Company: SHPH
Filing Date: 2025-02-13
Form Type: S-1
Source: 0001493152-25-006202
Chunk: 191

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-13
Form: S-1
Chunk 191
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 up to $ 1,350,000. AGP was paid a $ 50,000retainer fee.

As of September 30, 2024, the Company has incurred $ 101,651of expenses included in deferred costs recorded on the Company’s unaudited condensed consolidated balance sheet.

See Note 9, Subsequent Events, Alliance Global Partners.

Note 7 – Derivative Liabilities

Fair Value Assumptions Used in Accounting for Derivative Liabilities

ASC 815 requires us to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense.

In January 2023, in connection with the Alto Convertible Note, the Company issued warrants to purchase 127,260shares of common stock, with an exercise price of $ 1.93per share, as adjusted for the recent reverse split, valued at inception at $ 1,189,000and as of September 30, 2024, at $ 74,107. The Company determined our derivative liabilities from the warrants issued in relation to the Alto Convertible Note do not satisfy the classification as equity instruments due to the existence of a certain net cash settlement provision that is not within the sole control of the Company. In addition, there are certain down round provisions that could reduce the exercise price if the Company issues securities at lower prices in the future.

The Company has determined the Acceleration Option is an embedded derivative within the host instrument and has bifurcated it from the host instrument and recorded it as a derivative liability valued at $ 1,442,000, using a Monte Carlo simulation model. The Company determined our derivative liability from the noteholder’s Acceleration Option for the Alto Convertible Note is not clearly and closely related to the host and should be thus accounted for as a bifurcated derivative liability.

The Company classified these derivative liabilities as a Level 3 fair value measurement and used the Monte Carlo pricing model to calculate the fair value as of January 11, 2023 ($ 2,631,000included in debt discount) and September 30, 2024 ($ 74,107). Key inputs for the simulation are summarized below. The Monte Carlo simulation uses an implied VWAP for the January 11, 2023 valuation date. The implied VWAP was backsolved by setting the summation of the parts (e.g., derivatives and debt without derivatives) equal to the cash proceeds. The simulation was then iter