EFTA01377787.pdf

5- l/A Excess tax benefit from share-based payment activity — — (1,348) — — Provision for transaction losses 10,512 15,080 18.478 13,520 32,967 Provision for uncollectible receivables related to merchant cash advances — — 2,431 1.844 4,616 Deferred tax assets — — (2,664) (2.664) (207) Impairment of intangible assets — 2.430 — — — Changes in operating assets and liabilities: Settlements receivable (19,854) (27,704) (50,361) (57.781) (40.729) Merchant cash advance receivable — — (31,733) (28,438) (18,725) Other current assets (7.605) (2.384) (14,190) (12.760) (4,457) Other assets (1.615) 2.668 (636) (3.043) 1.102 Accounts payable 2,028 (942) 179 (1.916) 2.048 Customers payable 47,101 21,148 52,956 59,482 89,446 Charge-offs and recoveries to accrued transaction losses (7.335) (13.613) (17.514) (11.361) (25,415) Accrued expenses 3.909 9.912 8,113 11,047 13.950 Other current liabilities 1,433 103 3,007 2,265 1.524 Other liabilities 8 14.288 23,295 21.782 8.801 Net cash (used in) provided by operating activities (42.925) (60.577) (109.394) (87.548) 2.890 Cash flows from investing activities: Purchase of property and equipment (13.033) (47.931) (28.794) (21,261) (30.484) Payment for acquisition of intangible assets — — (400) (400) (110) (Increases) decreases in restricted cash (34,758) 40.000 (7,075) (3.402) (252) Business acquisitions (net of cash acquired) — (2,872) 11,715 11,715 (4,500) Net cash used in investing activities: (47.791) (10.803) (24.554) (13,348) (35.346) Cash flows from financing activities: Proceeds from issuance of preferred stock, net 221,754 1 148,748 98.822 — Principal payments on capital lease obligation (190) — — — — Proceeds from debt — — 30.000 30,000 — Principal payments on debt — — — — (30,000) Proceeds from the exercise of stock options 5.616 18.906 14.056 12.626 12.209 Excess tax benefit from share-based payment award — — 1.348 — — Net cash provided by (used in) financing activities 227.180 18.907 194.152 141,448 (17.791) Effect of foreign exchange rate on cash and cash equivalents (4) (760) (1.080) (404) (970) Net increase (decrease) in cash and cash equivalents 136.460 (53.233) 59.124 40.148 (51217) Cash and cash equivalents, beginning of period 82,949 219.409 166.176 166,176 225.300 Cash and cash equivalents, end of period 5219409 5 166,176 5 225.300 5 206.324 5 174.083 See accompanying notes to consolidated financial statements. F-8 Table of Content‘ SQUARE, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1-DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Square, Inc. (together with its subsidiaries, "Square" or the 'Company") was founded in 2009. The Company has extended its solution from payments and point-of-sale services to financial services and marketing services. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related http://www..ux.gov/Archivestedgar/data/I5I2673AXX 11193125 I 5369092/d937622dsI a.htm[11/6/2015 7:37:12 AM) CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0074939 CONFIDENTIAL SDNY_GM_00221123 EFTA01377787