Company: SHPH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001493152-25-008300
Chunk: 402

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1B
Chunk 402
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) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
The Company’s convertible notes where fair value option was not elected were liquidated by December 31, 2024.

Warrants

The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”)
and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether
the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,
among other conditions for equity classification. Finally, the Company determines if the warrants meet the definition of a derivative
based on their contractual terms. This assessment, which requires the use of professional judgment, is conducted at the time of warrant
issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded at their initial fair value on the date of issuance, and at each balance sheet date thereafter.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.
The Company also evaluates if changes in contractual terms or other considerations would result in the reclassification of outstanding
warrants from liabilities to stockholders’ equity (or vice versa).

    F-12

The
fair value of the warrants is estimated using a Monte Carlo simulation. Warrants that have terms greater than one year are classified
as non-current liabilities in the balance sheet, unless there is an indication that the warrants would be settled within one year.

Impairment
of Long-Lived Assets

The
Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying
amount of the asset may not be fully recoverable. Recoverability of assets is