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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, 2021
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)
Delaware47-4219082
(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 classTrading 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 filerAccelerated 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 July 30, 2021, there were 38,593,052 shares of the registrant’s common stock, $0.0001 par value per share, outstanding. The registrant has no other class of common stock outstanding.

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INTERNATIONAL MONEY EXPRESS, INC.
INDEX TO FINANCIAL STATEMENTS
Page
PART 1 - FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II - OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to certain events that could have an effect on our future performance, including but without limitation, statements regarding our plans, objectives, financial performance, business strategies, expectations for our business and the business of the Company.
These statements relate to expectations concerning matters that are not historical fact and may include the words or phrases such as “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” and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Except for historical information, matters discussed in this Form 10-Q are forward-looking statements. These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, as well as macroeconomic conditions, and are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those currently anticipated. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Accordingly, there is no assurance that our expectations will, in fact, occur or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements. Some 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:
the COVID-19 pandemic, responses thereto and the economic and market effects thereof, including unemployment levels, inflation and increased capital markets volatility;
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;
cyber-attacks or disruptions to our information technology environment, computer network systems and data centers;
our ability to maintain agent relationships on terms consistent with those currently in place;
credit risks from our agents and the financial institutions with which we do business;
bank failures, sustained financial illiquidity, or illiquidity at our clearing, cash management or custodial financial institutions;
new technology or competitors that disrupt the current ecosystem by introducing digital platforms;
our ability to satisfy our debt obligations and remain in compliance with our credit facility requirements;
interest rate risk from elimination of the London Inter-bank Offered Rate (“LIBOR”) as a benchmark interest rate;
our success in developing and introducing new products, services and infrastructure;
customer confidence in our brand and in consumer money transfers generally;
our ability to maintain compliance with regulatory requirements of the jurisdictions in which we operate or plan to operate;
international political factors or implementation of tariffs, border taxes or restrictions on remittances or transfers of money out of the United States and Canada;
changes in U.S. tax laws;
political instability, currency restrictions and volatility in countries in which we operate or plan to operate;
consumer fraud and other risks relating to customers’ authentication;
weakness in U.S. or international economic conditions;
changes in immigration laws and their enforcement;
our ability to protect our brand and intellectual property rights;
our ability to 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, 2020.
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.
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PART 1 – FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
June 30, 2021December 31, 2020
ASSETS(unaudited)
Current assets:
Cash$139,716 $74,907 
Accounts receivable, net of allowance of $1,486 and $1,503, respectively
70,540 55,017 
Prepaid wires, net14,457 53,281 
Prepaid expenses and other current assets4,985 3,521 
Total current assets229,698 186,726 
Property and equipment, net13,937 13,021 
Goodwill36,260 36,260 
Intangible assets, net17,850 20,430 
Other assets4,678 3,036 
Total assets$302,423 $259,473 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt, net$3,882 $7,044 
Accounts payable14,009 12,771 
Wire transfers and money orders payable, net54,982 41,746 
Accrued and other liabilities25,822 22,380 
Total current liabilities98,695 83,941 
Long-term liabilities:
Debt, net81,152 80,579 
Deferred tax liability, net1,400 692 
Total long-term liabilities82,552 81,271 
Commitments and contingencies, see Note 13
Stockholders’ equity:
Common stock $0.0001 par value; 230,000,000 shares authorized, 38,585,724 and 38,217,125 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.
4 4 
Additional paid-in capital64,009 59,310 
Retained earnings57,164 34,960 
Accumulated other comprehensive loss(1)(13)
Total stockholders’ equity121,176 94,261 
Total liabilities and stockholders’ equity$302,423 $259,473 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(in thousands, except for share data, unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Revenues:
Wire transfer and money order fees, net$99,306 $72,793 $180,218 $139,888 
Foreign exchange gain, net16,655 11,660 29,703 21,214 
Other income786 609 1,402 1,211 
Total revenues116,747 85,062 211,323 162,313 
Operating expenses:
Service charges from agents and banks77,864 56,271 141,237 108,498 
Salaries and benefits10,175 7,069 20,050 14,428 
Other selling, general and administrative expenses
7,079 5,155 12,582 10,492 
Depreciation and amortization2,345 2,691 4,679 5,381 
Total operating expenses97,463 71,186 178,548 138,799 
Operating income19,284 13,876 32,775 23,514 
Interest expense1,254 1,633 2,594 3,503 
Income before income taxes18,030 12,243 30,181 20,011 
Income tax provision4,803 3,265 7,977 5,345 
Net income13,227 8,978 22,204 14,666 
Other comprehensive income (loss)16 3 12 (141)
Comprehensive income$13,243 $8,981 $22,216 $14,525 
Earnings per common share:
Basic$0.34 $0.24 $0.58 $0.39 
Diluted$0.34 $0.24 $0.57 $0.39 
Weighted-average common shares outstanding:
Basic38,433,748 38,035,279 38,336,977 38,035,146 
Diluted39,027,414 38,047,792 38,937,699 38,043,233 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Index
INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except for share data, unaudited)
Three Months Ended June 30, 2021
Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesAmount
Balance, March 31, 202138,362,788$4 $61,640 $43,937 $(17)$105,564 
Net income— — 13,227 — 13,227 
Issuance of common stock:
Exercise of stock options100,275— 995 — — 995 
Restricted stock units33,381— — — — — 
Restricted stock awards88,215— — — — — 
Fully vested shares1,065— — — — — 
Share-based compensation— 1,374 — — 1,374 
Adjustment from foreign currency translation, net
— — — 16 16 
Balance, June 30, 202138,585,724$4 $64,009 $57,164 $(1)$121,176 

