Shuttle Pharmaceuticals Holdings, Inc 8-K, filed Feb 13, 2024
Shuttle Pharmaceuticals Holdings, Inc. (SHPH)
About this 8-K
Shuttle Pharmaceuticals Holdings, Inc filed this 8-K on February 13, 2024, reporting on events of February 7, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement |
Effective February 7, 2024, Shuttle Pharmaceuticals Holdings, Inc., a Delaware corporation (“SHPH” or the “Company”), and its wholly-owned subsidiary, Shuttle Diagnostics, Inc., a Maryland corporation (“Diagnostics”), entered into a securities purchase agreement (the “Purchase Agreement”) with SRO, LLC, a Nevada limited liability company (“SRO LLC”), pursuant to which SRO LLC agreed to commit to purchasing from the Company $2,250,000 of units (the “Units”) from the Company, with each Unit consisting of (i) one share of SHPH common stock, (ii) a warrant to purchase one share of SHPH common stock exercisable at a purchase price of $2.35 per share, and (iii) a percentage of equity interest in Diagnostics such that, assuming the sale of all $2,250,000 of Units, SRO LLC will own a 22% interest in Diagnostics. The Units will be sold at a per Unit price equal to 90% of the VWAP of SHPH common stock for the five trading days immediately preceding closing. The parties entered into the Purchase Agreement in anticipation of the Company commencing a rights offering (the “Rights Offering”) pursuant to which the Company intends to offer a total of $4,500,000 Units to existing stockholders, which includes the $2,250,000 Units being sold to SRO LLC, an entity which is owned by Keith Moore, CEO of Boustead Securities, LLC (“BSL”).
The Purchase Agreement allows SRO LLC up to 60 days to raise the initial $2,250,000, which funds will be placed in escrow with Sutter Securities, Inc. (“SSI”), an affiliate of BSL, pursuant to the terms of an escrow agreement entered into between the Company and SSI on February 7, 2024 (the “Escrow Agreement”). The funds will remain in escrow up until closing on the Rights Offering. In addition, in the event the Company fails to raise a full $4,500,000 in the Rights Offering, SRO LLC agreed to a backstop commitment pursuant to which it would have the right to purchase any remaining Units not purchased by existing SHPH stockholders in the Rights Offering, up to an additional $2,250,000 (the “Back-up Contingency”). Unless the parties waive the conditions to closing, in the event the full $4,500,000 is not raised, whether through SRO LLC or through SHPH’s existing stockholders, the Company will not close on the offering and any funds raised and held in escrow will be returned to investors.
It is the Company’s intention that funds raised in the Rights Offering will be used to develop a diagnostics laboratory to perform multi-institutional clinical trials to obtain validation data for FDA approval of a diagnostic metabolite panel as a “device” for use in patients presenting with prostate cancers, with the potential to also obtain additional funding through a Small Business Innovation Research grant through the National Institutes of Health.
In conjunction with its entry into the Purchase Agreement, on February 7, 2024, the Company entered into a placement agent and advisory services agreement (the “Placement Agent Agreement”) with BSL, pursuant to which BSL and BSL’s affiliates will provide the Company with regular and customary financial consulting advice and will act as placement agent, on a best efforts basis, for the Rights Offering. In exchange for its services, BSL will receive a commitment fee equal to $112,500 upon the earlier of the Company filing the registration statement on Form S-1 registering the Rights Offering or upon such date as the Company terminates the Rights Offering, a commission equal 8% of the gross proceeds disbursed to the Company upon closing the Rights Offering, and $40,000 in diligence and related expenses.
The foregoing descriptions of the Purchase Agreement, the Placement Agent Agreement and the Escrow Agreement do not purport to be complete and each is qualified in its entirety by reference to the full text of such agreement, which agreements are attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3 and are incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities |
The disclosures set forth in Item 1.01 above are incorporated into this Item 3.02 by reference.
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| Item 8.01 | Other Events |
In conjunction with its entry into the Purchase Agreement with SRO LLC, the Company issued a press release announcing its intention to commence the Rights Offering, whereby it will raise up to $4,500,000 through the sale of Units, with SRO LLC committing to purchase $2,250,000 of the Units in the Rights Offering and offering a Back-up Contingency for any unsold subscriptions not purchased in the Rights Offering. Prior to commencing the Rights Offering, the Company will need to file a registration statement on Form S-1 registering the Rights Offering, and it cannot be certain of the timing of when such registration statement will be filed, when it will clear comments or be declared effective by the Securities and Exchange Commission, or when the Rights Offering will be commenced.
A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
The information in this Item 8.01, including Exhibit 99.1, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information of the information contained in this Item 8.01, including Exhibit 99.1.
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to statements concerning future results, strategy and plans of the Company (including certain statements which may be identified by the use of the words “plans,” “expects,” “does not expect,” “estimated,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” “does not anticipate” or “believes,” or variations of such words and phrases, or state that certain actions, events or results “may,” “could,” “would,” “might,” “projects,” “will,” “will be taken,” “occur” or “be achieved”). Forward-looking statements are based on the opinions and estimates of management of the Company, as of the date such statements are made, and they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Additional information on these and other factors that may cause actual results and the Company’s performance to differ materially is included in the Company’s periodic reports filed with the SEC, including, but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and subsequent Quarterly Reports on Form 10-Q. Copies of the Company’s filings with the SEC are available publicly on the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligations to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Securities Purchase Agreement, dated February 7, 2024, between Shuttle Pharmaceuticals Holdings, Inc., Shuttle Diagnostics, Inc. and SRO LLC. | |
| 10.2 | Placement Agent and Advisory Services Agreement, dated February 7, 2024, between Shuttle Pharmaceuticals Holdings, Inc. and Boustead Securities, LLC. | |
| 10.3 | Offering Deposit Account Agency Agreement, dated February 7, 2024, between Shuttle Pharmaceuticals Holdings, Inc., Boustead Securities, LLC and Sutter Securities Inc. | |
| 99.1 | Press Release dated February 13, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: February 13, 2024 | ||
| SHUTTLE PHARMACEUTICALS HOLDINGS, INC. | ||
| By: | /s/ Anatoly Dritschilo | |
| Name: | Anatoly Dritschilo | |
| Title: | Chief Executive Officer | |
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Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”), effective as of February 7, 2024, is made by and between Shuttle Pharmaceuticals Holdings, Inc., a Delaware corporation (the “Company” or “SHPH”), its wholly owned subsidiary, Shuttle Diagnostics, Inc., a Delaware corporation (“Diagnostics” and together with the Company, the “Sellers”), and SRO, LLC, a Nevada limited liability company (“SRO” or the “Buyer”). This Agreement supersedes and replaces all prior agreements and understandings between the Sellers and the Buyer.
RECITALS
A. The Company is publicly traded on the Nasdaq Stock Exchange, LLC’s Capital Market (“Nasdaq”), where its common stock is traded under the ticker symbol SHPH, and its recently formed subsidiary, Diagnostics, was formed for purposes of establishing a diagnostic laboratory to perform a multi-institutional clinical trial to obtain clinical validation data for FDA approval of the diagnostic metabolite panel as a “device” for use in testing patients presenting with prostate cancers. The planned clinical trial (the “Clinical Trial”) is estimated to require enrollment of approximately 450 patients scheduled to undergo radiation therapy for the treatment of prostate cancers and will require follow up of patients for a minimum of three years.
B. The Company, in combination with Diagnostics, is now seeking to raise $4,500,000 in financing through a rights offering of Units (as defined below) (the “Offering”), which Offering will support the establishment by Diagnostics of a laboratory and allow it to complete the Clinical Trial, with the potential to obtain additional funding through the application to the National Institutes of Health (“NIH”) for a SBIR grant (the “Matching Funds”).
C. The Company and Diagnostics, seeking to complete the Offering and obtain the Matching Funds, now seek to complete the Offering through the sale to of units (together the “Units” and individually, a “Unit”), with each Unit consisting of (i) one share of SHPH common stock, (ii) warrants to purchase the Company’s Common Stock, with a fixed exercise price of $2.35 per warrant share, which warrants shall not be exercisable until six months after closing on the Offering, and (iii) a percentage equity interest in Diagnostics stock, with each Unit to be sold at a cost of 90% of the VWAP of the Company’s common stock for the five trading days immediately prior to Closing.
D. In an effort to complete the Offering, the Buyer has agreed to commit to purchasing 50% of the Offering proceeds through placing in escrow $2,250,000 (the “Purchase Commitment”), subject to a successful completion of a Rights Offering, to be commenced following receipt of the Purchase Commitment, pursuant to which the Company will raise a total of $4,500,000 (including the Purchase Commitment held in escrow) (the “Maximum Offering Amount”). The Purchase Commitment will be deposited in an escrow account established by the Company within 60 days of entry into this Agreement.
