Company: SXTPW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043779
Chunk: 174

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 174
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 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.

Share-Based Payments

We account for share-based payments in accordance
with ASC Subtopic 718, Compensation - Stock Compensation (“ASC 718”). We measure compensation for all share-based payment
awards granted to employees, directors, and nonemployees, based on the estimated fair value of the awards on the date of grant. For awards
that vest based on continued service, the service-based compensation cost is recognized on a straight-line basis over the requisite service
period, which is generally the vesting period of the awards. For service vesting awards with compensation expense recognized on a straight-line
basis, at no point in time does the cumulative grant date value of vested awards exceed the cumulative amount of compensation expense
recognized. The grant date is determined based on the date when a mutual understanding of the key terms of the share-based awards is established.
We account for forfeitures as they occur.

We estimate the fair value of all stock option
awards as of the grant date by applying the Black-Scholes option pricing model. The application of this valuation model involves assumptions,
including the fair value of the common stock, expected volatility, risk-free interest rate, expected dividends and the expected term of
the option. Due to the lack of a public market for our common stock prior to the IPO and lack of company-specific historical implied volatility
data, we base our computations of expected volatility on the historical volatility of a representative group of public companies with
similar characteristics of the Company, including stage of development and industry focus. The historical volatility is calculated based
on a period of time commensurate with