Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 940

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 3
Chunk 940
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 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.

55

Inventory

We report inventories at the lower of cost or
net realizable value. Cost is comprised of direct materials and, where applicable, costs we incur in bringing the inventories to their
present location and condition. We use the Specific Identification method per lot. A box price is calculated per lot number and sales
are recognized by their lot number.

We regularly monitor our inventory levels to
identify inventory that may expire or has a cost basis in excess of its estimated realizable value, and record write-downs for inventory
that has expired, inventory that has a cost basis in excess of its expected net realizable value, and inventory in excess of expected
sales requirements. We charge any write-downs of inventories to Cost of Revenues in the Consolidated Statements of Operations and Comprehensive
Loss.

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 the share-based awards
is established. We account for forfeitures as they occur.

We estimate the fair value of all stock option
awards as of the grant date by applying the Black-Scholes option pricing model. The application of this valuation model involves assumptions,
including the fair value of the common stock,