Company: CRCL
Filing Date: 2025-04-18
Form Type: S-1/A
Source: 0001193125-25-084832
Chunk: 344

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-18
Form: S-1/A
Chunk 344
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with” and “without” approach. During the period when an obligation to return the digital asset collateral exists, the embedded derivative is marked-to-marketand any changes in the fair value of the underlying digital asset is recorded within Digital assets (gains) losses and impairmenton the Consolidated Statements of Operations. Upon the return of the digital asset collateral, any unrealized gain (loss) on the embedded derivative that was attributable to the collateral is realized. As of December 31, 2023, the embedded derivatives balance only consisted of embedded derivatives in connection with the digital asset collateral related to Circle stablecoin lending activities and does not contain any significant unobservable inputs. There were no digital assets held as collateral related to Circle stablecoin lending activities as of December 31, 2024. F-35

Convertible debt, net of debt discount On March 1, 2019, the Company issued a convertible note in connection with an acquisition. The note had a par value of $24.0 million, matures in seven years and is convertible into Series E preferred shares with a 2.9% interest rate. The Company elected the fair value option for recording this note. We measured the fair value of our convertible debt using the probability weighted “as converted” model. The change in fair value of the note is recorded in Other income (expense), neton the Consolidated Statements of Operations. The changes in carrying value of convertible debt, net of debt discount are reflected in the following tables (in thousands):

| Table 11.3. Changes in Carrying Value of Convertible Debt    |     |   |         |   |
|:-------------------------------------------------------------|:----|:--|--------:|:--|
| Balance as of December 31, 2023                              |     | $ |  58,487 |   |
| Net discount on convertible notes                            |     |   |   1,062 |   |
| Capitalized interest                                         |     |   |     479 |   |
| Fair value adjustment                                        |     |   |  (3,428 | ) |
| Fair value adjustment  –  credit risk                        |     |   |  (1,095 | ) |
| Conversion of convertible notes to Series E Preferred Shares |     |   | (14,788 | ) |
| Balance as of                                                
 December 31, 2024                                            |     | $ |  40,717 |   |

| Balance as of December 31,