UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission File No. 001-37986

INTERNATIONAL MONEY EXPRESS, INC.

(Exact name of registrant as specified in its charter)

Delaware	47-4219082
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
9480 South Dixie Highway Miami, Florida	33156
(Address of Principal Executive Offices)	(Zip Code)

(305) 671-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock ($0.0001 par value)	IMXI	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an 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	☐	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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐  No ☒

As of August 4, 2022, there were 37,875,372 shares of the registrant’s common stock, $0.0001 par value per share, outstanding. The registrant has no other class of common stock outstanding.

INTERNATIONAL MONEY EXPRESS, INC.

INDEX TO FINANCIAL STATEMENTS

		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		3
PART 1 - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	4
	Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	42
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
SIGNATURES		45

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act, as amended, which reflect our current views with respect to certain events that are not historical facts but could have an effect on our future performance, including but without limitation, statements regarding our plans, objectives, financial performance, business strategies, projected results of operations, and expectations for the business of the Company.

These statements may include and be identified by words or phrases such as, without limitation, “would,” “will,” “should,” “expects,” “believes,” “anticipates,” “continues,” “could,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “forecasts,” “intends,” “assumes,” “estimates,” “approximately,” “shall,” “our planning assumptions,” “future outlook,” “currently,” “target,” “guidance,” and similar expressions (including the negative and plural forms of such words and phrases). These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments, projections about our business and our industry, and macroeconomic conditions, and are subject to various risks, uncertainties, estimates, contingencies and other factors, many of which are outside our control, that could cause actual results to differ materially from those expected or implied by such forward-looking statements and could materially adversely affect our business, financial condition, results of operation, cash flows and liquidity. Factors that could cause or contribute to such differences include, but are not limited to, the following:

•changes in applicable laws or regulations;

•factors relating to our business, operations and financial performance, including:

◦our ability to successfully execute, manage, integrate and obtain the anticipated financial benefits of key acquisitions and mergers, including the acquisition of Envios de Valores La Nacional Corp. and LAN Holdings, Corp.;

◦public health conditions, responses thereto and the economic and market effects thereof;

◦competition in the markets in which we operate;

◦volatility in foreign exchange rates that could affect the volume of consumer remittance activity and/or affect our foreign exchange related gains and losses;

◦our ability to maintain favorable agent relationships;

◦credit risks from our agents and the financial institutions with which we do business;

◦bank failures, sustained financial illiquidity, or financial institution illiquidity;

◦new technology or competitors, such as digital platforms;

◦cyber-attacks or disruptions to our information technology, computer network systems, data centers and phone apps;

◦our ability to satisfy our debt obligations and remain in compliance with our credit facility requirements;

◦our success in developing and introducing new products, services and infrastructure;

◦consumer confidence in our brand and in consumer money transfers generally;

◦our ability to maintain compliance with applicable regulatory requirements;

◦international political factors, political stability, tariffs, border taxes or restrictions on remittances or transfers;

◦currency restrictions and volatility in countries in which we operate or plan to operate;

◦consumer fraud and other risks relating to the authenticity of customers’ orders;

◦changes in immigration laws and their enforcement;

◦our ability to protect intellectual property rights;

◦our ability to recruit and retain key personnel; and

•other economic, business and/or competitive factors, risks and uncertainties, including those described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10-K for the year ended December 31, 2021.

All forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are only made as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3

PART 1 – FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share data)

	June 30, 2022		December 31, 2021
ASSETS	(unaudited)
Current assets:
Cash	$	114,600	$	132,474
Accounts receivable, net	97,154		67,317
Prepaid wires, net	56,818		56,766
Prepaid expenses and other current assets	5,686		6,988
Total current assets	274,258		263,545
Property and equipment, net	21,698		17,905
Goodwill	36,260		36,260
Intangible assets, net	13,607		15,392
Other assets	12,798		7,434
Total assets	$	358,621	$	340,536
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt, net	$	3,882	$	3,882
Accounts payable	15,375		23,151
Wire transfers and money orders payable, net	61,878		56,066
Accrued and other liabilities	35,792		33,760
Total current liabilities	116,927		116,859
Long-term liabilities:
Debt, net	77,270		79,211
Lease liabilities, net	3,130		—
Deferred tax liability, net	1,096		1,426
Total long-term liabilities	81,496		80,637
Commitments and contingencies, see Note 15
Stockholders’ equity:
Common stock $0.0001 par value; 230,000,000 shares authorized, 39,011,042 and 38,820,222 shares issued and 37,941,619 and 38,478,700 shares outstanding as of June 30, 2022 and December 31, 2021, respectively.	4		4
Additional paid-in capital	70,012		66,875
Retained earnings	109,441		81,803
Accumulated other comprehensive loss	(65)		(76)
Treasury stock, at cost; 1,069,423 and 341,522 shares as of June 30, 2022 and December 31, 2021, respectively.	(19,194)		(5,566)
Total stockholders’ equity	160,198		143,040
Total liabilities and stockholders’ equity	$	358,621	$	340,536

