Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 1644

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 1644
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 the amount
of $839,887 and elected to recognize the new debt under the ASC 825 fair value option until it was settled, which occurred in the third
quarter of 2023 (see below). Therefore, there were no amounts outstanding as of December 31, 2024 or December 31, 2023.

F-26

A reconciliation of the beginning and ending
balances for the Convertible Knight Note, which was measured at fair value on a recurring basis using significant unobservable inputs
(Level 3) is as follows for the year ended December 31, 2023:

    Convertible Knight Note,
    at fair value 
  
    Promissory Notes, at fair value at December 31, 2022 
    $- 
  
    Fair value at modification date - January 9, 2023 
     21,520,650 
  
    Change in fair value 
     (5,379,269)
  
    Accrued interest recognized 
     1,293,549 
  
    Extinguishment of Promissory Notes 
     (17,434,930)
  
    Promissory Notes, at fair value at December 31, 2023 
    $- 

As a result of the completion of the IPO and
as required under the terms of the Knight Debt Conversion Agreement, 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). In
addition, the entirety of the accumulated interest as of March 31, 2022 converted into 80,965 shares of Series A Preferred Stock at the
conversion rate detailed above, in full satisfaction of the Company’s obligations with respect to the accumulated interest. Upon
consummation of the IPO and under the terms of the Knight Debt Conversion Agreement, the Company became obligated to the contingent milestone
payments and the accumulated Royalty discussed above, which value was included in the reacquisition price of the debt upon extinguishment.
The Company recognized a final mark-to-market adjustment of $6,105,066 to adjust the Convertible Knight Loan to its fair value on the
date of settlement, and as a result, no gain or loss was recognized on the debt extinguishment.

The Company performed an evaluation of the contingent
payment features and concluded that the contingent milestone payment is a freestanding financial instrument