| Summary of significant accounting policies | 2 Summary of significant accounting
policies Basis
of presentation The
accompanying condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”). Consolidation The
accompanying condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. Significant
inter-company balances, investment and capital, if any, have been eliminated upon consolidation. Liquidity In
assessing the Company’s liquidity, the Company monitors and evaluates its cash and cash equivalent and its operating and capital
expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital
expenditure obligations. Cash
flow from operations and capital contributions and loans from shareholders have been utilized to finance the working capital requirements
of the Company. As of June 30, 2024, the Company has negative cash flow from operating activities of S$ 9,522,000
(US$ 7,025,000 ).
The Company’s working capital was positive
S$ 2,402,000 (US$ 1,773,000 )
as of June 30, 2024 and the Company had S$ 2,976,000
(US$ 2,196,000 )
in cash and cash equivalents, which is unrestricted as to withdrawal and use as of June 30, 2024. On
September 26, 2024, the Company completed its follow-on public offering. In this offering, the Company issued 5,300,000 0.85 4.5 To
sustain its ability to support the Company’s operating activities, the Company considered supplementing its sources of funding
through the following:
● cash
and cash equivalents generated from operations;
● other
available sources of financing from Singapore banks and other financial institutions;
● financial
support from the Company’s related parties and shareholders;
● issuance
of additional convertible notes; and
● obtaining
funds through a future raise debt and equity. Management
has commenced a strategy to raise debt and equity. However, there can be no certainty that these additional financings will be available
on acceptable terms or at all. If management is unable to execute this plan, there would likely be a material adverse effect on the Company’s
business. Based
on the above considerations, management believes that the Company has sufficient funds to meet its operating and capital expenditure
needs and obligations in the next 12 months. However, there is no assurance that the Company will be successful in implementing the foregoing
plans or additional financing will be available to the Company on commercially reasonable terms. There are a number of factors that could
potentially arise that could undermine the Company’s plans such as (i) changes in the demand for the Company’s services,
(ii) government policies, and (iv) economic conditions in Singapore and worldwide. The Company’s inability to secure needed financing
when required may require material changes to the Company’s business plan and could have a material impact on the Company’s
financial conditions and result of operations. RYDE
GROUP LTD NOTES
TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2 Summary
of significant accounting policies (continued) Foreign
currency translation and transaction The
accompanying consolidated financial statements are presented in the Singapore Dollars (“SGD” or “S$”), which
is the reporting currency of the Company. The functional currency of the Company and its subsidiaries in the British Virgin Islands
is United States Dollars (“USD” or “US$”). All information presented in S$ have been rounded to the nearest thousand,
unless otherwise stated. Convenience
translation Translations
of balances in the unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements
of operations and comprehensive loss, unaudited interim condensed consolidated statements of changes in shareholders’ equity
and unaudited interim condensed consolidated statements of cash flows from SGD into USD as of June 30, 2024 are solely for the
convenience of the readers and are calculated at the rate of SGD1.00
= USD0.7379 , representing the exchange rate set
forth in the H.10 statistical release of the Federal Reserve Board on June 28, 2024. No representation is made that the SGD amounts
could have been, or could be, converted, realized or settled into USD at such rate, or at any other rate. Cash
and cash equivalents Cash
and cash equivalents represent cash in bank and are unrestricted as to withdrawal or use. Accounts
receivable,net Accounts
receivable mainly represent amounts due from clients that meet the revenue recognition criteria. These accounts receivable are recorded
net of any allowance for doubtful accounts. Management reviews its receivables on a regular basis to determine whether the allowance
for doubtful accounts is adequate and provides an allowance when necessary. The allowance is based on management’s best estimates
of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off
against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. Deposits,
prepaid expenses and other current assets Deposits,
prepaid expenses and other current assets are classified as either current or non-current based on the terms of the respective agreements.