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(in thousands, except for share data, unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues:
Wire transfer and money order fees, net	$	117,622	$	99,306	$	215,621	$	180,218
Foreign exchange gain, net	18,195		16,655		33,868		29,703
Other income	1,118		786		2,111		1,402
Total revenues	136,935		116,747		251,600		211,323
Operating expenses:
Service charges from agents and banks	92,066		77,864		169,060		141,237
Salaries and benefits	11,748		10,175		23,058		20,050
Other selling, general and administrative expenses	7,663		7,079		14,730		12,582
Depreciation and amortization	2,251		2,345		4,434		4,679
Total operating expenses	113,728		97,463		211,282		178,548
Operating income	23,207		19,284		40,318		32,775
Interest expense	1,112		1,254		2,064		2,594
Income before income taxes	22,095		18,030		38,254		30,181
Income tax provision	6,111		4,803		10,616		7,977
Net income	15,984		13,227		27,638		22,204
Other comprehensive (loss) income	(101)		16		11		12
Comprehensive income	$	15,883	$	13,243	$	27,649	$	22,216
Earnings per common share:
Basic	$	0.42	$	0.34	$	0.72	$	0.58
Diluted	$	0.41	$	0.34	$	0.71	$	0.57
Weighted-average common shares outstanding:
Basic	38,257,156		38,433,748		38,309,295		38,336,977
Diluted	39,228,991		39,027,414		39,153,039		38,937,699

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except for share data, unaudited)

	Three Months Ended June 30, 2022
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance, March 31, 2022	38,885,736	$	4	(565,910)	$	(9,194)	$	68,431	$	93,457	$	36	$	152,734
Net income	—	—		—	—		—		15,984		—		15,984
Issuance of common stock:
Exercise of stock options, net of shares withheld for taxes	29,990	—		—	—		(75)		—		—		(75)
Restricted stock units and awards, net of shares withheld for taxes	94,540	—		—	—		(9)		—		—		(9)
Fully vested shares	776	—		—	—		—		—		—		—
Share-based compensation	—	—		—	—		1,665		—		—		1,665
Adjustment from foreign currency translation, net	—	—		—	—		—		—		(101)		(101)
Acquisition of treasury stock, at cost	—	—		(503,513)	(10,000)		—		—		—		(10,000)
Balance, June 30, 2022	39,011,042	$	4	(1,069,423)	$	(19,194)	$	70,012	$	109,441	$	(65)	$	160,198

	Three Months Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance, March 31, 2021	38,362,788	$	4	$	61,640	$	43,937	$	(17)	$	105,564
Net income	—	—		—		13,227		—		13,227
Issuance of common stock:
Exercise of stock options	100,275	—		995		—		—		995
Restricted stock units and awards	121,596	—		—		—		—		—
Fully vested shares	1,065	—		—		—		—		—
Share-based compensation	—	—		1,374		—		—		1,374
Adjustment from foreign currency translation, net	—	—		—		—		16		16
Balance, June 30, 2021	38,585,724	$	4	$	64,009	$	57,164	$	(1)	$	121,176

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(CONTINUED)

(in thousands, except for share data, unaudited)

	Six Months Ended June 30, 2022
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance, December 31, 2021	38,820,222	$	4	(341,522)	$	(5,566)	$	66,875	$	81,803	$	(76)	$	143,040
Net income	—	—		—	—		—		27,638		—		27,638
Issuance of common stock:
Exercise of stock options	73,715	—		—	—		487		—		—		487
Restricted stock units and awards, net of shares withheld for taxes	115,327	—		—	—		(283)		—		—		(283)
Fully vested shares	1,778	—		—	—		—		—		—		—
Share-based compensation	—	—		—	—		2,933		—		—		2,933
Adjustment from foreign currency translation, net	—	—		—	—		—		—		11		11
Acquisition of treasury stock, at cost	—	—		(727,901)	(13,628)		—		—		—		(13,628)
Balance, June 30, 2022	39,011,042	$	4	(1,069,423)	$	(19,194)	$	70,012	$	109,441	$	(65)	$	160,198

	Six Months Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance, December 31, 2020	38,217,125	$	4	$	59,310	$	34,960	$	(13)	$	94,261
Net income	—	—		—		22,204		—		22,204
Issuance of common stock:
Exercise of stock options	244,907	—		2,429		—		—		2,429
Restricted stock units and awards	121,596	—		—		—		—		—
Fully vested shares	2,096	—		—		—		—		—
Share-based compensation	—	—		2,270		—		—		2,270
Adjustment from foreign currency translation, net	—	—		—		—		12		12
Balance, June 30, 2021	38,585,724	$	4	$	64,009	$	57,164	$	(1)	$	121,176

