Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 304

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 304
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 in time does the cumulative grant date value of vested awards exceed the cumulative
amount of compensation expense recognized. The grant date is determined based on the date when a mutual understanding of the key terms
of the share-based awards is established. The Company accounts for forfeitures as they occur. 

The Company estimates the fair value of all stock
option awards as of the grant date by applying the Black-Scholes option pricing model. The application of this valuation model involves
assumptions, including the fair value of the common stock, expected volatility, risk-free interest rate, expected dividends and the expected
term of the option. Due to the lack of a public market for the Company’s common stock prior to the IPO and lack of company-specific
historical implied volatility data, the Company has based its computations of expected volatility on the historical volatility of a representative
group of public companies with similar characteristics of the Company, including stage of development and industry focus. The historical
volatility is calculated based on a period of time commensurate with the expected term assumption. The Company generally uses the simplified
method as prescribed by the SEC Staff Accounting Bulletin Topic 14, Share-Based Payment, to estimate the expected term for stock
options, whereby, the expected term equals the midpoint of the weighted average remaining time to vest, vesting period and the contractual
term of the options due to its lack of historical exercise data. For certain options granted out-of-the-money, the Company’s best
estimate of the expected term is the contractual term of the award. The risk-free interest rate is based on U.S. Treasury securities
with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as
the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The assumptions used in calculating
the fair value of share-based awards represent management’s best estimates and involve inherent uncertainties and the application
of significant judgment.

Compensation expense for restricted stock units
(“RSUs”) with only service-based vesting conditions is recognized on a straight-line basis over the vesting period. Compensation
cost for service-based RSUs is based on the grant date fair value of the award, which is the closing market price of the Company’s
common stock on the grant date multiplied by the number of shares awarded.

For awards that vest upon a liquidity event or
a change in control, the performance condition is not probable of being achieved until the event occurs. As a