Three Months Ended June 30, 2020
Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated Other
Comprehensive Loss
Total
Stockholders’
Equity
SharesAmount
Balance, March 31, 202038,035,279$4 $55,412 $6,864 $(51)$62,229 
Net income— — 8,978 — 8,978 
Share-based compensation— 686 — — 686 
Adjustment from foreign currency translation, net
— — — 3 3 
Balance, June 30, 202038,035,279$4 $56,098 $15,842 $(48)$71,896 

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

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, 2021
Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 202038,217,125$4 $59,310 $34,960 $(13)$94,261 
Net income— — 22,204 — 22,204 
Issuance of common stock:
Exercise of stock options244,907— 2,429 — — 2,429 
Restricted stock units33,381— — — — — 
Restricted stock awards88,215— — — — — 
Fully vested shares2,096— — — — — 
Share-based compensation— 2,270 — — 2,270 
Adjustment from foreign currency translation, net
— — — 12 12 
Balance, June 30, 202138,585,724$4 $64,009 $57,164 $(1)$121,176 

Six Months Ended June 30, 2020
Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated Other
Comprehensive
(Loss) Income
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 201938,034,389$4 $54,694 $1,176 $93 $55,967 
Net income— — 14,666 — 14,666 
Issuance of common stock:
Exercise of stock options890— (4)— — (4)
Share-based compensation— 1,408 — — 1,408 
Adjustment from foreign currency translation, net
— — — (141)(141)
Balance, June 30, 202038,035,279$4 $56,098 $15,842 $(48)$71,896 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Index

INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Six Months Ended June 30,
20212020
Cash flows from operating activities:
Net income$22,204 $14,666 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization4,679 5,381 
Share-based compensation2,270 1,408 
Provision for credit losses667 1,101 
Debt origination costs amortization385 376 
Deferred income tax provision, net708 658 
Loss on disposal of property and equipment169 131 
Total adjustments8,878 9,055 
Changes in operating assets and liabilities:
Accounts receivable, net(16,174)(21,485)
Prepaid wires, net38,825 11,635 
Prepaid expenses and other assets(1,305)1,008 
Wire transfers and money orders payable, net13,228 8,648 
Accounts payable and accrued and other liabilities4,634 (2,054)
Net cash provided by operating activities70,290 21,473 
Cash flows from investing activities:
Purchases of property and equipment(3,181)(1,591)
Net cash used in investing activities(3,181)(1,591)
Cash flows from financing activities:
Repayments of term loan facility(42,041)(3,830)
Borrowings under term loan facility40,158  
Debt origination costs(2,894) 
Proceeds from exercise of stock options2,429  
Net cash used in financing activities(2,348)(3,830)
Effect of exchange rate changes on cash48 (184)
Net increase in cash64,809 15,868 
Cash, beginning of period74,907 86,117 
Cash, end of period$139,716 $101,985 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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INTERNATIONAL MONEY EXPRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands, unaudited)
Six Months Ended June 30,
20212020
Supplemental disclosure of cash flow information:
Cash paid for interest$2,169 $3,133 
Cash paid for income taxes$8,825 $2,403 
Supplemental disclosure of non-cash financing activity:
Issuance of common stock for cashless exercise of stock options$ $4 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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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 34 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 a new Delta variant of COVID-19, which appears to be causing an increase in COVID-19 cases. Public health officials and medical professionals have warned that a resurgence of COVID-19 cases may continue to spike, particularly if vaccination rates do not quickly increase or if additional, potent disease variants emerge. It is unclear how long the resurgence will last, how severe it will be, and what safety measures governments will impose in response to it.

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 customers, inflation, interest rate levels and foreign exchange volatility, all of which remain uncertain and cannot be predicted at this time. 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 Intermex Holdings, Inc., its wholly-owned indirect subsidiary, Intermex Wire Transfer, LLC (“LLC”), Intermex Wire Transfers de Guatemala, S.A. (“Intermex Guatemala”) - 100% owned by LLC, Intermex Wire Transfer de Mexico, S.A. and Intermex Transfers de Mexico, S.A. (“Intermex Mexico”) - 98% owned by LLC, Intermex Wire Transfer Corp. - 100% owned by LLC, Intermex Wire Transfer II, LLC - 100% owned by LLC and Canada International Transfers Corp. - 100% owned by LLC.

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, 2020.

Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issued amended guidance, Intangibles – Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment. The amended standard simplifies how an entity tests goodwill by eliminating Step 2 of the goodwill impairment test related to measuring an impairment charge. Instead, impairment will be recorded for the amount that the carrying amount of a reporting unit exceeds its fair value. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

The FASB issued amended guidance, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amended standard requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement if those costs would be capitalized by the customers in a software licensing arrangement. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.
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The FASB issued guidance, Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

The FASB issued guidance, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. The guidance requires that a lessee recognizes a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. This guidance is required to be adopted by the Company on January 1, 2022 using the modified retrospective approach. The Company is currently evaluating the impact this guidance will have on the condensed consolidated financial statements.

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 January 1, 2023. The Company is currently evaluating the impact this guidance will have on the condensed consolidated financial statements.

The FASB issued guidance, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This accounting standards update provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This new guidance may be adopted by the Company no later than December 1, 2022, with early adoption permitted. The potential adoption of this guidance is not expected to have a material impact 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, 2021 and 2020, as follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Wire transfer and money order fees$99,671 $72,965 $180,887 $140,281 
Discounts and promotions(365)(172)(669)(393)
Wire transfer and money order fees, net99,306 72,793 180,218 139,888 
Foreign exchange gain, net16,655 11,660 29,703 21,214 
Other income786 609 1,402 1,211 
Total revenues$116,747 $85,062 $211,323 $162,313 

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 7) 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 customer’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, 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 transactions 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.
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NOTE 3 – ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE, NET OF ALLOWANCE
Accounts Receivable

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

June 30, 2021December 31, 2020
Accounts receivable$72,026 $56,520 
Allowance for credit losses(1,486)(1,503)
Accounts receivable, net$70,540 $55,017 

Notes Receivable

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

June 30, 2021December 31, 2020
Notes receivable, current$630 $710 
Allowance for credit losses(215)(244)
Net current$415 $466 
Notes receivable, long-term$921 $816 
Allowance for credit losses(327)(295)
Net long-term$594 $521 

The net current portion of notes 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. The notes have interest rates ranging from 0% to 16% per annum. At June 30, 2021 and December 31, 2020, there were $1.6 million and $1.5 million, respectively, of notes collateralized by personal guarantees from the sending agents and assets from their businesses in case of a default by the agent.

