Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 36

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 36
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 can sell the received equity instruments.

21

11. COMMITMENTS AND CONTINGENCIES

Leases

The Company is a party to a single lease for its
office space located in Washington, DC, which was most recently renewed for an additional one-year term that expires March 31, 2026. As
the term of the office lease is 12 months, the lease is not recorded on the balance sheet. The Company recognizes lease expense on this
lease as short-term lease costs. Operating lease costs, including short-term leases, were in the amount of $4,967 and $14,053 for the
three months ended March 31, 2025, and March 31, 2024, respectively.

Board of Directors

In November and December 2022, the Company signed
agreements with four director nominees (Cheryl Xu, Paul Field, Charles Allen, and Stephen Toovey) which came into effect on July 11, 2023,
the date the Company’s Registration Statement was declared effective. Each director is entitled to receive cash compensation of
$11,250 quarterly. In addition, the two non-audit committee chairs (Toovey, Field) will receive $1,250 per quarter and the audit committee
chair (Allen) will receive an additional $2,000 per quarter. In addition, each director is entitled to receive annual equity-based compensation
awards, with the amounts and terms to be determined by the Compensation Committee.

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 $10 million 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 8).

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