[10-Q] 60 DEGREES PHARMACEUTICALS, INC. Quarterly Earnings Report

Rhea-AI Filing Summary

60 Degrees Pharmaceuticals (SXTP) reported Q3 2025 results. Cash and cash equivalents were $4,115,779 as of September 30, 2025, up from $1,659,353 at year‑end, primarily reflecting equity financings completed in January, February, and July. Product revenue was $437,602, up from $135,293 a year ago, while research revenue was $90,960. The quarter’s net loss attributed to the company was $2,316,324, and net loss attributed to common stockholders was $2,443,191, or $0.66 per share.

Operating expenses totaled $2,316,397, including research and development of $809,777 and general and administrative of $1,506,620. An inventory reserve drove a cost of revenues increase and a gross loss of $100,088; the company recorded $436,561 of write‑downs for expired inventory in the quarter. Derivative liabilities measured at fair value were $797,275 among current liabilities totaling $2,197,394.

The company disclosed substantial doubt about its ability to continue as a going concern, citing accumulated losses and cash used in operations of $5,156,566 for the nine months. Common shares outstanding were 4,104,469 at quarter‑end and 4,230,448 as of November 13, 2025. During 2025, it raised net proceeds of $804,346, $908,627, and $4,281,300 through registered offerings, and established a $1,397,532 ATM program with no sales as of quarter‑end.

Insights

Biopharma equity analyst

Stronger cash from 2025 raises, but going concern persists.

SXTP increased liquidity to $4,115,779 at September 30, 2025, aided by equity proceeds in January, February, and July 2025. Q3 product revenue reached $437,602, and operating expenses were $2,316,397, resulting in a quarterly net loss of $2,316,324. Expired inventory write‑downs of $436,561 pressured gross margin.

The filing states “substantial doubt” about continuing as a going concern, reflecting nine‑month operating cash use of $5,156,566 and accumulated deficit of $46,454,556. Current liabilities include derivative liabilities of $797,275, and accounts payable and accrued expenses of $1,391,347.

Future activity depends on execution of capital plans disclosed, including the $1,397,532 ATM facility (no sales as of quarter‑end). Subsequent disclosures may detail utilization of the ATM or additional financings, which would influence liquidity.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _________ to __________

COMMISSION FILE NUMBER 001-41719

60 DEGREES PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware		45-2406880
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1025 Connecticut Avenue NW Suite 1000 Washington, D.C. 20036		(202) 327-5422
(Address of principal executive offices) (Zip Code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		SXTP		The Nasdaq Stock Market LLC
Warrants, each warrant to purchase one share of Common Stock		SXTPW		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☒		Smaller reporting company	☒
			Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of November 13, 2025 the registrant had a total of 4,230,448 shares of its common stock, par value $0.0001 per share, issued and shares outstanding.

INDEX

		Page
PART I. FINANCIAL INFORMATION		1
Item 1.	Consolidated Condensed Financial Statements (unaudited)	1
	Consolidated Condensed Balance Sheets	1
	Consolidated Condensed Statements of Operations and Comprehensive Loss	2
	Consolidated Condensed Statements of Shareholders’ Equity	3
	Consolidated Condensed Statements of Cash Flows	5
	Notes to Consolidated Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
PART II. OTHER INFORMATION		39
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
SIGNATURES		43

i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends impacting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “intend,” “seek,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “might,” “forecast,” “continue,” or the negative of those terms, and similar expressions and comparable terminology intended to reference future periods. Forward-looking statements include, but are not limited to, statements about:

● Our ability to effectively operate our business segment;

● Our ability to manage our research, development, expansion, growth and operating expenses;

● Our ability to evaluate and measure our business, prospects and performance metrics;

● Our ability to compete, directly and indirectly, and succeed in a highly competitive and evolving industry;

● Our ability to respond and adapt to changes in technology and customer behavior; and

● Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand.

Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, the forward-looking statements in this Quarterly Report should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.

ii

PART I - FINANCIAL INFORMATION

ITEM 1. Consolidated Condensed Financial Statements

60 DEGREES PHARMACEUTICALS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

	September 30, 2025			December 31,
	(Unaudited)			2024
ASSETS:
Current Assets:
Cash and Cash Equivalents	$	4,115,779		$	1,659,353
Accounts Receivable		674,036			486,748
Prepaid and Other Assets		992,390			1,068,940
Short-Term Investments		-			1,728,472
Inventory (Note 3)		527,004			442,764
Total Current Assets		6,309,209			5,386,277
Property and Equipment, net (Note 4)		227,752			149,808
Other Assets:
Long-Term Prepaid Expense		-			66,176
Intangible Assets, net (Note 5)		152,383			157,084
Total Other Assets		152,383			223,260
Total Assets	$	6,689,344		$	5,759,345
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable and Accrued Expenses	$	1,391,347		$	1,007,618
SBA EIDL (including accrued interest) (Note 7)		8,772			8,772
Derivative Liabilities (Note 8)		797,275			640,830
Total Current Liabilities		2,197,394			1,657,220
Long-Term Liabilities:
SBA EIDL (including accrued interest) (Note 7)		144,992			147,119
Total Long-Term Liabilities		144,992			147,119
Total Liabilities		2,342,386			1,804,339
Commitments and Contingencies (Note 11)
SHAREHOLDERS' EQUITY:
Series A Preferred Stock, $0.0001 par value, 1,000,000 shares authorized; 76,480 and 76,480 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively (Note 6)		9,567,439			9,567,439
Common Stock, $0.0001 par value, 150,000,000 shares authorized; 4,104,469 and 566,908 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively(1) (Note 6)		410			57
Additional Paid-in Capital(1)		41,172,888			34,860,590
Accumulated Other Comprehensive Income		144,039			135,471
Accumulated Deficit		(46,454,556)			(40,527,957)
60P Shareholders’ Equity:		4,430,220			4,035,600
Noncontrolling Interest		(83,262)			(80,594)
Total Shareholders' Equity		4,346,958			3,955,006
Total Liabilities and Shareholders' Equity	$	6,689,344		$	5,759,345

(1) Prior periods presented have been adjusted to reflect the 1:5 reverse stock split on February 24, 2025.

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

1

60 DEGREES PHARMACEUTICALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2025			2024			2025			2024
Product Revenues – net of Discounts and Rebates		$	437,602		$	135,293		$	702,086		$	365,939
Cost of Revenues			537,690			111,687			661,013			266,688
Gross (Loss) Profit			(100,088)			23,606			41,073			99,251
Research Revenues			90,960			12,818			390,630			43,177
Net (Loss) Revenue			(9,128)			36,424			431,703			142,428
Operating Expenses:
Research and Development			809,777			940,063			1,467,283			4,372,571
General and Administrative Expenses			1,506,620			1,215,053			4,805,648			3,419,747
Total Operating Expenses			2,316,397			2,155,116			6,272,931			7,792,318
Loss from Operations			(2,325,525)			(2,118,692)			(5,841,228)			(7,649,890)
Interest Expense			(1,708)			(1,467)			(4,719)			(6,490)
Change in Fair Value of Derivative Liabilities			(21,103)			(56,712)			(156,445)			1,683,034
Other Income, net			31,550			16,623			74,938			67,358
Total Interest and Other Income (Expense), net			8,739			(41,556)			(86,226)			1,743,902
Loss from Operations before Provision for Income Taxes			(2,316,786)			(2,160,248)			(5,927,454)			(5,905,988)
Provision for Income Taxes (Note 9)			250			250			1,813			751
Net Loss including Noncontrolling Interest			(2,317,036)			(2,160,498)			(5,929,267)			(5,906,739)
Net Loss – Noncontrolling Interest			(712)			(713)			(2,668)			(4,669)
Net Loss – attributed to 60 Degrees Pharmaceuticals, Inc.			(2,316,324)			(2,159,785)			(5,926,599)			(5,902,070)
Comprehensive Loss:
Net Loss			(2,317,036)			(2,160,498)			(5,929,267)			(5,906,739)
Unrealized Foreign Currency Translation Gain			1,230			4,403			8,568			3,646
Total Comprehensive Loss			(2,315,806)			(2,156,095)			(5,920,699)			(5,903,093)
Net Loss – Noncontrolling Interest			(712)			(713)			(2,668)			(4,669)
Comprehensive Loss – attributed to 60 Degrees Pharmaceuticals, Inc.			(2,315,094)			(2,155,382)			(5,918,031)			(5,898,424)
Cumulative Dividends on Series A Preferred Stock			(128,097)			(116,571)			(372,960)			(352,333)
Net Loss - attributed to common stockholders		$	(2,443,191)		$	(2,271,953)		$	(6,290,991)		$	(6,250,757)
Net Loss per Common Share:
Basic and Diluted		$	(0.66)		$	(4.65)		$	(2.92)		$	(21.74)
Weighted Average Number of Common Shares Outstanding(1)
Basic and Diluted			3,675,407			488,654			2,152,682			287,529

(1) Prior periods presented have been adjusted to reflect the 1:5 reverse stock split on February 24, 2025.

