Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 89

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 89
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 method.
The Company includes the unconstrained amount of estimated variable consideration in the transaction price, which reflects the amount
for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting
period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and
if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis
in the period of adjustment. Reserves are established for the estimates of variable consideration based on the amounts the Company expects
to be earned or to be claimed on the related sales.

9

The Company receives the majority of its revenues
from sales of its Arakoda product to resellers in the US and abroad. The Company records US commercial revenues as a receivable 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 $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