Shuttle Pharmaceuticals Holdings, Inc.

Previous wording

On December 31, 2024, we received a letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) stating that for the 30 consecutive business day period between November 15, 2024 to December 30, 2024 our common stock had failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, or until June 30, 2025 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days.

Current wording

On December 31, 2024, we received a letter from the Nasdaq Staff stating that for the 30 consecutive business day period between November 15, 2024 to December 30, 2024 our common stock had failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until June 30, 2025, to regain compliance with the Minimum Bid Price Requirement.

Previous wording

Following the March 2025 $5.75 million equity financing, on March 14, 2025, Nasdaq acknowledged that we had regained compliance with the Listing Rule 5550(b)(1) but indicated that if we fail to evidence compliance upon filing the March 31, 2025 Form 10-Q, we may be subject to delisting. We have evidenced compliance through maintaining a minimum closing bid price of our common stock of $1.00 per share or greater from June 16, 2025 to July 1, 2025. Accordingly, we have regained compliance with Listing Rule 5550(a)(2).

Current wording

Following the March 2025 $5.75 million equity financing, on March 14, 2025, Nasdaq acknowledged that we had regained compliance with the Listing Rule 5550(b)(1) but indicated that if we failed to evidence compliance upon filing the March 31, 2025 Form 10-Q, we may have been subject to delisting. We evidenced compliance through maintaining a minimum closing bid price of our common stock of $1.00 per share or greater from June 16, 2025 to July 1, 2025. Accordingly, we regained compliance with the Minimum Bid Price Requirement.

Previous wording

On June 16, 2025, in order to maintain the Minimum Bid Price Requirement again, we effectuated a 1-for-25 reverse stock split of our issued and outstanding common stock, rounding up to account for any fractional shares. The reverse stock split had no effect on our authorized shares of common stock or preferred stock and the par value will remain unchanged at $0.00001, respectively. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these unaudited condensed consolidated financial statements and related disclosures.

Current wording

On June 16, 2025, in order to maintain the Minimum Bid Price Requirement, we effectuated a 1-for-25 reverse stock split of our issued and outstanding common stock, rounding up to account for any fractional shares. The reverse stock split had no effect on our authorized shares of common stock or preferred stock and the par value will remain unchanged at $0.00001, respectively. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these consolidated financial statements and related disclosures.

Previous wording

*Research and Development.*Total research and development (“R&D”) expense was $0.9 million for the three months ended September 30, 2025, as compared to $1.4 million to the three months ended September 30, 2024. The decrease in total R&D expense of $0.5 million, or 33%, is primarily related to a $0.5 million decrease in subcontractor expenses and $0.2 million decrease in R&D compensation related expenses in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Subcontractor expense made up 78% of total R&D expenses in the three months ended September 30, 2025 and 73% of total R&D expenses during the three months ended September 30, 2024. R&D compensation related expenses were $0.2 million in the three months ended September 30, 2025 as compared to $0.3 million in the three months ended September 30, 2024. For the three months ended September 30, 2025, R&D compensation related expenses were 16% as a percent of total R&D expense, representing a decrease from the 22% of total R&D incurred in the three months ended September 30, 2024. The decrease is largely attributable to the lower employee headcount year over year and retirement of our CSO.

Current wording

*Research and Development.*Total research and development (“R&D”) expense was $0.3 million for the three months ended March 31, 2026, as compared to $1.6 million to the three months ended March 31, 2025. The decrease in total R&D expense of $1.3 million, or 83%, is primarily related to a $0.9 million decrease in subcontractor expenses and $0.2 million decrease in R&D compensation related expenses in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Subcontractor expense made up 36% of total R&D expenses in the three months ended March 31, 2026 and 58% of total R&D expenses during the three months ended March 31, 2025. R&D compensation related expenses were $0.2 million in the three months ended March 31, 2026 as compared to $0.6 million in the three months ended March 31, 2025. For the three months ended March 31, 2026, R&D compensation related expenses were 37% as a percent of total R&D expense, representing a decrease from the 26% of total R&D incurred in the three months ended March 31, 2025. The decrease is largely attributable to the lower employee headcount year over year and retirement of our CSO.

Previous wording

General and Administrative Expenses. General and administrative expenses in the three months ended September 30, 2025 increased by $0.6 million, or 169%, from $0.3 million in the three months ended September 30, 2024 to $0.8 million in the three months ended September 30, 2025. The increase in general and administrative expenses was primarily due to costs associated with advertising for investor relations of $0.5 million for the three months ended September 30, 2025.

Current wording

General and Administrative Expenses. General and administrative expenses in the three months ended March 31, 2026 increased by $0.6 million, or 94%, from $0.6 million in the three months ended March 31, 2025 to $1.2 million in the three months ended March 31, 2026. The increase in general and administrative expenses was primarily due to costs associated with advertising for investor relations of $0.1 million and amortization expense for developed technology of $0.6 for the three months ended March 31, 2026.

