Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 970

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 3
Chunk 970
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ivable
when our 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 $4,986,526 in research and
development costs during the year ended December 31, 2024 ($691,770 for the year ended December 31, 2023). 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 and the Fair Value Option
(“FVO”)

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.

F-15

The Company may choose to elect the FVO for certain
eligible financial instruments, such as certain Promissory Notes, in order to simplify the accounting treatment. Items for which the
FVO has been elected are presented at fair value in