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net income	$	27,638	$	22,204
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,434		4,679
Share-based compensation	2,933		2,270
Provision for credit losses	1,498		667
Debt origination costs amortization	507		385
Deferred income tax (benefit) provision, net	(330)		708
Non-cash lease expense	999		—
Loss on disposal of property and equipment	434		169
Total adjustments	10,475		8,878
Changes in operating assets and liabilities:
Accounts receivable, net	(31,339)		(16,174)
Prepaid wires, net	213		38,825
Prepaid expenses and other assets	494		(1,305)
Wire transfers and money orders payable, net	5,550		13,228
Lease liabilities	(1,037)		—
Accounts payable and accrued and other liabilities	(7,434)		4,634
Net cash provided by operating activities	4,560		70,290
Cash flows from investing activities:
Purchases of property and equipment	(6,642)		(3,181)
Acquisition of agent locations	(225)		—
Net cash used in investing activities	(6,867)		(3,181)
Cash flows from financing activities:
Repayments of term loan facility	(2,188)		(42,041)
Borrowings under term loan facility	—		40,158
Debt origination costs	—		(2,894)
Proceeds from exercise of stock options	487		2,429
Payments for stock awards	(283)		—
Repurchases of common stock	(13,628)		—
Net cash used in financing activities	(15,612)		(2,348)
Effect of exchange rate changes on cash	45		48
Net (decrease) increase in cash	(17,874)		64,809
Cash, beginning of period	132,474		74,907
Cash, end of period	$	114,600	$	139,716

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands, unaudited)

	Six Months Ended June 30,
	2022		2021
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,468	$	2,169
Cash paid for income taxes	$	8,767	$	8,825
Issuance of common stock for cashless exercise of options	$	1,293	$	—
Non-cash lease liabilities arising from obtaining right-of-use assets	$	253	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9

INTERNATIONAL MONEY EXPRESS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BUSINESS AND ACCOUNTING POLICIES

International Money Express, Inc. (the “Company” or “us” or “we”) operates as a money transmitter between the United States of America (“United States” or “U.S.”) and Canada to Mexico, Guatemala and other countries in Latin America, Africa and Asia through a network of authorized agents located in various unaffiliated retail establishments and 37 Company-operated stores throughout the United States and Canada.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). Although the worst effects of the pandemic appear to have subsided in the United States, the pandemic has had and continues to have a significant effect on economic conditions in the United States, and continues to cause significant uncertainties in the U.S. and global economies, particularly as a result of new variants and sub-variants of COVID-19, which appear to be causing an increase in COVID-19 cases in certain places around the world. Public health officials and medical professionals have warned that COVID-19 resurgences may continue to occur due to a variety of factors, including the extent of economic activity, social interaction, vaccination rates and the emergence of potent variants. It is unclear if and when resurgences will occur or how long any resurgence will last, how severe it will be, and what safety measures governments and businesses will impose in response.

The extent to which the COVID-19 pandemic affects our business, operations and financial results depends, and will continue to depend, on numerous evolving factors that we may not be able to accurately predict. Although the Company’s operations continued effectively despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our financial condition, results of operations and cash flows is dependent on future developments, including the duration or resurgence of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our consumers, inflation (including changes in wages) and governmental efforts to restrain inflation, interest rate levels and foreign exchange volatility, all of which remain uncertain and cannot be predicted at this time. If the global response to contain and remedy the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, or if an escalation in the global response to contain the COVID-19 pandemic is required or is unsuccessful, the Company could experience a material adverse effect on its financial condition, results of operations and cash flows.

The condensed consolidated financial statements of the Company include International Money Express, Inc. and its majority-owned subsidiaries. The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements.

The Company’s interim condensed consolidated financial statements and related notes are unaudited. In the opinion of management, all adjustments (including normal recurring adjustments) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. Certain information and footnote disclosures required by GAAP have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

On March 16, 2022, the Company entered into a definitive purchase agreement to acquire Envios de Valores La Nacional Corp. and LAN Holdings, Corp., which either directly or indirectly operate as money remittance companies in the United States, Canada and certain countries in Europe. The transaction is subject to customary regulatory approvals and is expected to close late in the third quarter or early fourth quarter of 2022. Intermex expects to pay cash of approximately $50.0 million (subject to customary purchase price adjustments) on closing and up to an additional $3.0 million in contingent consideration in 2023.

