Company: SHPH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001493152-25-008300
Chunk: 1071

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 6
Chunk 1071
---
 Investor moved the Investment Amount from First Republic Bank, after which time the Springing
DACA was no longer in effect. Further, pursuant to amendments to the SPA entered into in May and June of 2023, the Company and the Investor
agreed that all of the Investment Amount would be released to the Company and the relevant provision of the SPA which required the Springing
DACA would no longer be deemed applicable. In addition, the Company granted the Investor the option to purchase up to an additional $10
million in convertible notes and warrants on substantially the same terms as the Alto Convertible Note and Alto Warrant, excluding the
Springing DACA requirement, with such option to be effective through December 31, 2025. The agreement offered the investor an opportunity
to participate in future capital raises at substantially similar terms as the January 11, 2023 agreement. The Company expected that such
subsequent convertible notes and warrants would be issued on substantially similar terms as the January 11, 2023 initial agreement, as
amended, thus providing the Company the opportunity to negotiate certain aspects of the agreement.

    F-19

Boustead
Securities, LLC (“Boustead”) served as a placement agent for the Alto Convertible Note and Warrant offering and received
$345,000 cash compensation and a warrant to purchase 8,909 shares of common stock, exercisable at $18.80 per share, as adjusted. The
Boustead warrant was determined to be an equity instrument valued on a non-recurring basis. The Company used the Black Scholes valuation
model using a term of five years, volatility of 110%, a risk-free rate of 3.53% for a value of $99,543.

The
Company allocated the finance costs related to the Boustead placement agent fee of $345,000, based on the relative fair market values
of the Convertible Note and warrants issued. The allocation of the financing costs applied $232,027 to the debt component as a debt discount
that was being amortized to interest expense over the term of the Convertible Note, $104,245 to the warrant derivative liability component,
expensed as a finance fee, and $8,727 to the equity warrant as a reduction in additional paid in capital.

The
Company allocated to the debt component of the note an original discount of $300,000, legal fees of $65,000, $215,000 for additional
interest fees on day one