On the Closing Date of the Merger, there were 36.2 million shares of the Company’s common stock outstanding and outstanding warrants to purchase approximately 9 million shares of common stock. As of the Closing Date, the former stockholders of Intermex owned approximately 48.3% and the former stockholders of FinTech owned approximately 51.7% of the combined company’s outstanding common stock. At December 31, 2019, the Company was authorized to issue 230 million shares of common stock and had 38.0 million shares of common stock issued and outstanding at $0.0001 par value per common share.

On September 11, 2019, the Company entered into an underwriting agreement with certain selling stockholders and several underwriters relating to the underwritten public offering of 5.2 million shares of the Company’s common stock, at a price to the public of $12.75 per share. Also, the underwriters purchased 782,608 additional shares of common stock at the same price as the initial shares under a 30-day option period granted by the selling stockholders. The closing of the offering occurred on September 16, 2019. The Company did not receive any of the proceeds from the offering. However, it did incur approximately $0.8 million in certain costs, which are included in other selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

Prior to the Merger, FinTech issued 8.8 million public warrants (“Public Warrants”) and 0.2 million private placement warrants (“Placement Warrants”)(combined are referred to as the “Warrants”). The Company assumed the Warrants upon the change of control event. As a result of the Merger, the Warrants issued by FinTech were no longer exercisable for shares of FinTech common stock but instead were exercisable for common stock of the Company. All other features of the Warrants remained unchanged. There were no cash obligations for the Company pertaining to these Warrants.

Each whole Warrant entitled the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. The Warrants became exercisable 30 days after the completion of the Merger and were to expire 5 years after that date, or earlier upon redemption or liquidation.

On March 28, 2019, the Company commenced a Tender Offer (the “Offer”) to purchase the Warrants. In connection with the Offer, the Company offered the holders of the Warrants a combination of 0.201 shares of its common stock and $1.12 in cash (the “Exchange Consideration”) for each Warrant tendered and exchanged pursuant to the Offer. Concurrently with the Offer, the Company solicited consents from holders of the Warrants to amend the Warrant Agreement dated January 19, 2017 (the “Warrant Agreement”), to permit the Company to require that each outstanding Warrant be converted into a combination of 0.181 shares of the Company’s Common Stock and $1.00 in cash, without interest (the “Conversion Consideration”), which Conversion Consideration was approximately 10% less than the Exchange Consideration applicable to the Offer. Approximately 99.51% of the outstanding Warrants were validly tendered and not withdrawn in the Offer. On April 29, 2019, the Company entered into Amendment No. 1 to the Warrant Agreement and, on or about May 20, 2019, exchanged all remaining untendered Warrants for the Conversion Consideration.

Between April and May of 2019, the Company issued an aggregate of approximately 1.8 million shares of common stock and paid approximately $10.0 million in cash in exchange for the Warrants tendered in the Offer as well as those converted at the Conversion Consideration, resulting in a total of approximately 38.0 million shares of common stock outstanding following the issuance. For the year ended December 31, 2019, the Company incurred approximately $0.9 million in professional and legal fees related to the Offer, which are included in other selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

In connection with the Merger, the stockholders of FinTech approved the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan”), which provides for the granting of stock options and RSUs to employees and independent directors of the Company. As of December 31, 2019, there were 3.3 million shares reserved for issuance under the 2018 Plan.

The value of each option grant is estimated on the grant date using the Black-Scholes option pricing model ("BSM"). The option pricing model requires the input of highly subjective assumptions, including the grant date fair value of our common stock, expected volatility, risk-free interest rates, expected term and expected dividend yield. To determine the grant date fair value of the Company’s common stock, we use the closing market price of our common stock at the grant date. We also use an expected volatility based on the historical volatilities of a group of guideline companies and the “simplified” method for calculating the expected life of our stock options as the options are “plain vanilla” and we do not have any significant historical post-vesting activity. We have elected to account for forfeitures as they occur. The risk-free interest rates are obtained from publicly available U.S. Treasury yield curve rates.


	Year Ended December 31, 2019			Year Ended December 31, 2018
Weighted-average grant date price of our common stock (per share)	$	13.83		$	10.00
Expected volatility	28.6		%	28.6		%
Weighted-average risk-free interest rate	1.7		%	2.9		%
Expected term (in years)	6.25			6.25
Expected dividend yield	0.0		%	0.0		%

Share-based compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. The stock options issued under the 2018 Plan have 10-year terms and vest in four equal annual installments beginning one year after the date of the grant. The Company recognized compensation expense for stock options of approximately $2.6 million and $1.0 million for the years ended December 31, 2019 and 2018, respectively, which is included in salaries and benefits in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2019, there were 2.9 million outstanding stock options and unrecognized compensation expense of approximately $7.2 million is expected to be recognized over a weighted-average period of 2.3 years.


