects, or (iii) any of the Company’s and Merger Subs’ other representation and warranties not to be true and correct in all respects (in each case without giving effect to any qualification as to “material,” “materiality,” “material respects,” “Material Adverse Effect” or words of similar import or effect set forth in such representations and warranties) except where the failure of such representations and warranties to be so true and correct would not have (and would not reasonably be expected to have) a Material Adverse Effect.
     
 

By Intermex if the Company receives redemption requests in an amount of $50 million or more in connection with the special meeting and the amount of such redemption requests is not less than $50 million on the fifth business day following the date of the special meeting.

 

  By the Company or Intermex, as applicable, not later than the third business day following the delivery to such party of a supplemental notification by the other party regarding developments that would impact the ability to be satisfied of certain conditions to the receiving party’s obligation to consummate the Merger under the Merger Agreement.

 

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Effect of Termination

 

If the Merger Agreement is terminated, all further rights and obligations of the parties under the Merger Agreement will terminate and become void and of no force and effect, except (i) that the parties will, in all events, remain bound by and continue to be subject to the provisions of the Merger Agreement relating to termination, waiver of claims against the trust account, survival, notices, annexes, exhibits and schedules, computation of time, expenses, governing law, assignment, successors and assigns, no third party rights, counterparts, titles and headings, entire agreement, severability, specific performance, waiver of jury trial, indulgence not waiver and amendments and (ii) for liability for willful breach of the Merger Agreement.

 

Fees and Expenses

 

Regardless of whether the Merger is consummated, except as otherwise provided in the Merger Agreement, each party to the Merger Agreement must pay its own expenses incident to the Merger Agreement and the transactions contemplated thereby; provided that if the closing occurs the Company will pay at the closing all of Intermex’s transaction expenses subject to certain specified exceptions.

 

Amendments

 

The Merger Agreement may be amended at any time prior to the effective time of the Merger by an instrument in writing signed on behalf of the Company, the Merger Subs and Intermex; provided, however, that after the Merger Agreement is approved by the Company’s stockholders as contemplated by this proxy statement/prospectus, no amendment or waiver is permitted that would require further approval of the Company’s stockholders unless such approval is obtained.

 

Appraisal Rights

 

Appraisal rights are not available to our stockholders in connection with the Merger. On December 20, 2017, Interwire LLC, the sole stockholder of Intermex delivered an irrevocable written consent adopting the Merger Agreement and approving the Merger and therefore cannot properly demand appraisal of its shares pursuant to Section 262 of the Delaware General Corporation Law (“DGCL”).

  

Tax Consequences

 

For U.S. federal income tax purposes, the Merger is intended to constitute a reorganization within the meaning of Section 368(a) of the Code. The parties to the Merger Agreement have adopted the Merger Agreement as a “plan of reorganization” within the meaning of Section 1.368-2(g) of the U.S. Treasury Regulations. No party to the Merger Agreement has made any representation or warranty to any other party as to the tax consequences of the Merger or the other transactions contemplated thereby.

 

Survival and Indemnification

 

The Merger Agreement does not provide for contractual indemnification rights for breaches of the representations, warranties and covenants contained in the Merger Agreement, which representations, warranties and covenants will not survive the closing of the Merger except for those covenants contained therein that by their explicit terms apply or are to be performed in whole or in part after the closing (see the subsection entitled “–Effect of Termination” above). There are no remedies available for any breach of the representations, warranties, covenants or agreements of the parties to the Merger Agreement after the closing, except for covenants explicitly to be performed in whole or in part after the closing, and we will have no recourse against Interwire LLC, Intermex’s sole stockholder, other than for fraud.