The maturities of notes receivable at June 30, 2021 are as follows (in thousands):
Unpaid Principal
Balance
Under 1 year$630 
Between 1 and 2 years692 
Between 2 and 3 years229 
Total$1,551 

Allowance for Credit Losses

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

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Beginning balance$2,058 $1,477 $2,042 $1,236 
Provision504 364 667 1,101 
Charge-offs(623)(589)(888)(1,186)
Recoveries89 98 207 199 
Ending Balance$2,028 $1,350 $2,028 $1,350 


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

June 30, 2021December 31, 2020
Accounts receivable$1,486 $1,503 
Notes receivable542 539 
Allowance for credit losses$2,028 $2,042 

NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following (in thousands):

June 30, 2021December 31, 2020
Prepaid insurance$297 $465 
Prepaid fees and services1,230 1,452 
Notes receivable, net of allowance415 466 
Assets pending settlement229 218 
Prepaid income taxes1,861 103 
Prepaid expenses and current assets - other953 817 
$4,985 $3,521 

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS
Intangible assets on the condensed consolidated balance sheets of the Company consist of goodwill, 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 primarily 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, 2021.

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

GoodwillIntangibles
Balance at December 31, 2020$36,260 $20,430 
Amortization expense (2,580)
Balance at June 30, 2021$36,260 $17,850 

Amortization expense related to intangible assets for the next five years and thereafter is as follows (in thousands):

2021$2,581 
20223,997 
20232,989 
20242,270 
20251,717 
Thereafter4,296 
$17,850 

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NOTE 6 – WIRE TRANSFERS AND MONEY ORDERS PAYABLE, NET
Wire transfers and money orders payable, net consisted of the following (in thousands):

June 30, 2021December 31, 2020
Wire transfers payable, net$22,436 $11,806 
Customer voided wires payable15,180 13,374 
Money orders payable17,366 16,566 
$54,982 $41,746 

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.

NOTE 7 – ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities consisted of the following (in thousands):

June 30, 2021December 31, 2020
Commissions payable to sending agents$14,566 $12,500 
Accrued salaries and benefits3,248 2,957 
Accrued bank charges1,602 1,170 
Accrued legal fees60 75 
Accrued other professional fees1,011 826 
Accrued taxes1,486 1,276 
Deferred revenue loyalty program2,944 2,750 
Other905 826 
$25,822 $22,380 

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

Balance, December 31, 2020$2,750 
Revenue deferred during the period1,036 
Revenue recognized during the period(842)
Balance, June 30, 2021$2,944 

NOTE 8 – DEBT
Debt consisted of the following (in thousands):

June 30, 2021December 31, 2020
Term loan facility$87,500 $89,383 
87,500 89,383 
Less: Current portion of long-term debt (1)
(3,882)(7,044)
Less: Debt origination costs(2,466)(1,760)
$81,152 $80,579 
(1)Current portion of long-term debt is net of debt origination costs of approximately $0.5 million and $0.6 million at June 30, 2021 and December 31, 2020, respectively.

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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 a financing agreement with a group of banking institutions, dated November 7, 2018 and further amended on December 7, 2018 (the “Original Credit Agreement”). The Original Credit Agreement provided for a $35 million revolving credit facility, a $90 million term loan facility and an up to $30 million incremental facility of which $12 million was utilized in 2019 for the term loan facility and $10 million was utilized in May of 2021 for the revolving credit facility (see below). The Original Credit Agreement also provided for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The maturity date of the Original Credit Agreement was November 7, 2023.

