International Money Express Inc

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 –BASIS OF PRESENTATION AND BUSINESS

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.”), Canada, Spain, Italy, the United Kingdom and Germany primarily to Mexico, Guatemala and other countries in Latin America, Europe, Africa and Asia through a network of authorized agents located in various unaffiliated retail establishments and 117 Company-operated stores throughout those jurisdictions.

The accompanying consolidated financial statements of the Company include the accounts of International Money Express, Inc. and other entities in which the Company has a controlling financial interest. All significant inter-company balances and transactions have been eliminated in consolidation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.

Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding for each period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares and common share equivalents outstanding for each period. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and performance stock units (“PSUs”) have vested, using the treasury stock method. Potential common shares are excluded from the computation of diluted earnings per common share when the effect would be anti-dilutive. Treasury stock shares that have been repurchased are not considered outstanding and therefore are excluded from the weighted average number of common shares outstanding calculation.

Cash and Cash equivalents

Cash is comprised of deposits in U.S. and foreign banks and cash in hand held at our Company-operated stores. The Company recognizes interest income from its cash deposits on an accrual basis. The Company considers cash equivalents to be short term, highly liquid investments with original maturities of three months or less. Cash equivalents include cash on deposit in overnight deposit accounts.

Concentrations

The Company maintains certain of its cash balances in various U.S. banks, which at times, may exceed federally insured limits. The Company hasnot incurred any losses on these accounts. In addition, the Company maintains various bank accounts in Mexico, Guatemala, Canada, the Dominican Republic, Spain, Italy, Germany and the United Kingdom, which may not be fully insured. During the year ended December 31, 2024, the Company hasnot incurred any losses on these uninsured foreign bank accounts; however, the Company maintains a $3.8 million reserve on the balance of deposits held as a result of the closure of a financial institution in Mexico in 2021 (see Note 6).

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Management believes it is not exposed to any significant credit risk regarding these accounts as it performs periodic reviews of the creditworthiness of the financial institutions the Company uses. Cash and cash equivalents balances were as follows (in thousands):

A substantial portion of our paying agents are concentrated in a few large banks and financial institutions and large retail chains. Our largest paying agent by volume accounted for approximately 25% of the Company’s total remittance volume for both of the years ended December 31, 2024 and 2023, respectively, primarily from the U.S. to Mexico.

Revenue Recognition

Revenues for wire transfer and money order fees are recognized at the time the transaction is processed. The Company acts as the principal for these transactions as the Company controls the service at all times prior to transferring the funds to the beneficiary, is primarily responsible for fulfilling the customer contracts, has the risk of loss and has the ability to establish transaction prices. Therefore, these fees are recognized on a gross basis equal to the full amount of the fee charged to the customer. These fees also vary by transaction primarily depending upon, the principal amount sent, the send and receive locations, as well as the respective currencies of the send and receive locations. Foreign exchange gain, net, which represents the difference between the exchange rate set by the Company and the rate realized, is initially recognized when the customer's wire transfer transaction is processed and the purchase of foreign currency is completed. Other income primarily represents revenues for technology services provided to the independent network of agents who utilize the Company’s technology in processing transactions paid by credit or debit card, check cashing services and maintenance fees, for which revenue is derived by a fee per transaction that is recognized when the transactions is processed. In addition, we generate revenue from our wire as a service relationships with digital partners where we receive a fee for facilitating money transfers processed through our proprietary software systems, using our money transmitter licenses and payer network relationships, which are recognized at the time the transaction is processed. The Company acts as the agent for these transactions.

Refer to Note 4 for the discussion related to revenue recognition and additional information on the Company’s revenue.

Business Combinations

The Company accounts for its business combinations using the acquisition method, which requires that intangible assets be recognized apart from goodwill if they are contractual in nature or separately identifiable. Acquisitions are measured based on the fair value of consideration transferred and, if the consideration transferred is not cash, measurement is based on the fair value of the consideration transferred or the fair value of the assets acquired, whichever is more reliably measurable. The excess of the consideration transferred over the fair value of identifiable assets acquired and liabilities assumed is allocated to goodwill.

The valuation and allocation processes rely on significant assumptions made by management. In certain situations, the allocations of excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when the Company receives updated information, including valuations and other analyses, which are completed within one year of the acquisition. Revisions to the preliminary fair values, which may be significant, are recorded through goodwill until pending information is finalized, not to exceed one year from the acquisition date. Any revisions to the fair values after they have been finalized will be accounted for as a gain or loss in the consolidated statement of income and comprehensive income.

Consideration transferred may consist of potential future payments that are contingent upon the acquired business achieving certain levels of earnings in the future, also referred to as “contingent consideration” or “earn-out.” Earn-out liabilities are measured at their estimated fair value as of the date of acquisition. Changes in the fair value of earn-out liabilities are recorded as a component of operating income in the consolidated statement of income and comprehensive income. Earn-out liabilities are included within accrued current and other liabilities within the consolidated balance sheet. Earn-out payments, to the extent they relate to the estimated earn-out liability as of the date of acquisition, are classified within financing activities in the consolidated statement of cash flows. Earn-out payments in excess of the acquisition date earn-out liability are classified within operating activities.

Direct costs incurred in connection with business combination transactions are expensed as incurred and are included as Transaction Costs in the consolidated statements of income and comprehensive income.

