Company: SHPH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001493152-25-008300
Chunk: 626

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 2
Chunk 626
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 the units that are forfeited
by employees that leave the Company prior to vesting as they occur. Compensation cost for RSUs is recognized using the straight-line
method over the requisite service period.

Research
and Development Expenses

Research
and development expenses are charged to expense as incurred. Research and development expenses include, but are not limited to, product
development, clinical and regulatory expenses, payroll and other personnel expenses, which include a certain portion of the Company’s
chief executive officer, chief operating officer, vice president regulatory (formerly the chief financial officer) and directors’
compensation. For the year ended December 31, 2024 and 2023, a portion of personnel-related expenses and stock-based compensation expense
for these individuals totaling $0.5 million and $0.8 million, respectively, was included within research and development due to their
active involvement in the research and development activities, materials, supplies, related subcontract expenses, and consulting costs.

Regarding
the accounting treatment for reimbursements, GAAP provides limited guidance on the accounting for government grants received by for-profit
companies. In accordance with ASC Topic 832, Government Assistance, as adopted January 1, 2022, the Company discloses certain
types of government assistance received in the notes to the consolidated financial statements that includes: a) the nature of the transaction
including the nature of the assistance being given, b) the accounting policies being used to account for the transaction and c) other
provisions of relevance, where required. Depending on the type of grant or contract, the Company understands there is more than one acceptable
alternative for the accounting treatment – a reduction of costs, a deferred credit to be amortized, revenue or other income. The
Company has concluded that reimbursements received for R&D expenses incurred are more akin to a reduction of costs and applies reimbursements
against incurred research costs. For the years ended December 31, 2024 and 2023, the Company recorded $3.6 million and $3.5 million,
respectively, in research and development.

    F-13

Income
Taxes

The
Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset
and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences,
and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases.