Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 991

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 3
Chunk 991
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 host contract. Derivative liabilities are carried at fair value at each balance sheet
date, and any changes in fair value are recognized in the accompanying Consolidated Statements of Operations and Comprehensive Loss.
See Note 8 for further details.

F-24

As a result of the completion of the IPO and
as required under the terms of the 2022 and 2023 Bridge Notes, the Company issued the holders 5,071 shares of common stock, determined
by the outstanding principal balance of each note divided by the IPO price. In addition, the Company made cash payments to the holders
of the 2022 and 2023 Bridge Notes totaling $1,749,488 in full settlement of the outstanding debt obligations. The embedded derivative
liability (conversion feature) was marked to market on the settlement date, and the Company recognized a debt extinguishment loss of
$614,670 upon settlement, representing the difference between (i) the reacquisition price, consisting of cash and shares, and (ii) the
net carrying value of the debt including associated derivative liabilities on the date of conversion. As such, as of December 31, 2024
and 2023 there were no amounts outstanding under the 2022 and 2023 Bridge Notes.

Related Party Notes

During May 2022, the Company executed convertible
promissory notes with the Company’s Chief Executive Officer and a family member related to the Chief Executive Officer. The notes
were initially due at the earlier of one-year from the issuance date or the closing of an IPO (the “Related Party Notes”).
Upon the closing of the IPO, these notes were mandatorily convertible at a conversion rate determined at a 20% discount to the IPO price,
discussed further below. Additionally, each of these note holders received five-year (5) fully vested warrants upon the closing of the
IPO, with an exercise price of 90% of the IPO price. 

The Company performed an evaluation of the conversion
features embedded in the Related Party Notes and the warrants and concluded that such instruments qualified for treatment as derivative
liabilities under ASC 815 and required bifurcation from the host contract. See Note 8 for further details.

As a result of the completion of the IPO and
as required under the terms of the Related Party Notes, the entirety of the outstanding principal balance converted to 1,333 shares of
common stock at a conversion rate equal to 80% of the IPO price, fully satisfying the