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Accounts Receivable and Allowance for Credit Losses

Accounts receivable and agent advances receivable are recorded at their net realizable value, which is net of an allowance for credit losses. Accounts receivable are recorded upon initiation of the wire transfer and are typically due to the Company within five days. The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its sending agents or digital partners to make required payments.

The Company calculates its allowance for credit losses using expected credit loss rates on financial instruments based on the total estimated amount to be collected over the lifetime of the instruments. Expected credit losses for uncollectible receivable balances consider both current conditions and reasonable and supportable forecasts of future conditions. Current conditions include pre-defined aging criteria, as well as specified events that indicate the balance due is not collectible. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available macroeconomic data and whether future credit losses are expected to differ from historical losses. Accounts receivable that are more than 90 days past due are charged off against the allowance for credit losses.

Receivable balances from sending agents and digital partners are usually due to the Company within five days from the invoice date. Any balances not collected after that time are considered past due.

The Company is not party to any off-balance sheet arrangements that would require an allowance for credit losses.

Prepaid Wires, Net

Prepaid wires, net represents funds provided to certain paying agents in advance of a transaction, net of wires pending to be picked up by the beneficiary of the money transfer.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist primarily of right-of-use assets (see Note 8), fixed assets in process (see Note 6), prepaid expenses for services, tenant allowance, agent advances receivable (see Note 6) and deferred financing costs. Fees earned on agent advances receivable are recognized on a cash basis at the advance origination date.

Wire Transfers Payable, Net

Wire transfers payable, net represent wires pending to be picked up by the beneficiary of the money transfer net of funds provided to certain paying agents in advance of a transaction.

Leases

The Company is a party to leases for office space, warehouses and Company-operated store locations. The Company determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Company is the lessee, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. At commencement date, lease right-of-use (“ROUs”) assets consist of the amount of the initial measurement of the lease liability, any lease payments made to the lessor at or before the commencement date, minus any lease incentive received, and any initial direct costs. If a lease does not provide a discount rate and the rate cannot be readily determined, an incremental borrowing rate is used to determine the present value of future lease payments. Lease and variable non-lease components within the Company’s lease agreements are not accounted for separately. Certain leases contain escalation provisions and/or renewal options, which give the Company the option to extend the lease. However, due to uncertainty surrounding the likelihood of lease renewal these options are not reflected in the calculation of the ROU asset and operating lease liability for a significant portion of our leases.

Property and Equipment

Property and equipment, including leasehold improvements, are stated at cost, or the allocated fair value in purchase accounting, less accumulated depreciation and amortization. The costs of additions and betterments that substantially extend the useful life of an asset are capitalized and the expenditures for ordinary repairs and maintenance are expensed in the period incurred as part of other selling, general and administrative expenses in the consolidated statements of income and comprehensive income. Land is not depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the lease term or the estimated useful life of the improvement, whichever is shorter. At the time depreciable assets are retired or otherwise disposed, the cost and the related accumulated depreciation of such assets are eliminated from the accounts and any gain or loss is recognized in the current period. The Company capitalizes costs incurred for the development of internal use computer software, which are depreciated over five years using the straight-line method.

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Goodwill and Intangible Assets

Goodwill and intangible assets result primarily from business acquisition transactions. Intangible assets include primarily agent relationships, trade names, developed technology and other intangibles, all with finite lives. Other intangibles primarily relate to the acquisition of certain agent locations and non-competition agreements. Upon the acquisition, the purchase price is first allocated to identifiable assets and liabilities, including trade name and other intangibles, with any remaining purchase price recorded as goodwill.

Goodwill is not amortized; however, it is assessed for impairment at least annually, at the beginning of the fourth quarter, or more frequently if triggering events occur. For purposes of the annual assessment, management initially performs a qualitative assessment, which includes consideration of the economic, industry and market conditions in addition to our overall financial performance and the performance of these assets. If our qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, we perform a quantitative analysis. In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis. A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on our long-term projections. Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans. If the fair value of the reporting unit exceeds its carrying amount, there is no impairment. If not, we recognize an impairment equal to the difference between the carrying amount of the reporting unit and its fair value, not to exceed the carrying amount of goodwill.

The Company’s agent relationships, trade names and developed technology are amortized utilizing an accelerated method over their estimated useful lives of up to 15 years. Other intangible assets are amortized on a straight-line basis over a useful life of up to 10 years. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described below in “Impairment of Long-Lived Assets.”

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including amortizable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted future net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management’s estimates, depending upon the nature of the assets.

Debt Origination Costs

The Company incurred debt origination costs related to the Second A&R Credit Agreement (as defined herein), consisting of a revolving credit facility, and amortizes these costs over the life of the related debt using the straight-line method. The unamortized portion of debt origination costs related to deferred up-front commitment fees paid directly to the lender related to the revolving credit facility are recorded within other assets in the consolidated balance sheets. Amortization of debt origination costs is included as a component of interest expense in the consolidated statements of income and comprehensive income.

Advertising Costs

Advertising costs are included in other selling, general and administrative expenses in the consolidated statements of income and comprehensive income and are expensed as incurred. The Company incurred advertising costs of approximately $1.2 million, $0.3 million and $1.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Income Taxes

The Company is subject to U.S. federal and various state income and other taxes and our foreign subsidiaries are subject to taxation by local tax authorities. The Company accounts for income taxes in accordance with GAAP which requires, among other things, recognition of future tax benefits measured at enacted rates attributable to deductible temporary differences between financial statement and income tax bases of assets and liabilities and to tax net operating loss carryforwards to the extent that realization of said benefits is more likely than not. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount which we believe we are more likely than not to be able to utilize.

