Company: SHPH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001493152-25-008300
Chunk: 120

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 120
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 the fair value of the Company’s convertible notes and derivative liabilities,
respectively.

Leases

The
Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use asset (“ROU”),
operating lease liability - current, and operating lease liability - noncurrent on the consolidated balance sheets.

ROU
assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the related
obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date
based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the
Company uses an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing, over a similar term
of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives.
The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise
that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

    F-10

Leases
with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheets and are expensed on a straight-line
basis over the lease term in the consolidated statement of operations. The Company has lease agreements with lease and non-lease components,
which are generally accounted for separately.

The
Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would
have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment
(the “incremental borrowing rate” or “IBR”). The Company determines the appropriate IBR by identifying a reference
rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference
rate, the Company used an equity built up, risk adjusted rate, as the implicit interest rate.

Property
and Equipment

Property
and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred;
additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost
and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of
property and equipment is provided using the