Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 126

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 126
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 and infrastructure development stage that meet specific criteria are capitalized and costs
incurred in the day-to-day operation of the website are expensed as incurred. All costs associated with the websites are subject to straight-line
amortization over a three-year period. 

Gain or Loss on Debt Extinguishment

Gain or loss on debt extinguishment is generally
recorded upon an extinguishment of a debt instrument or the conversion of certain of the Company’s convertible debt determined
to have variable share settlement features. Gain or loss on extinguishment of debt is calculated as the difference between the reacquisition
price and net carrying amount of the debt, which includes unamortized debt issuance costs and the fair value of any related derivative
instruments. In the case of debt instruments for which the fair value option has been elected, the net carrying value is equal to its
fair value on the date of extinguishment and no gain or loss is recognized.

Derivative Liabilities

The Company assesses the classification of its
derivative financial instruments each reporting period, which formerly consisted of bridge shares, convertible notes payable, and certain
warrants, and determined that such instruments initially qualified for treatment as derivative liabilities as they met the criteria for
liability classification under ASC 815. As of December 31, 2024, the Company’s derivative financial instruments consist of contingent
payment arrangements.

F-12

The Company analyzes all financial instruments
with features of both liabilities and equity under FASB ASC Topic No. 480, Distinguishing Liabilities from Equity (“ASC
480”), and FASB ASC Topic No. 815, Derivatives and Hedging (“ASC 815”). 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,
as a component of other income or expense as change in fair value of derivative liabilities. The Company uses a Monte Carlo simulation
model or 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), the Company 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