E. Assuming the sale of the Maximum Offering Amount, at Closing, the Company will transfer 44% (or 44 shares) of the equity interest in Diagnostics to the external investors (the “Investors”), who shall consist of the Buyer and any existing SHPH stockholders who participate in the Offering, and the Company will retain ownership of 56% (or 56 shares) of the equity interests in Diagnostics.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Incorporation of Recitals. The parties acknowledge the accuracy of the foregoing recitals of facts and understandings, which recitals are incorporated herein by this reference.
2. Purchase Commitment; Issuance and Sale of Units.
(a) Purchase Commitment and Sale. On the terms and conditions set forth herein, including the Closing conditions set forth in Section 5 below, the Company shall issue sell, transfer, convey, assign and deliver to the Units to Buyer, and Buyer shall purchase from Seller, $2,250,000 of Units, with each Unit to be priced at 90% of the VWAP of the Company’s Common Stock during the five Trading Days immediately preceding Closing. The closing (the “Closing”) of the transaction contemplated in this Agreement is anticipated to occur on or before the later of (i) April 30, 2024 or (ii) within 30 days of the effective date of the Registration statement (as defined in Section 6(a)(3) below) if the Registration Statement had yet to be declared effective by April 30, 2024 (the “Closing Date”), subject to the satisfactory completion of the Rights Offering and satisfaction or waiver of the conditions to closing set forth in Section 7 below, or at such other place, date and/or time as agreed to in writing by the parties.
3. Consideration and Escrow. In advance of Closing, the $2,250,000 Purchase Commitment shall be, within 60 days from the date hereof, placed in an escrow account duly established by the Company for purposes of holding the Purchase Commitment. The Purchase Commitment will be released to the Company from escrow upon successful completion of the Rights Offering.
4. Back-up Contingency. In the event the Company fails to raise the Maximum Offering Amount in the Rights Offering by April 30, 2024 or within 30 days of the effective date of the Registration Statement (whichever is later) due to insufficient participation by current holders of the SHPH common stock, Buyer will have the right to exercise the Back-up Contingency, pursuant to which it may purchase up to an additional $2,250,000, or whatever amount remains unsold in the Offering, in order to raise the Maximum Offering Amount for the Company.
5. Representations and Warranties
(a) Representations and Warranties of the Company. The Sellers hereby represent and warrant to Buyer as follows:
(1) Organization and Authority of the Company. Each of the Company and Diagnostics are corporations duly organized, validly existing, and in good standing under the state of Delaware and Maryland, respectively, and each are qualified to do business in the state of Maryland. The Company and Diagnostics, as Sellers, have full corporate power and authority to enter into this Agreement, to carry out its obligations hereunder, and to consummate the transactions contemplated hereby. The execution and delivery by the Company and Diagnostics of this Agreement, the performance by the Company and Diagnostics of their obligations hereunder, and the consummation by the Company and Diagnostics of the transactions contemplated herein have been duly authorized by all requisite corporate action on the part of the Company and Diagnostics. This Agreement constitutes a legal, valid, and binding obligation of the Sellers enforceable against the Sellers in accordance with its terms.
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(2) Capitalization.
(A) The Company. The Company has authorized the issuance of one hundred million (100,000,000) shares of Common Stock and twenty million (20,000,000) shares of Preferred Stock. As of the date of this Agreement, the Company has sixteen million sixty-nine thousand three hundred twenty (16,069,320) shares of Common Stock issued and outstanding and no (0) shares of Preferred Stock issued and outstanding. In addition, there are 183,529 restricted stock units outstanding that were issued under the Company’s equity incentive plan which will, upon vesting, automatically convert into shares of Common Stock.
(B) Diagnostics. As of the date of this Agreement, Diagnostics has authorized 100 shares of stock, all of which are presently held by the Company. Other than the aforementioned, there are no outstanding or authorized options, warrants, convertible securities, stock appreciation, phantom stock, profit participation, or other rights, agreements, or commitments relating to the shares of either the Company or Diagnostics or obligating the Company or Diagnostics to issue or sell any shares of, or any other interest in, the Company or Diagnostics. Neither the Company nor Diagnostics has any voting trusts, stockholder agreements, proxies, or other agreements in effect with respect to the voting or transfer of any of the Company’s or Diagnostics’ outstanding stock. In advance of the Rights Offering, Diagnostics will amend its articles of incorporation to increase it authorized shares to 10,000 authorized shares, or such number of shares as to make share ownership more easily divisible among shareholders participating in the Offering.
(3) No Contravention. The execution, delivery, and performance of this Agreement, and the consummation of the transactions contemplated hereby, will not: (i) violate any statute, ordinance, regulation, order, judgment, or decree of any court or governmental agency or board; or (ii) violate, conflict with, result in any breach of, or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under any contract to which the Company or Diagnostics is a party or by which the Company or Diagnostics is bound.
(4) No Consents. No consent, approval, or authorization of, or declaration, filing, or registration with, any governmental authority or any other person is required to be obtained or made by the Company or Diagnostics in connection with the execution, delivery and performance of the transactions contemplated by this Agreement or any transaction document to which the Company or Diagnostics is a party, except (i) the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the issuance of the rights under the Rights Offering and any shares registered thereunder upon exercise of the rights, and (ii) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the sale of any securities in the Rights Offering.
(5) Disclosure. No representation or warranty by the Company or Diagnostics contained in this Agreement, and no statement contained in any other document, certificate, or other instrument delivered pursuant to this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary, in light of the circumstances under which it was made, in order to make the statements herein or therein not misleading. The representations and warranties made to Buyer are made with the knowledge and expectation that Buyer is relying thereon and the same shall not be affected by any investigation heretofore or hereafter made by or on behalf of Buyer.
(b) Representations and Warranties of Buyer. The Buyer hereby represents and warrants to the Company and Diagnostics, as Sellers, as follows:
(1) Organization. Buyer is a limited liability company duly organized, validly existing, and in good standing under the laws of the state of Nevada.
(2) Authority. Buyer has the full right, capacity, limited liability company power, and authority to execute and deliver this Agreement, to perform Buyer’s obligations hereunder, and to consummate the transactions contemplated hereby. This Agreement and each transaction document to which Buyer is a party constitute the valid and legally binding obligations of Buyer, enforceable in accordance with its terms and conditions, except as may be limited by: (i) applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting enforcement of creditors’ rights generally; and (ii) laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
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(3) No Contravention. The execution, delivery, and performance of this Agreement and each transaction document to which Buyer is a party, and the consummation of the transactions contemplated hereby, will not: (i) violate any statute, ordinance, regulation, order, judgment, or decree of any court or governmental agency or board; or (ii) violate, conflict with, result in any breach of, or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under any contract to which Buyer is a party or by which Buyer is bound.
(4) No Consents. No consent, approval, or authorization of, or declaration, filing, or registration with, any governmental authority or any other person is required to be obtained or made by Buyer in connection with the execution, delivery and performance of the transactions contemplated by this Agreement.
(5) Investment Purpose. Buyer is acquiring the Units solely for Buyer’s own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Units are not registered under the Securities Act of 1933, as amended, or any state securities laws, and that the Units, including the warrants and the shares underlying the Units and warrants, may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. Buyer is able to bear the economic risk of holding the Units for an indefinite period (including total loss of its investment), and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of Buyer’s investment.
(6) Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable Buyer to deliver the Purchase Commitment to be held in escrow and for such funds to be released to the Company from escrow at the Closing.
(7) No Short Selling. For so long as Buyer or any of its affiliated parties holds any shares of SHPH Common Stock, Buyer and its affiliated parties will not participate in short selling of the Company’s common stock.
6. Conditions to Closing.
(a) Conditions Precedent to Obligations of Buyer. The obligation of Buyer to purchase the Purchase Commitment and to consummate the transaction contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any one or more of which may be waived by Buyer:
(1) Accuracy of Representations and Warranties. The representations and warranties of the Company and Diagnostics, as Sellers, contained in this Agreement shall be true and correct in all material respects on and as of the Closing with the same force and effect as though made on and as of such date.
(2) Performance. The Company and Diagnostics shall have performed and complied with the covenants and agreements required by this Agreement to be performed and complied with by the Company and Diagnostics at or prior to the Closing Date.
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(3) Registration Statement: The Company shall have filed a registration statement on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) duly registering the Rights Offering, including the shares of common stock, and such Registration Statement shall have been declared effective by the SEC.
(4) Seller Deliveries. At the Closing, the Company, as Seller, shall deliver to Buyers the following:
(A) one or more stock certificate(s) or such other documentation as is required to evidence the Units issued in the name of the Buyer; and
(B) any other agreements, consents, or instruments reasonably requested by any Buyer pursuant to this Agreement.
