EFTA01377816.pdf

S-I/A 2017 42 15,232 2018 3 15,306 2019 15,206 Thereafter 66,601 Total 5 159 S 142,049 Less amount representing interest (13) Present value of capital lease obligations 146 Less current portion of capital lease obligation (50) Non-current portion of capital lease obligation S 96 Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of September 30, 2015 are as follows (unaudited, in thousands): Capital Operating Year: 2015 (remaining 3 months) $ 16 $ 3,749 2016 62 14,616 2017 47 14,729 2018 5 14,897 2019 — 15,149 Thereafter — 67,219 Total 5 130 5130,359 Less amount representing interest (8) Present value of capital lease obligations 122 Less current portion of capital lease obligation (57) Non-current portion of capital lease obligation S 65 F-44 Table of Content% Litigation On December 1, 2010, the Company, along with co-founder Jim McKelvey, filed a complaint in the United States District Court for the Eastern District of Missouri (Civil Action No. 4:10-cv-02243) against REM Holdings 3, LLC ("REM') that. as amended, seeks to correct the inventorship of three patents. The patents named Robert Morley as the sole inventor and REM as their assignee of rights, and the Company filed suit to have Mr. McKelvey added as an inventor. REM subsequently filed counterclaims alleging that the Company had infringed those same three patents. The litigation was stayed pending the outcome of reexamination proceedings before the U.S. Patent and Trademark Office ("PTO") with respect to the three patents. Wth the exception of five recently amended claims, which have not yet progressed beyond preliminary reexamination, all of the claims from the three patents asserted in Mr. Morley's 2010 complaint have either been canceled or otherwise found unpatentable by the Patent Office Trial and Appeals Board. On January 30, 2014, Mr. Morley and REM filed a complaint against the Company, Jack Dorsey, and Mr. McKelvey, again in the United States District Court for the Eastern District of Missouri (Civil Action No. 4:14-CV-00172), alleging that the formation of the Company and the development of its card reader and decoding technologies constituted, among other things, breach of an oral joint venture, fraud, negligent misrepresentation, civil conspiracy, unjust enrichment, and misappropriation of trade secrets, as well as other related claims. Mr. Morley also alleges infringement of an additional patent from the same family as those in the prior litigation, and he seeks correction of inventorship of certain of our patents. This lawsuit has now been consolidated with the prior litigation, and the patent-related claims have been stayed pending the outcome of PTO proceedings. The Company is vigorously defending against the claims of REM and Mr. Morley in both cases. Given the early stage of the District Court proceedings. the Company cannot reliably determine the potential liability that could result from this matter. On March 19, 2015. Jeffry Levin filed a putative class action lawsuit against Caviar, Inc. (a wholly owned subsidiary of Square), alleging that Caviar misclassified Mr. Levin and other similarly situated couriers as independent contractors under the provisions of the California Labor Code and claiming that certain expenses should have been borne by Caviar. This lawsuit was http://www.sec.gov/A rehi vestedgaddata/1512673ANS11193125 I 5369092/d937622dsla.htm[11/6/2015 7:37:12 AMJ CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0074968 CONFIDENTIAL SDNY_GM_00221152 EFTA01377816