Previous wording

Legal and Professional Expenses. During the three months ended September 30, 2025, legal and professional expenses decreased by $0.9 million or 67% compared to the same period in 2024. The decrease in legal and professional fees was primarily due to higher accounting expenses in the three months ended September 30, 2024 compared to the three months ended September 30, 2025 related to the restatement and reaudit of the Company’s financial statements, which occurred and concluded in 2024.

Current wording

Legal and Professional Expenses. During the three months ended March 31, 2026, legal and professional expenses increased by $0.009 million or 1% compared to the same period in 2025. The increase in legal and professional fees was primarily due to higher legal and professional fees in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

*Other Expense.*During the three months ended September 30, 2025, other expense decreased by $0.7 million or 89% compared to the same period in 2024. The decrease was primarily driven by a $0.3 million decrease in interest expense, $0.8 million decrease in loss on settlement of convertible debt, partially offset by a $0.3 million decrease in change in fair value of derivative liabilities, $0.1 million decrease in loss on change in fair value of convertible notes, and $0.1 million decrease in gain on sale of marketable securities.

Current wording

*Other Income (expense).*During the three months ended March 31, 2026, other income increased by $0.2 million or 163% compared to other expense of the same period in 2025. The increase was primarily driven by a $0.1 million increase in change in fair value of derivative liabilities, partially offset by a $0.09 million decrease in change in fair value of convertible notes.

Previous wording

Our unaudited condensed consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred losses since inception and had a net loss of $9.1 million and no revenues generated during the nine months ended September 30, 2025 and working capital of approximately $1.3 million as of September 30, 2025. We do not expect to generate positive cash flows from operating activities in the near future.

Current wording

Our unaudited condensed consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred losses since inception and had a net loss of $2.2 million and no revenues generated during the three months ended March 31, 2026 and working capital deficit of approximately $5.8 million as of March 31, 2026. We do not expect to generate positive cash flows from operating activities in the near future.

Previous wording

On October 15, 2025, the Company received a letter from Theradex Systems, Inc., providing written notice of termination of the master agreement, dated November 1, 2018 (the “Master Agreement”), between us and Theradex, and all work orders thereunder, and demanding immediate payment of all outstanding amounts owed thereunder in the aggregate amount of $1.1 million. The Company has accrued for the outstanding amount and it is included in accounts payable and accrued expenses on the condensed consolidated balance sheet as of September 30, 2025.

Current wording

In January 2025, we entered into a change order to the existing agreement with Theradex Systems, Inc., our primary third-party CRO, for purposes of supporting our clinical trials of Ropidoxuridine. As disclosed in our SEC Form 8-K filings on October 21, 2025 and November 21, 2025, the Company received a letter from Theradex Systems, Inc., providing written notice of termination of the master agreement, dated November 1, 2018 (the “Master Agreement”), between us and Theradex, and all work orders thereunder, and demanding immediate payment of all outstanding amounts owed thereunder in the aggregate amount of $1.091 million. Pursuant to the notice of termination, on November 20, 2025, we entered into a release and settlement agreement (the “Settlement Agreement”) with Theradex, pursuant to which we will pay a partial payment of $300,000 to Theradex as full and final payment of any and all claims relating to the debt or obligation previously owed by us to Theradex, totaling approximately $557,000 (the “Outstanding Liabilities”) and in consideration of such payment, each party will release, acquit and discharge each other from all claims arising from the Outstanding Liabilities and Theradex will properly wind down operations in a manner compliant with the Food and Drug Administration. After the payments pursuant to the Settlement Agreement, we will still owe amounts, under five separate research site agreements between the Company and various hospitals, as disclosed in the Settlement Agreement. As part of the Company’s wind down of its Clinical Trials, the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include right of use asset impairment charges, accelerated expense recognition of share-based payments, and contract termination costs. Costs associated with the wind down of the Clinical Trials are recorded within research and development expenses in the consolidated financial statements of operations.

Previous wording

In March 2025, we entered into a consulting services agreement (the “Bowery Consulting Agreement”) with Bowery Consulting Group Inc. (the “Consultant”). According to the Bowery Consulting Agreement, the Consultant will provide consulting services in connection with our business, advising on viability of plans for scaling activities, growth and capital raising strategies and cost minimization associated with technological platform improvements and marketing spend. On September 8, 2025, the managing partner of the Consultant was appointed to the Company’s Board of Directors. As a result, the Consultant became a related party effective as of that date. We agreed to pay the Consultant $260,000 for their services, which we are not obligated to pay until we regain full Nasdaq listing requirement. We received notice from Nasdaq on July 2, 2025 that we had regained compliance with the listing requirement and have since paid the fee.

