Company: SHPH
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001641172-25-009325
Chunk: 12

Company: Shuttle Pharmaceuticals Holdings, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 12
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 initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited
condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should
be recorded as liabilities are evaluated at the end of each reporting period.

For our derivative financial instruments classified
as a liability, we use a Monte Carlo valuation model to value the derivative instruments at inception and on subsequent valuation dates.
The model requires the use of simulations that are weighted based the volatility of a set of guideline companies and significant unobservable
inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on
each simulation calculated as an average. The Monte Carlo simulation uses an implied VWAP for valuation. The implied VWAP was backsolved
by setting the summation of the parts (e.g., derivatives and debt without derivatives) equal to the cash proceeds and is updated each
period.

The use of Monte Carlo valuation models require key
inputs, some of which are based on estimates and judgements by management. Any change to these key inputs could produce significantly
higher or lower fair value measurements.

Item 3. Quantitative and Qualitative Disclosures
About Market Risk

As a “smaller reporting company,” we are
not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures
(as defined in Securities Exchange Act of 1934, as amended, or the Exchange Act Rule 15d-15(e)) are designed with the objective of ensuring
that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized,
and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed
with the objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of March 31, 2025, our
management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Such
evaluation was carried out under the supervision of our Chief Executive Officer with the participation of our President and Chief Operating
Officer, and our Chief Financial Officer, and our third-party financial service provider. Based on this evaluation, management concluded
that our disclosure controls and procedures were,