Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 1757

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7A
Chunk 1757
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 (“ASC 730-10”). Under ASC 730-10,
research and development costs are expensed as incurred. Accordingly, internal research and development costs are expensed as incurred.
Prepayments for research and development services are deferred and amortized over the service period as the services are provided. Advance
payments for specific materials, equipment, or facilities determined to have no alternative future use are initially deferred and recognized
as research and development expense when the related goods are delivered. 

The Company recorded $4,986,526 in research and
development costs during the year ended December 31, 2024 ($691,770 for the year ended December 31, 2023). The Company has also issued
shares of common stock to nonemployees in exchange for research and development services. The Company recognizes prepaid research and
development costs on the grant date, as defined in FASB ASC Subtopic No. 718, Compensation – Stock Compensation. See Note
10 for further details.

Fair Value of Financial Instruments and the Fair Value Option
(“FVO”)

The inputs used to measure fair value are based
on a hierarchy that prioritizes observable and unobservable inputs used in valuation techniques. These levels, in order of highest to
lowest priority, are described below:

    Level
    1
    -
    Quoted
    prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

    Level
    2
    -
    Observable
    prices that are based on inputs not quoted on active markets but corroborated by market data.

    Level
    3
    -
    Unobservable
    inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants.
    These valuations require significant judgment.

F-15

The Company may choose to elect the FVO for certain
eligible financial instruments, such as certain Promissory Notes, in order to simplify the accounting treatment. Items for which the
FVO has been elected are presented at fair value in the Consolidated Balance Sheets and any change in fair value unrelated to credit
risk is recorded in Other Expense, net in the Consolidated Statements of Operations and Comprehensive Loss. Changes in fair value related
to credit risk are recognized in Other Comprehensive Loss. As a result of the completion of the IPO, all financial instruments for which
the FVO was elected were extinguished. See Note 7 for more information on the extinguishment of the Promissory Notes.

The Company