Company: SHPH
Filing Date: 2025-02-13
Form Type: S-1
Source: 0001493152-25-006202
Chunk: 223

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-13
Form: S-1
Chunk 223
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 Notes

On August 1, 2022, the Company issued promissory note units, consisting of an aggregate $ 50,000in 10% promissory notes with a maturity date of July 31, 2023 (the “August 2022 Promissory Notes”) and warrants to purchase 2,500shares of common stock exercisable at a price of the lesser of $ 20.00per share or 50% of the per share price paid in the Company’s initial public offering. In addition, the Company issued convertible note units, consisting of an aggregate of $ 75,000in 6% convertible notes with a maturity date of December 31, 2024 (the “August 2022 Convertible Notes”, and collectively, the “August 2022 Notes”) and warrants to purchase 3,750shares of common stock exercisable at a price of the lesser of $ 20.00per share or 50% of the per share price paid in the Company’s initial public offering. The Company received net proceeds of $ 50,000upon the issuance of the August 2022 Promissory Notes, $ 25,000upon the issuance of the August 2022 Convertible Notes (non-related party) and $ 50,000upon the issuance of the August 2022 Convertible Notes issued to a related party (as detailed in Note 5 above).

The Company assessed the embedded features of the August 2022 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 $45,000
at issuance (see Note 8 for fair value considerations). The Company assessed the embedded features of the August 2022 Convertible Notes
and determined that the automatic conversion feature with a 50% discount to per share price paid (a share-settled redemption feature)
and the 10% principal increase feature were not clearly and closely related to the debt host instrument and met the definition of a derivative
and as such, required bifurcation from the August 2022 Convertible Notes. The Company estimated the fair value at issuance of these features
to be $31,000 and recorded as a discount to the August 2022 Convertible Notes (see Note 8 for fair value considerations).

The Company determined that the warrants issued with the August 2022 Notes should be classified as liabilities under ASC 815, as