| Summary of significant accounting policies | 2 Summary of significant accounting policies
(a) Basis
of presentation and principles of consolidation The
unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management,
necessary to present a fair statement of the Company’s financial position as of September 30, 2024 and the results of operations
for the three and nine months ended September 30, 2024 and 2023. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary in order to make the consolidated financial statements not misleading have been included. The
unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission (the “SEC”) and accordingly do not include all of the disclosures normally made in the Company’s
annual financial statements. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto of Seamless for the fiscal year ended December 31, 2023.
(b) Emerging
Growth Company The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which
is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
(c) Retroactive
Application of Reverse Recapitalization Pursuant
to ASC 805-40, Reverse Acquisitions CURRENC
GROUP INC. AND SUBSIDIARIES NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2 Summary of significant accounting policies (continued) Retroactive
Application of Reverse Recapitalization to the Condensed Consolidated Statements of Shareholders’ Deficit Pursuant
to the terms of the Business Combination Agreement, as part of the Closing, all of the issued and outstanding Seamless common shares
were all converted into 40,000,000 0.650635750 Retroactive
Application of Reverse Recapitalization to the Condensed Consolidated Statements of Operations and Comprehensive Loss Furthermore,
based on the retroactive application of the reverse recapitalization to the Company’s Condensed Consolidated Statements of Changes
in Shareholders’ Deficit, Seamless recalculated the weighted-average shares for the pre-Business Combination portion of the periods
ended September 30, 2024 and 2023. The basic and diluted weighted-average Seamless common shares were retroactively converted to Currenc
ordinary shares using the Exchange Ratio to conform to the recast periods (see Note 2 (j), Net income (loss) per share Retroactive
Application of Reverse Recapitalization to the Condensed Consolidated Balance Sheets Finally,
to conform to the retroactive application of recapitalization to the Company’s Condensed Consolidated Statements of Changes in
Shareholders’ Deficit, the Company reclassified the par value of Seamless common shares to additional paid-in capital (“APIC”),
less amounts attributable to the par value of the ordinary shares as recast, as of December 31, 2023. Further
details of the Reverse Recapitalization are contained in Note 3, Reverse Recapitalization and Related Transactions
(d) Going
concern The
accompanying unaudited consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business. As
of September 30, 2024, the Company had cash balances of $ 49.1 54.1 22.7 11.3 11.7 0.4 2.2 While
the Company believes that it will be able to continue to grow the Company’s revenue base and control expenditures, there is no
assurance that it will be able to achieve these goals. As a result, the Company continually monitors its capital structure and operating
plans and evaluates various potential funding alternatives that may be needed to finance the Company’s business development activities,
general and administrative expenses and growth strategy.
(e) Use
of estimates The
preparation of the accompanying unaudited consolidated financial statements in conformity with GAAP requires management to make estimates,
assumptions and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Certain
accounting estimates of the Company require a higher degree of judgment than others in their application. These include valuation of
goodwill, provision for credit losses, impairment of long-lived assets, impairment of equity investee, valuation of convertible bonds
and the valuation allowance for deferred tax assets. Management bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.
(f) Revenue
recognition The
Company complies with ASC 606, Revenue from Contracts with Customers. Revenue
from contracts with customers is measured based on the consideration specified in a contract with a customer in exchange for transferring
goods or services to a customer net of sales and service tax, returns, rebates and discounts. The Company recognizes revenue when (or
as) it transfers control over a product or service to its customer. An asset is transferred when (or as) the customer obtains control
of the asset. Depending on the substance of the contract, revenue is recognized when the performance obligation is satisfied, which may
be at a point in time or over time. Contract
assets represent the Company’s right to consideration for performance obligations that have been fulfilled but for which the customer
has not been billed as of the balance sheet date. CURRENC
GROUP INC. AND SUBSIDIARIES NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2 Summary of significant accounting policies (continued) Remittance
services revenue Revenue
from contracts with customers on service charges and gain/loss on foreign exchange arising from remittance activities are recognized
upon the processing and execution of the international money transfer transactions. Remittance services are further divided into Fiat
Currency Prefunded Remittance Service and XRP Prefunded Remittance Service. Management has considered these two services to be two product
lines. The
customers of the remittance services are financial institutions (referred to as “Remittance Partners”). Remittance Partners
who use the fiat currency prefunding option for their remittance business with the Company are referred to as Fiat Currency Prefunded
Remittance Partners, whereas customers who choose the XRP Prefunding mode are referred to as XRP Prefunded Remittance Partners. Fiat
Currency Prefunded Remittance Service The
Company earns revenue by charging their customers a Fiat Currency Prefunded Remittance Fee when they use the Company’s platform
to transfer money to a beneficiary in another country. These Fiat Currency Prefunded Remittance Fees are fixed and specific for every
country’s currency and are charged at the point-in-time of executing this performance obligation. Prior to delivering cash to the
customer’s beneficiary, the customer must directly provide the Company with prefunding (i.e., the cash to be remitted to the beneficiary).
