Company: SHPH
Filing Date: 2025-02-13
Form Type: S-1
Source: 0001493152-25-006202
Chunk: 224

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-13
Form: S-1
Chunk 224
---
 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), exceeded the proceeds received and as such, the Company recorded a loss at issuance of $ 124,786, in finance fee (as restated) in the statement of operations. The discount on the August 2022 Notes was being amortized under the straight-line method, as the initial carrying value was $ 0, through the maturity date of the respective notes. The Company recognized amortization expense of $ 7,661related to the discount on the August 2022 Notes as interest expense in its statement of operations for the year ended December 31, 2022.

Boustead Securities LLC acted as placement agent for the August 2022 Notes and received warrants to purchase 625shares of common stock at an exercise price of $ 20.00per share. The fair value of the warrants was estimated as $ 14,662using 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 recorded by the Company in stockholders’ equity at issuance.

During the year ended December 31, 2022, the lender under the August 2022 Promissory Notes and one lender under the August 2022 Convertible Notes exercised warrants to purchase 3,750shares of common stock in exchange for tendering their outstanding principal balance ($ 75,000) on their respective notes. As the warrants being exercised were classified as liabilities, the Company accounted for the settlement as an extinguishment of debt. The Company recognized the issuance of the 3,750shares of common stock at their estimated fair value ($ 121,875