(b) Conditions Precedent to Obligations of Sellers. The obligations of the Company and Diagnostics, as Sellers, to issue and sell the Units and to consummate the transaction contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any one or more of which may be waived by the Company:
(1) Completion of Rights Offering; Backstop Contingency. The Company shall (i) have successfully completed the Rights Offering, which Rights Offering shall have been conducted pursuant to an effective Registration Statement and pursuant to which at least $2,250,000 of Units were sold to existing SHPH stockholders or, (ii) in the event the Rights Offering was not successfully completed and the $2,250,000 of Units offered for sale in the Rights Offering were not sold in full by April 30, 2024 or within 30 days of the effective date of the Registration Statement, whichever is later, the Buyer may exercise its right to purchase any remaining Units not yet sold in the Rights Offering, up to the Maximum Offering Amount.
(2) Accuracy of Representations and Warranties. The representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects on and as of the Closing with the same force and effect as though made on and as of such date.
(3) Performance. Buyer shall have performed and complied with the covenants and agreements required by this Agreement to be performed and complied with by it at or prior to the Closing Date.
(4) Buyer Deliveries. At the Closing, Buyer shall deliver to the Company, as Seller, the following:
(A) the closing payment, which shall consist of the Purchase Commitment plus any Back-up Contingency exercised by the Buyer in advance of Closing; and
(B) any other agreements, consents, or instruments requested by the Company pursuant to this Agreement.
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7. Indemnification.
(a) The Company and Diagnostics, as Sellers, shall indemnify, defend, and hold Buyer harmless from, against any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorney fees (collectively, “Losses”), incurred or suffered by Buyer (whether directly or as a result of a claim by a third party) that arise or result from the breach or non-performance of any covenant, representation or warranty of Sellers contained in this Agreement; provided, however, that the Company and Diagnostics shall not be liable for any Losses arising from or relating to fraud, willful misconduct, or gross negligence of any Buyer.
(b) Buyer shall indemnify, defend, and hold the Company and Diagnostics, as Sellers, harmless from, against any and all Losses, incurred or suffered by Sellers (whether directly or as a result of a claim by a third party) that arise or result from the breach or non-performance of any covenant, representation or warranty of Buyer contained in this Agreement; provided, however, that Buyer shall not be liable for any Losses arising from or relating to fraud, willful misconduct, or gross negligence of Sellers.
8. Miscellaneous.
(a) Further Assurances. At any time after the date of this Agreement, upon the request of a party, the requested party agrees to execute, acknowledge, and deliver all such further acts, deeds, assignments, transfers, conveyances, powers of attorney, assurances, and other documents or instruments to evidence and implement the transactions described in this Agreement at the reasonable request and expense of the requesting party.
(b) Survival. All representations and warranties of the Company and Diagnostics, as Sellers, and Buyer contained in this Agreement or in any certificate delivered pursuant hereto or thereto shall survive the Closing and shall not be deemed waived or otherwise affected by any investigation made or any knowledge acquired with respect thereto. The covenants and agreements of the Sellers and Buyer contained in this Agreement shall survive the Closing and shall continue until all obligations with respect thereto shall have been performed or satisfied or shall have been terminated in accordance with their terms.
(c) Expenses. The Company is responsible for all reasonable expenses incurred by Buyer in connection with this Agreement and the transactions contemplated hereby, including without limitation, attorneys’ and costs.
(d) Notice. All notices and other communications given or made pursuant to this Agreement or any transaction document shall be in writing and shall be deemed effectively given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. All communications shall be sent to the respective parties at their address set forth on the signature page hereto, or to such address as subsequently modified by written notice given in accordance with this Section 8(d).
(e) Entire Agreement. This Agreement, including any other agreements and schedules to be entered into in connection with the transactions contemplated hereby, constitutes and embodies the entire understanding and agreement of the parties hereto relating to the subject matter hereof and supersedes all prior agreements or understandings of the parties hereto, whether written or oral.
(f) Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the party or parties to be bound thereby. No delay in the exercise of any right or remedy under this Agreement shall constitute a waiver thereof and the waiver by any party of any right or remedy under this Agreement on any one occasion shall not be deemed a waiver of such right or remedy on any subsequent occasion.
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(g) Successors and Assigns; No Third Party Beneficiaries. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective heirs, executors, administrators, legal representatives, successors, and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(h) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be or become prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.
(i) Cumulative Remedies. The rights and remedies of a party available under this Agreement or otherwise available are cumulative and may be exercised singularly or concurrently, and the exercise of any one or more remedy shall not constitute a waiver of any other available remedy. No act, delay, omission, or course of dealing between the parties hereto shall be constitute a waiver of a party’s rights or remedies available under this Agreement.
(j) Construction. Any rule of construction to the affect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement. Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any party. All words used herein will be construed to be of the gender or number the circumstances require. Terms that are not specifically defined herein shall be given their ordinary meaning.
(k) Headings. The titles and subtitles used in this Agreement are used for convenience only and shall not be considered in construing or interpreting this Agreement.
(l) Governing Law. This Agreement shall be governed by and construed under the laws of the State of New York without regard to its conflict of law principles.
(m) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING, CAUSE OF ACTION, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING ANY EXHIBITS AND SCHEDULES ATTACHED TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (i) NO REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION; (ii) EACH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) EACH PARTY MAKES THIS WAIVER KNOWINGLY AND VOLUNTARILY; AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8(m).
(n) Attorneys’ Fees. If any legal action or other proceeding, including arbitration or action for declaratory relief, is brought for the enforcement of this Agreement or because of an alleged dispute, breach, default, or misrepresentation in connection with this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and other costs, in addition to any other relief to which the party may be entitled.
(o) Counterparts and Signature Pages. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[SIGNATURE PAGE FOLLOWS]
| 7 |
IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement effective as of the Effective Date set forth above.
| BUYER: | ||
| SRO, LLC | ||
| By: | /s/ Keith Moore | |
| Name: | Keith Moore | |
| Title: | Managing Member | |
| Address for Notice: | ||
| Boustead Securities LLC | ||
| 6 Venture, Suite 395, | ||
| Irvine, CA 92618 | ||
| Email: keith@boustead1828.com | ||
| SELLERS: | ||
| THE COMPANY: | ||
| SHUTTLE PHARAMCEUTICALS HOLDINGS, INC. | ||
| By: | /s/ Anatoly Dritschilo | |
| Name: | Anatoly Dritschilo, M.D. | |
| Title: | Chief Executive Officer | |
| Address for Notice: | ||
| 401 Professional Drive, Suite 260 | ||
| Gaithersburg, MD 20879 | ||
| Email: dritscha@georgetown.edu | ||
| SUBSIDIARY: | ||
| SHUTTLE DIAGNOSTICS, INC. | ||
| By: | /s/ Anatoly Dritschilo | |
| Name: | Anatoly Dritschilo, M.D. | |
| Title: | President | |
| Address for Notice: | ||
| 401 Professional Drive, Suite 260 | ||
| Gaithersburg, MD 20879 | ||
| Email: dritscha@georgetown.edu | ||
Signature Page to Stock Purchase Agreement
Exhibit 10.2
PLACEMENT AGENT AND ADVISORY SERVICES AGREEMENT
This PLACEMENT AGENT AND ADVISORY SERVICES AGREEMENT (the “Agreement”), dated as of February 7, 2024 (the “Effective Date”), by and between Boustead Securities, LLC (“BSL”), a California limited liability company having its principal offices located at 6 Venture, Suite 395, Irvine, CA 92618 and Shuttle Pharmaceuticals Holdings, Inc., a Delaware corporation (together with its affiliates and subsidiaries, hereafter referred to as the “Company”), having its principal office at 401 Professional Drive, Suite 260, Gaithersburg, MD 20879.
WHEREAS, BSL is pleased to act as the exclusive placement agent and financial advisor to the Company, including its affiliates and subsidiaries, in connection with the Company’s plan to pursue the corporate finance activities described in this Agreement or any combination thereof.