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

2

 60 DEGREES PHARMACEUTICALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

	For the Three and Nine Months Ended September 30, 2025
	Series A Preferred Stock					Common Stock(1)					Additional Paid-In Capital(1)			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity Attributable to 60P			Noncontrolling Interest on Shareholders			Total Shareholders' Equity
	Shares		Amount			Shares		Amount
Balance—December 31, 2024	76,480		$	9,567,439		566,908		$	57		$	34,860,590		$	(40,527,957)		$	135,471		$	4,035,600		$	(80,594)		$	3,955,006
Issuance of common stock and warrants pursuant to January 2025 Offering, net of offering costs paid at closing and deferred offering costs (Note 6)	-			-		204,312			20			804,326			-			-			804,346			-			804,346
Issuance of common stock and warrants pursuant to February 2025 Offering, net of offering costs paid at closing and deferred offering costs (Note 6)	-			-		300,700			30			908,597			-			-			908,627			-			908,627
Issuance of common stock upon exercise of Pre-Funded Warrants	-			-		385,200			38			1,888			-			-			1,926			-			1,926
Issuance of shares for annual performance bonuses, net of shares withheld for taxes	-			-		15,809			2			103,542			-			-			103,544			-			103,544
Share-based compensation expense	-			-		-			-			142,645			-			-			142,645			-			142,645
Net foreign translation loss	-			-		-			-			-						(9,904)			(9,904)			-			(9,904)
Net loss	-			-		-			-			-			(1,876,549)			-			(1,876,549)			(752)			(1,877,301)
Share rounding adjustment for reverse stock split	-			-		(38)			-			-						-			-			-			-
Balance— March 31, 2025 (unaudited)	76,480		$	9,567,439		1,472,891		$	147		$	36,821,588		$	(42,404,506)		$	125,567		$	4,110,235		$	(81,346)		$	4,028,889
Share-based compensation expense	-			-		-			-			34,503			-			-			34,503			-			34,503
Net foreign translation gain	-			-		-			-			-			-			17,242			17,242			-			17,242
Net loss	-			-		-			-			-			(1,733,726)			-			(1,733,726)			(1,204)			(1,734,930)
Balance— June 30, 2025 (unaudited)	76,480		$	9,567,439		1,472,891		$	147		$	36,856,091		$	(44,138,232)		$	142,809		$	2,428,254		$	(82,550)		$	2,345,704
Issuance of common stock and warrants pursuant to July 2025 Offering, net of offering costs paid at closing and deferred offering costs (Note 6)	-			-		1,753,314			175			4,281,125			-			-			4,281,300			-			4,281,300
Issuance of common stock upon exercise of Pre-Funded Warrants	-			-		878,264			88			790			-			-			878			-			878
Share-based compensation expense	-			-		-			-			34,882			-			-			34,882			-			34,882
Net foreign translation gain	-			-		-			-			-			-			1,230			1,230			-			1,230
Net loss	-			-		-			-			-			(2,316,324)			-			(2,316,324)			(712)			(2,317,036)
Balance— September 30, 2025 (unaudited)	76,480		$	9,567,439		4,104,469		$	410		$	41,172,888		$	(46,454,556)		$	144,039		$	4,430,220		$	(83,262)		$	4,346,958

(1) Prior periods presented have been adjusted to reflect the 1:5 reverse stock split on February 24, 2025.

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

3

60 DEGREES PHARMACEUTICALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

	For the Three and Nine Months Ended September 30, 2024
	Series A Preferred Stock					Common Stock(1)					Additional Paid-In Capital(1)			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity Attributable to 60P			Noncontrolling Interest on Shareholders			Total Shareholders' Equity
	Shares		Amount			Shares		Amount
Balance—December 31, 2023	78,803		$	9,858,040		96,847		$	10		$	27,457,373		$	(32,580,850)		$	135,561		$	4,870,134		$	(72,038)		$	4,798,096
Issuance of common stock and warrants, net of underwriting discounts and offering costs paid at closing and deferred offering costs (Note 6)	-			-		87,683			9			1,898,287			-			-			1,898,296			-			1,898,296
Issuance of common stock upon exercise of Pre-Funded Warrants	-			-		8,326			1			4,994			-			-			4,995			-			4,995
Issuance of shares for RSUs	-			-		3,201			-			-			-			-			-			-			-
Net foreign translation loss	-			-		-			-			-			-			(3,894)			(3,894)			-			(3,894)
Net income (loss)	-			-		-			-			-			430,470			-			430,470			(2,485)			427,985
Balance— March 31, 2024 (unaudited)	78,803		$	9,858,040		196,057		$	20		$	29,360,654		$	(32,150,380)		$	131,667		$	7,200,001		$	(74,523)		$	7,125,478
Issuance of common stock upon exercise of Pre-Funded Warrants	-			-		8,326			1			4,994			-			-			4,995			-			4,995
Issuance of shares for RSUs	-			-		1,069			-			-			-			-			-			-			-
Voluntary return of shares issued to vendor for services	-			-		(2,000)			-			-			-			-			-			-			-
Net foreign translation gain	-			-		-			-			-			-			3,137			3,137			-			3,137
Net loss	-			-		-			-			-			(4,172,755)			-			(4,172,755)			(1,471)			(4,174,226)
Balance— June 30, 2024 (unaudited)	78,803		$	9,858,040		203,452		$	21		$	29,365,648		$	(36,323,135)		$	134,804		$	3,035,378		$	(75,994)		$	2,959,384
Voluntary conversion of Series A Preferred Stock into common stock	(2,323)			(290,601)		14,667			1			290,600			-			-			-			-			-
Issuance of common stock pursuant to ATM Offering, net of offering costs paid at closing and deferred offering costs (Note 6)	-			-		135,568			14			1,729,796			-			-			1,729,810			-			1,729,810
Issuance of warrants in Private Placement, net of offering costs paid at closing and deferred offering costs (Note 6)	-			-		-			-			3,414,502			-			-			3,414,502			-			3,414,502
Issuance of common stock for fractional shares pursuant to Reverse Stock Split rounding adjustment	-			-		18,710			2			(2)			-			-			-			-			-
Share-based compensation expense	-			-		-			-			15,246			-			-			15,246			-			15,246
Net foreign translation gain	-			-		-			-			-			-			4,403			4,403			-			4,403
Net loss	-			-		-			-			-			(2,159,785)			-			(2,159,785)			(713)			(2,160,498)
Balance— September 30, 2024 (unaudited)	76,480		$	9,567,439		372,397		$	38		$	34,815,790		$	(38,482,920)		$	139,207		$	6,039,554		$	(76,707)		$	5,962,847

(1) Prior periods presented have been adjusted to reflect the 1:5 reverse stock split on February 24, 2025.

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

4

60 DEGREES PHARMACEUTICALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Nine Months Ended September 30,		2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss		$	(5,929,267)		$	(5,906,739)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation			28,155			6,277
Amortization			31,150			28,004
Amortization of ROU Asset			-			13,517
Amortization of Capitalized Share-Based Payments			132,353			3,531,763
Share-Based Compensation under Equity Incentive Plan			212,030			15,246
Change in Fair Value of Derivative Liabilities			156,445			(1,683,034)
Write-offs of Capitalized Patents			-			11,300
Change in Inventory Reserve			244,682			-
Changes in Operating Assets and Liabilities:
Accounts Receivable			(187,288)			(92,490)
Prepaid and Other Assets			10,373			(99,756)
Inventory			(328,922)			14,133
Accounts Payable and Accrued Liabilities			455,378			171,411
Accrued Interest, net			18,345			(5,853)
Reduction of Lease Liability			-			(13,650)
Net Cash Used in Operating Activities			(5,156,566)			(4,009,871)
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalization of Patents			(20,868)			(49,869)
Purchases of Fixed Assets			(60,000)			(103,773)
Acquisition of Intangibles			(1,785)			(25,374)
Purchase of Short-Term Investments			-			(1,708,000)
Maturities of Short-Term Investments			1,708,000			-
Net Cash Provided by (Used in) Investing Activities			1,625,347			(1,887,016)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds from January 2024 Offering			-			1,898,296
Net Proceeds from January 2025 Offering			804,346			-
Net Proceeds from February 2025 Offering			908,627			-
Net Proceeds from July 2025 Offering			4,281,300			-
Shares Withheld for Net Share Settlement of Performance Bonuses			(18,000)			-
Net proceeds from ATM Offering			-			1,729,810
Net proceeds from Private Placement			-			3,414,502
Proceeds from Exercise of Pre-Funded Warrants			2,804			9,990
Net Cash Provided by Financing Activities			5,979,077			7,052,598
Effect of Exchange Rate Changes on Cash			8,568			2,492
Change in Cash and Cash Equivalents			2,456,426			1,158,203
Cash and Cash Equivalents—Beginning of Period			1,659,353			2,142,485
Cash and Cash Equivalents—End of Period		$	4,115,779		$	3,300,688
NONCASH INVESTING/FINANCING ACTIVITIES
Fair Value of Warrants Issued to Underwriters		$	-		$	71,364
Purchases of Fixed Assets included in Accounts Payable		$	46,099		$	-
Conversion of Series A Preferred Stock into Common Stock		$	-		$	290,601
Capitalized Patent Costs included in Accounts Payable		$	3,796		$	-
Gross Shares Issued for Annual Performance Bonuses		$	121,544		$	-

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

5

60 DEGREES PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS

60 Degrees Pharmaceuticals, Inc. was incorporated in Delaware on June 1, 2022 and merged on the same day with 60 Degrees Pharmaceuticals, LLC, a District of Columbia limited liability company organized on September 9, 2010 (“60P LLC”). 60 Degrees Pharmaceuticals, Inc. and its subsidiary (referred to collectively as the “Company”, “60P”, or “60 Degrees Pharmaceuticals”) is a specialty pharmaceutical company that specializes in the development and marketing of new medicines for the treatment and prevention of infectious diseases. 60P achieved FDA approval of its lead product, ARAKODA® (tafenoquine), for malaria prevention, in 2018. Currently, 60P’s pipeline under development covers development programs for tick-borne fungal and other viral diseases utilizing three of the Company’s future products: (i) new products that contain the Arakoda regimen of tafenoquine; (ii) new products that contain tafenoquine; and (iii) celgosivir and/or botanical extracts from Australian Chestnut Trees. The Company’s headquarters are located in Washington, D.C., with a majority-owned subsidiary in Australia.

Risks and Uncertainties

The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, the risks associated with developing product candidates and successfully launching and commercializing its drug/device combination products, the Company’s ability to obtain regulatory approval of such products in the United States and other geography markets, the uncertainty of the broad adoption of its approved products by physicians and consumers, and significant competition.

