Company: SXTPW
Filing Date: 2025-02-14
Form Type: S-1
Source: 0001213900-25-014334
Chunk: 302

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-02-14
Form: S-1
Chunk 302
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549 |   |
| Extinguishment                              
 of Promissory Notes                         |     |               | (17,434,930 | ) |
| Promissory                                  
 Notes, at fair value at December 31, 2023   |     | $             |           - |   |

F-59

The Company performed an evaluation of the contingent payment features and concluded that the contingent milestone payment is a freestanding financial instrument that meets the definition of a derivative under ASC 815, and accordingly, the fair value of the derivative liability is marked to market each reporting period until settled. The future Royalty payment due to Knight was determined to be an embedded component of the Series A Preferred Stock, however is exempt from derivative accounting under the ASC 815 scope exception for specified volumes of sales or service revenues. Therefore, the Company accrues a royalty expense within cost of sales as sales are made.

Debenture

On April 24, 2019, 60P entered into the Knight debenture of $ 3,000,000with an original issue discount of $ 2,100,000, which was being amortized using the effective interest method. The Company subsequently restructured the Knight Loans, including the debenture, pursuant to the Knight Debt Conversion Agreement (see above). $ 13,696of the original issue discount was amortized to interest expense in 2023 prior to the amendment ($ 500,103during the year ended December 31, 2022) and the unamortized original issue discount at December 31, 2023 was $ 0($ 279,061at December 31, 2022) as a result of the debt conversion (discussed above), which was accounted for as a debt extinguishment.

The Knight debenture as of December 31, 2023 and 2022 consisted of the following:

|                                         |     | December 
 31,      
 2023     |   |     | December 31, 
 2022         |           |   |
|:----------------------------------------|:----|:---------|:--|:----|:-------------|----------:|:--|
| Original Debenture                      |     | $        | - |     | $            | 3,000,000 |   |
| Unamortized Debt Discount               |     |          | - |     |              |  (279,061 | ) |
| Debenture Prior to Accumulated Interest |