The Company accounts for tax contingencies by assessing all material positions, including all significant uncertain positions, for all tax years that are open to assessment or challenge under tax statutes. Those positions that have only timing consequences are separately analyzed based on the recognition and measurement model provided in the tax guidance.

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As required by the uncertain tax position guidance, the Company recognizes the financial statement benefit of a position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company applies the uncertain tax position guidance to all tax positions for which the statute of limitations remains open. The Company’s policy is to classify interest accrued as interest expense and penalties as other selling, general and administrative expenses.

Foreign Currency Translation and Transactions

The financial statements and transactions of the Company’s foreign operations are maintained in their functional currency, which is other than the U.S. dollar. Assets and liabilities are translated at current exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rate for each period. Translation adjustments, which result from the process of translating the financial statements of the Company’s foreign operations into U.S. dollars, are recorded as a component of accumulated other comprehensive income (loss).

Gains or losses from foreign currency transactions amounted to approximately a gain of $0.1 million, a gain of $0.2 million and a loss of $15.5 thousand for the years ended December 31, 2024, 2023 and 2022, respectively, and are included in other selling, general and administrative expenses in the consolidated statements of income and comprehensive income.

We manage foreign currency risk through the structure of the business and an active risk management process. We currently settle with our payers in Latin America primarily by entering into foreign exchange tom and spot transactions with local and foreign currency providers (“counterparties”). There are no collateral posting requirements for these transactions.

The foreign exchange tom and spot transactions are derivatives that are carried at fair value in Prepaid expenses and other current assets or Accrued and other liabilities on the Consolidated Balance Sheets. The foreign currency exposure on our foreign exchange tom and spot transactions is limited by the fact that all transactions are settled withintwo business days from trade date. Foreign currency fluctuations, however, may negatively affect our average exchange gain per transaction. Changes in fair value are recognized in Foreign exchange gain, net on the Consolidated Statements of Income and Comprehensive Income. We do not elect hedge accounting, but rather use these derivatives for economic hedging purposes. The Company had open tom and spot foreign exchange contracts for Mexico and Guatemala with a notional amount of approximately $12.7 million and $56.9 million at December 31, 2024 and 2023, respectively. Unrealized gain, net on these open contracts werenot material at December 31, 2024 and 2023.

In addition, included in wire transfers and money orders payable, net in our consolidated balance sheets as of December 31, 2024 and 2023, there are $23.0 million and $40.7 million, respectively, of wire transfers payable denominated in foreign currencies, primarily in Mexican pesos and Guatemalan quetzales.

Also, included in prepaid wires, net in our consolidated balance sheets as of December 31, 2024 and 2023, there are $29.8 million and $17.8 million, respectively, of prepaid wires denominated in foreign currencies, primarily in Mexican pesos and Guatemalan quetzales.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and the net foreign currency translation adjustment and is presented in the consolidated statements of income and comprehensive income.

Share-Based Compensation

The Company accounts for its share-based compensation expense related to equity awards granted to employees, independent directors and service providers based on estimated fair values on the date of grant. We have elected to account for forfeitures as they occur. The Company may use either authorized and unissued shares or treasury shares to meet share issuance requirements. See Note 14 for further discussion related to the Company’s share-based compensation plans.

The Company’s business is organized aroundone reportable segment that provides money transmittal services between the U.S., Canada and certain countries in Europe to Mexico, Guatemala and other countries in Latin America, Europe, Africa and Asia through a network of authorized agents located in various unaffiliated retail establishments and 117 Company-operated stores throughout the U.S., Canada, Spain, Italy, Germany and the United Kingdom, as well as digitally through the Internet via our websites and mobile device applications. This is based on the objectives of the business and how our chief operating decision maker, the CEO and President, monitors operating performance and allocates resources.

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Reclassifications

Certain prior year amounts have been reclassified to conform with current year presentation. These changes did not have any effect on net income, stockholders’ equity or cash flows.

Accounting Pronouncements

The FASB issued guidance, ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM). The guidance does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard was effective for the Company for the fiscal year ended December 31, 2024. The amendments in this ASU were applied retrospectively to all prior periods presented in the consolidated financial statements. As a result of the adoption of this guidance, the Company was required to disclose its significant single reportable segment expenses and the amount and composition of other single reportable segment items, which are discussed in more detail in Note 18.

The FASB issued guidance, ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. This guidance requires a public entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For the Company, the new standard is effective for annual periods beginning after December 15, 2024. An entity may apply the amendments in this guidance prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the previously required disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. The adoption of this guidance is not expected to have a material effect on the consolidated financial statements.

The FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures about specified categories of expenses (including purchases of inventory, employee compensation, intangible asset amortization, and depreciation) included in certain expense captions presented on the face of the statement of income. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim reporting periods within fiscal years beginning one year later. Early adoption is permitted. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements.

NOTE 3 –ACQUISITIONS

On July 2, 2024, the Company completed the acquisition of 100% of the issued and outstanding stock of a money services entity incorporated in the United Kingdom. This acquisition provides the Company the opportunity to enter into markets in which it did not have a presence previously, such as the ability to provide outbound remittance services from the United Kingdom.

The total consideration transferred by the Company in connection with the acquisition was approximately $1.4 million in cash, subject to customary purchase price adjustments. The acquisition was funded with cash on hand.

