GLYCOMIMETICS INC

Convertible Notes

As of March 31, 2024, Crescent has issued $37.5 million in convertible notes to certain investors. Crescent accounts for the Convertible Notes under Accounting Standard Codification (“ASC”) No. 815, Derivatives and Hedging (“ASC 815”). Under ASC 815-15-25, the election can be at the inception of a financial instrument to account for the instrument under ASC No. 825, Fair Value Measurements and Disclosures (Including the Fair Value Option) (“ASC 825” and the “Fair Value Option”). Crescent performed an analysis of all of the terms and features of the Convertible Notes and has not elected the Fair Value Option. Crescent assessed all terms and features of the Convertible Notes in order to identify any potential embedded features that would require bifurcation. As part of this analysis, Crescent assessed the economic characteristics and risks of the embedded features. Crescent determined that the share settled redemption feature was clearly and closely related to the debt host and did not require separate accounting. Crescent determined that the conversion options of the Convertible Notes, including the conversion features related to a defaulting purchaser and highest interest rate, were not clearly and closely associated with a debt host. However, these features did not meet the definition of a derivative under ASC 815, Derivatives and Hedging, and as a result, did not require separate accounting as a derivative liability.

Immediately prior to the closing of the Merger, the Convertible Notes were converted into 21,200,564 shares of Pre-Merger Crescent common stock based on the aggregate principal amount of $37.5 million plus unpaid accrued interest divided by the conversion price in connection with the Pre-Closing Financing.