Effective as of May 12, 2021, the Company amended the Original Credit Agreement by entering into Increase Joinder No. 2 (the “Joinder No. 2”) to the Original Credit Agreement, which was accounted for as a debt modification, under which the revolving line of credit commitment under the Original Credit Agreement was increased by $10 million to an aggregate of $45 million. The Joinder No. 2 did not have any impact to any of the terms of the term loan facility under the Original Credit Agreement. The Company incurred debt origination costs of $76.8 thousand which were capitalized and will be amortized over the remaining life of the revolving line of credit facility, as described below, using the straight-line method, as it is not significantly different than the effective interest method.

On June 24, 2021, 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 Original Credit Agreement. The A&R Credit Agreement provides for a $150 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 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 $87.5 million principal amount of the existing term loan facility under the Original 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 Original 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 three months ended June 30, 2021.

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, 2021 for the term loan facility and revolving credit facility, which substantially related to the Original Credit Agreement, were 5.19% and 0.98%, 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
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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 9 – 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 intangibles assets. The determination of our intangible fair values includes several assumptions and inputs (Level 3) that are subject to various risks and uncertainties. Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties. 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.

NOTE 10 – SHARE-BASED COMPENSATION
International Money Express, Inc. Omnibus Equity Compensation Plans

On June 26, 2020, at the 2020 Annual Meeting of Stockholders, the Company’s stockholders approved the International Money Express, Inc. 2020 Omnibus Equity Compensation Plan (the “2020 Plan”), which 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 3.4 million shares of the Company’s common stock available for issuance under the 2020 Plan, including 0.4 million shares that were available for grant under the International Money Express, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan” and together with the 2020 Plan, the “Plans”). As of June 30, 2021, 2.6 million shares remained available for future awards under the 2020 Plan. The 2018 Plan was terminated effective June 26, 2020.

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 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 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 $0.6 million for both the three months ended June 30, 2021 and 2020, and $1.3 million and $1.2 million for the six months ended June 30, 2021 and 2020, respectively, which are included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. As of June 30, 2021, unrecognized compensation expense related to stock options of approximately $4.5 million is expected to be recognized over a weighted-average period of 1.6 years.

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A summary of the stock option activity under the Plans during the six months ended June 30, 2021 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, 20202,714,902 $10.97 8.19$4.03 
Granted $ $ 
Exercised(244,907)$9.92 $3.71 
Forfeited(50,750)$10.34 $4.45 
Outstanding at June 30, 20212,419,245 $11.09 7.56$4.11 
Exercisable at June 30, 2021940,294 $10.30 7.24$3.60 

Restricted Stock Units and Share Awards

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 $0.3 million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively, and $0.5 million and $0.2 million for the six months ended June 30, 2021 and 2020, respectively, which are included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. As of June 30, 2021, unrecognized compensation expense related to RSUs of approximately $3.5 million is expected to be recognized over a weighted-average period of 2.1 years.

A summary of the RSU activity during the six months ended June 30, 2021 is presented below:

Number of RSUsWeighted-Average
Grant Price
Nonvested at December 31, 202040,881 $13.38 
Granted269,631 $14.94 
Vested(33,381)$13.13 
Forfeited(17,408)$14.36 
Nonvested at June 30, 2021259,723 $14.97 

Under the 2020 Plan, effective October 1, 2020, 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, 2021, 1,065 and 2,096 fully vested shares 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 operations 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 $78 thousand and $101 thousand for the three and six months ended June 30, 2021, respectively, which are included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. No compensation expense was recognized for the three and six months ended June 30, 2020. As of June 30, 2021, there was $1.1 million of unrecognized compensation expense related to RSAs, which is expected to be recognized over a weighted-average period of 2.3 years.

A summary of the RSA activity during the six months ended June 30, 2021 is presented below:

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Number of RSAsWeighted-Average
Grant Price
Nonvested at December 31, 2020 $ 
Granted88,215 $14.17 
Vested $ 
Forfeited $ 
Nonvested at June 30, 202188,215 $14.17 

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 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 $0.2 million and $0.3 million for the three and six months ended June 30, 2021, which are included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. There was no compensation expense recognized for the three and six months ended June 30, 2020. As of June 30, 2021, there was $2.2 million of unrecognized compensation expense related to PSUs, which is expected to be recognized over a weighted-average period of 2.5 years.