Accounting Pronouncements

On January 1, 2022, the Company adopted the new accounting guidance, Leases (Topic 842) (“ASC 842”), which required the Company to record assets and liabilities on the balance sheet for lease-related rights and obligations and disclose key information about its leasing arrangements. The guidance requires that a lessee recognizes a liability to make lease payments (the lease liability) and a right-of-use (“ROU”) asset representing its right to use the underlying asset for the lease term on the balance sheet. Leases are classified as financing or operating, with classification affecting the pattern of expense recognition in the condensed consolidated statements of income and comprehensive income. Refer to Note 6 for additional information on the adoption of this standard and related disclosures.

10

The FASB issued guidance, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, regarding the measurement of credit losses for certain financial instruments. The new standard replaces the incurred loss model with a current expected credit loss (“CECL”) model. The CECL model is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company is required to adopt the new guidance on December 31, 2022. The Company is currently evaluating the impact this guidance will have on the condensed consolidated financial statements.

NOTE 2 – REVENUES

The Company recognized revenues from contracts with customers for the three and six months ended June 30, 2022 and 2021, as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Wire transfer and money order fees	$	118,788	$	99,671	$	217,191	$	180,887
Discounts and promotions	(1,166)		(365)		(1,570)		(669)
Wire transfer and money order fees, net	117,622		99,306		215,621		180,218
Foreign exchange gain, net	18,195		16,655		33,868		29,703
Other income	1,118		786		2,111		1,402
Total revenues	$	136,935	$	116,747	$	251,600	$	211,323

There are no significant initial costs incurred to obtain contracts with customers, although the Company has a loyalty program under which customers earn one point for each wire transfer completed. Points can be redeemed for a discounted wire transaction fee or a foreign exchange rate that is more favorable to the customer. The customer benefits vary by country, and the earned points expire if the customer has not initiated and completed an eligible wire transfer transaction within the immediately preceding 180-day period. In addition, earned points will expire 30 days after the end of the program. Because the loyalty program benefits represent a future performance obligation, a portion of the initial consideration is recorded as deferred revenue loyalty program (see Note 8) and a corresponding loyalty program expense is recorded as contra revenue. Revenue from this performance obligation is recognized upon customers redeeming points or upon expiration of any points outstanding.

Except for the loyalty program discussed above, our revenues include only one performance obligation, which is to collect the consumer’s money and make funds available for payment, generally on the same day, to a designated recipient in the currency requested.

The Company also offers several other services, including money orders and check cashing through its sending agents, for which revenue is derived from a fee per transaction. For substantially all of the Company’s revenues, the Company acts as principal in the transaction and reports revenue on a gross basis because the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss and has the ability to establish transaction prices.

NOTE 3 – ACCOUNTS RECEIVABLE AND AGENT ADVANCES RECEIVABLE, NET OF ALLOWANCE

Accounts Receivable

Accounts receivable represents outstanding balances from sending agents for pending wire transfers or money orders from consumers. The outstanding balance of accounts receivable, net of allowance for credit losses, consists of the following (in thousands):

	June 30, 2022		December 31, 2021
Accounts receivable	$	99,534	$	69,498
Allowance for credit losses	(2,380)		(2,181)
Accounts receivable, net	$	97,154	$	67,317

11

Agent Advances Receivable

The Company had agent advances receivable, net of allowance for credit losses, from sending agents as follows (in thousands):

	June 30, 2022		December 31, 2021
Agent advances receivable, current	$	1,228	$	791
Allowance for credit losses	(36)		(55)
Net current	$	1,192	$	736
Agent advances receivable, long-term	$	1,329	$	656
Allowance for credit losses	(26)		(13)
Net long-term	$	1,303	$	643

The net current portion of agent advances receivable is included in prepaid expenses and other current assets (see Note 4), and the net long-term portion is included in other assets in the condensed consolidated balance sheets. Agent advances receivable have interest rates ranging from 0% to 15.0% per annum. At June 30, 2022 and December 31, 2021, there were $2.6 million and $1.4 million, respectively, of agent advances receivable collateralized by personal guarantees from sending agents and assets from their businesses in case of a default by the agent.

The maturities of agent advances receivable at June 30, 2022 are as follows (in thousands):

	Unpaid Advance Balance
Under 1 year	$	1,228
Between 1 and 2 years	1,218
Between 2 and 3 years	111
Total	$	2,557

Allowance for Credit Losses

The changes in the allowance for credit losses related to accounts receivable and agent advances receivable are as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	2,256	$	2,058	$	2,249	$	2,042
Provision	1,056		504		1,498		667
Charge-offs	(970)		(623)		(1,502)		(888)
Recoveries	100		89		197		207
Ending Balance	$	2,442	$	2,028	$	2,442	$	2,028

The allowance for credit losses allocated by financial instrument category is as follows (in thousands):

	June 30, 2022		December 31, 2021
Accounts receivable	$	2,380	$	2,181
Agent advances receivable	62		68
Allowance for credit losses	$	2,442	$	2,249

