Shuttle Pharma Announces Its Intent to Pursue a Rights Offering

Rhea-AI Summary

Shuttle Pharmaceuticals Holdings, Inc. announces a Rights Offering to raise up to $4.5 million through the distribution of subscription rights, offering existing stockholders the opportunity to purchase Units consisting of common stock, warrants, and equity interest in Diagnostics.

Positive

• Shuttle Pharmaceuticals Holdings, Inc. plans to raise up to $4.5 million through a Rights Offering.
• Existing SHPH stockholders will have the opportunity to purchase Units containing common stock, warrants, and equity interest in Diagnostics.
• The Units will be sold at a price equal to 90% of the VWAP of SHPH common stock for the five trading days preceding closing.
• SRO LLC has committed to purchasing $2.25 million of Units from the Company, with a backstop commitment for an additional $2.25 million if the full amount is not raised.
• Shuttle Pharmaceuticals Holdings, Inc. has entered into an agreement with Boustead Securities, LLC for financial consulting advice and placement agent services for the Rights Offering.
• The company intends to file a registration statement with the Securities and Exchange Commission to effect the Rights Offering, with a record date to be determined.
• The Rights Offering will be made only by means of a prospectus meeting the requirements of the Securities Act of 1933.

Negative

• None.

Financial Analyst

Shuttle Pharmaceuticals Holdings' announcement of a Rights Offering to raise up to $4.5 million is a strategic move to enhance its capital structure and fund its operations, specifically in the area of radiation therapy for cancer patients. The structure of the Rights Offering is noteworthy, as it includes not only common stock but also warrants and an equity interest in a subsidiary. This multi-faceted approach allows for a diversified investment opportunity, which might be more attractive to investors seeking both immediate and future value.

The involvement of SRO LLC, with a commitment to purchase $2.25 million of Units and a backstop provision, provides a safety net for the company, ensuring a minimum level of capital raise. This commitment could be seen as a vote of confidence in the company's prospects and may encourage other investors to participate. However, the discount offered at 90% of the VWAP (Volume Weighted Average Price) could signal to the market a potential undervaluation of the stock or a need for the company to incentivize participation in the Rights Offering.

Investors should be aware that the outcome of this Rights Offering could significantly influence SHPH's financial flexibility and its ability to fund ongoing and future projects. A successful capital raise could lead to advancements in their pipeline, whereas a shortfall, despite the backstop commitment, may reflect market skepticism about the company's potential or its valuation.

Market Research Analyst

The Rights Offering from Shuttle Pharmaceuticals Holdings is indicative of the company's growth trajectory and its need for additional capital to support its pipeline of products in the specialty pharmaceutical sector. The market's reception of this offering will be critical, as it reflects investor sentiment regarding the company's current valuation and future prospects. The terms of the Rights Offering, especially the inclusion of an equity interest in Shuttle Diagnostics, suggest an attempt to leverage the subsidiary's potential value to attract investment.

It is essential to monitor the subscription rate of the Rights Offering, as it will provide insights into the market's confidence in SHPH's strategic direction and operational efficiency. Moreover, the engagement of Boustead Securities, LLC as a placement agent and financial advisor could potentially expand the reach of the offering and bring in a broader investor base, which might be necessary given the ambitious target of the capital raise.

Long-term, the success of this Rights Offering could position SHPH for more aggressive development and commercialization efforts, potentially leading to increased market share and revenue growth. Conversely, a tepid response could necessitate a reassessment of the company's strategies and operational execution.

Legal Expert

The forthcoming filing of a registration statement under the Securities Act of 1933 is a critical legal step for Shuttle Pharmaceuticals Holdings' Rights Offering. This process, subject to review by the SEC, ensures regulatory compliance and investor protection. The company's adherence to these legal frameworks is essential for maintaining credibility and investor trust.

Investors should note that the Rights Offering is contingent upon SEC review and approval, which introduces a level of uncertainty. The timeline and outcome of this review could impact the schedule and success of the offering. The legal stipulation that no securities can be sold prior to registration or qualification under the applicable securities laws further underscores the importance of regulatory due diligence in this process.

Additionally, the announcement explicitly states that the press release is not an offer to sell or a solicitation of an offer to buy, which is a standard legal disclaimer to prevent premature commitments and to comply with securities regulations. Investors should await the prospectus, which will provide detailed information about the Rights Offering, including risks, benefits and the company's strategic plans post-capital raise.

ROCKVILLE, Md., Feb. 13, 2024 /PRNewswire/ -- 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

View original content to download multimedia:https://www.prnewswire.com/news-releases/shuttle-pharma-announces-its-intent-to-pursue-a-rights-offering-302060196.html

SOURCE Shuttle Pharmaceuticals Holdings, Inc.

What is Shuttle Pharmaceuticals Holdings, Inc.'s plan to raise funds?

Shuttle Pharmaceuticals Holdings, Inc. plans to raise up to $4.5 million through a Rights Offering.

What do the Units offered in the Rights Offering consist of?

The Units consist of one share of SHPH common stock, a warrant to purchase one share of SHPH common stock, and a percentage of equity interest in Diagnostics.

Who has committed to purchasing $2.25 million of Units from the Company?

SRO LLC has committed to purchasing $2.25 million of Units from Shuttle Pharmaceuticals Holdings, Inc.

What is the backstop commitment made by SRO LLC?

SRO LLC has a backstop commitment to purchase any remaining Units not purchased by existing SHPH stockholders in the Rights Offering, up to an additional $2.25 million.

With whom has Shuttle Pharmaceuticals Holdings, Inc. entered into an agreement for financial consulting advice and placement agent services?

Shuttle Pharmaceuticals Holdings, Inc. has entered into an agreement with Boustead Securities, LLC for financial consulting advice and placement agent services.

How will the Rights Offering be conducted?

The Rights Offering will be made only by means of a prospectus meeting the requirements of the Securities Act of 1933.