Company: SHPH
Filing Date: 2025-01-15
Form Type: S-1
Source: 0001493152-25-002253
Chunk: 223

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-01-15
Form: S-1
Chunk 223
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 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 the settlement amount could vary based on the occurrence of the initial public offering. The Company measured the fair value of these warrants using 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 $ 20.00per share, a five-year term, 80.0%volatility and a risk free rate of 2.66%, and recognized them at their full fair value of $ 146,624.

The fair value of these warrants, the fair value of the bifurcated derivative liabilities and the other debt issuance costs incurred (totaling $ 27,162, including the fair value of the Boustead warrants described below),