MIME 2017 Annual Report

49 For the year ended March 31, 2016, cash provided by operating activities was $24.6 million. The primary factors affecting our operating cash flows during the period were our net loss of $3.2 million, adjusted for non-cash items of $10.5 million for depreciation and amortization of our property and equipment, $7.9 million of share-based compensation expense, and $1.0 million in net foreign currency gains. The drivers of the changes in operating assets and liabilities were an $18.6 million increase in deferred revenue and a $4.7 million increase in accrued expenses and other liabilities, partially offset by a $9.8 million increase in accounts receivable, a $2.2 million increase in prepaid expenses and other current assets, a $0.5 million decrease in accounts payable and a $0.4 million increase in other assets. Investing activities Cash used in investing activities of $35.0 million for the year ended March 31, 2018 consisted primarily of $34.5 million in capital expenditures and $1.4 million in payments related to the iSheriff and other acquisitions, partially offset by net purchase and maturity activity on investments of $0.9 million. Cash used in investing activities of $84.6 million for the year ended March 31, 2017 consisted of $67.6 million in purchases of investments, $18.5 million in capital expenditures and $5.6 million in payments related to the iSheriff acquisition partially offset by $7.0 million in maturities of investments. Cash used in investing activities of $14.2 million for the year ended March 31, 2016 was due to capital expenditures. Our capital expenditures were associated primarily with computer equipment purchased in support of our expanding infrastructure and to a lesser extent leasehold improvements and office equipment associated with increased headcount. Financing activities Cash provided by financing activities of $13.2 million for the year ended March 31, 2018 was primarily due to $17.0 million of proceeds from issuance of ordinary shares from share option exercises and our employee stock purchase plan, partially offset by payments on debt of $1.8 million, payments on capital lease obligations of $1.0 million and payments on construction financing lease obligation of $1.0 million. Cash used in financing activities of $0.3 million for the year ended March 31, 2017 was primarily due to payments on debt of $4.6 million and payments on capital lease obligations of $0.2 million, partially offset by $4.5 million of proceeds from exercises of share options. Cash provided by financing activities of $63.8 million for the year ended March 31, 2016 was due primarily to $68.3 million in proceeds from our IPO, net of issuance costs, and $0.9 million of proceeds from exercises of share options, partially offset by payments on debt of $5.4 million. Net operating loss carryforwards As of March 31, 2018, we had U.K. net operating loss carryforwards of approximately $52.6 million that do not expire. As of March 31, 2018, we had U.S. federal net operating loss carryforwards of approximately $56.4 million. U.S. federal net operating loss carryforwards generated through March 31, 2017 of approximately $31.5 million expire at various dates through 2037, and U.S. federal net operating loss carryforwards generated during the year ended March 31, 2018 of approximately $24.9 million do not expire. As of March 31, 2018, we had U.S. state net operating loss carryforwards of approximately $39.5 million that expire at various dates through 2038. As of March 31, 2018, we had Australian net operating loss carryforwards of approximately $17.3 million that do not expire. As of March 31, 2018, the Company had Germany net operating loss carryforwards of approximately $2.4 million that do not expire. As of March 31, 2018, the Company had a U.K. income tax credit carryforward of $1.2 million that does not expire. On April 1, 2017, we adopted ASU No. 2016-09, Compensation – Stock Compensation (ASU 2016-09). In connection with the adoption, we are required to recognize all excess tax benefits and tax deficiencies attributable to share-based compensation as either income tax expense or tax benefit in the income statement in the period when the awards vest or are settled. We applied this amendment prospectively to excess tax benefits and tax deficiencies arising from vesting or settlement after the adoption date. ASU 2016-09 also requires excess tax benefits to be recognized, regardless as to whether the benefit reduces taxes payable in the current period. We adopted this guidance using a modified retrospective transition method and recorded a cumulative-effect adjustment for certain off-balance sheet net operating loss carryforwards to retained earnings and deferred tax assets with an equal offsetting adjustment to our valuation allowance of approximately $7.4 million.