Company: SHPH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001493152-25-008300
Chunk: 524

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1C
Chunk 524
---
 agreement (the “SPA”) with Alto Opportunity Master Fund,
SPC – Segregated Master Portfolio B, a Cayman entity (the “Investor”), pursuant to which the Company sold to the Investor
a $4,300,000 convertible note (the “Alto Convertible Note”) and warrant (the “Alto Warrant”) to purchase 127,260
shares of common stock, exercisable at $18.80 per share, in exchange for gross proceeds of $3,935,000 (the “Investment Amount”)
(See Note 6). As a consequence of the Company issuing the Convertible Bridge Notes, the exercise price of the Alto Warrant was adjusted
to $0.48 per share. The Company determined that the Alto Warrant contains a net cash settlement feature at inception and categorized
the Alto Warrant as a liability in the accompanying consolidated financial statements. The
Alto Convertible Note was amortized on a monthly basis and the Company could make such monthly amortization payments in cash or, subject
to certain equity conditions, in registered shares of common stock or a combination thereof. Installments could be deferred by the noteholder,
resulting in a variable interest rate. However, the effective interest rate was approximately 214% based on the internal rate of return
calculated on a series of cash flows that occur at regular intervals. For equity repayment, the Alto Convertible Note was convertible
into shares of common stock at a price per share equal to the lower of (i) $18.80 per share, as adjusted, (ii) 90% of the three lowest
daily VWAPs of the 15 trading days prior to the payment date, or (iii) 90% of the VWAP of the trading day prior to payment date. The
noteholder was able to be convert at any time at a fixed price of $18.80 per share, as adjusted. The noteholder had an acceleration of
installment amount conversion option (the “Alto Acceleration Option”), whereby the noteholder, with certain share percentage
limitations, could convert to common stock any outstanding installment amount at an amount equal to the installment amount plus five
times (5x) the installment amount at any time. The Company determined the Alto Acceleration Option was an embedded derivative within
the host instrument and bifurcated it from the host instrument and recorded it as a derivative liability valued at $1,442,000 at inception,
using a Monte Carlo