The following table summarizes the fair values of consideration transferred and identifiable net assets acquired in the acquisition on July 2, 2024, the measurement period adjustments through the period ended December 31, 2024 and the fair values of consideration transferred and identifiable net assets acquired as of December 31, 2024.

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The goodwill balance for this acquisition represents the estimated values of the Company’s assembled workforce and synergies expected to be achieved from the combined operations of the acquired entity and the Company. Goodwill resulting from this acquisition is not deductible for tax purposes.

The acquired entity's results of operations have been included in the Company's results of operations from the date of its acquisition. The Company’s consolidated statement of income and comprehensive income includes $178.2 thousand and $174.9 thousand of revenue and net loss for the year ended December 31, 2024, respectively, from the acquired entity.

Restructuring costs

During the year 2024, the Company executed a restructuring plan primarily related to certain of its foreign operations and La Nacional. These restructuring costs are part of the Company's plan, for which the objectives are to reorganize the workforce, streamline operational processes, integrate technology functionality, as well as to develop efficiencies within the Company. For the year ended December 31, 2024, the Company incurred approximately $3.1 million in expenses for a reduction of workforce in certain locations, closing of certain facilities, discontinuing technology and disposal of obsolete assets. These expenses include approximately $2.3 million in severance payments and related benefits, $0.4 million in software and software development costs write-offs and $0.4 million in legal and professional fees, which are included in restructuring costs in the consolidated statement of income and comprehensive income.

The following table presents the changes in our liability balance related to restructuring costs for the year ended December 31, 2024 (in thousands):

For the year ended December 31, 2023, the Company incurred $1.2 million in expenses related to a restructuring plan for La Nacional. These expenses include approximately $0.9 million in severance payments and related benefits included in salaries and benefits in the consolidated statement of income and comprehensive income, $0.3 million in computer equipment write-offs, $38 thousand for the early

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termination of a lease agreement and $31 thousand in legal fees related to the surrender of money transmitter licenses of La Nacional, which are included in other selling, general and administrative expenses in the consolidated statement of income and comprehensive income.

Transaction Costs

Transaction costs include all internal and external costs directly related to acquisition activities and the Company's evaluation of strategic alternatives, consisting primarily of legal, consulting, accounting and financial advisory fees. Transaction costs for the years ended December 31, 2024, 2023, and 2022 amounted to $1.8 million, $0.4 million and $3.0 million, respectively.

NOTE 4 –REVENUE

The Company recognized in revenues from contracts with customers, sending agents and others for the years ended December 31, 2024, 2023 and 2022, the following (in thousands):

There areno significant initial costs incurred to obtain contracts with customers, although the Company has a loyalty program under which customers earnone 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 90-day period under the revised terms and conditions of the loyalty program, which were effective starting on September 26, 2024. Prior to the modification, points expired if an eligible wire transfer transaction was not initiated 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 11) 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. Effective February 1, 2025, the loyalty program was terminated. Under the termination conditions, customers will be able to redeem their points through July 31, 2025. Any points not redeemed until that date, will expire automatically.

Except for the loyalty program discussed above, our revenues include onlyone 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.

Wire transfers and money order fees include money order fees of $2.2 million, $2.2 million and $1.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

NOTE 5 –ACCOUNTS RECEIVABLE AND AGENT ADVANCES RECEIVABLE, NET OF ALLOWANCE

Accounts Receivable

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

Agent Advances Receivable

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

The net current portion of agent advances receivable is included in prepaid expenses and other current assets (see Note 6), and the net long-term portion is included in other assets in the consolidated balance sheets. At December 31, 2024 and 2023, there were $4.6 million and $4.6 million, respectively, of agent advances receivable collateralized by personal guarantees from the sending agents and assets from their businesses in case of a default by the agent.

The maturities of agent advances receivable at December 31, 2024 are as follows (in thousands):

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):

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

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NOTE 6 –PREPAID EXPENSES AND OTHER ASSETS

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

Other assets consisted of the following (in thousands):

As of December 31, 2023, fixed assets in process included approximately $6.1 million in capital expenditures related to lease hold improvements and other assets in connection with our new headquarters (see Note 8).

Prior to 2022, 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 $5.3 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. The Company maintains a valuation allowance of approximately $3.8 million as of December 31, 2024, in connection with the balance of deposits held by the financial institution as a result of its closure, which has not materially changed since 2022.

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NOTE 7 –PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

Depreciation expense included in depreciation and amortization expense in the consolidated statements of income and comprehensive income was approximately $9.6 million, $8.0 million and $5.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Repairs and maintenance expenses included in other selling, general and administrative expenses in the consolidated statements of income and comprehensive income were approximately $6.1 million, $5.4 million and $3.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

NOTE 8 –LEASES

To conduct certain of our operations, the Company is a party to leases for office space, warehouses and Company-operated store locations. In December 2022, the Company entered into a lease agreement, which expires in 2033, for its new headquarters to accommodate its growing workforce. The new lease agreement provides for the Company to receive a tenant allowance amounting to approximately $3.8 million through the construction period, all of which has been disbursed through December 31, 2024. Also, the Company commenced making monthly lease payments on November 1, 2024.

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

(1) Operating right of-use assets are recorded net of accumulated amortization of $14.5 million and $10.0 million as of December 31, 2024 and 2023, respectively.