In addition, higher rates of inflation have resulted in the U.S. Federal Reserve raising interest rates. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. Furthermore, if additional banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, the Company or its partners’ ability to access existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on the Company’s business and financial condition, including the Company’s ability to access additional capital on favorable terms, or at all, which could in the future negatively affect the Company’s ability to pursue its business strategy. 

Going Concern

The Company’s future results are subject to substantial risks and uncertainties. Since its inception, the Company has not demonstrated the ability to generate enough revenues to date to cover operating expenses and has accumulated losses to date. At September 30, 2025, the Company had cash and cash equivalents totaling $4,115,779, as compared to cash and cash equivalents totaling $1,659,353 at December 31, 2024. During the nine months ended September 30, 2025 the Company used cash of $5,156,566 in its operating activities. The Company’s capital commitments over the next twelve months include interest payments on the Company’s debt arrangement of $8,772 and $1,391,347 to satisfy accounts payable and accrued expenses.

To date, the Company has funded its operations primarily with proceeds from sales of common stock and warrants for the purchase of common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.

Continuation as a going concern is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and achieve gross profitability from the Company’s single marketed product. To achieve profitability, the Company expects it will need to raise additional capital to fund its activities relating to commercial support for its existing product and any future clinical research trials and operating activities. However, there can be no assurance that it will ever achieve or maintain profitability. These conditions, among others, raise substantial doubt about the ability of the Company to continue as a going concern for one year from the date these consolidated condensed financial statements are issued.

6

Management plans to fund operations of the Company through third party and related party debt/advances, private placement of restricted securities and the issuance of stock in a subsequent offering until such a time as the business achieves profitability or a business combination may be achieved. However, there can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are favorable to the Company. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting the Company’s ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If the Company raises funds through collaborations, or other similar arrangements with third parties, it may have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to the Company and/or may reduce the value of its common stock. If the Company is unable to raise additional funds through equity or debt financings when needed, it may be required to delay, limit, reduce or terminate its product development or future commercialization efforts or grant rights to develop and market its product candidates even if the Company would otherwise prefer to develop and market such product candidates itself.

As such, management concluded that such plans do not alleviate the substantial doubt about the ability of the Company to continue as a going concern for one year from the date these consolidated condensed financial statements are issued.

The consolidated condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business, and do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.                           

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of 60P are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company has prepared the accompanying consolidated condensed financial statements pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). These financial statements are unaudited and, in the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows have been included and are of a normal and recurring nature. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 due to various factors. These consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto as of and for the years ended December 31, 2024 and 2023, included in the Company’s annual report on Form 10-K, as filed with the SEC on March 27, 2025 (the “Annual Report”). Certain information, footnote disclosures, and significant accounting policies that would substantially duplicate the disclosures contained in the Annual Report have been omitted.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and those estimates may be material. Significant estimates include the reserve for inventory, the fair value of derivative liabilities, and stock-based compensation.

7

Reverse Stock Splits

Following stockholder approval in July 2024, the Company effected a reverse stock split at a ratio of 1:12, which was effective as of August 12, 2024 (the “1:12 Reverse Stock Split”). On November 6, 2024, a majority of the Company’s stockholders approved an additional reverse stock split at a split ratio ranging between 1:3 and 1:5, as determined by the Board of Directors in its sole discretion. On February 10, 2025, the Board of Directors approved a 1:5 reverse split ratio. On February 24, 2025, the Company effected the 1:5 reverse stock split (the “1:5 Reverse Stock Split”, and together with the 1:12 Reverse Stock Split, the “Reverse Stock Splits”). Beginning February 24, 2025, the common stock traded on The Nasdaq Capital Market on a split adjusted basis.

Proportional adjustments were made to the number of shares of common stock issuable upon exercise or conversion of the Company’s equity awards, warrants, and other equity instruments convertible into common stock, as well as the respective exercise prices, if applicable, in accordance with the terms of the instruments. Unless otherwise noted, all references to numbers of shares of the Company’s common stock and per share information presented in these consolidated condensed financial statements have been retroactively adjusted, as appropriate, to reflect the Reverse Stock Splits, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, accounts receivable, inventory purchases, and borrowings.

Significant customers represent any customer whose business makes up 10% of receivables or revenues. At September 30, 2025, significant customers represented 89% of receivables (consisting of six total customers and two significant customers at 75% and 13%, respectively), and 95% of receivables at December 31, 2024 (consisting of three total customers and one significant customer). For the three months ended September 30, 2025, significant customers comprised 80% of total net product revenues (consisting of four total customers and one significant customer at 80%). For the three months ended September 30, 2024, 92% of total net product revenues (consisting of two total customers and one significant customer) were generated from significant customers. For the nine months ended September 30, 2025, 91% of total net product revenues (consisting of four total customers and two significant customers at 73% and 18%, respectively) were generated from significant customers. For the nine months ended September 30, 2024, 94% of total net product revenues (consisting of three total customers and one significant customer) were generated from significant customers.

Currently, the Company has exclusive relationships with distributors in Australia and Europe. A failure to perform by any of our current distributors would create disruption for patients in those markets.

Since the Company first started working on tafenoquine, all inventory has been acquired in a collaborative relationship from a sole vendor. Should the vendor cease to supply tafenoquine, it would take significant costs and efforts to rebuild the supply chain with a new sole vendor sourcing the active pharmaceutical ingredient (“API”).

Segment Information

Since its inception, the Company operates and manages its business as a single identifiable segment, focused on the development and marketing of new medicines for the treatment and prevention of infectious diseases. The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”).

The Company’s CODM is its Chief Executive Officer, who reviews and evaluates consolidated net income or loss for purposes of evaluating performance, making operating decisions, allocating resources, and planning and forecasting for future periods. The significant components of consolidated net income or loss regularly provided to the CODM include net product revenues and the significant expense categories presented in the accompanying consolidated condensed statements of operations and comprehensive loss (cost of revenues, research and development, and general and administrative expenses). These are presented at the consolidated level and used by the CODM to monitor budgeted versus actual results to make key operating decisions. The information and operating expense categories presented in the accompanying consolidated condensed statements of operations and comprehensive loss are fully reflective of the significant expense categories and amounts that are regularly provided to the CODM.

8

The measure of segment assets that is regularly reported to the CODM includes cash and cash equivalents and short-term investments, each as reported on the consolidated condensed balance sheets. Total consolidated cash and cash equivalents and short-term investments were $4,115,779 and $3,387,825 as of September 30, 2025 and December 31, 2024, respectively.

Derivative Liabilities

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”). The classification of derivative financial instruments is reassessed each reporting period. 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. As of September 30, 2025, derivative liabilities consist of contingent payment arrangements. The Company uses 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.

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 September 30, 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 method. The Company includes the unconstrained amount of 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, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its 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 the Company expects to be earned or to be claimed on the related sales.

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The Company receives the majority of its revenues from sales of its Arakoda product to resellers in the US and abroad. The Company records US 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.

Research and Development Costs

The Company accounts for research and development costs in accordance with FASB ASC Subtopic No. 730-10, Research and Development (“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 $809,777 and $940,063 in research and development expense during the three months ended September 30, 2025 and 2024, respectively, ($1,467,283 and $4,372,571 for the nine months ended September 30, 2025 and 2024, respectively). 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

The carrying value of the Company’s financial instruments included in current assets and current liabilities (such as cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses) approximate their fair value due to the short-term nature of such instruments.

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.

The Company’s financial instruments recorded at fair value on a recurring basis at September 30, 2025, and December 31, 2024 include the derivative liability associated with the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control, which is carried at fair value based on Level 3 inputs. The Company uses a probability-weighted expected return method to determine the fair value of the contingent milestone payment using significant inputs such as the timing and probability of discrete potential exit scenarios, forward interest rate curves, and discount rates based on implied and market yields. See Note 8 for more information on Derivative Liabilities. 

10

Liabilities measured at fair value at September 30, 2025 and December 31, 2024 are as follows:

	September 30, 2025
	Level 1			Level 2			Level 3			Total
Liabilities:
Derivative Liabilities	$	-		$	-		$	797,275		$	797,275
Total	$	-		$	-		$	797,275		$	797,275

	December 31, 2024
	Level 1			Level 2			Level 3			Total
Liabilities:
Derivative Liabilities	$	-		$	-		$	640,830		$	640,830
Total	$	-		$	-		$	640,830		$	640,830

There were no transfers of financial instruments between Level 1, Level 2, and Level 3 during the periods presented.

A rollforward of liabilities measured at fair value using Level 3 inputs for the three and nine months ended September 30, 2025 and 2024 is presented in Note 8 – Derivative Liabilities. 

Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also measures certain assets and liabilities at fair value on a nonrecurring basis. The Company’s non-financial assets, including Intangible Assets and Property and Equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized.

Certificates of deposit, classified as cash equivalents or short-term investments depending on the instrument’s original time to maturity, are measured at amortized cost, which approximates fair value as of September 30, 2025 and December 31, 2024.

Foreign Currency Transactions and Translation

The individual financial statements of each group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated condensed financial statements of the Company are presented in United States dollars, which is the functional currency of the Company and the presentation currency for the consolidated condensed financial statements.

For the purpose of presenting consolidated condensed financial statements, the assets and liabilities of the Company’s foreign operations are mostly translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized as a component of other comprehensive income (loss) as unrealized foreign currency translation gain (loss).

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Exchange rates along with historical rates used in these financial statements are as follows:

		Average Exchange Rate
		Three Months Ended September 30,						Nine Months Ended September 30,						As of
Currency		2025			2024			2025			2024			September 30, 2025			December 31, 2024
1 AUD =		0.65	USD		0.67	USD		0.64	USD		0.66	USD		0.66	USD		0.62	USD

Reclassifications

Certain prior period interim amounts have been reclassified for consistency with the current period presentation. These reclassifications had no material effect on the consolidated condensed results of operations and comprehensive loss, shareholders’ equity, or cash flows.