These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. As of June
30, 2024 and December 31, 2023, management believes that the Company’s deposits, prepaid expenses and other current assets are
not impaired. RYDE
GROUP LTD NOTES
TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2 Summary
of significant accounting policies (continued) Use
of estimates The
preparation of condensed consolidated interim financial statements in conformity with US GAAP requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities
that are not readily apparent from other sources. Significant accounting estimates reflected in the Company’s consolidated financial
statements include, but are not limited to, impairment of long-lived assets, and allowance for credit losses on receivables, and
provision for expired credit. Actual results may differ from these estimates. Provision
for expired credit Provision
for expired credit represent all expired credits that are not redeemed by consumers. A provision for expired credit is recognized when
the credit expires, if the amount of the obligation can be estimated reliably. The provision is recognized as a reduction of expense
in the consolidated income statement, and as an asset on the consolidated balance sheet. The amount of the provision for expired credit
is estimated based on historical experience and the expected rate of redemption. The estimate is reviewed regularly and adjusted if necessary,
based on actual experience. Property
and equipment, net Property
and equipment are stated at cost less accumulated depreciation and impairment if applicable. The Company computes depreciation using
the straight-line method over the estimated useful lives of the assets as follows: Schedule
of property and equipment estimated useful life
Computer 3
years
Office
equipment 3
years
Renovations
3
years
Operating
lease right-of-use assets 2
years The
cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is
included in the consolidated statement of income. Expenditures for maintenance and repairs are charged to expense as incurred, while
additions renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates
the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Intangible
assets, net Developed
technology Research
costs are expensed as incurred. An intangible asset arising from development expenditure on an individual project is recognized only
when the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or
sale, its intention to complete and its ability to use or sell the assets, how that asset will generate future economic benefits, the
availability of resources to complete and the ability to measure reliably the expenditure during the development. Developed technology have finite useful life and are amortized over a period of expected sales from the related project of 3 Business
combinations We
account for our business combinations using the acquisition method of accounting, which requires, among other things, allocation of the
fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values
on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities
is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and
assumptions, especially with respect to intangible assets. Our estimates of fair value are based upon assumptions believed to be reasonable,
but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement
period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed,
with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition
date. After the measurement period, any subsequent adjustments are reflected on the consolidated statements of operations. Acquisition
costs, such as legal and consulting fees, are expensed as incurred. Goodwill Goodwill
is measured at cost less accumulated impairment losses. Goodwill is not subject to amortization, but is tested for impairment on an annual
basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of the reporting unit may
be in excess of its fair value. As part of the annual goodwill impairment test, the Company first performs a qualitative assessment to
determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not
that the fair value of the Company’s reporting unit is less than its carrying amount, the quantitative impairment test will be
required. Alternatively, the Company may bypass the qualitative assessment and perform a quantitative impairment test. An impairment
loss of goodwill amounted to S$ 664,000 RYDE
GROUP LTD NOTES
TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2 Summary
of significant accounting policies (continued) Impairment
of long-lived assets The
Company evaluates the recoverability of its long-lived assets (asset groups), including property and equipment and operating lease right-of-use
assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset (asset group) may not
be fully recoverable. When these events occur, the Company measures impairment by comparing the carrying amount of the assets to the
estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and their eventual disposition. If
the sum of the expected undiscounted cash flows is less than the carrying amount of the asset (asset group), the Company recognizes an
impairment loss based on the excess of the carrying amount of the asset (asset group) over their fair value. Fair value is generally
determined by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily
available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful
life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely
independent of the cash flows of other assets and liabilities. Operating
lease right-of-use assets The
Company determines if an arrangement is a lease at inception. Operating leases are included in property and equipment, and operating
lease liability in the Company’s unaudited interim condensed consolidated balance sheets. Operating lease right-of-use (“ROU”)
assets are included in the property and equipment. ROU assets represent the Company’s right to use an underlying asset for the
lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease
ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When
determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will
exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company used an incremental borrowing
rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected
to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) for leases that have lease terms of 12 months
or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition
requirements; and (ii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior
to January 1, 2019 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing
leases, and (c) initial direct costs. Fair
value measurements ASC
820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required
or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in pricing the asset or liability.
ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level
1 - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level
2 other
inputs that are directly or indirectly observable in the marketplace.
Level
3 unobservable
inputs which are supported by little or no market activity. The
carrying amounts of cash and cash equivalents, accounts receivable, net, deposits prepaid and other current assets, accounts payable,
accrued expenses, other current liabilities, convertible loans, and note from a shareholder approximate their fair values because of
their generally short maturities. RYDE
GROUP LTD NOTES
TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2 Summary
of significant accounting policies (continued) Revenue
recognition Mobility
and quick commerce arrangement The
Company recognizes revenue for its ride-hailing and quick commerce marketplace in accordance with ASC 606. The Company generates revenue
from commissions and service fees (collectively, “fees”) paid by driver partners and consumers for use of the Ryde platform
to connect driver partners with consumers to facilitate and successfully complete transaction via the Application (“App”)
where the Company operates as an agent. The Company recognizes revenue upon completion of each transaction. Driver partners and consumers
enter into terms of service (“ToS”) with the Company in order to use the Ryde App. Under the ToS, driver partners and consumers
agree that the Company retains the applicable fee as consideration for their use of the Ryde platform from the fare and related charges
it collects from consumers on behalf of driver partners. The Company is acting as an agent in facilitating the ability for a driver partner
to provide a mobility and quick commerce service to a consumer. The Company reports revenue on a net basis, reflecting the fee owed to
the Company from a driver partner as revenue, and not the gross amount collected from the consumer. As
the Company’s customary business practice, a contract exists between the driver partner and consumer and the Company when the driver
partner’s and consumer’s ability to cancel the transaction lapses, which typically is upon pickup of the consumer or goods.
The Company’s single performance obligation in the transaction is to connect driver partners with consumer to facilitate the completion
of a successful mobility or quick commerce service for consumer. The Company recognizes revenue upon completion of a transaction as its
performance obligation is satisfied upon the completion of the transaction. The Company collects the fare and related charges from consumers
on behalf of driver partners using the consumer’s pre-authorized credit card or other payment mechanism and retains its fees before
making the remaining disbursement to driver partners; thus the driver partner’s ability and intent to pay is not subject to significant
judgment. Principle
vs Agent consideration Judgment
is required in determining whether we are the principal or agent in transactions with driver partners, and consumer. We evaluate the
presentation of revenue on a gross or net basis based on whether we control the service provided to the consumers and are the principal
(i.e. “gross”), or we arrange for other parties to provide the service to the consumers and are an agent (i.e. “net”).
This determination also impacts the presentation of incentives provided to driver partners and discounts and promotions offered to consumers
to the extent they are not customers. For
the mobility and quick-commerce transactions, our role is to provide the service to driver partners to facilitate a successful trip or
quick-commerce service to consumer. We concluded we do not control the good or service provided by driver partners to consumers as (i)
we do not pre-purchase or otherwise obtain control of the goods or services prior to its transfer to the consumers; (ii) we do not direct
driver partners to perform the service on our behalf, and (iii) we do not integrate services provided by driver partners with our other
services and then provide them to consumers. As part of our evaluation of control, we review other specific indicators to assist in the
principal versus agent conclusions. We are not primarily responsible for mobility and quick commerce services provided to consumers,
nor do we have inventory risk related to these services. While we facilitate setting the price for mobility and quick commerce services,
the driver partners and consumers have the ultimate discretion in accepting the transaction price and this indicator alone does not result
in us controlling the services provided to consumers. In
transactions with consumers, we act as an agent of the driver partners by connecting consumers seeking mobility and quick commerce services
with driver partners looking to provide these services. Driver partners and consumers are our customers and pay us a fee for each successfully
completed transaction with consumers. Accordingly, we recognize revenue on a net basis, representing the fee we expect to receive in
exchange for us providing the service to driver partners and consumers. RYDE
GROUP LTD NOTES
TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2 Summary
of significant accounting policies (continued) Revenue
recognition (continued) Mobility
and quick commerce The
Company derives its mobility and quick commerce revenue primarily from fees paid by driver partners and consumers for use of the platform
and related service to connect with consumers and successfully complete a transaction via the platform. The Company recognizes revenue
when a transaction is completed. The
presentation of revenue is on a net basis. The Company is an agent as its performance obligation is to arrange for another party (i.e.
