Company: SXTPW
Filing Date: 2025-02-14
Form Type: S-1
Source: 0001213900-25-014334
Chunk: 254

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-02-14
Form: S-1
Chunk 254
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 value at March 31, 2023     |     |             |  21,815,841 |   |
| Fair value - mark to market adjustment                |     |             |   1,064,849 |   |
| Accrued interest recognized                           |     |             |     659,306 |   |
| Promissory Notes, at fair value at June 30, 2023      |     |             |  23,539,996 |   |
| Fair value - mark to market adjustment                |     |             |  (6,105,066 | ) |
| Extinguishment of Promissory Notes                    |     |             | (17,434,930 | ) |
| Promissory Notes, at fair value at September 30, 2023 |     | $           |           - |   |

F-25

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 shares of common stock (representing % 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 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 $ 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 that meets the definition
of a derivative under ASC 815, and accordingly, the fair value of the derivative liability is marked to market each reporting period until
settled. The future Royalty payment due to Knight was determined to be an embedded component of the Series A Preferred Stock, however
is exempt from derivative accounting under the ASC 815 scope exception for specified volumes of sales or service revenues. Therefore,
the Company accrues a royalty expense within cost of