Share-Based Payments

On November 22, 2022, the Company adopted the 2022 Equity Incentive Plan also referred to as (“2022 Plan”). The 2022 Plan and related share-based awards are discussed more fully in Note 10.

The Company accounts for share-based payments in accordance with ASC Subtopic 718, Compensation - Stock Compensation (“ASC 718”). The Company measures 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. The Company accounts for forfeitures as they occur.

The Company estimates 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 the Company’s common stock prior to the IPO and lack of company-specific historical implied volatility data, the Company has based its 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 the expected term assumption. The Company generally uses the simplified method as prescribed by the SEC Staff Accounting Bulletin Topic 14, Share-Based Payment, to estimate the expected term for stock options, whereby, the expected term equals the midpoint of the weighted average remaining time to vest, vesting period and the contractual term of the options due to its lack of historical exercise data. For certain options granted out-of-the-money, the Company’s best estimate of the expected term is the contractual term of the award. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The assumptions used in calculating the fair value of share-based awards represent management’s best estimates and involve inherent uncertainties and the application of significant judgment.

Compensation expense for restricted stock units (“RSUs”) with only service-based vesting conditions is recognized on a straight-line basis over the vesting period. Compensation cost for service-based RSUs is based on the grant date fair value of the award, which is the closing market price of the Company’s common stock on the grant date multiplied by the number of shares awarded.

For awards that vest upon a liquidity event or a change in control, the performance condition is not probable of being achieved until the event occurs. As a result, no compensation expense is recognized until the performance-based vesting condition is achieved, at which time the cumulative compensation expense is recognized. Compensation cost related to any remaining time-based service for share-based awards after the liquidity-based event is recognized on a straight-line basis over the remaining service period.

For fully vested, nonforfeitable equity instruments that are granted at the date the Company and a nonemployee enter into an agreement for goods or services, the Company recognizes the fair value of the equity instruments on the grant date. The corresponding cost is recognized as an immediate expense or a prepaid asset and expensed over the service period depending on the specific facts and circumstances of the agreement with the nonemployee. See Note 10 for further details.

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Net Loss per Common Share

Net Loss per Common Share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during each period. The Company includes pre-funded warrants, which carry a nominal exercise price per share, in its computation of basic and diluted net loss per share beginning on the date of issuance. The cumulative dividends accrued on the Series A Preferred Stock during the period are reflected as an increase to net loss or a reduction of net income in determining basic and diluted net loss attributable to common stockholders.

As the Company reported a net loss for all periods presented, the calculation of diluted net loss per common share is the same as basic net loss per common share.

As a result of the 1:5 Reverse Stock Split, which was effective as of February 24, 2025, all shares of outstanding common stock and net loss per common share calculations have been retroactively adjusted for all periods presented.

Related Parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

Subsequent Events

The Company considers events or transactions that occur after the balance sheet date, but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through November 13, 2025, which is the date the financial statements were issued. See Note 12.

Recently Adopted and Issued Accounting Pronouncements

From time to time, the FASB issues Accounting Standards Updates (“ASU”) to amend the authoritative literature in the ASC. The Company regularly evaluates new ASUs to determine the impact that these pronouncements may have on the consolidated condensed financial statements. Other than the pronouncements listed below, the Company believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, or (iii) are not applicable to the Company’s consolidated condensed financial statements or related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses and segment profit or loss. ASU 2023-07 also requires entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new required disclosures under the ASU. The Company adopted ASU 2023-07 on a retrospective basis for the 2024 annual period, and for interim periods beginning in 2025. The impact is limited to the Company’s financial statement disclosures, which are presented in the Segment Information section above.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company will adopt this standard for the annual period ending December 31, 2025. The impact of ASU 2023-09 will be limited to the Company’s financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which applies to all public business entities that file financial statements with the SEC. The amendments in this ASU require public business entities to disclose on an annual and interim basis, disaggregated information about certain income statement expense line items. The new standard is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact that ASU 2024-03 will have on its financial statement disclosures.             

3. INVENTORY

Inventory consists of the following major classes:

	September 30, 2025			December 31, 2024
Raw Material (API)	$	345,195		$	-
Work in Process		-			284,883
Finished Goods		426,491			157,881
Total Inventory		771,686			442,764
Reserve for Expiring Inventory		(244,682)			-
Inventory	$	527,004		$	442,764

The Company regularly monitors its inventory levels to identify inventory that may expire or has a cost basis in excess of its estimated net realizable value, and records write-downs for inventory that has expired, inventory that has a cost basis in excess of its expected net realizable value, and inventory in excess of expected sales requirements. Any write-downs of inventories are charged to cost of revenues in the consolidated condensed statements of operations and comprehensive loss. During the three months ended September 30, 2025 and 2024, write downs for expired inventory were $436,561 and $1,165, respectively ($436,596 and $18,490 for the nine months ended September 30, 2025 and 2024, respectively).

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4. PROPERTY AND EQUIPMENT

Property and Equipment, net consists of:

	September 30, 2025			December 31, 2024
Lab Equipment	$	333,010		$	233,411
Machinery		55,800			55,800
Computer Equipment		11,597			7,000
Furniture		3,030			3,030
Property and Equipment, at cost		403,437			299,241
Accumulated Depreciation		(175,685)			(149,433)
Property and Equipment, net	$	227,752		$	149,808

Depreciation expense for the three months ended September 30, 2025 and 2024 was in the amount of $12,225 and $4,334, respectively ($28,155 and $6,277 for the nine months ended September 30, 2025 and 2024, respectively).             

5. INTANGIBLE ASSETS

Intangible Assets, net consists of:

		September 30, 2025			December 31, 2024
Patents		$	152,267		$	127,603
Website Development Costs			106,407			104,622
Intangible Assets, at cost			258,674			232,225
Accumulated Amortization			(106,291)			(75,141)
Intangible Assets, net		$	152,383		$	157,084

During the three months ended September 30, 2025 and 2024, the Company capitalized website development related costs of $1,785 and $3,299, respectively, in connection with the upgrade and enhancement of functionality of the corporate website at www.60degreespharma.com  ($1,785 and $25,374 for the nine months ended September 30, 2025 and 2024, respectively). Amortization expense for the three months ended September 30, 2025 and 2024, was in the amount of $10,605 and $10,325, respectively ($31,150 and $28,004 for the nine months ended September 30, 2025 and 2024, respectively). During the three months ended September 30, 2025 and 2024 write-downs for expired or obsolete patents totaled $0 and $2,922, respectively ($0 and $11,300 for the nine months ended September 30, 2025 and 2024, respectively).

The following table summarizes the estimated future amortization expense for our patents and website development costs as of September 30, 2025:

Period		Patents			Website Development Costs
2025 (remaining three months)		$	1,816		$	5,754
2026			7,264			13,027
2027			7,264			3,689
2028			7,264			397
2029			7,264			-
Thereafter			38,435			-
Total		$	69,307		$	22,867

The Company has recorded $60,209 in capitalized patent expenses that will become amortizable as the patents they are associated with are awarded.

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6. STOCKHOLDERS’ EQUITY

Pursuant to the Certificate of Incorporation of 60 Degrees Pharmaceuticals, Inc., the Company’s authorized shares consist of (a) 150,000,000 shares of common stock, par value $0.0001 per share and (b) 1,000,000 shares of preferred stock, par value $0.0001 per share, of which 80,965 have been designated as Series A Non-Voting Convertible Preferred Stock (“Series A Preferred Stock”). As of September 30, 2025, 4,104,469 shares of Common Stock and 76,480 shares of Series A Preferred Stock are issued and outstanding.

Following stockholder approval in November 2024, on February 18, 2025, the Company filed an additional Amendment to the Certificate of Incorporation with the Secretary of State of Delaware to effect the 1:5 Reverse Stock Split of the issued and outstanding shares of the Company’s common stock, which was effective as of February 24, 2025. As of the effective time of the 1:5 Reverse Stock Split, every five (5) issued and outstanding shares of the Company’s common stock were automatically combined and converted into one (1) issued and outstanding share of the Company’s common stock.

No fractional shares of common stock were issued in connection with the Reverse Stock Splits. All fractional shares were rounded up to the nearest whole share with respect to outstanding shares of common stock. The Reverse Stock Splits did not change the authorized number of shares of common stock or preferred stock, the par value of the common stock, or the number of issued and outstanding shares of Series A Preferred Stock. All references to numbers of shares of the Company’s common stock and per share information in these consolidated condensed financial statements have been retroactively adjusted, as appropriate, to reflect the Reverse Stock Splits, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital.

Common Stock

January 2025 Offering

On January 28, 2025, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company sold, in a registered direct offering priced at-the-market under the rules of Nasdaq, an aggregate of 204,312 shares of common stock at a purchase price of $5.105 per share. The shares were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-280796). In a concurrent private placement, the Company also issued to the investors unregistered warrants (the “January 2025 Warrants”) to purchase up to an aggregate of 408,621 shares of common stock at an exercise price of $3.855 per share. The January 2025 Warrants are exercisable upon issuance, or January 30, 2025, and expire twenty-four months from the date of issuance, or January 30, 2027. The registered direct offering and concurrent private placement (together, the “January 2025 Offering”) closed on January 30, 2025, resulting in net proceeds to the Company of approximately $804,346, after deducting the placement agent fees and other offering expenses paid by the Company.

As compensation for acting as the placement agent for the January 2025 Offering, in addition to certain cash fees, the Company issued H.C. Wainwright & Co., LLC (the “Placement Agent”) warrants to purchase up to 15,325 shares of common stock at an exercise price of $6.382 (the “January 2025 Agent Warrants”). The January 2025 Agent Warrants were exercisable upon issuance and expire twenty-four months from the date of issuance.