NOW THEREFORE, in consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
| 1. | Purpose: The Company hereby engages BSL on an exclusive basis for the term specified in Paragraph 5 hereof to render consulting advice to the Company upon the terms and conditions set forth herein. |
| 2. | BSL Services: During the Term of this Agreement, BSL and BSL’s affiliates shall provide the Company with such regular and customary financial consulting advice as is reasonably requested by the Company, provided that BSL shall not be required to undertake duties not reasonably within the scope of this Agreement. It is understood and acknowledged by the parties that the value of BSL’s advice is not readily quantifiable, and that although BSL shall be obligated to render the advice contemplated by this Agreement upon the reasonable request of the Company, in good faith, BSL shall not be obligated to spend any specific amount of time in so doing. BSL’s services may include but will not necessarily be limited to serving as the Company’s placement agent, on a best-efforts basis and advising the Company on its offering of $4,500,000 of Units pursuant to that Term Sheet between BSL and the Company, dated February 7, 2024 (the “Offering”). |
| 3. | Fees and Expenses: Boustead reserves the right to reduce any item of its compensation, including expenses, or adjust the terms thereof as specified herein in the event that a determination and/or suggestion will be made by the Financial Industry Regulatory Authority (“FINRA”) to the effect that the aggregate compensation is in excess of FINRA rules or that the terms thereof require adjustment; provided, however, the aggregate compensation for the Offering paid by the Company may not be increased above the amounts stated herein as follows: |
| a) | Fees: |
| i. | Commitment Fee. BSL shall receive a commitment fee equal to $112,500 upon the earlier of the filing of the Registration Statement or termination of the Offering (the “Payment Date”). The Company may elect to pay the Commitment Fee in cash or in shares of its common stock (“SHPH Shares”). If the Commitment Fee is paid in SHPH Shares, the number of SHPH Shares issued to BSL shall be determined by dividing the Commitment Fee by a price per share of SHPH common stock equal to the Volume Weighted Average Price per SHPH share for the five (5) trading days preceding to the Payment Date. | |
| ii. | Success Fees. Upon the closing of the Offering, Boustead shall receive a success fee, payable in cash, equal to eight percent (8%) of the gross amount to be disbursed to the Company from the Offering’s closing. | |
| iii. | Expenses: The Company has remitted to BSL $40,000 for due diligence and legal expenses, which fee payment was received by BSL prior to entry into this Agreement. |
| 4. | BSL’s Opinions and Advice: The Company acknowledges that all opinions and advice (written or oral) given by BSL to the Company in connection with BSL’s engagement are intended solely for the benefit and use of the Company in considering the transaction to which they relate, and the Company agrees that no person or entity other than the Company shall be entitled to make use of or rely upon the advice of BSL to be given hereunder, and no such opinion or advice shall be used for any manner or for any purpose, nor may the Company make any public references to BSL, or use BSL’s name in any annual reports or any reports or releases of the Company, without the BSL’s prior written consent, except as may be required pursuant to SEC rules and regulations or other legal requirements. |
| 5. | Term; Termination of Agreement. The term of this Agreement shall be from the Effective Date through the first-year anniversary thereof. Either party may terminate this Agreement prior to its expiration by notifying the other party in writing upon a material breach by that other party, unless such breach is curable and is in fact cured within thirty (30) days after such notice. Notwithstanding the foregoing, all provisions of this Agreement (including Exhibit A hereto) other than Sections 1, 3 and 4 shall survive the termination or expiration of this Agreement. BSL shall be entitled to compensation under Section 2 through the end of the Term. |
| 6. | Indemnification. The indemnification provisions set forth in Exhibit A hereto are incorporated by reference and are a part of this Agreement. |
| 7. | Notices. Any notice required shall be in writing and may be delivered by hand, e-mail, fax or first-class mail to the following addresses (or at such other email, fax number or address as shall hereafter be specified by such party by like notice): |
| (a) | If to the Company, to: |
Anatoly Dritschilo, CEO
Shuttle Pharmaceuticals Holdings, Inc.
1 Research Ct.
Rockville, MD 20850
Email: dritscha@georgetown.edu
With a copy to:
Megan J. Penick, Esq.
Dorsey & Whitney LLP
51 West 52nd Street
New York, NY 10019
Email: penick.megan@dorsey.com
| (b) | If to BSL, to: |
Keith Moore, CEO
Boustead Securities, LLC
6 Venture, Suite 395
Irvine, CA 92618
Telephone Number: (949) 295-1580
Fax Number: (815) 301-8099
E-mail: keith@boustead1828.com
With a copy to:
Christopher P. Parrington, Esq.
Boustead & Company Limited
P.O. Box 118
Chaska, MN 55318
Email: Chris.Parrington@bousteadco.com
Notices shall be deemed to have been given contemporaneously in the case of fax or e-mail. Notices given by first class mail shall be deemed to have been given seven days after mailing. Evidence that the notice was properly addressed, stamped and mailed shall be prima facie evidence of mailing.
| 8. | Company to Control Transactions. The terms and conditions under which the Company would enter into a Transaction shall be at the sole discretion of the Company. Nothing in this Agreement shall obligate the Company to actually consummate a Transaction. The Company may terminate any negotiations or discussions at any time and reserves the right not to proceed with a Transaction. |
| 9. | Confidentiality of Company Information. BSL, and its officers, directors, employees and agents shall use commercially reasonable efforts to maintain in strict confidence and not copy, disclose or transfer to any other party (a) all confidential business and financial information regarding the Company and its affiliates, including without limitation, projections, business plans, marketing plans, product development plans, pricing, costs, customer, vendor and supplier lists and identification, channels of distribution, and terms of identification of proposed or actual contracts, and (b) all confidential technology of the Company. In furtherance of the foregoing, BSL agrees that it shall not transfer, transmit, distribute, download, or communicate, in any electronic, digitized or other form or media, any of the confidential technology of the Company. |
All communications regarding any possible transactions, requests for due diligence or other information, requests for facility tours, product demonstrations or management meetings, will be submitted or directed to the Company, and BSL shall not contact any employees, customers, suppliers or contractors of the Company or its affiliates without the Company’s express permission. Nothing in this Agreement shall constitute a grant of authority to BSL or any representatives thereof to remove, examine or copy any particular document or types of information regarding the Company, and the Company shall retain control over the particular documents or items to be provided, examined or copied. BSL shall be permitted to maintain at least one copy of all Company information, confidential or not, in any format, whether electronic, digital, or hard copy, to satisfy its recordkeeping requirements.
The provisions of this Section shall survive any termination of this Agreement.
| 10. | Press Releases, Etc. BSL will not disclose the fact that discussions or negotiations are taking place concerning a possible Transaction involving the Company, or the status or terms and conditions thereof. |
| 11. | Due Diligence: Neither the Company, nor any of its directors, officers, or stockholders, should, in any way rely on BSL to perform any due diligence with respect to the Company. It is expressly understood and agreed that the Investors will conduct their own due diligence on the Company and the opportunity. |
| 12. | Compliance with Laws. BSL represents and warrants that it shall conduct itself in compliance with applicable federal and state laws. BSL represents that it is not a party to any other Agreement, which would conflict with or interfere with the terms and conditions of this Agreement. |
| 13. | Assignment Permissible. The Company does acknowledge that BSL may pay other consultants or agents in connection with this Agreement and that BSL reserves the right to assign this Agreement to BSL affiliates, Sutter Securities Inc. and Sutter Securities Clearing, LLC. |
| 14. | Amendments. Neither party may amend this Agreement or rescind any of its existing provisions without the prior written consent of the other party. |
| 15. | Governing Law; Dispute Resolution; Attorneys’ Fees. This Agreement shall be deemed to have been made in the State of Delaware and shall be construed, and the rights and liabilities determined, in accordance with the law of the State of Delaware, without regard to the conflicts of laws rules of such jurisdiction. Any controversy or claim relating to or arising from this Agreement (a “Dispute”) shall be settled, as applicable, in federal court located in Los Angeles, California. Should a Dispute not rise to meet the qualifications of filing in federal court in Los Angeles, CA, then the Dispute shall be resolved by arbitration in accordance with the Arbitration Rules of the Financial Industry Regulatory Authority (“FINRA”) as such rules may be modified herein or as otherwise agreed by the parties in controversy. The forum for arbitration shall be Orange County, California. Following thirty (30) days’ notice by any party of intention to invoke arbitration, any Dispute arising under this Agreement and not mutually resolved within such thirty (30) day period shall be determined by the arbitrators upon which the parties agree. In the event a suit, action, arbitration, or other proceeding of any nature whatsoever, including, without limitation, any proceeding under the U.S. Bankruptcy Code, is instituted by any party to interpret or enforce any provision of this Agreement, then the prevailing party shall be entitled to recover from the other parties its reasonable attorneys’, paralegals’, accountants’, and other experts’ fees, and all other fees, costs, and expenses actually incurred and reasonably necessary in connection therewith. |