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NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other current assets consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Prepaid insurance	$	296	$	923
Prepaid fees and services	1,644		1,930
Agent advances receivable, net of allowance	1,192		736
Assets pending settlement	633		331
Prepaid income taxes	382		1,563
Prepaid expenses and current assets - other	1,539		1,505
	$	5,686	$	6,988

Other assets consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Revolving line origination fees	$	1,772	$	2,032
Agent incentives advances	905		1,010
Agent advances receivable, net of allowance	1,303		643
Right-of-use assets, net	4,755		—
Funds held by seized banking entities, net of allowance	3,173		3,114
Other assets	890		635
	$	12,798	$	7,434

During September 2021, local banking regulators in Mexico resolved to close and liquidate a local financial institution, citing a lack of compliance with minimum capital requirements. The Company has approximately $5.1 million of exposure from deposits it held with this bank when it was closed. In accordance with the banking regulations in Mexico, large depositors such as the Company will be paid once the assets of the financial institution are liquidated. Currently, it is difficult to predict the length of the liquidation process or if the proceeds from the asset liquidation will be sufficient to recover a portion or all of its funds on deposit. Consequently, the Company maintains a valuation allowance of approximately $2.0 million in connection with the balance of deposits held by the financial institution as a result of its closure.

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS

Goodwill and the majority of intangible assets on the condensed consolidated balance sheets of the Company were recognized from a prior acquisition. Intangible assets on the condensed consolidated balance sheets of the Company consist of agent relationships, trade name, developed technology and other intangible assets. Agent relationships, trade name and developed technology are all amortized over 15 years using an accelerated method that correlates with the projected realization of the benefit. The agent relationships intangible represents the network of independent sending agents; trade name refers to the Intermex name, branded on all agent locations and well recognized in the market; and developed technology includes the state-of-the-art system that the Company has continued to develop and improve over the past 20 years. Other intangible assets relate to the acquisition of Company-operated stores, which are amortized on a straight line basis over 10 years. The determination of our intangible fair values includes several assumptions that are subject to various risks and uncertainties. Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties, and no impairment charges were determined necessary to be recognized during the three and six months ended June 30, 2022.

The following table presents the changes in goodwill and intangible assets (in thousands):

	Goodwill		Intangibles
Balance at December 31, 2021	$	36,260	$	15,392
Acquisition of agent locations	—		225
Amortization expense	—		(2,010)
Balance at June 30, 2022	$	36,260	$	13,607

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Amortization expense related to intangible assets for the remainder of 2022 and thereafter is as follows (in thousands):

2022	$	2,017
2023	3,024
2024	2,305
2025	1,752
2026	1,332
Thereafter	3,177
	$	13,607

NOTE 6 – LEASES

To conduct certain of our operations, the Company is a party to leases for office space, warehouses and Company-operated store locations. Our leases have remaining terms of up to 9.2 years, some of which include options to renew and extend the lease. We presently intend to exercise certain of the extension options available to us and for purposes of computing the right-of-use assets and lease liabilities required by ASC 842, we have incorporated the options to renew that are reasonably certain of exercise by us.

The Company adopted ASC 842, including related amendments, effective January 1, 2022, using the modified retrospective approach and used the effective date as the date of initial application; therefore comparative periods were not adjusted. The Company determined that all of its leasing arrangements are classified as operating leases. The Company elected to apply the practical expedients to (i) not reassess its prior conclusions about lease identification, lease classification and initial direct costs and (ii) use hindsight in determining the lease term. In addition, the Company elected not to separate lease and non-lease components for all arrangements where the Company is a lessee. Adoption of the new standard resulted in the recording of additional right-of-use assets and lease liabilities of approximately $5.6 million as of January 1, 2022. The adoption of ASC 842 did not materially impact the Company’s consolidated net income and had no impact on cash flows. Additionally, there was no cumulative effect of adoption recognized on retained earnings in the condensed consolidated statement of changes in stockholders’ equity.

The presentation of right-of-use assets and lease liabilities in the condensed consolidated balance sheet is as follows (in thousands):

Leases	Classification	June 30, 2022
Assets
Right-of-use assets	Other assets(1)	$	4,755
Total leased assets		$	4,755
Liabilities
Current
Operating	Accrued and other liabilities	$	1,587
Noncurrent
Operating	Lease liabilities	3,130
Total Lease liabilities		$	4,717

(1) Operating right of-use assets are recorded net of accumulated amortization of $1.0 million as of June 30, 2022.

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Lease expense for the three and six months ended June 30, 2022, was as follows (in thousands):

		Three Months Ended		Six Months Ended
Lease Cost	Classification	June 30, 2022		June 30, 2022
Operating lease cost	Other selling, general and administrative expenses	$	530	$	999

Rent expense for the three and six months ended June 30, 2021 was $0.6 million and $1.2 million, respectively.

