Company: CRCL
Filing Date: 2025-06-02
Form Type: S-1/A
Source: 0001193125-25-132755
Chunk: 380

Company: Circle Internet Group, Inc.
Filing Date: 2025-06-02
Form: S-1/A
Chunk 380
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 same terms as those granted to employees under the Award Plan. For stock-based awards granted to non-employees,compensation expense is recognized based on the grant date fair value of the awards on a straight-line basis over the requisite service period. The Company recognizes stock-based compensation expense, net of estimated forfeitures, using a fair-value based method for costs related to all equity awards issued under the equity incentive plans, including options and RSUs granted to employees, directors, and non-employees.Stock-based compensation expense is recognized and included in Compensation expenses in the Consolidated Statements of Operations. The Company estimates the fair value of stock options with only service-based conditions on the date of grant using the Black-Scholes-Merton (“Black-Scholes”) option-pricing model. The fair value of the stock option is expensed over the related service period which is typically the vesting period and the straight-line method is used for expense attribution. The model requires management to make a number of assumptions, including the fair value and expected volatility of our underlying common stock, expected term of the stock option, risk-free interest rate, and expected dividend yield. The expected term of the stock option is based on the average period the stock option is expected to remain outstanding based on the stock option’s vesting and contractual terms. The estimated forfeiture rate is based on accumulated historical forfeiture data. The Company evaluates the assumptions used to value stock awards quarterly. The RSUs vest upon the satisfaction of both a service condition and a liquidity condition. Both the service and liquidity conditions must be met for the expense to be recognized. The fair value of RSUs is estimated based on the fair value of our common stock on the date of grant. Stock-based compensation expense related to the RSUs is recorded on a tranche-by-tranchebasis over the requisite service period, when the liquidity condition is considered probable. Common Stock Valuation The valuations of our common stock were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. In the absence of an active market, our board of directors, with input from management, exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of our common stock as of the date of each option grant, including the following factors:

| • |     | the results of contemporaneous valuations performed at periodic intervals by an independent valuation firm; |

| • |     | the prices, rights, preferences, and privileges of our