Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 31

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 2024, respectively). The loan is collateralized by all tangible and intangible personal property of the Company. The Company
is prohibited from accepting future advances under any superior liens on the collateral without the prior consent of SBA.

18

The current future payment obligations of the
principal are as follows:

    Period 
    Principal Payments 
  
    2025 (remaining nine months) 
    $- 
  
    2026 
     404 
  
    2027 
     3,217 
  
    2028 
     3,332 
  
    2029 
     3,467 
  
    Thereafter 
     139,580 
  
    Total 
    $150,000 

8. DERIVATIVE LIABILITIES

In accordance with the provisions of ASC 815,
derivative liabilities are initially measured at fair value at the commitment date and subsequently remeasured at each reporting period,
with any increase or decrease in the fair value recorded in the results of operations within other income/expense as the change in fair
value of derivative liabilities.

As of March 31, 2025 and December 31, 2024, derivative
liabilities consist of the contingent milestone payment due to Knight Therapeutics, Inc. (“Knight”), a former lender of the
Company, as required by the Debt Conversion Agreement executed between the Company and Knight on January 9, 2023, as subsequently amended
(the “Knight Debt Conversion Agreement”). Key points of this agreement were as follows:

●The Parties agreed to fix Knight’s
cumulative debt to the value as it stood on March 31, 2022, which consisted of  principal and accumulated interest. As a result
of the completion of the IPO, the cumulative outstanding principal as of March 31, 2022 converted to 18,473 shares of common stock (representing
19.9% ownership of the Company’s common stock after giving effect to the IPO), and the entirety of the accumulated interest as
of March 31, 2022 converted into 80,965 shares of Series A Preferred Stock, in full satisfaction of the Company’s obligations with
respect to the outstanding principal and accumulated interest.

●The Parties agreed that the
Company will make a milestone payment of $10 million to Knight if, after the IPO, the Company sells Arakoda™ or if a Change of
Control (as per the definition included in the original loan agreement dated on December 10