Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 1429

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 6
Chunk 1429
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 the transaction price
to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. As part
of the accounting for these arrangements, we may be required to make significant judgments, including identifying performance obligations
in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price
to each performance obligation.

Revenues from product sales are recorded at the
net sales price, or “transaction price,” which may include estimates of variable consideration that result from product returns.
We determine the amount of variable consideration by using either the expected value method or the most-likely-amount method. We include
the unconstrained amount of estimated variable consideration in the transaction price, which reflects the amount for which it is probable
that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, we re-evaluate
the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjust our estimate
of the 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