Company: SHPH
Filing Date: 2025-01-15
Form Type: S-1
Source: 0001493152-25-002253
Chunk: 220

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-01-15
Form: S-1
Chunk 220
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 its statement of operations for the year ended December 31, 2022.

In April 2022, the warrants were modified by the Company
to nullify the effect of the April 2022 reverse stock split, allowing the warrant to remain outstanding and exercisable for 62,500 shares
of common stock at an exercise price of $8.00 per share. The Company calculated the incremental fair value provided to the holders of
the warrants due to the modification as $941,000, which was recorded as a deemed dividend during the year ended December 31, 2022. The
incremental fair value was estimated using a Black-Scholes model, with inputs including the estimated fair value of the Company’s
common stock of $32.00, the exercise price of either $16.00 (pre-modification) or $8.00 (post-modification), a remaining term of 4.75
years, volatility of 83.6% and a risk free rate of 2.55%.

In September 2022, the warrants were exercised by the lenders in exchange for tendering the outstanding principal balance ($ 500,000) on the December 2021 Promissory Notes. The Company treated the settlement as a debt extinguishment for accounting purposes. The Company recognized a loss on extinguishment of $ 1,531,852upon this settlement and issuance of the 62,500shares of common stock upon exercise, based on the difference between the estimated fair value of the common stock issued ($ 2,031,250) and the carrying value of the December 2021 Promissory Notes. The Company paid all accrued interest under the December 2021 Promissory Notes from issuance through settlement to the lenders in cash during the year ended December 31, 2022.

2022 Convertible Bridge Notes

On February 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