Company: SHPH
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001641172-25-009325
Chunk: 13

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 13
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 and continue to be, ineffective as of March 31, 2025. Based on the foregoing, our management
concluded that our internal controls over the following financial reporting areas to be material weaknesses:

    ●
    Our written policies and procedures over accounting transaction processing and period end financial close and reporting are limited, which has resulted in ineffective oversight in the establishment of proper monitoring controls over accounting and financial reporting; in addition, we lacked sufficient review and segregation of duties for certain financial transactions, manual journal entries, and critical financial spreadsheets, such that a proper review had not been performed by someone other than preparer, and that process documentation is lacking for review and monitoring controls over accounting and financial reporting. These were contributing factors which led to untimely filings for certain periods in fiscal year 2024.

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    ●
    We lack a formal process to identify and ensure the proper classification of operating expenses as Research and Development.

    ●
    We identified findings related to overall information technology general controls (“ITGCs”) including issues with super-user access and segregation of duties for systems supporting the Company’s internal control processes and controls.

Management’s Remediation
Measures

While the Company has improved
its organizational capabilities, the Company’s remediation efforts will continue to take place. Management is committed to maintaining
a strong internal control environment. In response to the identified material weaknesses in the overall control environment, management
is currently implementing additional measures which include:

    ●
    Hired a new Chief Financial Officer during the second quarter of 2024 to bolster the Company’s internal technical accounting and financial reporting experience and provide bandwidth for the prior Chief Financial Officer to focus on the Company’s expanding clinical trial.

    ●
    Engaged a third-party consulting firm to assist with the preparation of SEC reporting and other technical accounting matters.

The Company will continue
to review and improve its internal controls over financial reporting to address the underlying causes of the material weaknesses and control
deficiencies. Such material weaknesses and control deficiencies will not be fully remediated until the Company has concluded that its
internal controls are operating effectively for a sufficient period of time.

Remediation of Previously Disclosed Material Weaknesses

As previously disclosed in our Annual Report on Form
10-K for the year ended December 31, 2024, we identified material weaknesses in our internal controls over financial reporting for 1)
significant unusual transactions, including complex accounting associated with debt and equity transactions and 2) certain
technical aspects of financial reporting for stock-based compensation transactions