Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 110

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 110
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 operations, or losses of permits that could result in the Company ceasing operations.

Contingent Compensation 

Following the Company’s IPO and the conversion
of the outstanding debt pursuant to the Knight Debt Conversion Agreement as discussed in Note 8, the Company is obligated to pay Knight
a contingent milestone payment of $10 million if the Company sells Arakoda or if a Change of Control occurs. The Company accounts for
the contingent milestone payment as a derivative liability (See Note 8).

On July 15, 2015, the Company entered into the
Exclusive License Agreement with the U.S. Army Medical Materiel Development Activity (the “U.S. Army”), which was subsequently
amended (the “U.S. Army Agreement”), in which the Company obtained a license to develop and commercialize the licensed technology
with respect to all therapeutic applications and uses excluding radical cure of symptomatic vivax malaria. The term of the U.S. Army Agreement
will continue until the expiration of the last to expire of the patent application or valid claim of the licensed technology, or 20 years
from the start date of the U.S. Army Agreement, unless terminated earlier by the parties. The Company must make a minimum annual royalty
payment of 3% of Net Sales (as defined in the U.S. Army Agreement) for Net Sales less than $35 million, and 5% of Net Sales greater than
$35 million, with US government sales excluded from the definition of Net Sales. In addition, the Company must pay fees upon the achievement
of certain milestones. The Company accrues the minimum annual royalty when the related sales occur. The achievement of the remaining milestones
under the U.S. Army Agreement are not considered probable and thus no accruals for the related milestone payments have been made.

On December 20, 2024, the Company entered into
a Patent License Agreement with Tufts Medical Center (“Tufts MC”), in which the Company obtained a license to research and
commercialize the licensed technology with respect the use of tafenoquine for treatment and/or prevention of babesiosis (the “Tufts
MC Agreement”). The term of the Tufts MC Agreement will continue until the expiration or final abandonment of the last patent application
or issued patent for the use of tafenoquine for treatment and/or prevention of babesiosis, unless terminated earlier by the parties. On
the earlier of (x) the date of patent issuance or (y) the date of regulatory approval for the use of t