Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 120

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 120
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 amounts will become due.

Components of Results of Operations

Product Revenues - net of Discounts and
Rebates

We receive the majority of our product revenues
from sales of our Arakoda product to resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject
to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates
for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”).

Cost of Revenues, Gross Profit, and Gross
Margin

Cost of revenues associated with our products
is primarily comprised of direct materials, shipping, manufacturing-related costs incurred in the production process, serialization costs,
and inventory write-downs due to expiration.

Other Operating Revenues

Other operating revenues for the periods presented
include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. Beginning in the third
quarter of 2024, we began to recognize research revenues associated with our new contract with the United States Army Medical Materiel
Development Activity (USAMMDA) for Arakoda supply chain upgrade support. Research revenue under this contract is recognized when we incur
the direct costs eligible for reimbursement, up to the maximum allowable amount.

Operating Expenses

Research and Development

Research and development costs for the periods
presented primarily consist of contracted R&D services and costs associated with preparation for and conducting our Babesiosis trial.
We expense all research and development costs in the period in which they are incurred. Payments made prior to the receipt of goods or
services to be used in research and development are recognized as prepaid assets and expensed over the service period as the services
are provided. We have also issued shares of our common stock to vendors in exchange for research and development services.

General and Administrative Expenses

Our general and administrative expenses primarily
consist of salaries, advertising and promotion expenses, professional services fees, such as consulting, audit, accounting and legal fees,
general corporate costs and allocated costs, including facilities, information technology and amortization of intangibles.

Interest and Other Income (Expense), Net

We earn interest income from cash invested in
interest-bearing accounts, as well as cash equivalents and short-term investments consisting of certificates of deposits with original
maturities ranging from three to six months. Interest expense for the periods presented is limited to a single $150,000 SBA loan that
bears interest at 3.75%. Other