This is the traditional prefunding process, which the Company describes as Fiat Currency Prefunded Remittance Service. XRP
Prefunded Remittance Service Unlike
the Fiat Currency Prefunded Remittance Service, the customer obtains prefunding through Ripple Solution offered by Ripple Lab Inc. (see
Note 9) with the XRP Prefunded Remittance Service. Ripple supplies the customer with the XRP equivalent of the requested prefunding.
The Company subsequently liquidates this XRP on Ripple’s behalf, and the fiat currency obtained as a result of the liquidation
process is transferred to the customer’s beneficiary. Customers who prefund their remittance service with XRP must enter into an
agreement with Ripple and undergo stringent credit checks in order to get XRP prefunding and use Ripple’s platform. The Company
charges their customers an XRP Prefunded Remittance Service Fee when the money is transferred to the customer’s beneficiary. For
both the XRP Prefunded and Fiat Currency Prefunded Remittance Services, the Company has no obligations to the customer in terms of guarantees,
warranties or other similar obligations. There are also no significant payment terms involved as the Company obtains their fees shortly
after charging their customers. Sales
Walletku Modern Channel Revenue
from the sale of goods is recognized at the point in time when the Company satisfies their performance obligation, which is upon delivery
of the goods to the customer. The credit terms are typically 3-7 days. Sales
of airtime Revenue
from airtime sold is recognized when the relevant international airtime transfer or reload request is processed and executed. Other
services Revenue
from contracts with customers on other services is recognized as and when services are rendered. CURRENC
GROUP INC. AND SUBSIDIARIES NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2 Summary of significant accounting policies (continued)
(g) Segments As
the chief operating decision-maker (“CODM”) of the Company, the Chief Executive Officer reviews the financial results when
making decisions about allocating resources and assessing the performance of the Company. TNG (Asia) Limited (“TNGA”), the
Tranglo Sdn BHD and related subsidiaries (“Tranglo”), GEA Limited and GEA Pte Ltd. (“GEA”) and PT Walletku Indompet
Indonesia (“Walletku”) are all considered operating segments. These have been aggregated into two reportable segments, which
are remittance services and sales of airtime, as described in Note 7. Other services are not assigned to a specific reportable segment
as their results of operations are immaterial. The
remittance segment is operated through TNGA, GEA and Tranglo. TNGA and GEA are in the retail remittance business in Hong Kong, which
is in the upstream segment of the remittance business, whereas Tranglo operates the remittance hub covering Southeast Asia and globally,
and is thus in the downstream segment of the remittance business. Management operates, monitors and evaluates the whole remittance business
through these three subsidiaries so as to generate the maximum synergy and create maximum value for the Company. The
Company operates the airtime segment via their international airtime transfer business through Tranglo and their retail airtime trading
business locally in Indonesian through WalletKu. As with the remittance segment, management believes maximum synergy and business value
can best be achieved by aggregating and managing the airtime business through these two subsidiaries.
