Company: SHPH
Filing Date: 2025-01-24
Form Type: 424B3
Source: 0001493152-25-003508
Chunk: 219

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-01-24
Form: 424B3
Chunk 219
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 8, 2022 and March 11, 2022, the Company sold $ 365,000and $ 225,000, respectively, in 6% convertible notes (the “2022 Convertible Notes”), which bore 6% interest (which would be waived upon a conversion event), were repayable on December 31, 2024, and were convertible upon the completion of the Company’s initial public offering or other liquidity event at 50% of the per share price paid by investors in such an event. In addition, if the 2022 Convertible Notes were not converted during the period 12 months after their initial issuance, the outstanding principal amount of the 2022 Convertible Notes would be increased by 10%. The Company received net proceeds of $ 525,715from the 2022 Convertible Notes, after deducting a total of $ 64,285in fees paid to Boustead Securities LLC for services provided as placement agent for the offering. Boustead also received warrants in connection with the issuances with a total estimated fair value of $ 92,336(see discussion below) and the Company incurred $ 17,363in additional costs which were recorded as debt issuance costs upon issuance of the 2022 Convertible Notes.

The Company assessed the embedded features of the 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 2022 Convertible Notes. The Company estimated the fair value at issuance of these features to be $ 221,000and recorded as a discount to the 2022 Convertible Notes (see Note 8 for fair value considerations). Of the total $ 173,984of issuance costs incurred related to the 2022 Convertible Notes, the Company allocated $ 108,858of the debt issuance costs to the 2022 Convertible Notes (as a discount) and $ 65,126allocated to the derivative liability and expensed as a component of the finance fee (as restated) in the statement of operations. The discount on the 2022 Convertible Notes was amortized under the effective interest method through the maturity dates of the notes. The Company recognized amortization expense of $ 37,745related to the discount on the