A summary of the PSU activity during the six months ended June 30, 2021 is presented below:

Number of PSUsWeighted-Average
Remaining Contractual
Term (Years)
Weighted-Average
Grant Price
Nonvested at December 31, 2020 — $ 
Granted171,500 $14.17 
Vested $ 
Forfeited $ 
Nonvested at June 30, 2021171,500 9.68$14.17 

NOTE 11 – EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income for the year by the weighted average number of common shares outstanding for the period. In computing dilutive earnings per share, basic earnings per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards, including common stock options, RSUs, RSAs and PSUs.

Below are basic and diluted earnings per share for the periods indicated (in thousands, except for share data):
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Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net income for basic and diluted earnings per common share$13,227 $8,978 $22,204 $14,666 
Shares:
Weighted-average common shares outstanding – basic38,433,748 38,035,279 38,336,977 38,035,146 
Effect of dilutive securities:
RSUs41,323 12,513 33,783 7,995 
Stock options532,231  553,001 92 
RSAs6,234  4,404  
PSUs13,878  9,534  
Weighted-average common shares outstanding – diluted39,027,414 38,047,792 38,937,699 38,043,233 
Earnings per common share – basic$0.34 $0.24 $0.58 $0.39 
Earnings per common share – diluted$0.34 $0.24 $0.57 $0.39 

As of June 30, 2021, there were 0.6 million options and 53,864 RSUs excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.

As of June 30, 2020, there were 3.1 million options and 22,500 RSUs excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.

NOTE 12 – INCOME TAXES
A reconciliation between the income tax provision at the U.S. statutory tax rate and the Company’s income tax provision on the condensed consolidated statements of operations and comprehensive income is below (in thousands, except for tax rates):

Three Months Ended
June 30,
Six Months Ended June 30,
2021202020212020
Income before income taxes$18,030 $12,243 $30,181 $20,011 
U.S statutory tax rate21 %21 %21 %21 %
Income tax expense at statutory rate3,786 2,571 6,338 4,202 
State tax expense, net of federal995 659 1,673 1,058 
Foreign tax rates different from U.S. statutory rate
23 26 40 59 
Non-deductible expenses74 12 137 22 
Other(75)(3)(211)4 
Total tax provision$4,803 $3,265 $7,977 $5,345 

Effective income tax rates for interim periods are based upon our current estimated annual rate. The Company’s effective income tax rate varies based upon an estimate of taxable earnings as well as on the mix of taxable earnings in the various states and countries in which we operate. Changes in the annual allocation and apportionment of the Company’s activity among these jurisdictions results in changes to the effective rate utilized to measure the Company’s deferred tax assets and liabilities.

As presented in the income tax reconciliation above, the tax provision recognized on the condensed consolidated statements of operations and comprehensive income was affected by state taxes, non-deductible expenses, share-based compensation expense and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a
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nationwide effort to curtail the effects of COVID-19. The CARES Act provides various tax law changes in response to the COVID-19 pandemic, including increasing the ability to deduct interest expense, providing for deferral on tax deposits, and amending certain provisions of the previously enacted Tax Cuts and Jobs Act. After considering the provisions of the CARES Act, the Company determined that the CARES Act did not have a material effect on its annual effective tax rate and the income tax provision for the three and six months ended on June 30, 2021 or 2020.

NOTE 13 – COMMITMENTS AND CONTINGENCIES
Leases

The Company is a party to leases for office space, warehouses and Company-operated store locations. Rent expense under all operating leases, included in other selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income, amounted to approximately $0.6 million and $0.5 million for the three months ended June 30, 2021 and 2020, respectively, and $1.2 million and $1.0 million for the six months ended June 30, 2021 and 2020, respectively,

At June 30, 2021, future minimum rental payments required under operating leases for the remainder of 2021 and thereafter are as follows (in thousands):

2021$816 
20221,322 
2023970 
2024815 
2025696 
Thereafter