Company: SXTPW
Filing Date: 2025-02-14
Form Type: S-1
Source: 0001213900-25-014334
Chunk: 314

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-02-14
Form: S-1
Chunk 314
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 $ 40,000(vesting quarterly over twelve months, with a cost basis of $ 5.00per share) and a non-qualified option to purchase $ 40,000of common stock (twelve month vesting with an exercise price equal to $ 5.30), in each case equity compensation is contingent on the receipt of shareholder approval to increase the number of shares authorized under the 2022 Plan.

Contingencies

The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations.

Contingent Compensation

Following the Company’s IPO and the conversion of the outstanding debt pursuant to the Knight Debt Conversion Agreement as discussed in Note 8, the Company is obligated to pay Knight a contingent milestone payment of $ 10million if the Company sells Arakoda™ or if a Change of Control occurs. The Company accounts for the contingent milestone payment as a derivative liability (See Note 9).

On July 15, 2015, the Company entered into the Exclusive License Agreement with the U.S. Army Medical Materiel Development Activity (the “U.S. Army”), which was subsequently amended (the “U.S. Army Agreement”), in which the Company obtained a license to develop and commercialize the licensed technology with respect to all therapeutic applications and uses excluding radical cure of symptomatic vivax malaria. The term of the U.S. Army Agreement will continue until the expiration of the last to expire of the patent application or valid claim of the licensed technology, or 20years from the start date of the U.S. Army Agreement, unless terminated earlier by the parties. The Company must make a minimum annual royalty payment of 3% of Net Sales (as defined in the U.S. Army Agreement) for Net Sales less than $ 35million, and 5% of Net Sales greater than $ 35million, with US government sales excluded from the definition of Net Sales. In addition, the Company must pay fees upon the achievement of certain milestones, including a sales-based milestone fee of $ 75,000once cumulative Net Sales from all sources exceeds $ 6million. The Company accrues the minimum annual royalty when the related sales occur. During the year ended December 31, 2023, the sales-based milestone target was achieved and therefore the Company has accrued a liability of $ 75,000for the related payment, which