As of June 30, 2022, the Company’s weighted average remaining lease terms on its operating leases is 3.9 years, and the Company’s weighted average discount rate is 2.59%, which is the Company’s incremental borrowing rate. The Company used its incremental borrowing rate for all leases, as none of the Company’s lease agreements provide a readily determinable implicit rate.

Lease Payments

Future minimum lease payments for assets under non-cancelable operating lease agreements with original terms of more than one year for the remainder of 2022 and thereafter are as follows (in thousands):

2022	$	862
2023	1,371
2024	1,131
2025	989
2026	288
Thereafter	325
Total lease payments	4,966
Less: Imputed interest	(249)
Present value of lease liabilities	$	4,717

NOTE 7 – WIRE TRANSFERS AND MONEY ORDERS PAYABLE, NET

Wire transfers and money orders payable, net consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Wire transfers payable, net	$	23,436	$	20,744
Customer voided wires payable	19,292		16,895
Money orders payable	19,150		18,427
	$	61,878	$	56,066

Customer voided wires payable consist primarily of wire transfers that were not completed because the recipient did not collect the funds within 30 days and the sender has not claimed the funds and, therefore, are considered unclaimed property. Unclaimed property laws of each state in the United States in which we operate, the District of Columbia, and Puerto Rico require us to track certain information for all of our money remittances and payment instruments and, if the funds underlying such remittances and instruments are unclaimed at the end of an applicable statutory abandonment period, require us to remit the proceeds of the unclaimed property to the appropriate jurisdiction. Applicable statutory abandonment periods range from three to seven years.

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NOTE 8 – ACCRUED AND OTHER LIABILITIES

Accrued and other liabilities consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Commissions payable to sending agents	$	17,636	$	16,303
Accrued salaries and benefits	2,763		4,892
Accrued bank charges	1,410		1,371
Accrued legal fees	—		422
Accrued other professional fees	1,121		1,619
Accrued taxes	6,041		4,908
Lease liabilities, current portion	1,587		—
Deferred revenue loyalty program	3,760		3,391
Other	1,474		854
	$	35,792	$	33,760

The following table shows the changes in the deferred revenue loyalty program liability (in thousands):

Balance, December 31, 2021	$	3,391
Revenue deferred during the period	1,382
Revenue recognized during the period	(1,013)
Balance, June 30, 2022	$	3,760

NOTE 9 – DEBT

Debt consisted of the following (in thousands):

	June 30, 2022		December 31, 2021
Term loan facility	$	83,125	$	85,313
	83,125		85,313
Less: Current portion of long-term debt (1)	(3,882)		(3,882)
Less: Debt origination costs	(1,973)		(2,220)
	$	77,270	$	79,211

(1)Current portion of long-term debt is net of debt origination costs of approximately $0.5 million both at June 30, 2022 and December 31, 2021.

On June 24, 2021, the Company and certain of its domestic subsidiaries as borrowers and the other guarantors from time to time party thereto (collectively, the “Loan Parties”) entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with a group of banking institutions. The A&R Credit Agreement amended and restated in its entirety the Company’s previous credit agreement. The A&R Credit Agreement provides for a $150.0 million revolving credit facility, an $87.5 million term loan facility and an uncommitted incremental facility, which may be utilized for additional revolving or term loans, of up to $70.0 million. The A&R Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The proceeds of the term loan were used to refinance the existing term loan facility under the Company’s previous credit agreement, and the revolving credit facility is available for working capital, general corporate purposes and to pay fees and expenses in connection with this transaction. The maturity date of the A&R Credit Agreement is June 24, 2026.

This refinancing was accounted for as a debt modification. The balance of the unamortized debt origination costs of $1.8 million under the Company’s previous credit agreement, the origination costs paid to the Loan Parties of $1.0 million in connection with the term loan facility of the A&R Credit Agreement and debt origination costs paid to the Loan Parties and third-party costs of $1.8 million incurred in connection with the revolving credit facility of the A&R Credit Agreement will be associated with the new arrangement, and therefore, they will be amortized over the remaining life of the A&R Credit Agreement using the straight-line method, as it is not significantly different than the effective interest method. Debt origination costs paid to third parties related to a portion of the term loan facility in connection with the A&R Credit Agreement were expensed as incurred during the second quarter of 2021.

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The unamortized portion of debt origination costs totaled approximately $3.7 million and $4.5 million at June 30, 2022 and December 31, 2021, respectively. Amortization of debt origination costs is included as a component of interest expense in the condensed consolidated statements of income and comprehensive income and amounted to approximately $0.3 million and $0.2 million for the three months ended June 30, 2022 and 2021, respectively, and $0.5 million and $0.4 million for the six months ended June 30, 2022 and 2021, respectively.