(h) Share-based
compensation The
Company accounts for share-based payments in accordance with ASC Topic 718 “Compensation – Stock Compensation” (“ASC
718”), under which the fair value of awards issued to employees is expensed over the period in which the awards vest. Seamless
had an incentive plan approved and adopted on September 13, 2018, namely the 2018 Equity Incentive Plan. Under the 2018 Equity
Incentive Plan, a total of 2,591,543 978,397 12.87 5,803,000 All
shares granted under the 2022 Incentive Plan will be vested upon (i) the completion of an IPO or (ii) the completion of a de-SPAC merger,
with such vesting occurring upon the Closing of the Business Combination on August 30, 2024. The Incentive shares will then be vested
under a trust, with 3,964,324 40,000,000 1,321,441 2,642,883 Seamless
estimates the fair value of awards using a binomial pricing model. Seamless accounts forfeitures as they occur. For the awards granted
on July 29, 2022, the following assumptions were used in the model: Schedule
of Fair Assumption of Awards Granted Expected
Volatility ( 39.84 43.74 Expected
Dividend Yield ( 0 Expected
Time to Liquidity ( 0.92 2.92 Exercise
Price ($ Nil Stock
price at grant date ($ 6.55 Weighted
Average Fair Value of 1 Share ($ 5.73 The
fair value of the awards granted on July 29, 2022 is $ 30,479,627 489,333 For
the awards granted on July 29, 2022, the following assumptions were used in the model: Schedule
of Fair Assumption of Awards Granted Expected
Volatility ( 26.65 42.32 Expected
Dividend Yield ( 0 Expected
Time to Liquidity ( 0.03 2.03 Exercise
Price ($ Nil Stock
price at grant date ($ 6.22 Weighted
Average Fair Value of 1 Share ($ 5.78 On
August 30, 2024, Seamless has re-granted 466,573 2,696,053 Share-based
compensation expense recognized during the three and nine month periods ended September 30, 2024 is $ 13,137,850 CURRENC
GROUP INC. AND SUBSIDIARIES NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2 Summary of significant accounting policies (continued)
(i) Prefunding
to remittances partner Prefunding
to remittance partner represents deposits made with such a partner for remittance services to be rendered by the partner in the future.
The prepayments are utilized when a remittance order is executed by the partner and the resulting amount of the order is deducted from
the balance with the partner. We
allow our remittance partners to prefund their balance through cryptocurrencies. These cryptocurrencies are mainly XRP. Ripple provides
the XRP upon request to the Company and our remittance partners. Under applicable accounting standards, we are an agent when facilitating
cryptocurrency transactions on behalf of our customers. These cryptocurrencies are held under a bailment arrangement in an account in
the Company’s name on behalf of our business partner but they are not Seamless’s assets and therefore, are not reflected
as cryptocurrency assets on our consolidated balance sheets . Although the Company does not control the XRP in the bailment account,
we are responsible for safeguarding the XRP in the bailment account. Independent
Reserve SG Pte Ltd (“Independent Reserve”), Philippine Digital Asset Exchange (“Pdax”), Betur, Inc. (“Coins.ph”)
and Bitstamp Global Limited (“Bitstamp”) (collectively, the “Cryptocurrency Exchanges”) are centralized crypto
exchanges which keep the cryptographic keys for each respective XRP wallet and provide the Company with its respective API access keys.