the driver partners) to provide the mobility and quick commerce services. Through the Company’s application, it allows for the
connecting of the driver partners and consumers. The Company only facilitates by connecting the driver partners and consumers. The driver
partners are responsible for fulfilling the contract. Incentives
provided to driver partners are recorded as a reduction of revenue if the Company does not receive a distinct good or service or cannot
reasonably estimate the fair value of the good or service received. Incentives to driver partners that are not provided in exchange for
a distinct good or service are evaluated as variable consideration, in the most likely amount to be earned by the driver partners at
the time or as they are earned by the driver partners, depending on the type of incentive. Since incentives are earned over a short period
of time, there is limited uncertainty when estimating variable consideration. Excess
driver partners incentives refer to cumulative payments to driver partners that exceed the cumulative revenue that are recognize from
driver partners with no future guarantee of additional revenue. Cumulative payments to driver partners could exceed cumulative revenue
from driver partners as a result of driver partners incentives or when the amount paid to driver partners for a trip exceeds the fare
charged to the consumer. Driver partners incentives largely depend on the business decisions based on market conditions. When
the cumulative amount of driver partners incentives exceeds the cumulative revenue earned since inception of the driver partners relationship,
the excess driver partners incentives are recorded in profit or loss as an expense. As a result, driver partners incentives provided
to driver partners at the beginning of a relationship are typically classified as cost of revenue, while driver partners incentives provided
to driver partners with a more mature relationship are typically classified as a reduction of revenue. Incentive
to consumers The
Company provides consumer incentives in the form of credit upon completion of transaction, with the aim of encouraging consumers to utilize
the Ryde platform for their future transactions. These credits are offered to consumers in the market to acquire new consumers, re-engage
existing customers, or generally increase overall use of the platform, and are similar to coupons. The Company records these credits
as liability on the balance sheet and as driver and riders cost and related expenses in the statement of operations and comprehensive
loss at the time these credits are redeemed by the consumers. Revenue
from Advertising Revenue
from advertising is recognized when the advertising services are provided to the merchant. The revenue is recognized at the amount of
consideration that the company expects to be entitled to receive, net of any discounts or refunds. If the consideration for the advertising
services includes barter trade, the revenue and cost are recognized separately based on the fair value of the barter trade. The
Company derives revenue from digital advertising services provided to merchants under contractual agreements. These services encompass
the display of merchants’ advertisements within our mobile/web platform and email channels. Revenue recognition commences at the
initiation of the contract period, as stipulated in the signed agreement with our merchant clients. The Company employs the ‘output
method’ to measure progress towards fulfilling its performance obligations. Under this method, revenue is recognized proportionately
over the duration of the contractual period. This method accurately reflects the faithful depiction of the transfer of services, as it
aligns with the nature of the services provided, where revenue is recognized based on the contractual period. Membership Revenue
from membership is recognized over the period of the membership. The subscription fee is recognized as revenue over the subscription
period. Any relevant costs incurred to provide the membership benefits are recognized as cost. The cashback bonuses, exclusive lifestyle
and food and beverage perks, and discounts provided to the members are not recognized as revenue. RYDE
GROUP LTD NOTES
TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2 Summary
of significant accounting policies (continued) Segments ASC
280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent
with the Company’s internal organizational structure as well as information about geographical areas, business segments and major
clients in financial statements for detailing the Company’s business segments. Management has determined that the Company operates
in a single segment because there is only one Chief Operating Decision Maker (“CODM”) for the Company who is the Company’s
Chief Executive Officer. Operating and financial metrics are applied to the entire Company as whole. The Company’s sales are principally
in Singapore. Concentrations
and credit risk Financial
instruments that potentially expose the Company to concentration of credit risk consist primarily of accounts receivable. The Company
has designed their credit policies with an objective to minimize their exposure to credit risk. The Company’s accounts receivable
are short term in nature and the associated risk is minimal. The Company conducts credit evaluations on its clients and generally does
not require collateral or other security. The Company periodically evaluates the creditworthiness of the existing clients in determining
the allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific
clients. As
of June 30, 2024 and December 31, 2023, the Company’s assets were located in Singapore and the Company’s revenue was principally
derived in Singapore. Employee
benefits Employee
benefits are recognized as an expense, unless the cost qualifies to be capitalized as an asset. Defined
contribution plans are post-employment benefit plans under which the Company pays fixed contributions into separate entities such as
the Central Provident Fund on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions
have been paid. The Central Provident Fund paid to The Central Provident Fund Board in Singapore is S$ 99,000 74,000 104,000 Share-based
compensation The
Company follows ASC 718, Compensation —Stock Compensation (“ASC 718”), which requires the measurement and recognition
of compensation expense for all share-based payment awards, including restricted stock units, based on estimated grant date fair values.
