Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 59

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 59
---
 service period.

33

For fully vested, nonforfeitable equity instruments
that are granted at the date we enter into an agreement for goods or services with a nonemployee, we recognize the fair value of the equity
instruments on the grant date. The corresponding cost is recognized as an immediate expense or a prepaid asset and expensed over the service
period depending on the specific facts and circumstances of the agreement with the nonemployee.

Derivative Liabilities

We analyze all financial instruments with features
of both liabilities and equity under ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic
815, Derivatives and Hedging (“ASC 815”). The classification of derivative financial instruments is reassessed each
reporting period. Derivative liabilities are adjusted to reflect fair value at each reporting period, with any increase or decrease in
the fair value recorded in the results of operations (other income/expense) as change in fair value of derivative liabilities. As of March
31, 2025, derivative liabilities consist of contingent payment arrangements. We use a probability-weighted expected return method to determine
the fair value of these instruments.

Upon conversion or repayment of a debt or equity
instrument in exchange for equity shares, where the embedded conversion option has been bifurcated and accounted for as a derivative liability
(generally convertible debt and warrants), we record the equity shares at fair value on the date of conversion, relieve all related debt,
derivative liabilities, and unamortized debt discounts, and recognize a net gain or loss on debt extinguishment, if any.

Equity or liability instruments that become subject
to reclassification under ASC Topic 815 are reclassified at the fair value of the instrument on the reclassification date.

Off-Balance Sheet Arrangements

During 2025 and 2024, we did not have any relationships
with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been
established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

JOBS Act Accounting Election

In April 2012, the JOBS Act was enacted. Section
107(b) of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can
delay the adoption of