February 2025 Offering

On February 5, 2025, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company sold, in a registered direct offering priced at-the-market under the rules of Nasdaq, an aggregate of 300,700 shares of the Company’s common stock at a purchase price of $3.575 per share. In a concurrent private placement, the Company separately issued to the investors unregistered warrants to purchase up to an aggregate of 300,700 shares of common stock at an exercise price of $2.95 per share (the “February 2025 Warrants”). The February 2025 Warrants were immediately exercisable upon issuance and expire twenty-four months from the date of issuance. The registered direct offering and concurrent private placement (together, the “February 2025 Offering”) closed on February 6, 2025, resulting in net proceeds to the Company of approximately $908,627, after deducting the placement agent fees and other offering expenses paid by the Company.

As compensation for acting as the placement agent for the February 2025 Offering, in addition to certain cash fees, the Company issued the Placement Agent warrants to purchase up to 22,554 shares of common stock at an exercise price of $4.469 (the “February 2025 Agent Warrants”). The February 2025 Agent Warrants were exercisable upon issuance and expire twenty-four months from the date of issuance.

July 2025 Offering

On July 15, 2025, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company sold, in a registered direct offering (the “July 2025 Offering”), 1,753,314 units at an offering price of $1.90 per unit and 878,264 pre-funded units at an offering price of $1.899 per pre-funded unit. Each unit consisted of (i) one share of common stock, (ii) one series A-1 warrant exercisable for one share of common stock (the “July 2025 A-1 Warrants”), and (iii) one series A-2 warrant exercisable for one share of common stock (the “July 2025 A-2 Warrants” and together with the July 2025 A-1 Warrants, the “July 2025 Warrants”). Each pre-funded unit consists of one pre-funded warrant exercisable for one share of common stock (the “July 2025 Pre-Funded Warrants”) and warrants identical to the July 2025 Warrants included in the units. The July 2025 Pre-Funded Warrants have an exercise price of $0.001 per share, and were immediately exercisable beginning on July 16, 2025 until exercised in full. The July 2025 A-1 Warrants have an exercise price of $1.90 per share and are exercisable beginning on July 16, 2025 until July 15, 2030. The July 2025 A-2 Warrants have an exercise price of $1.90 per share and are exercisable beginning on July 16, 2025 until January 15, 2027.

As compensation for acting as the placement agent for the July 2025 Offering, the Company also issued to H.C. Wainwright & Co., LLC warrants (the “July 2025 Placement Agent Warrants”) to purchase up to 197,368 shares of common stock. The July 2025 Placement Agent Warrants have an exercise price equal to $2.375 per share and are exercisable upon issuance, or July 16, 2025, and expire five years from the date of issuance, or July 15, 2030. 

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The July 2025 Offering was made pursuant to the Company’s registration statement on Form S-1 (File No. 333-288550), which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 15, 2025, and the final prospectus, which was filed with the SEC on July 16, 2025. The Offering closed on July 16, 2025, resulting in net proceeds to the Company of approximately $4,281,300, after deducting placement agent fees and other offering expenses paid by the Company.

2025 ATM Agreement

On September 5, 2025, the Company entered into an At-The-Market Sales Agreement (the “2025 ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) pursuant to which the Company may, from time to time, offer and sell shares of its common stock, having aggregate gross sales proceeds of up to $1,397,532 (the “2025 ATM Offering”). As compensation for acting as the sales agent for the 2025 ATM Offering, Wainwright will be entitled to a commission of 3.0% of the gross proceeds from sales of shares in the 2025 ATM Offering.

The common stock to be sold under the 2025 ATM Agreement, if any, will be issued and sold pursuant to the Company’s shelf registration statement on Form S-3 and accompanying base prospectus (Registration Statement No. 333-280796), which was declared effective by the SEC on July 18, 2024, and a prospectus supplement dated September 5, 2025 relating to the offer and sale of the shares pursuant to the 2025 ATM Agreement. As of September 30, 2025, no shares had been sold pursuant to the 2025 ATM Agreement. See Note 12 – Subsequent Events.

2024 ATM Offering

On July 12, 2024, the Company entered into an At-the-Market Issuance Sales Agreement (the “2024 ATM Agreement”) with WallachBeth Capital LLC as sales agent, to sell shares of common stock having an aggregate offering price of up to $1,253,603 from time to time, through an “at the market offering” program (the “2024 ATM Offering”). The offer and sale of shares of common stock from the ATM Offering were made pursuant to the Company’s shelf registration statement on Form S-3 and accompanying base prospectus (Registration Statement No. 333-280796) contained therein which became effective on July 18, 2024. The prospectus supplement was subsequently amended four times to increase the maximum aggregate offering price under the ATM Agreement. From July 19, 2024 to August 1, 2024, the Company sold a total of 135,568 shares in the ATM Offering for gross proceeds of $1,994,583.

On September 3, 2025, the Company and Wallachbeth Capital LLC entered into a Waiver and Termination Agreement, agreeing to terminate the 2024 ATM Agreement effective as of September 3, 2025.

Preferred Stock Conversions

On July 22, 2024 and July 26, 2024, the Company converted 1,291 and 1,032 shares of Series A Preferred Stock, respectively, held by Knight Therapeutics Inc. into 8,000 shares and 6,667 shares of common stock, respectively.

Warrant Exercises

During the three months ended September 30, 2025 and 2024 the Company issued 878,264 and 0 shares of common stock upon the exercise of 878,264 and 0 pre-funded warrants, respectively, resulting in proceeds to the Company of $878 and $0, respectively. During the nine months ended September 30, 2025 and 2024 the Company issued 1,263,464 and 16,652 shares of common stock upon the exercise of 1,263,464 and 16,652 pre-funded warrants, respectively, resulting in proceeds to the Company of $2,804 and $9,990, respectively.

Common Stock Warrants

As of September 30, 2025, the Company accounts for all issued and outstanding warrants to purchase common stock as equity-classified instruments based on the guidance in ASC 480 and ASC 815.

As compensation for acting as the placement agent for the Private Placement, the Company issued to H.C. Wainwright & Co., LLC warrants to purchase up to 43,479 shares of stock (the “September 2024 Agent Warrants”). The September 2024 Agent Warrants have substantially the same terms as the Series A Warrants, except that the September 2024 Agent Warrants have an exercise price equal to $8.63 per share.

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The following table presents a summary of the activity for the Company’s equity-classified warrants during the three and nine months ended September 30, 2025:

		Number of Warrants		Weighted Average Exercise Price			Weighted Average Remaining Contractual Life (Years)
Total outstanding, December 31, 2024(1)		1,765,070		$	17.59		3.26
Granted		747,200			3.56		2.00
Exercised		(385,200)			0.01		Indefinite
Forfeited		-			-		-
Expired		-			-		-
Total outstanding, March 31, 2025		2,127,070		$	15.85		2.60
Granted		-			-		-
Exercised		-			-		-
Forfeited		-			-		-
Expired		-			-		-
Total outstanding, June 30, 2025		2,127,070		$	15.85		2.10
Granted(2)		6,338,788			1.65		3.31
Exercised		(878,264)			0.001		Indefinite
Forfeited		-			-		-
Expired		-			-		-
Total outstanding, September 30, 2025		7,587,594		$	5.82		2.82
Total exercisable, September 30, 2025		7,587,594		$	5.82		2.82

(1) Weighted average remaining contractual life at December 31, 2024 excludes 385,200 Pre-Funded Warrants issued September 2024 that do not have a contractual expiration date, for which 0 warrants remain outstanding and exercisable at March 31, 2025, June 30, 2025 and September 30, 2025.

(2) Weighted average remaining contractual life excludes 878,264 Pre-Funded Warrants issued July 2025 that do not have a contractual expiration date, for which 0 warrants remain outstanding and exercisable at September 30, 2025.

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The following table presents a summary of the activity for the Company’s equity-classified warrants during the three and nine months ended September 30, 2024:

		Number of Warrants		Weighted Average Exercise Price			Weighted Average Remaining Contractual Life (Years)
Total outstanding, December 31, 2023		52,737		$	369.98		4.47
Granted		140,884			22.48		5.00
Exercised		(8,326)			0.60		Indefinite
Forfeited		-			-		-
Expired		-			-		-
Total outstanding, March 31, 2024		185,295		$	122.36		4.67
Granted		-			-		-
Exercised		(8,326)			0.60		Indefinite
Forfeited		-			-		-
Expired		-			-		-
Total outstanding, June 30, 2024		176,969		$	128.09		4.41
Granted(1)		1,782,612			4.70		-
Exercised		-			-		-
Forfeited		-			-		-
Expired		-			-		-
Total outstanding, September 30, 2024(1)		1,959,581		$	15.84		4.16
Total exercisable, September 30, 2024(2)		756,680		$	29.96		4.16

(1)

Weighted average remaining contractual life calculations exclude (i) 579,711 Pre-Funded Warrants issued September 2024 that do not have a contractual expiration date, (ii) 43,479 September 2024 Agent Warrants and 579,711 Series A Warrants issued September 2024 that expire five years from the Stockholder Approval Date, defined above, and (iii) 579,711 Series B Warrants issued September 2024 that expire eighteen months from the Stockholder Approval Date, which had not yet occurred as of September 30, 2024.

(2)

Weighted average remaining contractual life calculation excludes 579,711 exercisable Pre-Funded Warrants issued September 2024 that do not have a contractual expiration date.

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Series A Preferred Stock

During the three and nine months ended September 30, 2025 and 2024, the Company converted 0 and 2,323 shares of Series A Preferred Stock, respectively, held by Knight Therapeutics Inc. into 0 shares and 14,667 shares of common stock, respectively.

The holders of shares of Series A Preferred Stock have the rights, preferences, powers, restrictions, and limitations as set forth below.