The Company is the only party that holds the API access keys that grant it direct access to its XRP wallet maintained on the respective
Cryptocurrency Exchange. The Cryptocurrency Exchanges maintain records of all assets deposited by its users and send statements to the
Company. The Company reconciles its internal ODL transaction records to the statements received from the Cryptocurrency Exchanges to
ensure that these are accurate. The Company has an obligation to protect the API access keys from being abused or stolen. The Company
is responsible for any damages caused by loss or theft. Due
to the unique risks associated with cryptocurrencies, including technological, legal, and regulatory risks, in accordance with Staff
Accounting Bulletin No. 121 (“SAB 121”), we recognize a crypto asset safeguarding liability to reflect our obligation to
safeguard the crypto assets held in the bailment account, which is recorded in Accounts payable, accruals and other payables on our consolidated
balance sheet. We also recognize a corresponding safeguarding asset which is recorded in Prepayments, receivables and other assets on
our consolidated balance sheet. The crypto asset safeguarding liability and corresponding safeguarding asset are measured and recorded
at fair value on a recurring basis using prices available in the market we determine to be the principal market at the balance sheet
date. The corresponding safeguarding asset may be adjusted for loss events, as applicable. As of September 30, 2024, the Company has
not incurred any safeguarding loss events, and therefore, the crypto asset safeguarding liability and corresponding safeguarding asset
were recorded at the same value. Safeguarding assets as of September 30, 2024 and December 31, 2023 are $ 2,222,368 1,983,116 2,222,368 1,983,116
(j) Net
income (loss) per share Basic
earnings per share is calculated by dividing the net income or loss by the weighted average number of ordinary shares outstanding for
the period, without consideration of potentially dilutive securities. Diluted
net earnings per share is calculated by dividing the net income or loss by the weighted average number of ordinary shares and potentially
dilutive securities outstanding for the period. If there is a loss, potentially dilutive securities are not considered, as they would
be anti-dilutive. CURRENC
GROUP INC. AND SUBSIDIARIES NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2 Summary of significant accounting policies (continued) The
following tables provide the calculation of basic and diluted net loss per ordinary share for the three months and nine months ended
September 30, 2024, and September 30, 2023: Schedule
of basic and diluted net loss per ordinary shares
2024 2023 2024 2023
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
Numerator:
Net loss $ (4,961,006 ) $ (3,830,445 ) $ (11,810,167 ) $ (10,911,259 )
Denominator:
Weighted average ordinary shares outstanding 38,163,168 33,980,753 35,374,891 33,980,753
Basic and diluted net (loss) per share $ (0.13 ) $ (0.11 ) $ (0.33 ) $ (0.32 )
The
following table conveys the number of shares that may potentially be dilutive ordinary shares in the future. The holders of these shares
do not have a contractual obligation to share in the Company’s losses. The Company excluded the following potential ordinary shares,
presented based on amounts outstanding at each period end, from the computation of diluted loss per share: Schedule
of computation of diluted loss per share
September 30, 2024 September 30, 2023
Warrants 17,932,892 -
Convertible bonds (treasury stock method) 204,167 2,736,287
(k) Warrants The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”).
The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period
end date while the warrants are outstanding. All of the Company’s warrants have met the criteria for equity treatment (see Note
13, Shareholders’ Deficit
(l) Fair
Value Measurements Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly, hypothetical transaction between
market participants at the measurement date, or exit price. ASC 820, Fair Value Measurement (“ASC 820”) establishes a fair
value hierarchy for inputs, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
when measuring fair value. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management
judgment. The three levels are defined as follows:
● Level
1 – Quoted prices in active markets for identical assets or liabilities.
● Level
2 – Inputs other than Level 1 that are observable, either directly or indirectly, such
as quoted prices for similar assets or liabilities; quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data
for substantially the full term of the assets or liabilities; and
● Level
3 – Unobservable inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities. CURRENC
GROUP INC. AND SUBSIDIARIES NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
2 Summary of significant accounting policies (continued) ASC
825-10, Financial Instruments Convertible bonds and notes The
following table provides the financial liability reported at fair value and measured on a recurring basis at September 30, 2024: Schedule
of financial liability reported at fair value and measured on a recurring basis
Description Total Level 1 Level 2 Level 3
September 30, 2024
Description Total Level 1 Level 2 Level 3
Convertible Note $ 1,750,000 $ - $ - $ 1,750,000 As
of December 31, 2023, no financial liabilities were reported at fair value and measured on a recurring basis. There were no transfers
between fair value hierarchy levels during the period ended September 30, 2024. The
assumptions used in determining the fair value of the Company’s outstanding convertible note for the period ended September 30,
2024, is as follows: Schedule
of assumptions used in determining the fair value convertible note
September 30, 2024
Risk-free interest rate 3.81 %
Volatility 37.42 %
Expected life (years) 1.4
(j) Recent Accounting Pronouncements From
time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard
setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued
standards that are not yet effective are not expected to have a material impact on the Company’s financial position or results
of operations upon adoption. In
November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.
2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures |
