Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 57

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 57
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 (iii) determination of the transaction price; (iv) allocation of the transaction price
to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. As part
of the accounting for these arrangements, we may be required to make significant judgments, including identifying performance obligations
in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price
to each performance obligation.

32

Revenues from product sales are recorded at the
net sales price, or “transaction price,” which may include estimates of variable consideration that result from product returns.
We determine the amount of variable consideration by using either the expected value method or the most-likely-amount method. We include
the unconstrained amount of estimated variable consideration in the transaction price, which reflects the amount for which it is probable
that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, we re-evaluate
the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjust our estimate
of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. Reserves
are established for the estimates of variable consideration based on the amounts we expect to be earned or to be claimed on the related
sales.

We record U.S. commercial revenues as a receivable
when our American distributor transfers shipped product to their title model for 60P. Foreign sales to both Australia and Europe are recognized
as a receivable at the point product is shipped to distributor. The shipments to Australia and Europe are further subject to profit sharing
agreements for boxes sold to customers.

Share-Based Payments

We account for share-based payments in accordance
with ASC Subtopic 718, Compensation - Stock Compensation (“ASC 718”). We measure compensation for all share-based payment
awards granted to employees, directors, and nonemployees, based on the estimated fair value of the awards on the date of grant. For awards
that vest based on continued service, the service-based compensation cost is recognized on a straight-line basis over the requisite service
period, which is generally the vesting period of the awards. For service vesting awards with compensation expense recognized on a straight-line
basis, at no point 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