Shuttle Pharmaceuticals Holdings, Inc. Leases Disclosure
Note 3 - Leases
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the present value of the future lease payments as of the lease commencement date. Operating lease expense is recognized on a straight-line basis over the lease term.
The Company currently has a lease agreement which allows for the use of a laboratory facility, entered into on February 16, 2023, with base rent of $7,206 per month for a period of 64 months, which increases at the rate of 3% per year, that commenced June 1, 2023. The lease included a six-month 50% rent abatement upon commencement. Additional common area maintenance (“CAM”) fees are charged monthly and revised annually. In addition to monthly base rent, the Company pays monthly CAM fees, which are being expensed as incurred. An irrevocable letter of credit (“LOC”) for the security deposit of $43,234 and base rent of $3,891, including 50% abatement, and $3,315 of CAM cost, was due and paid on execution of the lease agreement. Alexandria Real Estate (ARE-QRS-CORP) is the beneficiary of the LOC. The current LOC expires on March 1, 2026.
Following the Company’s discontinuation of its clinical trial for Ropidoxuridine, the Company committed to a plan to pursue a sublease for its laboratory space. Although no sublease has been executed as of December 31, 2025, the Company recorded total non-cash impairment charges of $109,235 related to its operating lease right-of-use asset during the year ended December 31, 2025, to reflect the reduced expected economic value of the operating lease right-of-use asset based on estimated sublease rates. The impairment charges are recorded within research and development expenses in the consolidated statements of operations.
The following summarizes the right-of use asset and lease information for the Company’s operating leases:
| Years Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease cost | $ | 91,787 | $ | 91,787 | ||||
| Variable lease cost | 68,231 | 41,257 | ||||||
| Sublease income | (6,489 | ) | ||||||
| Total lease cost | $ | 160,018 | $ | 126,555 | ||||
| Other information: | ||||||||
| Cash paid for operating cash flows for operating leases | 94,247 | 91,502 | ||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Weighted-average remaining lease term - operating leases (year) | 2.67 | 3.67 | ||||||
| Weighted-average discount rate - operating leases | 10.48 | % | 10.48 | % | ||||
Future non-cancelable minimum lease payments under the operating lease liability as of December 31, 2025, are as follows:
| Years ended December 31, | ||||
| 2026 | 97,074 | |||
| 2027 | 99,986 | |||
| 2028 | 68,235 | |||
| 2029 and thereafter | ||||
| Total future minimum lease payments | 265,295 | |||
| Less: imputed interest | (33,148 | ) | ||
| Present value of payments | $ | 232,147 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Mar 21, 2024 | |
| 2022 | Mar 15, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.