| 16. | WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE AND AGREES NOT TO REQUEST A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT. |
| 17. | Waiver. Neither BSL’s nor the Company’s failure to insist at any time upon strict compliance with this Agreement or any of its terms nor any continued course of such conduct on their part shall constitute or be considered a waiver by BSL or the Company of any of their respective rights or privileges under this Agreement. |
| 18. | Severability. If any provision herein is or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect. |
| 19. | Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and will become effective and binding upon the Parties at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall constitute one Agreement binding on all the Parties hereto, notwithstanding that all of the Parties are not signatory to the same counterpart. Each of the Parties hereto shall sign a sufficient number of counterparts so that each party will receive a fully executed original of this Agreement. |
| 20. | Entire Agreement. This Agreement (together with Exhibit A) constitutes the entire agreement between the Company and BSL. No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any party hereto to any other party concerning the subject matter hereof. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties concerning the subject matter hereof are merged herein and shall be of no further force or effect. Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that certain engagement letter between the Company and BSL dated as of November 10, 2021 shall remain in full force and effect. |
| 21. | English Language. This Agreement is expressed in the English language. If this Agreement is translated by either party to another language for any purpose, the English language version shall govern over any translation in the event of any inconsistency, discrepancy or conflict in interpretation. All communications, notices, and other actions relating to this Agreement shall be in the English language. |
| 22. | No Warranties. BSL DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES WHICH ARE NOT EXPRESSLY STATED IN THIS AGREEMENT, WHETHER EXPRESS OR IMPLIED, TO THE FULLEST EXTENT PERMISSIBLE BY LAW. BSL DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES TO ANY PARTY THAT IS NOT A COMPANY SIGNATORY AND COMPANY ACKNOWLEDGES THAT THERE ARE NO INTENDED THIRD-PARTY BENEFICIARIES OF THIS AGREEMENT. FURTHER, THE COMPANY UNDERSTANDS AND ACKNOWLEDGES: |
(i) THE PERSONNEL REPRESENTING BSL IN NEGOTIATING THIS AGREEMENT DO NOT HAVE AUTHORITY TO MAKE ANY STATEMENTS, PROMISES OR REPRESENTATIONS IN CONFLICT WITH OR IN ADDITION TO THE INFORMATION IN THIS AGREEMENT AND BSL SPECIFICALLY DISCLAIMS ANY RESPONSIBILITY FOR ANY SUCH STATEMENTS, PROMISES, OR REPRESENTATIONS; STANDS AND ACKNOWLEDGES THAT:
(ii) COMPANY HAS NOT RELIED UPON SUCH STATEMENTS, PROMISES, OR REPRESENTATIONS AND WAIVES ANY RIGHTS OR CLAIMS ARISING FROM ANY SUCH STATEMENTS, PROMISES, OR REPRESENTATIONS;
(iii) WHILE COMPANY AND THE PERSONNEL REPRESENTING BSL IN NEGOTIATING THIS AGREEMENT MAY HAVE DISCUSSED POTENTIAL VALUE RANGES FOR THE COMPANY AND/OR TARGET SALE PRICES AND FINANCING OR TRANSACTION STRUCTURES, THE EXACT VALUE OF THE COMPANY COULD NOT POSSIBLY BE ASCERTAINED BY BSL OR ANY OTHER PARTY WITHOUT GOING TO MARKET AND, FURTHER, THAT THE EXACT VALUE OF THE COMPANY AND THE PRECISE STRUCTURE OF AN EVENTUAL FINANCING OR TRANSACTION CAN ONLY BE DETERMINED BY WHAT A WILLING AND ABLE COUNTERPARTY AGREES TO PAY AND COMPANY AGREES TO ACCEPT IN AN ARMS-LENGTH FINANCING OR TRANSACTION IN THE ABSENCE OF DURESS; AND
(iv) BSL’S ENGAGEMENT IS NOT A GUARANTEE THAT A VALUE OR STRUCTURE ACCEPTABLE TO COMPANY WILL OR CAN BE ACHIEVED VIA THE PROVISION OF THE SERVICES SET FORTH HEREIN.
| 23. | Non-Circumvention. Other than as provided for herein, the Company agrees NOT to proceed with any transaction with any Investors, introduced client, entities or persons or any other contact introduced by BSL to the Company. The Company agrees NOT to attempt to contact any Investors, entities or persons or any other contact introduced by BSL to the Company without first obtaining prior written approval from BSL. This Section shall survive the termination or expiration of the Agreement. |
| 24. | Non-Solicitation. Absent the written consent of the other parties, no party will, during the term of this Agreement and continuing for a period of two (2) year from the date of termination of this Agreement, solicit or attempt to entice away, hire, or engage any person who is at any time during the Term employed or engaged to perform services by the other party. Notwithstanding the foregoing, the restrictions in this Section shall not apply to employees or consultants who have been terminated by a party and are not subject to restrictive contractual obligations or covenants (including but not limited to any non-competition or garden leave provisions) with respect to such party. |
| 25. | No Commitment or Guarantee. The execution of this Agreement does not constitute a commitment by BSL or the Company to consummate any Transaction and does not ensure the successful placement of securities of any investment vehicle or the success of BSL with respect to finding any Investors or the success with respect to any Transaction. No promises or representations have been made except as expressly set forth in this Agreement and the parties have not relied on any promises or representations except as expressly set forth in this Agreement. |
| 26. | Further Assurances. The parties shall afford each other reasonable assurances, including written representations and access to any correspondence, agreements, or other documents, which the other party may reasonably request for the purpose of verifying compliance with the terms and conditions of this Agreement. |
Please confirm that the foregoing is in accordance with our understanding by signing and returning one copy of this Agreement to BSL to indicate the Company’s acceptance of the terms set forth herein.
By signing this Agreement, the signing party represents that he/it has unconditional authority to enter into this Agreement on behalf of each party hereto.
| Boustead Securities, LLC (“BSL”) | ||
| By: | /s/ Keith Moore | |
| Keith Moore, CEO | ||
| Shuttle Pharmaceuticals Holdings, Inc. (the “Company”) | ||
| By: | /s/ Anatoly Dritschilo | |
| Anatoly Dritschilo, CEO | ||
EXHIBIT A
Indemnification
The Company agrees that it shall indemnify and hold harmless, BSL, its members, managers, officers, employees, agents, affiliates and controlling persons within the meaning of Section 20 of the Securities Exchange Act of 1934 and Section 15 of the Securities Act of 1933, each as amended (any and all of whom are referred to as an “Indemnified Party”), from and against any and all losses, claims, damages, liabilities, or expenses, and all actions in respect thereof (including, but not limited to, all legal or other expenses reasonably incurred by an Indemnified Party in connection with the investigation, preparation, defense or settlement of any claim, action or proceeding, whether or not resulting in any liability), incurred by an Indemnified Party with respect to, caused by, or otherwise arising out of any transaction contemplated by this Agreement or BSL’s performing the services contemplated hereunder; provided, however, the Company will not be liable to the extent, and only to the extent, that any loss, claim, damage, liability or expense is finally judicially determined to have resulted primarily from BSL’s gross negligence or bad faith in performing such services.
If the indemnification provided for herein is conclusively determined (by an entry of final judgment by a court of competent jurisdiction and the expiration of the time or denial of the right to appeal) to be unavailable or insufficient to hold any Indemnified Party harmless in respect to any losses, claims, damages, liabilities or expenses referred to herein, then the Company, or its owners, whether an entity(ies) or individual(s), shall contribute to the amounts paid or payable by such Indemnified Party in such proportion as is appropriate and equitable under all circumstances taking into account the relative benefits received by the Company on the one hand and BSL on the other, from the transaction or proposed transaction under the Agreement or, if allocation on that basis is not permitted under applicable law, in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and BSL on the other, but also the relative fault of the Company and BSL; provided, however, in no event shall the aggregate contribution of BSL and/or any Indemnified Party be in excess of the net compensation actually received by BSL and/or such Indemnified Party pursuant to this Agreement.
The Company shall not settle or compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, claim, suit or proceeding in which any Indemnified Party is or could be a party and as to which indemnification or contribution could have been sought by such Indemnified Party hereunder (whether or not such Indemnified Party is a party thereto), unless such consent or termination includes an express unconditional release of such Indemnified Party, reasonably satisfactory in form and substance to such Indemnified Party, from all losses, claims, damages, liabilities or expenses arising out of such action, claim, suit or proceeding.
In the event any Indemnified Party shall incur any expenses covered by this Exhibit A, the Company shall reimburse the Indemnified Party for such covered expenses within ten (10) business days of the Indemnified Party’s delivery to the Company of an invoice therefor, with receipts attached. Such obligation of the Company to so advance funds may be conditioned upon the Company’s receipt of a written undertaking from the Indemnified Party to repay such amounts within ten (10) business days after a final, non-appealable judicial determination that such Indemnified Party was not entitled to indemnification hereunder.