Voting Rights - The holders of shares of Series A Preferred Stock are not entitled to any voting rights.

Dividends - From and after the date of issuance of any share of Series A Preferred Stock, cumulative dividends shall accrue, whether or not declared by the Board and whether or not there are funds legally available for the payment of dividends, on a daily basis in arrears at the rate of 6.0% per annum on the sum of the Liquidation Value (as defined below). Accrued dividends shall be paid in cash only when, as and if declared by the Board out of funds legally available therefor or upon a liquidation or redemption of the Series A Preferred Stock. On March 31 of each calendar year, any accrued and unpaid dividends shall accumulate and compound on such date, and are cumulative until paid or converted. Holders of shares of Series A Preferred Stock are entitled to receive accrued and accumulated dividends prior to and in preference to any dividend, distribution, or redemption on shares of Common Stock or any other class of securities that is designated as junior to the Series A Preferred Stock. During the three and nine months ended September 30, 2025, dividends in the amount of $128,097 and $372,960 accrued on outstanding shares of Series A Preferred Stock ($116,571 and $352,333 during the three and nine months ended September 30, 2024). As of September 30, 2025, cumulative dividends on outstanding shares of Series A Preferred Stock amount to $1,076,975. To date, the Company has not declared or paid any dividends.

Liquidation Rights - In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Series A Preferred Stock then outstanding will share ratably in any distribution of the remaining assets and funds of the Company with all other stockholders as if each share of Series A Preferred Stock had been converted by the Company to Common Stock as described below.

Conversion Rights - The Company has the right, in its sole discretion, to convert all or any portion of the outstanding shares of Series A Preferred Stock (including any fraction of a share), plus the aggregate accrued or accumulated and unpaid dividends thereon into a number of shares of Common Stock determined by (i) multiplying the number of shares to be converted by $100 per share, as adjusted for any stock splits, stock dividends, recapitalizations or similar transactions with respect to the Series A Preferred Stock (but unchanged as a result of the Reverse Stock Splits impacting the common stock on August 12, 2024 and February 24, 2025) (the “Liquidation Value”), (ii) plus all accrued and accumulated and unpaid dividends on such shares to be converted, and then (ii) dividing the result by the then-effective Conversion Price in effect, provided that such conversion would not result in the holders of shares of Series A Preferred Stock owning more than 19.9% of the outstanding shares of common stock on an as-converted basis. The “Conversion Price” is equal to the lesser of (a) the Liquidation Value, (b) the offering price per share of Common Stock in the Company’s IPO, as adjusted for the 1:12 Reverse Stock Split after August 12, 2024 and the 1:5 Reverse Stock Split after February 24, 2025, or $300 per share, or (c) the 10-day volume weighted average price per share of Common Stock, as reasonably determined by the Company.

7. DEBT

On May 14, 2020, the Company received COVID-19 EIDL lending from the U.S. Small Business Administration (SBA) in the amount of $150,000. The loan bears interest at an annual rate of 3.75% calculated on a monthly basis. Monthly payments of $731 were required beginning in November 2022, with a final balloon payment equal to the remaining principal due at the maturity date of October 12, 2050. The balance as of September 30, 2025 and December 31, 2024 was $153,764 and $155,891, respectively. The current maturity at September 30, 2025 is $8,772 and the long-term liability is $144,992 ($8,772 and $147,119 at December 31, 2024, respectively). The loan is collateralized by all tangible and intangible personal property of the Company. The Company is prohibited from accepting future advances under any superior liens on the collateral without the prior consent of SBA.

19

The current future payment obligations of the principal are as follows:

Period		Principal Payments
2025 (remaining three months)		$	-
2026			465
2027			3,220
2028			3,333
2029			3,470
Thereafter			139,512
Total		$	150,000

8. DERIVATIVE LIABILITIES

In accordance with the provisions of ASC 815, derivative liabilities are initially measured at fair value at the commitment date and subsequently remeasured at each reporting period, with any increase or decrease in the fair value recorded in the results of operations within other income/expense as the change in fair value of derivative liabilities.

As of September 30, 2025 and December 31, 2024, derivative liabilities consist of the contingent milestone payment due to Knight Therapeutics, Inc. (“Knight”), a former lender of the Company, as required by the Debt Conversion Agreement executed between the Company and Knight on January 9, 2023, as subsequently amended (the “Knight Debt Conversion Agreement”). Key points of this agreement were as follows:

● The Parties agreed to fix Knight’s cumulative debt to the value as it stood on March 31, 2022, which consisted of principal and accumulated interest. As a result of the completion of the IPO, the cumulative outstanding principal as of March 31, 2022 converted to 18,473 shares of common stock (representing 19.9% ownership of the Company’s common stock after giving effect to the IPO), and the entirety of the accumulated interest as of March 31, 2022 converted into 80,965 shares of Series A Preferred Stock, in full satisfaction of the Company’s obligations with respect to the outstanding principal and accumulated interest.

● The Parties agreed that the Company will make a milestone payment of $10 million to Knight if, after the IPO, the Company sells Arakoda™ or if a Change of Control (as per the definition included in the original loan agreement dated on December 10, 2015) occurs, provided that the purchaser of Arakoda™ or individual or entity gaining control of the Borrower is not the Lender or an affiliate of the Lender.

● For the period ending upon the earlier of (i) 10 years after the closing of the IPO, or (ii) the conversion or redemption in full of the Series A Preferred Stock, the Company will pay to Knight a royalty equal to 3.5% of the Company’s net sales (the “Royalty”) on a quarterly basis, where “Net Sales” has the same meaning as in the Company’s license agreement with the U.S. Army for tafenoquine.

Upon consummation of the IPO, the Company 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 Royalty 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 as sales are made.

The valuation of the contingent milestone payment includes significant unobservable inputs such as the timing and probability of discrete potential exit scenarios, forward interest rate curves, and discount rates based on implied and market yields.

A reconciliation of the beginning and ending balances for the derivative liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows for the three and nine months ended September 30, 2025:

		Contingent Milestone Payment
Derivative liabilities - December 31, 2024		$	640,830
Change in fair value			(5,105)
Derivative liabilities - March 31, 2025			635,725
Change in fair value			140,447
Derivative liabilities - June 30, 2025			776,172
Change in fair value			21,103
Derivative liabilities - September 30, 2025		$	797,275

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A reconciliation of the beginning and ending balances for the derivative liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows for the three and nine months ended September 30, 2024:

		Contingent Milestone Payment
Derivative liabilities - December 31, 2023		$	2,306,796
Change in fair value			(1,740,847)
Derivative liabilities - March 31, 2024			565,949
Change in fair value			1,101
Derivative liabilities - June 30, 2024			567,050
Change in fair value			56,712
Derivative liabilities - September 30, 2024		$	623,762

Changes in the fair value of derivative liabilities are included in other income (expense) in the accompanying consolidated condensed statements of operations and comprehensive loss. During the nine months ended September 30, 2025 and 2024, the Company recorded a net (loss) gain on the change in the fair value of derivative liabilities of ($156,445) and $1,683,034, respectively.

9. INCOME TAXES

The Company did not record a federal income tax provision or benefit for the three and nine months ended September 30, 2025 and 2024 due to taxable losses. The Company recorded a provision for income taxes for the District of Columbia of $250 and $250 for the three months ended September 30, 2025 and 2024, respectively, thereby reflecting the minimum statutory tax due ($1,813 and $751 for the nine months ended September 30, 2025 and 2024, respectively).

10. SHARE-BASED COMPENSATION

The following is a summary of share-based compensation expenses reported in the consolidated condensed statements of operations and comprehensive loss for the three and nine months ended September 30, 2025 and 2024:

		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2025			2024			2025			2024
Research and Development		$	-		$	600,000		$	-		$	3,227,300
General and Administrative Expenses			79,000			68,974			344,383			319,709
Total Share-Based Compensation Expense Included in Operating Expenses		$	79,000		$	668,974		$	344,383		$	3,547,009

Share-Based Compensation under 2022 Equity Incentive Plan

On November 22, 2022, the Company adopted the 2022 Equity Incentive Plan (the “2022 Plan”), which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to eligible employees, directors and consultants, to be granted from time to time by the Board of Directors of the Company. To date, the Company has granted shares of common stock, restricted stock units, stock options to employees, non-employees, and directors under the 2022 Plan. As of September 30, 2025, the number of remaining shares available for issuance under the 2022 Plan is equal to 57,068.

Stock Options

The Company grants stock options to employees, non-employees, and directors with exercise prices equal to the closing price of the underlying shares of the Company’s common stock on the Nasdaq Capital Market on the date that the options are granted. Options granted generally have a term of five to ten years from the grant date and are subject to vesting as determined in the individual award agreement. The Company estimates the fair value of stock options on the grant date by applying the Black-Scholes option pricing valuation model.

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There were no stock options granted during the three months ended September 30, 2025. During the nine months ended September 30, 2025, the Company granted a total of 120,000 stock options to two executives at a per share exercise price of $6.55. These options are subject to vesting annually in five equal tranches, with the first 20% tranche fully vested on the date of grant and thereafter, vest on the last date of each fiscal year beginning December 31, 2025. The weighted average grant date fair value of options granted during the nine months ended September 30, 2025 was $4.55.

During the three and nine months ended September 30, 2024, Company granted a total of 17,005 stock options at a weighted average per share exercise price of $54.62. The weighted average grant date fair value of options granted during the three and nine months ended September 30, 2024 was $8.78.

The following table summarizes the significant assumptions used in determining the fair value of options granted during the three and nine months ended September 30, 2025 and 2024:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2025			2024			2025			2024
Weighted-average grant date fair value	$	N/A		$	8.78		$	4.55		$	8.78
Risk-free interest rate		N/A			3.62% - 4.17%			4.36%			3.62% - 4.17%
Expected volatility		N/A			86.00% - 87.00%			90.00%			86.00% - 87.00%
Expected term (years)		N/A			6.41 - 10.00			4.50			6.41 - 10.00
Expected dividend yield		N/A			0.00%			0.00%			0.00%

For the three months ended September 30, 2025 and 2024, the Company recognized $34,882 and $15,246 of compensation expense related to stock option awards, respectively ($212,030 and $15,246 for the nine months ended September 30, 2025 and 2024, respectively).

