Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 88

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 88
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 records the equity shares at fair value on the date of conversion, relieves all
related debt, derivative liabilities, and unamortized debt discounts, and recognizes 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.

Equity-Classified Warrants

As of March 31, 2025, the Company accounts for
all outstanding warrants to purchase common stock as equity-classified instruments based on an assessment of the warrants’ specific
terms and applicable authoritative guidance in ASC 480 and ASC 815. This assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether
the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,
among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the
respective issuance dates and as of each subsequent reporting period while the warrants are outstanding.

Revenue Recognition

The Company recognizes revenue in accordance with
FASB ASC Topic No. 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is
transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those
goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer;
(ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of 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, the Company 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.
The Company determines the amount of variable consideration by using either the expected value method or the most-likely-amount