The foregoing indemnification and contribution provisions are not in lieu of, but in addition to, any rights which any Indemnified Party may have at common law hereunder or otherwise, and shall remain in full force and effect following the expiration or termination of BSL’s engagement and shall be binding on any successors or assigns of the Company and successors or assigns to all or substantially all of the Company’s business or assets.
Exhibit 10.3
OFFERING DEPOSIT ACCOUNT AGENCY AGREEMENT
This Offering Deposit Account Agency Agreement (this “Agreement”) dated as of February 7, 2024 by and among Shuttle Pharmaceuticals Holdings, Inc. (the “Company”), having an address at 401 Professional Drive, Suite 260, Gaithersburg, MD 20879, its wholly owned subsidiary, Shuttle Diagnostics, Inc., a Delaware corporation (“Subsidiary” and together with the Company, the “Sellers”), Boustead Securities, LLC, serving as the representative of the Placement Agents (the “Placement Agent”), having an address at 6 Venture, Suite 395, Irvine, CA 92618 USA, and Sutter Securities Inc. (the “Deposit Account Agent”), a broker-dealer registered with the Securities and Exchange Commission (“SEC”), having an office at 6 Venture, Suite 395, Irvine, CA 92618 USA.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Securities Purchase Agreement dated February 7, 2024 (the “Purchase Agreement”), the Sellers desires to sell (the “Offering”) up to a maximum of $4,500,000 of its units.
WHEREAS, unless extended upon agreement by the Sellers and the Placement Agent, the Offering will terminate at the close of business on the later of (i) April 30, 2024 or (ii) within 30 days of the effective date of the Registration Statement (the “Termination Date”), or such later date as agreed to by the parties in writing in accordance with the terms of this Agreement;
WHEREAS, the Sellers and Placement Agent desire to establish a deposit account with the Deposit Account Agent into which the Sellers and Placement Agent shall instruct investors introduced to the Sellers by Placement Agent (the “Investors”) to deposit checks and other instruments for the payment of money made payable to the order of “Sutter Securities as Agent for the Investors in Shuttle Pharmaceuticals Holdings, Inc.” and Deposit Account Agent is willing to accept said checks and other instruments for the payment of money in accordance with the terms hereinafter set forth;
WHEREAS, the Sellers, as issuer, and Placement Agent, as an introducing broker-dealer, represent and warrant to the Deposit Account Agent that they will comply with all of their respective obligations under applicable state and federal securities laws and regulations with respect to sale of the Offering;
WHEREAS, the Sellers and Placement Agent represent and warrant to the Deposit Account Agent that they have not stated to any individual or entity that the Deposit Account Agent’s duties will include anything other than those duties stated in this Agreement; and
WHEREAS, the Sellers and Placement Agent warrant to the Deposit Account Agent that a copy of each document that has been delivered to Investors and third parties that include Deposit Account Agent’s name and duties, has been attached hereto as Schedule I.
NOW, THEREFORE, IT IS AGREED as follows:
1. Delivery of Deposit Funds.
(a) Placement Agent and the Sellers shall instruct Investors to deliver to Deposit Account Agent checks made payable to the order of “Sutter Securities as Agent for the Investors in Shuttle Pharmaceuticals Holdings, Inc.,” or wire transfer to Sutter Securities Inc., 6 Venture, Suite 395, Irvine, CA 92618, ABA No. 122243774, Account Name “Sutter Securities as Agent for the Investors in Shuttle Pharmaceuticals Holdings, Inc.,” Account No. 2030809438, in each case, with the name and address of the individual or entity making payment. In the event any Investor’s address is not provided to Deposit Account Agent by the Investor, then Placement Agent and/or the Sellers agree to promptly provide Deposit Account Agent with such information in writing. The checks or wire transfers shall be deposited into a non-interest-bearing account at Banc of California entitled “Sutter Securities as Agent for the Investors in Shuttle Pharmaceuticals Holdings, Inc.” (the “Deposit Account”).
(b) The collected funds deposited into the Deposit Account are referred to as the “Deposit Funds.”
(c) The Deposit Account Agent shall have no duty or responsibility to enforce the collection or demand payment of any funds deposited into the Deposit Account. If, for any reason, any check deposited into the Deposit Account shall be returned unpaid to the Deposit Account Agent, the sole duty of the Deposit Account Agent shall be to return the check to the Investor and advise the Sellers and Placement Agent promptly thereof.
2. Release of Deposit Funds. The Deposit Funds shall be paid by the Deposit Account Agent in accordance with the following:
(a) In the event that the Sellers and Placement Agent advise the Deposit Account Agent in writing that the Offering has been terminated (the “Termination Notice”), the Deposit Account Agent shall promptly return the funds paid by each Investor to said Investor without interest or offset within five (5) business days.
(b) If prior to 3:00 P.M. Pacific time on the Termination Date, the Deposit Account Agent receives written notice, in the form of Exhibit A, attached hereto and made a part hereof, and signed by the Sellers and Placement Agent, stating that the Termination Date has been extended (the “Extension Notice”), then the Termination Date shall be so extended and such date shall be the new “Termination Date”.
(c) Provided that the Deposit Account Agent does not receive the Termination Notice in accordance with Section 2(a) and there have been funds deposited into the Deposit Account on or prior to the Termination Date or the date stated in the Extension Notice, if any, received by the Deposit Account Agent in accordance with Section 2(b) above, the Deposit Account Agent shall, upon receipt of written instructions, in the form of Exhibit B, attached hereto and made a part hereof, or in a form and substance satisfactory to the Deposit Account Agent, received from the Sellers and Placement Agent, pay the Deposit Funds in accordance with such written instructions, such payment or payments to be made by wire transfer within one (1) business day of receipt of such written instructions. Such instructions must be received by the Deposit Account Agent no later than 3:00 PM Pacific Time on a Business Day for the Deposit Account Agent to process such instructions that Business Day.
| 2 |
(d) If by 3:00 P.M. Pacific time on the later of the Termination Date or the date stated in the Extension Notice, if any, that the Deposit Account Agent has received in accordance with Section 2(b) above, the Deposit Account Agent has not received written instructions from the Sellers and Placement Agent regarding the disbursement of the Deposit Funds, then the Deposit Account Agent shall promptly return the Deposit Funds to the Investors without interest or offset within five (5) business days. The Deposit Funds returned to each Investor shall be free and clear of any and all claims of the Deposit Account Agent.
(e) The Deposit Account Agent shall not be required to pay any uncollected funds or any funds that are not available for withdrawal.
(f) If the Termination Date or any date that is a deadline under this Agreement for giving the Deposit Account Agent notice or instructions or for the Deposit Account Agent to take action is not a Business Day, then such date shall be the Business Day that immediately preceding that date. A “Business Day” is any day other than a Saturday, Sunday or a day that a SEC-registered broker-dealer is not legally obligated to be opened.
3. Acceptance by Deposit Account Agent. The Deposit Account Agent hereby accepts and agrees to perform its obligations hereunder, provided that:
(a) The Deposit Account Agent may act in reliance upon any signature believed by it to be genuine and may assume that any person who has been designated by Placement Agent or the Sellers to give any written instructions, notice or receipt, or make any statements in connection with the provisions hereof has been duly authorized to do so. Deposit Account Agent shall have no duty to make inquiry as to the genuineness, accuracy or validity of any statements or instructions or any signatures on statements or instructions. The names and of each individual authorized to act singly on behalf of the Sellers and Placement Agent are stated in Schedule II, which is attached hereto and made a part hereof. The Sellers and Placement Agent may each remove or add one or more of its authorized signers stated on Schedule II by notifying the Deposit Account Agent of such change in accordance with this Agreement, which notice shall include the true signature for any new authorized signatories.
(b) The Deposit Account Agent may act relative hereto in reliance upon advice of counsel in reference to any matter connected herewith. The Deposit Account Agent shall not be liable for any mistake of fact or error of judgment or law, or for any acts or omissions of any kind, unless caused by its willful misconduct or gross negligence.
(c) Placement Agent and the Sellers agree to indemnify and hold the Deposit Account Agent harmless from and against any and all claims, losses, costs, liabilities, damages, suits, demands, judgments or expenses (including but not limited to reasonable attorney’s fees) claimed against or incurred by Deposit Account Agent arising out of or related, directly or indirectly, to this Agreement unless caused by the Deposit Account Agent’s gross negligence or willful misconduct.
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(d) In the event that the Deposit Account Agent shall be uncertain as to its duties or rights hereunder, the Deposit Account Agent shall be entitled to (i) refrain from taking any action other than to keep safely the Deposit Funds until it shall be directed otherwise by a court of competent jurisdiction, or (ii) deliver the Deposit Funds to a court of competent jurisdiction.