Share-based compensation are valued using the market price of the Company’s common shares on the date of grant. The Company records
compensation expense, net of estimated forfeitures, over the requisite service period. Awards
classified in equity under ASC 718 that may be subject to temporary equity classification include:
● Shares
with a repurchase feature that the employee can exercise only after the shares have been vested for at least six months, as well
as options on such shares.
● Shares
that have a contingent repurchase feature that is outside the control of the employee and the entity if it is currently probable
that the contingency would not occur. Examples include shares redeemable only on the occurrence of a liquidity event, such as a change
of control.
● Options
that have a contingent cash-settlement provision not within the employee’s or the entity’s control if it is not currently
probable that the contingency would occur. Related
parties Parties
are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject
to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation. Income
taxes The
Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets are also provided for net operating loss carry forwards that can be utilized to
offset future taxable income. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period including the enactment date. A valuation allowance is established, when necessary, to reduce net deferred tax
assets to the amount expected to be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing
authorities. An
uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that
is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test,
no tax benefit is recorded. The
Company did not accrue any liability, interest or penalties related to uncertain tax positions in its provision for income taxes for
the six months ended June 30, 2024 and 2023. RYDE
GROUP LTD NOTES
TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2 Summary
of significant accounting policies (continued) Government
grants Government
grants are recognized when there is reasonable assurance that the grant will be received, and all attaching conditions will be complied
with. Government grants shall be recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as
expenses the related costs for which the grants are intended to compensate. Government grant is recognized as ‘Other income’
in profit or loss. The
following is a description of the government grants the Company have received:
● The
Jobs Growth Incentive (“JGI”): To support employers to expand local hiring from September 2020 to March 2023. The duration
of JGI support will vary depending on when the local hire was hired and the characteristics of the local hire.
● The
Progressive Wage Credit Scheme: It was introduced in Singapore Budget 2022 to provide transitional wage support for employers to
adjust to upcoming mandatory wage increases for lower-wage workers covered by the Progressive Wage and Local Qualifying Salary requirements
and voluntarily raise wages of lower-wage workers.
● CPF
Transition Offset: Transitory wage offsets provided by the Government equivalent to 50% of each year’s increase in employer
CPF contribution rates for every Singaporean and Permanent Resident employee aged above 55 to 70 to alleviate the rise in business
costs due to the increase in CPF contribution rates for senior workers.
● Government-Paid
Leave schemes: Leave schemes provided by the Government to support parents in having and raising children by reimbursing the companies
for leaves taken by eligible employees. Earnings
(loss) per share Basic
earnings (loss) per share is computed by dividing net earnings (loss) attributable to ordinary shareholders by the weighted average number
of ordinary shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if outstanding
stock options, warrants and convertible debt were exercised or converted into ordinary shares. When the Company has a loss, diluted shares
are not inclu |