Current wording

In March 2025, we entered into a consulting services agreement (the “Bowery Consulting Agreement”) with Bowery Consulting Group Inc. (the “Consultant”). According to the Bowery Consulting Agreement, the Consultant will provide consulting services in connection with our business, advising on viability of plans for scaling activities, growth and capital raising strategies and cost minimization associated with technological platform improvements and marketing spend. We agreed to pay the Consultant $260,000 for their services, which we are not obligated to pay until we regain full Nasdaq listing requirement. We received notice from Nasdaq on July 2, 2025 that we had regained compliance with the listing requirement and have since paid the fee.

Previous wording

On April 3, 2025, the Company entered into a consulting agreement with the IR Agency LLC (the “IR Agency”). Pursuant to theconsulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid the IR Agency $2.0 million on April 5, 2025. The term of the consulting agreement was three months starting on April 3, 2025. For the nine months ended September 30, 2025, the Company incurred $2.0 million of costs under the consulting agreement.

Current wording

On April 3, 2025, the Company entered into a consulting agreement with the IR Agency LLC (the “IR Agency”). Pursuant to the consulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid IR Agency $2.0 million on April 5, 2025. The term of the consulting agreement was three months starting on April 3, 2025. For the year ended December 31, 2025, the Company incurred $2.0 million of costs under the consulting agreement.

Previous wording

On September 15, 2025, the Company entered into another consulting agreement with the IR Agency. Pursuant to the consulting agreement, IR Agency agreed to provide marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid the IR Agency $1,450,000. The term of the consulting agreement will be two months. For the three months ended September 30, 2025, the Company incurred $0.5 million of costs under the consulting agreement.

Current wording

On September 15, 2025, the Company entered into another consulting agreement with the IR Agency. Pursuant to the consulting agreement, IR Agency agreed to provide marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid IR Agency $1.5 million. The term of the consulting agreement will be two months. For the year ended December 31, 2025, the Company incurred $1.5 million of costs under the consulting agreement.

Previous wording

On October 2025, the Company converted the October 2024 Convertible Bridge Notes into 117,612 shares of common stock due to reaching maturity. The Convertible Bridge Notes converted at a share price of $6.38, which is the conversion price with a 15% discount per the Convertible Bridge Notes’ terms. See Note 5 for more information.

Current wording

In October 2025, the October 2024 Convertible Bridge Notes mandatorily converted into 117,612 shares of common stock due to reaching maturity. The Convertible Bridge Notes converted at a share price of $6.38, which is the conversion price with a 15% discount per the Convertible Bridge Notes’ terms. See Note 5 for more information.

Previous wording

Our ability to continue as a going concern is dependent upon our ability to continue to successfully raise additional equity or debt financing to allow us to fund ongoing operations, conduct clinical trials and bring a drug candidate to commercialization to generate revenues. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements contained in the report are issued.

Current wording

Our ability to continue as a going concern is dependent upon our ability to continue to successfully raise additional equity or debt financing to allow us to fund ongoing operations, and commercialize, fund milestone and contingent payments due under the APA, and market our Molecule.ai platform in order to generate revenues. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements contained in the report are issued.

Previous wording

On February 27, 2025, we entered into a Revolving Loan Agreement (the “Revolving Loan Agreement”) with a single lender. Pursuant to and under the terms of the Revolving Loan Agreement, we issued a revolving note dated February 28, 2025 in the principal amount of up to $2.0 million (the “Revolving Note”), which we may draw upon at our discretion from time to time through its maturity on February 28, 2026. The Revolving Note bears interest at the rate of 18% per annum calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue interest daily commencing from the date of any draw down until paid in full.

Current wording

On February 27, 2025, we entered into a Revolving Loan Agreement (the “Revolving Loan Agreement”) with a lender. Pursuant to and under the terms of the Revolving Loan Agreement, we issued a revolving note dated February 28, 2025 in the principal amount of up to $2.0 million (the “Revolving Note”), which we may draw upon at our discretion from time to time through its maturity on February 28, 2026. The Revolving Note bears interest at the rate of 18% per annum calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue interest daily commencing from the date of any draw down until paid in full.

Previous wording

As of September 30, 2025, total current assets were $3.3 million and total current liabilities were $2.0 million, resulting in working capital of $1.3 million. As of December 31, 2024, total current assets were $2.2 million and total current liabilities were $1.5 million, resulting in a working capital of $0.7 million. The Company’s current assets as of September 30, 2025 are comprised of $2.1 million of cash and cash equivalents and $1.2 million of prepaid expenses and other current assets, with the increase from December 31, 2024 being primarily due to the March 2025 equity raise that provided $5.0 million in net cash and the June 2025 private placement that provided $3.9 million in net cash.