Restricted Stock Units

Compensation cost for service-based RSUs is based on the grant date fair value of the award, which is the closing market price of the Company’s common stock on the grant date multiplied by the number of shares awarded.

During the three and nine months ended September 30, 2025 and 2024, 0 shares of common stock underlying RSUs vested and no RSUs were granted. The Company recognized $0 of compensation expense related to vested RSUs for the three and nine months ended September 30, 2025 and 2024.

Annual Performance Bonus

In December 2024, the Board approved the payment of 2024 performance bonuses to executives of the Company. Each executive was provided the option of receiving up to $20,000 in cash, with the remainder paid in shares of common stock determined based on the closing market price on January 2, 2025. On January 20, 2025, the Company issued a total of 15,809 shares of common stock to the executives in settlement of the share-based portion of the 2024 performance bonuses. Approximately 2,748 shares were withheld to cover payroll tax withholdings. 

Share-Based Payments to Vendors for Services

In 2023, the Company issued shares of common stock as share-based payments to certain vendors in exchange for services to be rendered to the Company in the future. For fully vested, nonforfeitable equity instruments that are granted at the date the Company and a nonemployee enter into an agreement for goods or services, the Company recognizes the fair value of the equity instruments as a prepaid asset on the grant date, as defined in ASC 718. The corresponding cost is expensed over the service period depending on the specific facts and circumstances of the agreement with the nonemployee. As of September 30, 2025, the remaining unamortized balance of prepaid assets related to these share-based payments for which the grant date criteria has been met and the services are expected to be rendered within one year is $240,004 ($306,181 at December 31, 2024), which is presented as a component of prepaid and other assets on the accompanying consolidated condensed balance sheets. The unamortized balance of noncurrent prepaid assets related to these share-based payments for which the services are expected to be rendered beyond one year is $0 ($66,176 at December 31, 2024), reported in long-term prepaid expense on the accompanying consolidated condensed balance sheets.

The agreements with the nonemployees do not include any provisions to claw back the share-based payments in the event of nonperformance by the nonemployees. Subject to applicable federal and state securities laws, the nonemployees can sell the received equity instruments.

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11. COMMITMENTS AND CONTINGENCIES

Leases

The Company is a party to a single lease for its office space located in Washington, DC, which was most recently renewed for an additional one-year term that expires March 31, 2026. As the term of the office lease is 12 months, the lease is not recorded on the balance sheet. The Company recognizes lease expense on this lease as short-term lease costs. Operating lease costs, including short-term leases, were in the amount of $5,573 and $4,938 for the three months ended September 30, 2025 and 2024, respectively ($15,340 and $24,067 for the nine months ended September 30, 2025 and 2024, respectively).

Board of Directors

In November and December 2022, the Company signed agreements with four director nominees (Cheryl Xu, Paul Field, Charles Allen, and Stephen Toovey) which came into effect on July 11, 2023, the date the Company’s Registration Statement was declared effective. Each director is entitled to receive cash compensation of $11,250 quarterly. In addition, the two non-audit committee chairs (Toovey, Field) will receive $1,250 per quarter and the audit committee chair (Allen) will receive an additional $2,000 per quarter. In addition, each director is entitled to receive annual equity-based compensation awards, with the amounts and terms to be determined by the Compensation Committee.

Contingencies

The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations.

Contingent Compensation

Following the Company’s IPO and the conversion of the outstanding debt pursuant to the Knight Debt Conversion Agreement as discussed in Note 8, the Company is obligated to pay Knight a contingent milestone payment of $10 million if the Company sells Arakoda or if a Change of Control occurs. The Company accounts for the contingent milestone payment as a derivative liability (See Note 8).

On July 15, 2015, the Company entered into the Exclusive License Agreement with the U.S. Army Medical Materiel Development Activity (the “U.S. Army”), which was subsequently amended (the “U.S. Army Agreement”), in which the Company obtained a license to develop and commercialize the licensed technology with respect to all therapeutic applications and uses excluding radical cure of symptomatic vivax malaria. The term of the U.S. Army Agreement will continue until the expiration of the last to expire of the patent application or valid claim of the licensed technology, or 20 years from the start date of the U.S. Army Agreement, unless terminated earlier by the parties. The Company must make a minimum annual royalty payment of 3% of Net Sales (as defined in the U.S. Army Agreement) for Net Sales less than $35 million, and 5% of Net Sales greater than $35 million, with US government sales excluded from the definition of Net Sales. In addition, the Company must pay fees upon the achievement of certain milestones. The Company accrues the minimum annual royalty when the related sales occur. The achievement of the remaining milestones under the U.S. Army Agreement are not considered probable and thus no accruals for the related milestone payments have been made.

On December 20, 2024, the Company entered into a Patent License Agreement with Tufts Medical Center (“Tufts MC”), in which the Company obtained a license to research and commercialize the licensed technology with respect to the use of tafenoquine for treatment and/or prevention of babesiosis (the “Tufts MC Agreement”). The term of the Tufts MC Agreement will continue until the expiration or final abandonment of the last patent application or issued patent for the use of tafenoquine for treatment and/or prevention of babesiosis, unless terminated earlier by the parties. On the earlier of (x) the date of patent issuance or (y) the date of regulatory approval for the use of tafenoquine product in treatment of babesiosis, the Company must make royalty payments equal to 4% of Net Sales (as defined in the Tufts MC Agreement) for tafenoquine sold in a format labeled for use in the treatment of babesiosis or 2% of Net Sales for 60P products that are not sold in a format labeled for use in the treatment of babesiosis. In addition, for all sublicense revenue received by 60P from sales of sublicensed products, the Company must make royalty payments equal to 20% of the revenue received by the Company for sales of tafenoquine sold in a format labeled for use in the treatment of babesiosis or 10% for sales of tafenoquine that are not sold in a format labeled for use in the treatment of babesiosis. As of September 30, 2025, the royalty period has not commenced, thus no accruals have been made.

Litigation, Claims and Assessments

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of September 30, 2025, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations.

23

12. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through November 13, 2025, which is the date the financial statements were issued.

2025 Annual Meeting of Stockholders

On October 8, 2025, the Company conducted its virtual 2025 Annual Meeting of Stockholders (the “2025 Annual Meeting”). The Company’s stockholders of record at the close of business on August 29, 2025, the record date for the determination of stockholders entitled to vote at the 2025 Annual Meeting, approved the proposals to (1) elect five directors to serve until the 2026 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified; (2) approve an amendment to the 2022 Plan to increase the number of shares of common stock available for issuance by 250,000 shares; (3) approve an amendment to the Company’s Certificate of Incorporation, to effect a reverse stock split of the common stock at a reverse stock split ratio ranging from 1:3 to 1:10 inclusive, as may be determined at the appropriate time by the Board of Directors, in its sole discretion; and (4) ratify the selection of RBSM LLP by the Board of Directors as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025.

Option Grant

On October 21, 2025, the Company’s Board of Directors approved the grant of 32,000 stock options to each of the four directors (8,000 per director) at a per share exercise price of $1.46. These stock options were fully vested on the date of grant and have a term of seven years.

2025 ATM Agreement

Pursuant to the 2025 ATM Agreement described in Note 6, between October 16, 2025 and November 13, 2025, the Company sold an aggregate of 125,979 shares at a weighted average price per share of $1.62, generating net proceeds to the Company of $196,356, after deducting commissions and certain other offering expenses.  

There have been no other events or transactions during this time which would have a material effect on these consolidated condensed financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited consolidated condensed financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information set forth in certain of our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 27, 2025. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.

Overview

We are a specialty pharmaceutical company with a goal of using cutting-edge biological science and applied research to further develop and commercialize new therapies for the prevention and treatment of infectious diseases. We have successfully achieved regulatory approval of Arakoda® (“Arakoda”), a malaria preventative treatment that has been on the market since late 2019. Currently, 60P’s pipeline under development covers development programs for vector-borne, fungal, and viral diseases utilizing three of the Company’s future products: (i) new products that contain the Arakoda regimen of Tafenoquine; (ii) new products that contain Tafenoquine; and (iii) Celgosivir and/or botanical extracts from Australian Chestnut Trees.

Business Developments

The following highlights significant business developments in our business during the quarter ended September 30, 2025.

● On July 14, 2025, we announced our intent to seek a Minor Use Minor Species (MUMS) designation from the United States Food and Drug Administration (FDA) for the treatment of acute canine babesiosis upon completing a gap analysis of our existing data.

● After completing a 6,000 nationwide patient survey and quantitative research study, on July 15, 2025, we announced that we had determined the total addressable market (TAM) for Babesiosis treatment to be $1.1 billion through patent expiration in 2035.

● On July 17, 2025, we announced our entry into a sponsored research agreement with Tulane University to evaluate activity of tafenoquine against lyme and bartonella bacteria.

● On August 19, 2025, we announced our partnership with the Icahn School of Medicine at Mount Sinai for our planned Phase II clinical study of tafenoquine in treating chronic babesiosis.