Operating lease cost for the years ended December 31, 2024, 2023 and 2022, respectively, was as follows (in thousands):

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(1) Operating lease cost is included in other selling, general and administrative expenses in the consolidated statement of income and comprehensive income for the years ended December 31, 2024, 2023 and 2022.

As of December 31, 2024 and 2023, the Company’s weighted-average remaining lease terms on its operating leases is 6.6 and 6.7 years, and the Company’s weighted-average discount rate is 6.31% and 6.06%, respectively, 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 next five years and thereafter are as follows (in thousands):

NOTE 9 –GOODWILL AND INTANGIBLE ASSETS

Goodwill consists of the following (in thousands):

Intangible assets consist of the following (in thousands):

Goodwill and the majority of intangible assets on the consolidated balance sheets of the Company were primarily recognized from business acquisition transactions. The fair value measurements were based on significant inputs, such as the Company’s forecasted revenues, assumed turnover of agent locations, obsolescence assumptions for technology, market discount and royalty rates. These inputs are based on information not observable in the market and represent Level 3 measurements within the fair value hierarchy.

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Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties. A change in the conditions, circumstances or strategy of the Company may result in a need to recognize an impairment charge. As a result of the annual impairment tests, the Company determined that goodwill wasnot impaired as of December 31, 2024 and 2023.

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

Acquisition of Amigo Paisano brands

On December 4, 2024, the Company completed the acquisition of the Amigo Paisano brands and trademarks (“Amigo Paisano”) from a Guatemala-based third-party company, primarily concentrated in the United States to Guatemala corridor. Amigo Paisano provides the Company the opportunity to enhance its digital channel offerings and strengthen its presence in Central America.

The total consideration transferred by the Company in connection with the acquisition of Amigo Paisano was $12.0 million. The acquisition was funded with cash on hand. The allocation of the consideration transferred resulted in intangible assets that consisted of trade names of approximately $12.0 million, which will be amortized over an estimated useful life of 15 years. In addition, due to the timing of the acquisition of Amigo Paisano, the potential income tax consequences of this transaction have not been fully determined.

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

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NOTE 10 –WIRE TRANSFERS AND MONEY ORDERS PAYABLE, NET

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

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. Included in money orders payable, there are money orders that were not cashed by the recipient and the purchaser of the instrument 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 toseven years.

NOTE 11 –ACCRUED AND OTHER LIABILITIES

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

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

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Revenue recognized during the year ended December 31, 2024 of $4.9 million includes a $0.6 million adjustment as a result of the changes in the terms and conditions of points expiration as described in Note 4. Also, it includes a $1.3 million cumulative catch-up adjustment to remeasure the contract liability as a result of an update of the assumed expiration rate of the loyalty points outstanding as of September 30, 2024.

NOTE 12 –DEBT

Debt consisted of the following (in thousands):

(1)Current portion of long-term debt is net of debt origination costs of approximately $0.5 million as of December 31, 2023 (none in 2024).

Until August 28, 2024, the Company and certain of its domestic subsidiaries as borrowers and the other guarantors from time to time party thereto (collectively, the “Loan Parties”) maintained an Amended and Restated Credit Agreement (as amended, the “A&R Credit Agreement”) with a group of banking institutions. The A&R Credit Agreement provided for a $220.0 million revolving credit facility, an $87.5 million term loan facility and an uncommitted incremental facility, which may have been utilized for additional revolving or term loans, of up to $70.0 million. The A&R Credit Agreement also provided 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 was available for working capital, general corporate purposes and to pay fees and expenses in connection with entry into the A&R Credit Agreement.

At the election of the Company, interest on the term loan facility and revolving loans under the A&R Credit Agreement were determined by reference to the secured overnight financing rate as administered by the Federal Reserve Bank of New York ("SOFR") plus an index adjustment of 0.10% and an applicable margin ranging between 2.50% and 3.00% based upon the Company’s consolidated leverage ratio, as calculated pursuant to the terms of the A&R Credit Agreement. Loans (other than Term Loans, as defined in the A&R Credit Agreement), were subject to interest at the base rate plus an applicable margin ranging between 1.50% and 2.00% based upon the Company’s consolidated leverage ratio, as so calculated. The Company was also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum.

On August 29, 2024, the Company entered into the Second A&R Credit Agreement with a group of banking institutions, which amended and restated in its entirety the A&R Credit Agreement. The Second A&R Credit Agreement provides for a new $425.0 million, multi-currency, revolving credit facility and an uncommitted incremental facility, which may be utilized for additional term and revolving loans of up to $100.0 million. The Second A&R Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The maturity date of the Second A&R Credit Agreement is August 29, 2029. A portion of the initial borrowings under the new revolving credit facility were used to repay in full the remaining outstanding balance of the Company’s term loan under the A&R Credit Agreement and to pay the costs associated with establishing the new revolving credit facility. Borrowings under the Second A&R Credit Agreement are available for general corporate purposes to support the Company’s growth, as well as to fund share repurchases.

Entering into the Second A&R credit agreement was accounted for as a debt modification. The unamortized portion of debt origination costs primarily related to the Second A&R Credit Agreement totaled approximately $4.6 million and $2.9 million at December 31, 2024 and 2023, respectively. Amortization of debt origination costs is included as a component of interest expense in the consolidated statements of income and comprehensive income and amounted to approximately $1.4 million, $1.1 million and $1.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. Amortization of debt origination costs for the year ended December 31, 2024 includes a loss on debt extinguishment of approximately $0.3 million related to the payoff of the term loan facility to the banking institutions that ceased to participate in the credit facility.