At the election of the Company, interest on the term loan facility and revolving credit facility under the A&R Credit Agreement is determined by reference to either LIBOR (subject to replacement) or a “base rate”, in each case plus an applicable margin ranging between 2.50% and 3.00% per annum for LIBOR loans and between 1.50% and 2.00% per annum for base rate loans depending on the level of our consolidated leverage ratio, as calculated pursuant to the terms of the A&R Credit Agreement. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum. The effective interest rates for the six months ended June 30, 2022 for the term loan facility and revolving credit facility were 3.59% and 0.75%, respectively.

Interest is payable (x)(i) generally on the last day of each interest period selected for LIBOR loans, but in any event, not less frequently than every three months, and (ii) on the last business day of each quarter for base rate loans and (y) at final maturity. The principal amount of the term loan facility under the A&R Credit Agreement must be repaid in consecutive quarterly installments of 5.0% in years 1 and 2, 7.5% in year 3, and 10.0% in years 4 and 5, in each case on the last day of each quarter, commencing in September 2021 with a final balloon payment at maturity. The term loans under the A&R Credit Agreement may be prepaid at any time without premium or penalty. Revolving loans may be borrowed, repaid and reborrowed from time to time in accordance with the terms and conditions of the A&R Credit Agreement. The Company is also required to repay the loans upon receipt of net proceeds from certain casualty events, upon the disposition of certain property and upon incurrence of indebtedness not permitted by the A&R Credit Agreement. In addition, the Company is required to make mandatory prepayments annually from excess cash flow if the Company’s consolidated leverage ratio (as calculated under the A&R Credit Agreement) is greater than or equal to 3.0, and the remainder of any such excess cash flow is contributed to the available amount which may be used for a variety of purposes, including investments and distributions.

The A&R Credit Agreement contains financial covenants that require the Company to maintain a quarterly minimum fixed charge coverage ratio of 1.25:1.00 and a quarterly maximum consolidated leverage ratio of 3.25:1.00. The A&R Credit Agreement also contains covenants that limit the Company’s and its subsidiaries’ ability to, among other things, grant liens, incur additional indebtedness, make acquisitions or investments, dispose of certain assets, change the nature of their businesses, enter into certain transactions with affiliates or amend the terms of material indebtedness.

In addition, the A&R Credit Agreement generally restricts the payment of dividends or cash distributions by the Company with certain exceptions, including the following: i) to repurchase the Company’s common stock from current or former employees in an aggregate amount of up to $10.0 million per calendar year, and ii) other restricted payments in an aggregate amount not to exceed $40.0 million plus the Available Amount (as defined in the A&R Credit Agreement).

The obligations under the A&R Credit Agreement are guaranteed by the Company and certain domestic subsidiaries of the Company and secured by liens on substantially all of the assets of the Loan Parties, subject to certain exclusions and limitations.

NOTE 10 – FAIR VALUE MEASUREMENTS

The Company determines fair value in accordance with the provisions of FASB guidance, Fair Value Measurements and Disclosures, which defines fair value as an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-level fair value hierarchy that prioritizes the inputs used to measure fair value was established. There are three levels of inputs used to measure fair value and for disclosure purposes. Level 1 relates to quoted market prices for identical assets or liabilities in active markets. Level 2 relates to observable inputs other than quoted prices included in Level 1. Level 3 relates to unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s non-financial assets measured at fair value on a nonrecurring basis include goodwill and intangible assets. All other financial assets and liabilities are carried at amortized cost.

The Company’s cash balances are representative of their fair values as these balances are comprised of deposits available on demand. The carrying amounts of accounts receivable, prepaid wires, accounts payable and wire transfers and money orders payable are representative of their fair values because of the short turnover of these instruments.

The Company’s financial liabilities include its revolving credit facility and term loan facility. The fair value of the term loan facility, which approximates book value, is estimated by discounting the future cash flows using a current market interest rate. The estimated fair value of the revolving credit facility would approximate face value given the payment schedule and interest rate structure, which approximates current market interest rates.

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NOTE 11 – SHARE-BASED COMPENSATION

International Money Express, Inc. Omnibus Equity Compensation Plans

The International Money Express, Inc. 2020 Omnibus Equity Compensation Plan (the “2020 Plan”) provides for the granting of stock-based incentive awards, including stock options, restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and performance stock units (“PSUs”) to employees and independent directors of the Company. There are 3.7 million shares of the Company’s common stock approved for issuance under the 2020 Plan, which includes 0.4 million shares that were previously subject to awards granted under the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan” and together with the 2020 Plan, the “Plans”). Although awards remain outstanding under the 2018 Plan, which was terminated effective June 26, 2020, no additional awards may be granted under the 2018 Plan. As of June 30, 2022, 2.5 million shares remained available for future awards under the 2020 Plan.

