Company: CRCL
Filing Date: 2025-08-04
Form Type: DRS
Source: 0000950123-25-006942
Chunk: 185

Company: Circle Internet Group, Inc.
Filing Date: 2025-08-04
Form: DRS
Chunk 185
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 legal proceeding, or potential regulatory violation is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is required in both the determination of probability and whether an exposure is reasonably estimable. Our judgments are subjective and are based on the status of the legal or regulatory proceedings, the merits of our defenses, and consultation with in-house and outside legal counsel. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to pending claims, litigation, or other violations and may revise our estimates. Due to the inherent uncertainties of the legal and regulatory process in the multiple jurisdictions in which we operate, our judgments may differ materially from the actual outcomes. Convertible debt We have elected the fair value option for our convertible debt. We believe the estimate of fair value of these financial instruments requires significant judgment. We measured the fair value of our convertible debt using the probability weighted “as converted” model, which uses both observable and unobservable inputs and reflects our best estimates of the assumptions a market participant would use to calculate fair value. The significant unobservable inputs used include, but are not limited to:

| • |     | timing and probability of liquidity and other events; |

| • |     | discount rate; and |

| • |     | fair value of the underlying stock. |

Under the fair value election, changes in fair value of convertible debt are reported as Other income (expense), net in the consolidated statements of operations in each reporting period subsequent to the issuance. In the future, depending on the valuation approaches used and the expected timing and weighting of each, the inputs described above, or other inputs, may have a greater or lesser impact on our estimates of fair value. These inputs are based on historical performance of loans facilitated through our platform, as well as the consideration of market participant requirements. See Note 2 and Note 11 to our audited consolidated financial statements and Note 2 and Note 10 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus for further information regarding the fair value measurements of convertible debt. 114

CONFIDENTIAL TREATMENT REQUESTED BY CIRCLE INTERNET GROUP, INC. PURSUANT TO 17 C.F.R. § 200.83 Quantitative and qualitative disclosures about market risk Interest rate risk Our results of operations are exposed to changes in interest rates, among other macroeconomic conditions. Interest rate risk is highly sensitive to