Under the Second A&R Credit Agreement and at the election of the Company, interest on the revolving loans denominated in U.S. Dollars is determined by reference to either (i) SOFR, (ii) the daily simple SOFR or (iii) a defined “base rate,” in each case, plus an applicable margin ranging from 1.75% to 2.25% for SOFR rate loans and from 0.75% to 1.25% for base rate loans based upon the Company’s consolidated leverage ratio, as so calculated pursuant to the terms of the Second A&R Credit Agreement. Interest on revolving loans

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denominated in Euros or Pounds Sterling is determined by reference to the Euro Interbank Offered Rate (“EURIBOR”) or Sterling Overnight Index Average (“SONIA”), in each case, plus an applicable margin ranging from 1.75% to 2.25% based upon the Company’s consolidated leverage ratio, as so calculated.

The revolving loans may be borrowed, repaid, and reborrowed from time to time in accordance with the terms and conditions of the Second A&R Credit Agreement. Interest is payable quarterly for base rate loans, daily simple SOFR loans, and daily simple SONIA loans, and on the expiration of the applicable interest period for term SOFR loans and EURIBOR loans. The Company also pays an annual commitment fee of up to 0.30% of the actual daily amount by which the maximum availability under the revolving credit facility exceeds the sum of the outstanding amount of revolving credit loans.

The effective interest rates for the year ended December 31, 2024 for the term loan facility and revolving credit facility were 9.02% and 2.51%, respectively. The effective interest rates for the year ended December 31, 2023 for the term loan facility and revolving credit facility were 8.33% and 1.92%, respectively.

The Second A&R Credit Agreement also provides the Company with increased flexibility to make certain restricted payments, including the repurchase shares of its common stock, without limitation so long as the Company’s consolidated leverage ratio, as of the then most recently completed four fiscal quarters, after giving pro forma effect to such restricted payments, is 2.50 to 1.00 or less. In addition, the Company may make restricted payments that do not exceed in the aggregate during any fiscal year the greater of (i) $30.3 million and (ii)25% of Consolidated EBITDA (as defined in the Second A&R Credit Agreement) for the then most recently completed four fiscal quarters of the Company.

The Second A&R Credit Agreement also contains customary covenants that limit the ability of the Company and its subsidiaries to, among other things, grant liens, incur additional indebtedness, make acquisitions or investments, dispose of certain assets, issue dividends and distributions (other than to the Company and certain of its subsidiaries), change the nature of their businesses, enter into certain transactions with affiliates, or amend the terms of material indebtedness, in each case subject to certain thresholds and exceptions.

Under the Second A&R Credit Agreement, the Company is required to maintain a quarterly minimum interest coverage ratio of 3.00:1.00 and a quarterly maximum consolidated leverage ratio of 3.50 with a step-up to 3.75 in the quarter during which the Company completes a material acquisition, in each case, as computed in accordance with the terms of the Second A&R Credit Agreement. As of December 31, 2024, the Company was in compliance with these covenants.

The obligations under the Second 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 13 –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. The determination of our intangible fair values is based on a discounted cash flows analysis that includes several assumptions and inputs to measure the economic benefit of these assets over their useful lives (Level 3).

The Company's financial assets and liabilities are carried at amortized cost. The Company’s cash and cash equivalents balances are representative of their fair values as these balances are comprised of deposits available on demand or overnight. The carrying amounts of accounts receivable, agent advances 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 (until August 29, 2024). The fair value of the term loan facility, which approximated book value, was estimated by discounting the future cash flows using a current market interest rate (Level 3). 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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The following tables present the Company's financial instruments that are not measured at fair value, categorized based upon the fair value hierarchy (in thousands):

The following tables present the Company's assets measured at fair value on a non-recurring basis at the dates indicated (in thousands):

NOTE 14 –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, certain service providers and independent directors of the Company. There are approximately 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

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26, 2020, no additional awards may be granted under the 2018 Plan. As of December 31, 2024,1.5 million shares remained available for grant of 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 certain 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 infour equal annual installments beginningone year after the date of the grant. The Company recognized compensation expense for stock options of approximately $0.1 million, $0.5 million and $1.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, which is included in salaries and benefits in the consolidated statements of income and comprehensive income. As of December 31, 2024, there is no unrecognized compensation expense related to stock options.

A summary of the stock option activity during the year ended December 31, 2024 is presented below:

(1) The aggregate intrinsic value of stock options exercised during the years ended December 31, 2024, 2023 and 2022 was $4.0 million, $1.3 million, and $7.4 million respectively.

(2) The aggregate fair value of all vested/exercisable options outstanding as of December 31, 2024 was $0.7 million, which was determined based on the market value of our stock as of that date.

Restricted Stock Units

The RSUs granted under the 2020 Plan to the Company’s employees or certain service providers generally vest infour equal annual installments beginningone year after the date of the grant, while RSUs issued to the Company’s independent directors vest on or around theone-year anniversary from the grant date. The Company recognized compensation expense for all RSUs of approximately $3.3 million, $2.9 million and $1.8 million for the years ended December 31, 2024, 2023 and 2022, respectively, which is included in salaries and benefits in the consolidated statements of income and comprehensive income. As of December 31, 2024, unrecognized compensation expense of approximately $6.9 million is expected to be recognized over a weighted-average period of 1.9 years.