Current wording

As of March 31, 2026, total current assets were $2.5 million and total current liabilities were $8.3 million, resulting in working capital deficit of $5.8 million. As of December 31, 2025, total current assets were $0.5 million and total current liabilities were $8.0 million, resulting in a working capital deficit of $7.5 million. The Company’s current assets as of March 31, 2026 are comprised of $1.1 million of cash and cash equivalents and $1.4 million of prepaid expenses and other current assets, with the increase from December 31, 2025 being primarily due to the March 2026 equity raise that provided $3.2 million in net cash.

Previous wording

Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business. We have historically experienced negative cash flows from operating activities as we invested in research and development activities. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally attributable to stock-based compensation, changes in fair value of our derivative liabilities, changes in fair value of our convertible notes, and amortization of debt discounts and finance fees, as well as changes in components of operating assets and liabilities, which are generally attributable to increased expenses and timing of vendor payments.

Current wording

Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements (including marketing expenses) to support the business. We have historically experienced negative cash flows from operating activities as we invested in research and development activities. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally attributable to stock-based compensation, changes in fair value of our derivative liabilities, changes in fair value of our convertible notes, and amortization of debt discounts and finance fees, as well as changes in components of operating assets and liabilities, which are generally attributable to increased expenses and timing of vendor payments.

Previous wording

During the nine months ended September 30, 2024, net cash flows used in operating activities was $4.6 million, consisting of a net loss of $7.5 million and change in fair value of derivative liabilities of $0.3 million, partially offset by loss on settlement of convertible debt of $0.8 million, amortization of debt discount and finance fees of $1.1 million, accrued interest settled with common stock of $0.1 million, stock-based compensation of $0.2 million, and the net change in operating assets and liabilities of $1.1 million.

Current wording

During the three months ended March 31, 2026, net cash used in operating activities of $2.4 million was primarily due to our net loss of $2.2 million, change in fair value of derivative liabilities of $0.08 million, and the net change in operating assets and liabilities of $0.9 million, partially offset by stock-based compensation of $0.04 million and depreciation and amortization of $0.6 million.

Previous wording

During the nine months ended September 30, 2025, net cash used in operating activities of $8.5 million was primarily due to our net loss of $9.1 million, change in fair value of convertible notes of $0.1 million, and interest payments on convertible notes accounted for at fair value of $0.1 million, partially offset by stock-based compensation of $0.7 million.

Current wording

During the three months ended March 31, 2025, net cash used in operating activities of $2.5 million was primarily due to our net loss of $3.0 million, stock-based compensation of $0.5 million, change in fair value of convertible notes of $0.1 million, partially offset by the net change in operating assets and liabilities of $0.1 million.

Previous wording

For the nine months ended September 30, 2025, cash flows from financing activities was primarily comprised of proceeds of $5.4 million from the sale of common stock and pre-funded warrants as part of the March 2025 equity financing, net of placement agent costs of $0.3 million, and proceeds of $4.1 million, from the sale of common stock and pre-funded warrants as part of the June 2025 equity financing, net of placement agent costs of $0.2 million, partially offset by $0.6 million of payments of other issuance costs for issuance of common stock and equity-classified warrants in the March 2025 and June 2025 equity financings, $0.1 million for finance costs, and $0.2 million of repayment of note payable-related party used to finance our ongoing operations. For the nine months ended September 30, 2024, we paid $0.8 million related to payments on a convertible note and $0.1 million for finance costs.

Current wording

For the three months ended March 31, 2026, cash flows from financing activities was primarily comprised of proceeds of $3.5 million from the sale of common stock and pre-funded warrants as part of the March 2026 equity financing, net of placement agent costs of $0.3 million.

Previous wording

This discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While the significant accounting policies are described in more detail in the notes to the unaudited condensed consolidated financial statements included elsewhere in this report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Current wording

This discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While the significant accounting policies are described in more detail in the notes to the unaudited condensed consolidated financial statements included elsewhere in this report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Previous wording

For warrants with uncertain or more complex terms (such as variability in the warrant shares or exercise price), we may utilize more complex models to address such provisions, including Monte Carlo simulations or Probability-Weighted Expected Return Methods (“PWERM”). Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, 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. PWERM models require the estimate of an entity’s per share value of its common stock at various future outcomes and assigns a probability to each scenario. The value per share is then weighted based on the respective probabilities to determine a weighted-average expected return.

Current wording

For warrants with uncertain or more complex terms (such as variability in the warrant shares or exercise price), we may utilize more complex models to address such provisions, including Monte Carlo simulations or Black-Sholes Models. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, 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. Black-Sholes Models require specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.

Previous wording

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 back solved by setting the summation of the parts (e.g., derivatives and debt without derivatives) equal to the cash proceeds and is updated each period.

Current wording

For our derivative financial instruments classified as a liability, we use a Black-Sholes Models to value the derivative instruments at inception and on subsequent valuation dates. The model require specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.