(e) The Deposit Account Agent shall have no duty, responsibility or obligation to interpret or enforce the terms of any agreement other than Deposit Account Agent’s obligations hereunder, and the Deposit Account Agent shall not be required to make a request that any monies be delivered to the Deposit Account, it being agreed that the sole duties and responsibilities of the Deposit Account Agent shall be to the extent not prohibited by applicable law (i) to accept checks or other instruments for the payment of money and wire transfers delivered to the Deposit Account Agent for the Deposit Account and deposit said checks and wire transfers into the non-interest bearing Deposit Account, and (ii) to disburse or refrain from disbursing the Deposit Funds as stated above, provided that the checks received by the Deposit Account Agent have been collected and are available for withdrawal.
(f) Upon execution of this Agreement, the Sellers shall execute and deliver to Deposit Account Agent Exhibit C, for the purpose of providing standing wire instructions for the Sellers to be used for disbursements to said party.
4. Term of Deposits. This Agreement shall terminate upon the disbursement of all Deposit Funds in the Deposit Account pursuant to Section 2(c), Section 2(d), Section 6 or Section 7 (except with respect to provisions hereof which are specifically intended to survive such termination).
5. Deposit Account Statements and Information. The Deposit Account Agent agrees to send to the Sellers and/or the Placement Agent a copy of the Deposit Account periodic statement, upon request and to also provide the Sellers and/or Placement Agent, or their designee, upon request other deposit account information, including Deposit Account balances, by telephone or by computer communication, to the extent practicable. The Sellers and Placement Agent agree to complete and sign all forms or agreements required by the Deposit Account Agent for that purpose. The Sellers and Placement Agent each consent to the Deposit Account Agent’s release of such Deposit Account information to any of the individuals designated by Sellers or Placement Agent, which designation has been assigned in accordance with Section 3(a) by any of the persons in Schedule II. Further, the Sellers and Placement Agent have an option to receive e-mail notification of incoming and outgoing wire transfers. If this e-mail notification service is requested and subsequently approved by the Deposit Account Agent, the Sellers and Placement Agent agrees to provide a valid e-mail address and other information necessary to set-up this service and sign all forms and agreements required for such service. The Sellers and Placement Agent each consent to the Deposit Account Agent’s release of wire transfer information to the designated e-mail address(es). The Deposit Account Agent’s liability for failure to comply with this section shall not exceed the cost of providing such information.
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6. Resignation and Termination of the Deposit Account Agent. The Deposit Account Agent may resign at any time by giving 30 days’ prior written notice of such resignation to Placement Agent and the Sellers. Upon providing such notice, the Deposit Account Agent shall have no further obligation hereunder except to hold as depositary the Deposit Funds that it receives until the end of such 30-day period. In such event, the Deposit Account Agent shall not take any action, other than receiving and depositing Investors’ checks and wire transfers in accordance with this Agreement, until the Sellers have designated a banking corporation, trust sellers, attorney or other person as successor. Upon receipt of such written designation signed by Placement Agent and the Sellers, the Deposit Account Agent shall promptly deliver the Deposit Funds to such successor and shall thereafter have no further obligations hereunder. If such instructions are not received within 30 days following the effective date of such resignation, then the Deposit Account Agent may deposit the Deposit Funds held by it pursuant to this Agreement with a clerk of a court of competent jurisdiction pending the appointment of a successor. In either case provided for in this Section, the Deposit Account Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Deposit Funds.
7. Termination. The Sellers and Placement Agent may terminate the appointment of the Deposit Account Agent hereunder upon written notice specifying the date upon which such termination shall take effect, which date shall be at least 30 days from the date of such notice. In the event of such termination, the Sellers and Placement Agent shall, within 30 days of such notice, appoint a successor deposit account agent and the Deposit Account Agent shall, upon receipt of written instructions signed by the Sellers and Placement Agent, turn over to such successor deposit account agent all of the Deposit Funds; provided, however, that if the Sellers and Placement Agent fail to appoint a successor deposit account agent within such 30-day period, such termination notice shall be null and void and the Deposit Account Agent shall continue to be bound by all of the provisions hereof. Upon receipt of the Deposit Funds, the successor deposit account agent shall become the deposit account agent hereunder and shall be bound by all of the provisions hereof and Deposit Account Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Deposit Funds and under this Agreement.
8. Investment. All funds received by the Deposit Account Agent shall be held only in non-interest-bearing account at Banc of California.
9. Compensation. Deposit Account Agent shall be entitled, for the duties to be performed by it hereunder, to a fee as set forth on Schedule III. In addition, the Sellers shall be obligated to reimburse Deposit Account Agent for all fees, costs and expenses incurred or that become due in connection with this Agreement or the Deposit Account, including reasonable attorney’s fees. Neither the modification, cancellation, termination or rescission of this Agreement nor the resignation or termination of the Deposit Account Agent shall affect the right of Deposit Account Agent to retain the amount of any fee which has been paid, or to be reimbursed or paid any amount which has been incurred or becomes due, prior to the effective date of any such modification, cancellation, termination, resignation or rescission. To the extent the Deposit Account Agent has incurred any such expenses, or any such fee becomes due, prior to any closing, the Deposit Account Agent shall advise the Sellers and the Sellers shall direct all such amounts to be paid directly at any such closing.
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10. Notices. All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by hand-delivery, by facsimile (followed by first-class mail), by nationally recognized overnight courier service or by prepaid registered or certified mail, return receipt requested, to the addresses set forth below:
If to Placement Agent:
Boustead Securities LLC
6 Venture, Suite 395
Irvine, CA 92618
Attention: Keith Moore
Email: keith@boustead1828.com
With copy to:
If to the Sellers:
Shuttle Pharmaceuticals Holdings, Inc.
Shuttle Diagnostics, Inc.
401 Professional Drive, Suite 260
Gaithersburg, MD 20879
Attn: Dr. Anatoly Dritschilo, M.D.
Email: dritscha@georgetown.edu
With copy to:
Megan J. Penick
Dorsey & Whitney LLP
51 West 52nd Street
New York, NY 10019
Email: penick.megan@dorsey.com
If to Deposit Account Agent:
Sutter Securities Inc.
6 Venture, Suite 395
Irvine, CA 92618
Attention: Lincoln Smith
Email: lincoln.smith@sutterus.com
Fax: (310) 504-3704
11. General.
(a) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to agreements made and to be entirely performed within such State, without regard to choice of law principles and any action brought hereunder shall be brought in the courts of the State of California, located in the County of Orange or Los Angeles. Each party hereto irrevocably waives any objection on the grounds of venue, forum nonconveniens or any similar grounds and irrevocably consents to service of process by mail or in any manner permitted by applicable law and consents to the jurisdiction of said courts. EACH OF THE PARTIES HERETO HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
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(b) This Agreement sets forth the entire agreement and understanding of the parties with respect to the matters contained herein and supersedes all prior agreements, arrangements and understandings relating thereto.
(c) All of the terms and conditions of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties hereto, as well as their respective successors and assigns.
(d) This Agreement may be amended, modified, superseded or canceled, and any of the terms or conditions hereof may be waived, only by a written instrument executed by each party hereto or, in the case of a waiver, by the party waiving compliance. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver of any party of any condition, or of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term of this Agreement. No party may assign any rights, duties or obligations hereunder unless all other parties have given their prior written consent.
(e) If any provision included in this Agreement proves to be invalid or unenforceable, it shall not affect the validity of the remaining provisions.
(f) This Agreement and any modification or amendment of this Agreement may be executed in several counterparts or by separate instruments and all of such counterparts and instruments shall constitute one agreement, binding on all of the parties hereto.
12. Form of Signature. The parties hereto agree to accept a facsimile transmission copy of their respective actual signatures as evidence of their actual signatures to this Agreement and any modification or amendment of this Agreement; provided, however, that each party who produces a facsimile signature agrees, by the express terms hereof, to place, promptly after transmission of his or her signature by fax, a true and correct original copy of his or her signature in overnight mail to the address of the other party.
13. No Third-Party Beneficiaries. This Agreement is solely for the benefit of the parties and their respective successors and permitted assigns, and no other person has any right, benefit, priority, or interest under or because of the existence of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above.
| Shuttle Pharmaceuticals Holdings, Inc. | Shuttle Diagnostics, Inc. | |||
| By: | /s/ Anatoly Dritschilo | By: | /s/ Anatoly Dritschilo | |
| Name: | Dr. Anatoly Dritschilo, M.D. | Name: | Dr. Anatoly Dritschilo, M.D. | |
| Title: | CEO | Title: | President | |
| Boustead Securities LLC | Sutter Securities Inc. | |||
| By: | /s/ Keith Moore |
By: | /s/ Lincoln Smith | |
| Name: | Keith Moore | Name: | Lincoln Smith | |
| Title: | CEO | Title: | CCO | |
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Schedule I
OFFERING DOCUMENTS
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Schedule II
The Deposit Account Agent is authorized to accept instructions signed or believed by the Deposit Account Agent to be signed by any one of the following on behalf of the Sellers and Placement Agent.