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A summary of the RSU grant activity during the year ended December 31, 2024 is presented below:

(1)The aggregate fair value of all RSUs granted during the year ended December 31, 2024 was approximately $6.1 million, which was determined based on the market value of our stock as of that date.

Share Awards

During the years ended December 31, 2024, 2023 and 2022,1,803 and 3,617 and 3,444 fully vested shares, respectively, were granted to the Lead Independent Director and Chairs of the Committees of the Board of Directors. Compensation expense related to the fully vested share awards of $20.1 thousand, $80.5 thousand and $72.3 thousand for the years ended December 31, 2024, 2023 and 2022, respectively, was recorded and included in salaries and benefits in the consolidated statements of income and comprehensive income. Effective in the second quarter of 2024, the grant of share awards to certain of the Company's independent directors was replaced with the grant of RSAs as described below.

Restricted Stock Awards

The RSAs issued under the 2020 Plan to the Company’s employees generally vest infour equal annual installments beginningone year after the date of grant while RSAs issued to certain of the Company’s independent directors vest at the end of the three-month calendar quarter in which the grant is made. The Company recognized compensation expense for RSAs granted of $1.9 million, $1.2 million and $0.6 million for the years ended December 31, 2024, 2023 and 2022, respectively, which is included in salaries and benefits in the consolidated statements of income and comprehensive income. As of December 31, 2024, there was $3.2 million of unrecognized compensation expense related to RSAs, which is expected to be recognized over a weighted-average period of 1.7 years.

A summary of the RSA activity during the year ended December 31, 2024 is presented below:

(1)The aggregate fair value of all RSAs granted during the year ended December 31, 2024 was approximately $2.4 million, which was determined based on the market value of our stock as of that date.

Performance Stock Units

PSUs granted under the 2020 Plan 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 receiveone 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 adjusted earnings per share targets for a period of up tothree years combined with a service period ofthree years. Compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied. During the fourth quarter of 2024, the Company reassessed the probability of vesting for the PSU awards granted in 2023 and determined that it was not probable that the performance targets will be achieved. Therefore, the Company recognized an adjustment of approximately $2.1 million to reverse compensation expense on a cumulative basis in the fourth quarter of 2024.

The Company recognized compensation expense for PSUs of $1.6 million, $3.5 million and $3.2 million for the years ended December 31, 2024, 2023 and 2022, respectively, which is included in salaries and benefits in the consolidated statements of income and comprehensive

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income. As of December 31, 2024, there was $2.6 million of unrecognized compensation expense related to PSUs, which is expected to be recognized over a weighted-average period of 2.0 years.

A summary of the PSU activity during the year ended December 31, 2024 is presented below:

(1)The aggregate fair value of all PSUs granted during the year ended December 31, 2024 was approximately $4.4 million, which was determined based on the market value of our stock as of that date.

NOTE 15 –EQUITY

On August 18, 2021, the Company’s Board of Directors approved a stock repurchase program that authorizes the Company to purchase up to $40.0 million of outstanding shares of the Company’s common stock and which authorization was increased on March 3, 2023 to an additional $100.0 million and on August 26, 2024 to an additional $63.8 million of its outstanding shares (the “Repurchase Program”). Under the Repurchase Program, the Company is authorized to repurchase shares from time to time in accordance with applicable laws, both on the open market and in privately negotiated transactions and may include the use of derivative contracts or structured share repurchase agreements. The timing and amount of repurchases depends on several factors, including market and business conditions, the trading price of the Company’s common stock and the nature of other investment opportunities. The Repurchase Program may be limited, suspended or discontinued at any time without prior notice. The Repurchase Program does not have an expiration date. The Second A&R Credit Agreement, as amended, permits the Company to make restricted payments (including share repurchases, among others), (i) without limitation so long as the Consolidated Leverage Ratio (as defined in the Second A&R Credit Agreement, as amended), as of the then most recently completed four fiscal quarters of the Company, after giving pro forma effect to such restricted payments, is 2.25 to 1.00 or less, (ii) that do not exceed, in the aggregate during any fiscal year, the greater of (x) $30.3 million and (y)25.00% of Consolidated EBITDA (as defined in the Second A&R Credit Agreement) for the then most recently completed four fiscal quarters of the Company and (iii) to repurchase Company common stock from current or former employees in an aggregate amount of up to $15.0 million per calendar year.

The Company accounts for purchases of treasury stock under the cost method. Any direct costs incurred to acquire treasury stock are considered stock issue costs and added to the cost of the treasury stock. Separately from the Repurchase Program, on March 11, 2024 the Company entered into an agreement with Robert W. Lisy, the Company’s Chief Executive Officer, President and Chairman of the Board of Directors, for the purchase of 175,000 shares of the Company's common stock for a total purchase price of $3.3 million, in a privately-negotiated transaction. During the years ended December 31, 2024 and 2023, including the shares previously mentioned, the Company purchased 3,765,320 shares and 3,027,768 shares, respectively, for an aggregate purchase price of $75.1 million and $66.3 million, respectively. As of December 31, 2024, there was $63.2 million available for future share repurchases under the Repurchase Program.

NOTE 16 –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. Shares of treasury stock are not considered outstanding and therefore are excluded from the weighted-average number of common shares outstanding calculation.

Below are basic and diluted earnings per share for the periods indicated (in thousands, except for share data):

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As of December 31, 2024, there were 241.1 thousand RSUs and 113.0 thousand RSAs excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.

