Company: SHPH
Filing Date: 2025-02-13
Form Type: S-1
Source: 0001493152-25-006202
Chunk: 222

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-13
Form: S-1
Chunk 222
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 amortization expense of $ 37,745related to the discount on the 2022 Convertible Notes as interest expense in its statement of operations for the year ended December 31, 2022.

| F-37 |

For services provided in the offering, Boustead Securities LLC also received warrants to purchase 10%of the shares of common stock issuable upon conversion of the 2022 Convertible Notes, at the conversion price of the notes. Upon conversion, the warrant became exercisable for a total of 2,582shares of common stock at an exercise price of $ 16.00per share. These warrants were accounted for under ASC 718 and classified as liabilities due to the fact that the conversion of the 2022 Convertible Notes would impact their fair value. The fair value at issuance of the warrants was estimated as $ 92,336using a Black-Scholes model, with inputs that included an estimated fair value of the Company’s common stock of $ 32.00, an exercise price of $ 16.00per share (based on the estimated conversion terms), a five year term, 86.1%volatility and a risk free rate of 1.81%to 1.96%.

During the year ended December 31, 2022, the 2022 Convertible Notes were automatically converted into the securities issued by the Company to the investors in the initial public offering, at a discounted price of $ 32.00per unit. Consistent with the investors in the initial public offering, the 2022 Convertible Note holders received 18,438shares of common stock and warrants to purchase 18,438shares of common stock with an exercise price of $ 0.08per share. The warrants issued to the 2022 Convertible Note holders were immediately exercised. Pursuant to the automatic exercise of the share-settled redemption feature, the Company accounted for the conversion as an extinguishment of debt. The Company recognized the issuance of the shares of common stock and warrants at their estimated fair value, and recorded a loss on extinguishment of $ 310,621based on the difference between the estimated fair value ($ 1,198,438) and the net carrying amount of the 2022 Convertible Notes (including the carrying value of the bifurcated derivative liabilities, which were adjusted to then fair value upon settlement). The accrued cash interest was waived upon conversion and was included as a component of the loss on extinguishment.

August 2022