Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 775

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 2
Chunk 775
---
 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. We account for forfeitures as they occur.

We estimate 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 our common stock prior to the IPO and lack of company-specific historical implied
volatility data, we base our 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. We generally use 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
our lack of historical exercise data. For certain options granted out-of-the-money, our 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 we have never paid dividends and have no current plans
to pay any dividends on our common stock. The assumptions used in calculating the fair value of share-based awards represent our best
estimates and involve inherent uncertainties and the application of significant judgment.

We recognize compensation expense for restricted
stock units (“RSUs”) with only service-based vesting conditions 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 our 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 result, no compensation
expense is recognized until the performance-based vesting condition is achieved, at which time the cumulative compensation expense is
recognized. Compensation cost related to any remaining time-based service