As of December 31, 2023, there were 144.2 thousand RSUs,58.4 thousand RSAs, and 136.9 thousand PSUs excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.

As of December 31, 2022, there were 6.5 thousand stock options and 10.4 thousand RSUs excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.

As discussed in Note 15, during the years ended December 31, 2024 and 2023, the Company purchased 3,765,320 shares and 3,027,768 shares, respectively, for an aggregate purchase price of $75.1 million and $66.3 million, respectively. The effect of these repurchases on the Company’s weighted average shares outstanding for the years ended December 31, 2024 and 2023 was a reduction of 1,775,956 and 1,154,050 shares, respectively, due to the timing of the repurchases.

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NOTE 17 –INCOME TAXES

The provision (benefit) for income taxes consists of the following (in thousands):

A reconciliation between the income tax provision at the U.S. statutory tax rate and the Company’s income tax provision on the consolidated statements of income and comprehensive income is below (in thousands):

As presented in the income tax reconciliation above, the tax provision recognized on the consolidated statements of income and comprehensive income was impacted by state taxes, non-deductible officer compensation, share-based compensation tax benefits, valuation allowances, and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate. The Company is also subject to tax in various U.S. state and foreign jurisdictions. Changes in the annual allocation and apportionment of the Company’s activity amongst these state jurisdictions results in changes to the blended state rate utilized to measure the Company’s deferred tax assets and liabilities.

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Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of the Company’s assets and liabilities. The following table outlines the principal components of the deferred tax assets and liabilities (in thousands):

At December 31, 2024, the Company had pre-tax federal, state and foreign net operating loss carryforwards of approximately $12.3 million, $6.8 million and $32.2 million, respectively, which are available to reduce future taxable income. With certain exceptions, these net operating loss carryforwards will expire from 2030 through 2037 for federal losses, from 2028 through 2038 for state losses, and from 2038 through 2044 for foreign losses. In addition, $28.0 million of the foreign net operating loss carryforwards in our European jurisdictions carryforward indefinitely. Utilization of the Company’s net operating loss carryforwards is subject to an annual limitation under Internal Revenue Code Section 382. The Company has recorded a deferred tax asset for only the portion of its net operating loss carryforward that it expects to realize before expiration.

With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for the years prior to 2021. However, the Company has certain net operating loss carryforwards from tax years 2010 through 2017 that are subject to examination. As of December 31, 2024 and 2023, the Company didnot have any amounts accrued for interest and penalties or recorded for uncertain tax positions.

After consideration of all evidence, both positive and negative, management has determined thatno valuation allowance is required at December 31, 2024 or 2023 on the Company’s U.S. deferred tax assets. However, a valuation allowance of $6.5 million and $5.8 million as of December 31, 2024 and 2023, respectively, has been recorded on deferred tax assets associated with foreign net operating loss carryforwards. The valuation allowance increased by $0.7 million and $5.4 million during the years ended December 31, 2024 and 2023, respectively.

NOTE 18– SEGMENT REPORTING

The Company is a leading omnichannel money remittance services company focused primarily on the U.S. to LAC corridor, which includes Mexico, Central and South America and the Caribbean. We also provide our remittances services to Africa and Asia from the United States and offer sending services from Canada to Latin America and Africa as well as remittance services from Spain, Italy, the United Kingdom and Germany to Africa, Asia, Europe and Latin America. The Company has identifiedone operating and reportable

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segment. The Company defines its segment on the basis of the way in which internally reported financial information is regularly reviewed by the Company’s chief operating decision maker (the “CODM”) to analyze financial performance, make decisions, and allocate resources.

The Company’s CODM is Robert Lisy, Chairman, Chief Executive Officer and President. The CODM uses the Company’s consolidated financial results as a basis for making key operating decisions. Examples of key operating decisions include entering new markets, stock repurchases, and managing liquidity. The CODM considers Net Income as one of the relevant metrics in his decision making process.

The table below provides information about the Company's measure of segment performance and significant expense categories:

(1) Other segment items included in Segment net income is primarily composed of other selling, general and administrative expenses, transaction processing costs, provision for credit losses, and other overhead expenses.

NOTE 19 –COMMITMENTS AND CONTINGENCIES

Contingencies and Legal Proceedings

The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is the opinion of the Company’s management, based upon the information available at this time and the stage of the proceedings, that it is not possible to determine the probability of loss or estimate of damages, and therefore, the Company has not established a reserve for any of these proceedings.

The Company operates in all 50 states in the United States, two U.S. territories andeight other countries. Money transmitters and their agents are under regulation by state and federal laws. Violations may result in civil or criminal penalties or a prohibition from providing money transfer services in a particular jurisdiction. It is the opinion of the Company’s management, based on information available at this

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time, that the expected outcome of regulatory examinations will not have a material adverse effect on either the results of operations or financial condition of the Company.

Regulatory Requirements

Pursuant to applicable licensing laws, certain domestic and foreign subsidiaries of the Company are required to maintain minimum tangible net worth and liquid assets (eligible securities) to cover the amount outstanding of wire transfers and money orders payable. As of December 31, 2024 and 2023, the Company’s subsidiaries were in compliance with these requirements.

NOTE 20 –DEFINED CONTRIBUTION PLANS

The Company hastwo defined contribution plans available to most of its employees, where the Company makes contributions to the plans based on employee contributions. Total employer contribution expense included in salaries and benefits in the consolidated statements of income and comprehensive income was approximately $0.4 million, $0.4 million and $0.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.