Shuttle Pharmaceuticals Holdings, Inc.
Name and Title
Dr. Anatoly Dritschilo, M.D., CEO
Shuttle Diagnostics, Inc.
Name and Title
Dr. Anatoly Dritschilo, M.D., President
Boustead Securities LLC
Name and Title
Keith Moore, CEO
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Schedule III
Fee Schedule
| Service | Fee | |||
| Account Setup Fee | $ | 3,000.00 | ||
| Wire Transfers – Incoming (Domestic or International) | $ | 10.00 | ||
| Wire Transfers – Outgoing (Domestic) | $ | 15.00 | ||
| Wire Transfers – Outgoing (International) | $ | 25.00 | ||
| NACHA Upload per file | $ | 10.00 | ||
| ACH per transaction (incoming or outgoing) | $ | 1.00 | ||
| ACH Exceptions (incoming or outgoing) | $ | 10.00 | ||
| Check Processing (incoming or outgoing) | $ | 10.00 | ||
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Exhibit A
FORM OF EXTENSION NOTICE
Date:
Sutter Securities Inc.
6 Venture, Suite 395
Irvine, CA 92618
Attention: Lincoln Smith
Dear Mr. Smith:
In accordance with the terms of Section 2(b) of the Offering Deposit Account Agency Agreement dated [__________], 202[__], by and among Shuttle Pharmaceuticals Holdings, Inc. (the “Company”), its wholly owned subsidiary, Shuttle Diagnostics, Inc. (“Subsidiary” and together with the Company, the “Sellers”), Boustead Securities LLC (the “Placement Agent”), and Sutter Securities Inc. (the “Deposit Account Agent”), the Company and Placement Agent hereby notify the Deposit Account Agent that the Termination Date has been extended from [__________], 202[__] to [__________], 202[__], the new “Termination Date.”
| Very truly yours, | ||||
| Shuttle Pharmaceuticals Holdings, Inc. | Shuttle Diagnostics, Inc. | |||
| By: | By: | |||
| Name: | Dr. Anatoly Dritschilo, M.D. | Name: | Dr. Anatoly Dritschilo, M.D. | |
| Title: | CEO | Title: | President | |
| Boustead Securities LLC | Sutter Securities Inc. | |||
| By: | By: | |||
| Name: | Keith Moore | Name: | Lincoln Smith | |
| Title: | CEO | Title: | CCO | |
Exhibit B
FORM OF DEPOSIT RELEASE NOTICE
Date:
Sutter Securities Inc.
6 Venture, Suite 395
Irvine, CA 92618
Attention: Lincoln Smith
Dear Mr. Smith:
In accordance with the terms of Section 2(c) of the Offering Deposit Account Agency Agreement dated as of [__________], 202[__], by and between Shuttle Pharmaceuticals Holdings, Inc. (the “Company”), its wholly owned subsidiary, Shuttle Diagnostics, Inc. (“Subsidiary” and together with the Company, the “Sellers”), Boustead Securities LLC (the “Deposit Account Agent”) and Sutter Securities Inc. (the “Placement Agent”), the Company and Placement Agent hereby notify the Deposit Account Agent that the [No.] closing will be held on [__________], 202[__] for gross proceeds of $[Amount].
PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions attached):
| [Sellers]: | $[Amount] | |
| [Payee 1]: | $[Amount] | |
| [Payee 2]: | $[Amount] | |
Very truly yours,
| Shuttle Pharmaceuticals Holdings, Inc. | Shuttle Diagnostics, Inc. | |||
| By: | By: | |||
| Name: | Dr. Anatoly Dritschilo, M.D. | Name: | Dr. Anatoly Dritschilo, M.D. | |
| Title: | CEO | Title: | President | |
| Boustead Securities LLC | Sutter Securities Inc. | |||
| By: | By: | |||
| Name: | Keith Moore | Name: | Lincoln Smith | |
| Title: | CEO | Title: | CCO | |
Exhibit C
STANDING WIRE INSTRUCTIONS FOR SELLERS
In accordance with Section 3(f) of the Agreement disbursements to Sellers by wire transfer must be sent in accordance with the following wire instructions:
| Bank Name: | ||
| ABA Number: | ||
| Account Number: | ||
| Beneficiary Name: | Shuttle Pharmaceuticals Holdings, Inc. | |
| Beneficiary Address: | 401 Professional Drive, Suite 260 | |
| Gaithersburg, MD 20879 |
Exhibit 99.1
Shuttle Pharma Announces Its Intent to Pursue a Rights Offering
ROCKVILLE, Md., February 13, 2024 -- Shuttle Pharmaceuticals Holdings, Inc. (Nasdaq: SHPH) (“SHPH” or the “Company”), a discovery and development stage specialty pharmaceutical company focused on improving the outcomes of cancer patients treated with radiation therapy (RT), along with its wholly-owned subsidiary, Shuttle Diagnostics, Inc., a Maryland corporation (“Diagnostics”), today announced its intent to commence a Rights Offering where it plans to raise up to $4.5 million through the distribution of subscription rights and the exercise thereof, which full rights will entitle existing SHPH stockholders to purchase from the Company units (the “Units”), with each Unit consisting of (i) one share of SHPH common stock, (ii) a warrant to purchase one share of SHPH common stock exercisable at a per share purchase price of $2.35 per share, and (iii) a percentage of equity interest in Diagnostics. The Units will be sold at a per Unit price equal to 90% of the VWAP of SHPH common stock for the five trading days immediately preceding closing.
SHPH has separately entered into a securities purchase agreement with SRO LLC, a Nevada limited liability company, pursuant to which SRO LLC agreed to commit to purchasing from the Company $2.25 million of Units from the Company. In addition, in the event the Company fails to raise a full $4.5 million in the Rights Offering, SRO LLC agreed to a backstop commitment pursuant to which it would have the right to purchase any remaining Units not purchased by existing SHPH stockholders in the Rights Offering, up to an additional $2.25 million.
In conjunction with its entry into the Purchase Agreement, on February 7, 2024, the Company entered into a placement agent and advisory services agreement with Boustead Securities, LLC (“BSL”), pursuant to which BSL and BSL’s affiliates will provide the Company with regular and customary financial consulting advice and will act as placement agent, on a best efforts basis, for the Rights Offering.
SHPH intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement under the Securities Act of 1933, as amended, in order to effect the Rights Offering, which Rights Offering will be made to holders of SHPH common stock, and other security holders having the right to participate, as of a yet-to-be-determined record date. SHPH currently plans to fix a record date following its filing of a registration statement on Form S-1 registering the Rights Offering and after it completes the requisite review process by the Commission’s staff. At such time, SHPH stockholders as of the record date will be notified of their right to participate in the Rights Offering.
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of any securities referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. The Rights Offering, when commenced, will be made only by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended.
About Shuttle Pharmaceuticals
Founded in 2012 by faculty members of the Georgetown University Medical Center, Shuttle Pharmaceuticals is a discovery and development stage specialty pharmaceutical company focused on improving the outcomes for cancer patients treated with radiation therapy (RT). Our mission is to improve the lives of cancer patients by developing therapies that are designed to maximize the effectiveness of RT while limiting the side effects of radiation in cancer treatment. Although RT is a proven modality for treating cancers, by developing radiation sensitizers, we aim to increase cancer cure rates, prolong patient survival and improve quality of life when used as a primary treatment or in combination with surgery, chemotherapy and immunotherapy. For more information, please visit our website at www.shuttlepharma.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to statements concerning future results, strategy and plans of the Company (including certain statements which may be identified by the use of the words “plans,” “expects,” “does not expect,” “estimated,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” “does not anticipate” or “believes,” or variations of such words and phrases, or state that certain actions, events or results “may,” “could,” “would,” “might,” “projects,” “will,” “will be taken,” “occur” or “be achieved”). Forward-looking statements are based on the opinions and estimates of management of the Company, as of the date such statements are made, and they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Additional information on these and other factors that may cause actual results and the Company’s performance to differ materially is included in the Company’s periodic reports filed with the SEC, including, but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and subsequent Quarterly Reports on Form 10-Q. Copies of the Company’s filings with the SEC are available publicly on the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligations to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Shuttle Pharmaceuticals
Anatoly Dritschilo, M.D., CEO
240-403-4212
info@shuttlepharma.com
Investor Contacts
Lytham Partners, LLC
Robert Blum
602-889-9700
shph@lythampartners.com