Company: SHPH
Filing Date: 2025-01-15
Form Type: S-1
Source: 0001493152-25-002253
Chunk: 219

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-01-15
Form: S-1
Chunk 219
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 a “Loan Forgiveness Application” was submitted to PNC Bank along with the requested documentation. Thereafter, during the quarter ended March 31, 2022, the note liability was reduced in its entirety and the Company recognized a gain on forgiveness of $ 73,007in its statement of operations for the year ended December 31, 2022. (as restated)

December 2021 Promissory Notes

On December 28, 2021, the Company issued promissory note units, consisting of an aggregate $ 500,000in 10% unsecured promissory notes with a maturity date of December 28, 2022(the “December 2021 Promissory Notes”) and warrants to purchase 62,500shares of common stock exercisable at $ 8.00per share with an expiration date of December 28, 2026. The Company received net proceeds of $ 494,925upon the issuance of these promissory note units and incurred $ 21,890in additional issuance costs which were allocated between the December 2021 Promissory Notes and the warrants. The Company assessed the embedded features of the December 2021 Promissory Notes and determined that the accelerated repayment upon an initial public offering represented a derivative feature requiring bifurcation. The Company estimated the fair value of the derivative to be $ 367,000at issuance (see Note 8 for fair value considerations).

The Company determined that the warrants issued with the December 2021 Promissory Notes should be classified as equity. The Company measured the fair value of these warrants using a Black-Scholes model and allocated fair value to these warrants on a relative fair value basis. The proceeds from the December 2021 Promissory Notes allocated to the warrants at issuance was $ 418,449. The inputs to the Black-Scholes model included an estimated fair value of the Company’s common stock of $ 40.00, the exercise price of $ 8.00per share, a five year term, 86.3%volatility and a risk free rate of 1.27%.

The discount on the December 2021 Promissory Notes was being amortized using the straight-line method as the initial proceeds received were fully allocated to the warrants and bifurcated derivative, through the maturity date of the notes. The Company recognized amortization expense of $ 331,978 related to the discount on the December 2021 Promissory Notes as interest expense in