Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 1090

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 4
Chunk 1090
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 to resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject
to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates
for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”).

Cost of Revenues, Gross Profit (Loss), and Gross Margin

Cost of revenues associated with our products
is primarily comprised of direct materials, shipping, manufacturing related costs incurred in the production process, serialization costs
and inventory write-downs due to expiration.

Other Operating Revenues

Other operating revenues for the periods presented
include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. Beginning in the third
quarter of 2024, we began to recognize research revenues associated with our new contract with the United States Army Medical Materiel
Development Activity (USAMMDA) for Arakoda supply chain upgrade support. Research revenue under this contract is recognized when we incur
the direct costs eligible for reimbursement, up to the maximum allowable amount.

Operating Expenses

Research and Development

Research and development costs for the periods
presented primarily consist of contracted R&D services and costs associated with preparation for and conducting our Babesiosis trial
in 2024 and, in 2023, related to our halted COVID-19 clinical trial. We expense all research and development costs in the period in which
they are incurred. Payments made prior to the receipt of goods or services to be used in research and development are recognized as prepaid
assets and expensed over the service period as the services are provided. We have also issued shares of our common stock to vendors in
exchange for research and development services.

47

General and Administrative Expenses

Our general and administrative expenses primarily
consist of salaries, advertising and promotion expenses, professional services fees, such as consulting, audit, accounting and legal
fees, general corporate costs and allocated costs, including facilities, information technology and amortization of intangibles.

Interest and Other Income (Expense), Net

Prior to the IPO, our interest expense consisted
of interest accrued on our outstanding debt obligations and amortization of debt discounts and deferred issuance costs. Subsequently,
interest expense is mostly limited to a single, $150,000 SBA loan. Other components of other income and expense include changes in the
fair value of financial instruments, gains and losses on extinguishments of debt, and other miscellaneous income or expenses. We