	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2018	2,881,219	$	10.00	9.60	$	3.47
Granted	475,000	$	13.83		$	4.38
Exercised⁽¹⁾	(48,000)	$	10.20		$	3.54
Forfeited	(403,000)	$	10.81		$	3.68
Expired	—				$	—
Outstanding at December 31, 2019	2,905,219	$	10.51	8.74	$	3.58

Exercisable at December 31, 2019⁽²⁾	639,805	$	9.95	8.59	$	3.45

The RSUs issued under the 2018 Plan to the Company’s independent directors vest on the one-year anniversary from the grant date. The Company granted 19.0 thousand and 21.2 thousand of RSUs during the years ended December 31, 2019 and 2018, respectively, with weighted-average grant date fair values of $14.77 and $9.91, respectively. The Company recognized compensation expense for the RSUs of $192.5 thousand and $87.5 thousand for the years ended December 31, 2019 and 2018, respectively, which is included in salaries and benefits in the consolidated statements of operations and comprehensive income (loss). During 2019, 21,192 RSUs with a weighted-average grant date fair value of $9.91 vested and there were no forfeited RSUs. The aggregate fair value of the vested RSUs was $255.1 thousand. In addition, there were no forfeited or vested RSUs during 2018. As of December 31, 2019, there was $210.0 thousand of unrecognized compensation expense for the RSUs.

Interwire LLC, the former parent company of Intermex, issued Class B, C and D incentive units to employees of the Company (collectively “incentive units”) in connection with the Stella Point acquisition (see Note 3). As these units were issued as compensation to the Company’s employees, the expense was recorded by the Company. In connection with the Merger, on the Closing Date, all unvested incentive units for Class B, C and D became fully vested and were immediately recognized as share-based compensation expense.

Share-based compensation expense recognized related to these incentive units and included in salaries and benefits in the consolidated statements of operations and comprehensive income (loss), amounted to $4.7 million for the year ended December 31, 2018, and $1.8 million for the Successor period from February 1, 2017 through December 31, 2017. The performance conditions related to the Class C and D units were not considered probable of being achieved prior to the Merger, and therefore, no compensation was recognized for all prior periods. Subsequent to this settlement, all incentive units ceased to exist. Share-based compensation of $2.9 million for the Predecessor period from January 1, 2017 through January 31, 2017 primarily included the expense associated with stock options and restricted awards that vested due to the Stella Point acquisition.

The grant date fair value of the incentive units was calculated using the Monte Carlo Simulation. This approach derives the fair value of the incentive units based on certain assumptions related to expected volatility, expected term, risk-free interest rate and dividend yield. Expected volatilities were based on observed volatilities of similar publicly-traded companies, and the expected term was based on a formula that considers the vesting terms and the original contract term of the incentive unit awards. The risk-free rate was based on the U.S. Treasury yield curve, and the selected dividend yield assumption was determined in view of Interwire LLC’s historical and estimated dividend payout. The following were the assumptions used in calculating the fair value of the units at the grant dates:


	Number of Class B Units	Weighted- Average Grant Date Fair Value		Number of Class C Units	Weighted- Average Grant Date Fair Value		Number of Class D Units	Weighted- Average Grant Date Fair Value
Granted during the Successor Period	9,720,000	$	0.4878	4,860,000	$	0.2080	4,860,000	$	0.1489
Vested	(1,944,000)	0.4878		—	—		—	—
Forfeited	(304,000)	0.4872		(190,000)	0.2077		(190,000)	0.1485
Outstanding at December 31, 2017	7,472,000	0.4879		4,670,000	0.2080		4,670,000	0.1489
Granted	410,000	0.4948		205,000	0.2126		205,000	0.1535
Vested	(7,882,000)	0.4883		(4,875,000)	0.2082		(4,875,000)	0.1491
Outstanding at December 31, 2018	—	$	—	—	$	—	—	$	—

During the Successor period from February 1, 2017 through December 31, 2017, the Company distributed $20.2 million in cash dividends to its stockholders. The dividends were distributed out of the cash proceeds from the term loan entered into in August 2017 discussed in Note 9 and were recorded as a reduction to additional paid-in capital. There were no dividend distributions during the years ended December 31, 2019 and 2018 and the Predecessor period from January 1, 2017 through January 31, 2017.