Company: SXTPW
Filing Date: 2025-02-14
Form Type: S-1
Source: 0001213900-25-014334
Chunk: 304

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-02-14
Form: S-1
Chunk 304
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, the Company received a $ 200,000short term advance from the Geoffrey S. Dow Revocable Trust. In April 2023, the Company received $ 50,000as a short-term advance from management. The Geoffrey S. Dow Revocable Trust contributed $ 23,000and Tyrone Miller contributed $ 27,000. On May 11, 2023, these short term advances were refunded in full for an aggregate amount of $ 250,000.

9. DERIVATIVE LIABILITIES

In accordance with the provisions of ASC 815, derivative liabilities are initially measured at fair value at the commitment date and subsequently remeasured at each reporting period, with any increase or decrease in the fair value recorded in the results of operations within other income/expense as the change in fair value of derivative liabilities. As discussed in Note 8 above, certain of the Company’s bridge shares, warrants and convertible notes (containing an embedded conversion feature) were previously accounted for as derivative liabilities. The bridge shares and related conversion features were derecognized upon conversion on the date of the IPO. The Bridge Warrants (defined in Note 6) were previously accounted for as derivative liabilities as there was an unknown exercise price and number of shares associated with each instrument. In connection with the IPO, the terms of the Bridge Warrants became fixed. The Company determined the event resulted in equity classification for the Bridge Warrants. Accordingly, the Company remeasured the warrant liabilities to fair value, and reclassified the warrants to additional paid-in capital on the IPO date. As of December 31, 2023, derivative liabilities consist of the contingent milestone payment due to Knight upon a future sale of Arakoda™ or a Change of Control (See Note 8). The valuation of the contingent milestone payment includes significant inputs such as the timing and probability of discrete potential exit scenarios, forward interest rate curves, and discount rates based on implied and market yields.

In connection with the valuation of the Company’s derivative liabilitiesrelated to the 2022 Bridge Notes and warrants, the Company determined a fair value on the commitment date (May 24, 2022) of $ 1,483,888. As the fair value of the derivative liabilities exceeded the net proceeds received of $ 979,275, the Company recorded a debt discount at the maximum amount allowed (the face amount of the debt less the OID and debt issuance costs, as detailed in Note 8), which required the excess to be recorded as a