Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 16

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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American distributor transfers shipped product to their title model for 60P. Foreign sales to both Australia and Europe are recognized
as a receivable at the point product is shipped to distributor. The shipments to Australia and Europe are further subject to profit sharing
agreements for boxes sold to customers.

Research and Development Costs 

The Company accounts for research and development
costs in accordance with FASB ASC Subtopic No. 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, research
and development costs are expensed as incurred. Accordingly, internal research and development costs are expensed as incurred. Prepayments
for research and development services are deferred and amortized over the service period as the services are provided. Advance payments
for specific materials, equipment, or facilities determined to have no alternative future use are initially deferred and recognized as
research and development expense when the related goods are delivered.

The Company recorded $407,622 in research and
development expense during the three months ended March 31, 2025 ($337,182 for the three months ended March 31, 2024). The Company has
also issued shares of common stock to nonemployees in exchange for research and development services. The Company recognizes prepaid research
and development costs on the grant date, as defined in FASB ASC Subtopic No. 718, Compensation - Stock Compensation. See Note 10
for further details.

Fair Value of Financial Instruments

The carrying value of the Company’s financial
instruments included in current assets and current liabilities (such as cash and cash equivalents, accounts receivable, accounts payable,
and accrued expenses) approximate their fair value due to the short-term nature of such instruments.

The inputs used to measure fair value are based
on a hierarchy that prioritizes observable and unobservable inputs used in valuation techniques. These levels, in order of highest to
lowest priority, are described below:

    Level 1
    -
    Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

    Level 2
    -
    Observable prices that are based on inputs not quoted on active markets but corroborated by market data.

    Level 3
    -
    Unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The Company’s financial instruments recorded
at fair value on a recurring basis at March 31, 2025 and December