Stock Options

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 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 volatility of the Company’s common stock 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.

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 Plans have 10-year terms and generally 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 $0.5 million and $0.6 million for the three months ended June 30, 2022 and 2021, respectively, and $1.1 million and $1.3 million for the six months ended June 30, 2022 and 2021, respectively, which are included in salaries and benefits in the condensed consolidated statements of income and comprehensive income. As of June 30, 2022, unrecognized compensation expense related to stock options of approximately $1.5 million is expected to be recognized over a weighted-average period of 1.3 years.

A summary of stock option activity under the Plans during the six months ended June 30, 2022 is presented below:

	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2021	1,898,687	$	11.24	7.11	$	4.17
Granted	—	$	—		$	—
Exercised	(143,975)	$	13.44		$	4.98
Forfeited	(48,250)	$	14.18		$	6.37
Outstanding at June 30, 2022	1,706,462	$	10.98	6.51	$	4.04
Exercisable at June 30, 2022	952,736	$	10.48	6.28	$	3.72

Restricted Stock Units

The RSUs granted under the Plans to the Company’s employees generally vest in four equal annual installments beginning one year after the date of the grant, while RSUs issued to the Company’s independent directors vest on the one-year anniversary from the grant date. The Company recognized compensation expense for RSUs of approximately $0.5 million and $0.3 million for the three months ended June 30, 2022 and 2021, respectively, and $0.8 million and $0.5 million for the six months ended June 30, 2022 and 2021, respectively, which are included in salaries and benefits in the condensed consolidated statements of income and comprehensive income. As of June 30, 2022,

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unrecognized compensation expense related to RSUs of approximately $4.9 million is expected to be recognized over a weighted-average period of 2.0 years.

A summary of RSU activity during the six months ended June 30, 2022 is presented below:

	Number of RSUs	Weighted-Average Grant Price
Outstanding (nonvested) at December 31, 2021	231,934	$	14.99
Granted	194,790	$	16.75
Vested	(65,261)	$	14.90
Forfeited	(19,592)	$	15.31
Outstanding (nonvested) at June 30, 2022	341,871	$	15.99

Share Awards

The Lead Independent Director and Chairs of the Committees of the Board of Directors are granted, in aggregate, $64.0 thousand in awards of fully vested shares of the Company’s common stock, payable on a quarterly basis at the end of each quarter in payment of fees earned in such capacities. During the three and six months ended June 30, 2022, 776 and 1,778 fully vested shares, respectively, were granted to the Lead Independent Director and Chairs of the Committees of the Board of Directors resulting in compensation expense of $16.0 thousand and $32.0 thousand, respectively, recorded in the condensed consolidated statements of income and comprehensive income.

Restricted Stock Awards

The RSAs issued under the Plans to the Company’s employees generally vest in four equal annual installments beginning one year after the date of grant. The Company recognized compensation expense for RSAs granted of $0.2 million and $0.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.3 million and $0.1 million for the six months ended June 30, 2022 and 2021, respectively, which are included in salaries and benefits in the condensed consolidated statements of income and comprehensive income. As of June 30, 2022, there was $2.2 million of unrecognized compensation expense related to RSAs, which is expected to be recognized over a weighted-average period of 2.1 years.

A summary of RSA activity during the six months ended June 30, 2022 is presented below:

	Number of RSAs	Weighted-Average Grant Price
Outstanding (nonvested) at December 31, 2021	88,215	$	14.17
Granted	93,400	$	16.06
Vested	(22,053)	$	14.17
Forfeited	—	$	—
Outstanding (nonvested) at June 30, 2022	159,562	$	15.28

Performance Stock Units

PSUs granted to the Company’s employees generally vest subject to attainment of performance criteria during the service period established by the Compensation Committee. Each PSU represents the right to receive one share of common stock, and the actual number of shares issuable upon vesting is determined based upon performance compared to financial performance targets. The PSUs vest based on the achievement of certain revenue or adjusted earnings per share parameters for a period of two years combined with a service period of three years. Compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied. The Company recognized compensation expense for PSUs of $0.5 million and $0.2 million for the three months ended June 30, 2022 and 2021, respectively, and $0.7 million and $0.3 million for the six months ended June 30, 2022 and 2021, respectively, which are included in salaries and benefits in the condensed consolidated statements of income and comprehensive income. As of June 30, 2022,

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there was $3.8 million of unrecognized compensation expense related to PSUs, which is expected to be recognized over a weighted-average period of 2.2 years.

A summary of PSU activity during the six months ended June 30, 2022 is presented below:

	Number of PSUs	Weighted-Average Remaining Contractual Term (Years)	Weighted-Average Grant Price
Outstanding (nonvested) at December 31, 2021	171,500	9.17	$	14.17
Granted