July 2025 Offering

On July 15, 2025, we entered into a securities purchase agreement with certain institutional investors pursuant to which we sold, in a registered direct offering (the “July 2025 Offering”), 1,753,314 units at an offering price of $1.90 per unit and 878,264 pre-funded units at an offering price of $1.899 per pre-funded unit. Each unit consisted of (i) one share of common stock, (ii) one series A-1 warrant exercisable for one share of common stock (the “July 2025 A-1 Warrants”), and (iii) one series A-2 warrant exercisable for one share of common stock (the “July 2025 A-2 Warrants” and together with the July 2025 A-1 Warrants, the “July 2025 Warrants”). Each pre-funded unit consists of one pre-funded warrant exercisable for one share of common stock (the “July 2025 Pre-Funded Warrants”) and warrants identical to the July 2025 Warrants included in the units. The July 2025 Pre-Funded Warrants have an exercise price of $0.001 per share, and were immediately exercisable beginning on July 16, 2025 until exercised in full. The July 2025 A-1 Warrants have an exercise price of $1.90 per share and are exercisable beginning on July 16, 2025 until July 15, 2030. The July 2025 A-2 Warrants have an exercise price of $1.90 per share and are exercisable beginning on July 16, 2025 until January 15, 2027.

As compensation for acting as the placement agent for the July 2025 Offering, we also issued to H.C. Wainwright & Co., LLC warrants (the “July 2025 Placement Agent Warrants”) to purchase up to 197,368 shares of common stock. The July 2025 Placement Agent Warrants have an exercise price equal to $2.375 per share and are exercisable upon issuance, or July 16, 2025, and expire five years from the date of issuance, or July 15, 2030.

The July 2025 Offering was made pursuant to our registration statement on Form S-1 (File No. 333-288550), which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 15, 2025, and the final prospectus, which we filed with the SEC on July 16, 2025. The Offering closed on July 16, 2025, resulting in net proceeds of approximately $4,281,300, after deducting placement agent fees and other offering expenses paid by us.

25

2025 ATM Agreement

On September 5, 2025, we entered into an At-The-Market Sales Agreement (the “2025 ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) pursuant to which we may, from time to time, offer and sell shares of our common stock, having aggregate gross sales proceeds of up to $1,397,532 (the “2025 ATM Offering”). As compensation for acting as the sales agent for the 2025 ATM Offering, Wainwright will be entitled to a commission of 3.0% of the gross proceeds from sales of shares in the 2025 ATM Offering. The common stock to be sold under the 2025 ATM Agreement, if any, will be issued and sold pursuant to our shelf registration statement on Form S-3 and accompanying base prospectus (Registration Statement No. 333-280796), which was declared effective by the SEC on July 18, 2024, and our prospectus supplement dated September 5, 2025 relating to the offer and sale of the shares pursuant to the 2025 ATM Agreement. Between October 16, 2025 and November 13, 2025, we sold an aggregate of 125,979 shares at a weighted average price per share of $1.62, generating net proceeds of $196,356, after deducting commissions and certain other offering expenses.

Liquidity and Capital Resources

As of September 30, 2025, we had cash and cash equivalents of $4,115,779 ($1,659,353 as of December 31, 2024). For the nine months ended September 30, 2025 and 2024, our net cash used in operating activities was $5,156,566 and $4,009,871, respectively. To date, we have financed our operations primarily through the issuance of common stock, warrants to purchase common stock, and proceeds from the issuance of convertible debt and promissory notes. Based on current internal projections, taking into consideration the net proceeds of approximately $4.3 million received from the July 2025 public offering and an additional $196 thousand received through the 2025 ATM Agreement, we estimate that we will have sufficient funds to remain viable through March 31, 2026, assuming no additional capital raises. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure you that we will be able to raise additional capital on acceptable terms, or at all.

Going Concern

In their audit report for the fiscal year ended December 31, 2024, our auditors have expressed their concern as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate cash flows from operations and obtain financing. The audited consolidated financial statements for the year ended December 31, 2024 included an explanatory note referring to our recurring operating losses and expressing substantial doubt in our ability to continue as a going concern.

Our future results are subject to substantial risks and uncertainties. Since our inception, we have not demonstrated the ability to generate enough revenues to date to cover operating expenses and we have accumulated losses to date. To date, we have funded our operations primarily with proceeds from sales of common stock and warrants for the purchase of common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.

Continuation as a going concern is dependent upon our ability to meet our financial requirements, raise additional capital, and achieve gross profitability from our single marketed product. To achieve profitability, we expect we will need to raise additional capital to fund our activities relating to commercial support for our existing product and any future clinical research trials and operating activities. However, there can be no assurance that we will ever achieve or maintain profitability. These conditions, among others, raise substantial doubt about our ability to continue as a going concern for one year from the date these financial statements are issued.

We plan to fund our operations through third party and related party debt/advances, private placement of restricted securities and the issuance of stock in a subsequent offering until such a time as the business achieves profitability or a business combination may be achieved. However, there can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are favorable to us. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

As such, we have concluded that such plans do not alleviate the substantial doubt about our ability to continue as a going concern for one year from the date the accompanying financial statements are issued.

The accompanying consolidated condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business, and do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

26

 Contractual Obligations

The following table summarizes our contractual obligations as of September 30, 2025:

					Payments Due By Period
		Total			Less than 1 year			1-3 years			4-5 years			More than 5 Years
Principal obligations on the debt arrangements		$	150,000		$	-		$	6,167		$	7,007		$	136,826
Interest obligations on the debt arrangements			98,068			8,772			11,377			10,537			67,382
Accounts payable and accrued expenses			1,391,347			1,391,347			-			-			-
Total		$	1,639,415		$	1,400,119		$	17,544		$	17,544		$	204,208

Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the achievement of certain milestones. These contingent milestones may or may not be achieved. We have not included any of these amounts in the table above as we cannot estimate or predict when, or if, these amounts will become due.

Components of Results of Operations

Product Revenues - net of Discounts and Rebates

We receive the majority of our product revenues from sales of our Arakoda product to resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”).

Cost of Revenues, Gross Profit, and Gross Margin

Cost of revenues associated with our products is primarily comprised of direct materials, shipping, manufacturing-related costs incurred in the production process, serialization costs, and inventory write-downs due to expiration.

Other Operating Revenues

Other operating revenues for the periods presented include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. Beginning in the third quarter of 2024, we began to recognize research revenues associated with our new contract with the United States Army Medical Material Development Activity (USAMMDA) for Arakoda supply chain upgrade support. Research revenue under this contract is recognized when we incur the direct costs eligible for reimbursement, up to the maximum allowable amount.

Operating Expenses

Research and Development

Research and development costs for the periods presented primarily consist of contracted research and development services and costs associated with preparation for and conducting our Babesiosis trial. We expense all research and development costs in the period in which they are incurred. Payments made prior to the receipt of goods or services to be used in research and development are recognized as prepaid assets and expensed over the service period as the services are provided. We have also issued shares of our common stock to vendors in exchange for research and development services.

General and Administrative Expenses

Our general and administrative expenses primarily consist of salaries, advertising and promotion expenses, professional services fees, such as consulting, audit, accounting and legal fees, general corporate costs and allocated costs, including facilities, information technology and amortization of intangibles.

Interest and Other Income (Expense), Net

We earn interest income from cash invested in interest-bearing accounts, as well as cash equivalents and short-term investments consisting of certificates of deposits with original maturities ranging from three to six months. Interest expense for the periods presented is limited to a single $150,000 SBA loan that bears interest at 3.75%. Other components of other income (expense) include changes in the fair value of derivative liabilities and other miscellaneous income or expenses.

27

Results of Operations

The following table sets forth our results of operations for the periods presented:

		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			2025			2024
Product Revenues – net of Discounts and Rebates		$	437,602		$	135,293		$	702,086		$	365,939
Cost of Revenues			537,690			111,687			661,013			266,688
Gross (Loss) Profit			(100,088)			23,606			41,073			99,251
Research Revenues			90,960			12,818			390,630			43,177
Net (Loss) Revenue			(9,128)			36,424			431,703			142,428
Operating Expenses:
Research and Development			809,777			940,063			1,467,283			4,372,571
General and Administrative Expenses			1,506,620			1,215,053			4,805,648			3,419,747
Total Operating Expenses			2,316,397			2,155,116			6,272,931			7,792,318
Loss from Operations			(2,325,525)			(2,118,692)			(5,841,228)			(7,649,890)
Interest Expense			(1,708)			(1,467)			(4,719)			(6,490)
Change in Fair Value of Derivative Liabilities			(21,103)			(56,712)			(156,445)			1,683,034
Other Income, net			31,550			16,623			74,938			67,358
Total Interest and Other Income (Expense), net			8,739			(41,556)			(86,226)			1,743,902
Loss from Operations before Provision for Income Taxes			(2,316,786)			(2,160,248)			(5,927,454)			(5,905,988)
Provision for Income Taxes			250			250			1,813			751
Net Loss including Noncontrolling Interest			(2,317,036)			(2,160,498)			(5,929,267)			(5,906,739)
Net Loss – Noncontrolling Interest			(712)			(713)			(2,668)			(4,669)
Net Loss – attributed to 60 Degrees Pharmaceuticals, Inc.		$	(2,316,324)		$	(2,159,785)		$	(5,926,599)		$	(5,902,070)

The following table sets forth our results of operations as a percentage of revenue:

		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			2025			2025
Product Revenues – net of Discounts and Rebates		100.00	%		100.00	%		100.00	%		100.00	%
Cost of Revenues		122.87			82.55			94.15			72.88
Gross (Loss) Profit		(22.87)			17.45			5.85			27.12
Research Revenues		20.79			9.47			55.64			11.80
Net (Loss) Revenue		(2.09)			26.92			61.49			38.92
Operating Expenses:
Research and Development		185.05			694.83			208.99			1,194.89
General and Administrative Expenses		344.29			898.09			684.48			934.51
Total Operating Expenses		529.34			1,592.92			893.47			2,129.40
Loss from Operations		(531.42)			(1,566.00)			(831.98)			(2,090.48)
Interest Expense		(0.39)			(1.08)			(0.67)			(1.77)
Change in Fair Value of Derivative Liabilities		(4.82)			(41.92)			(22.28)			459.92
Other Income, net		7.21			12.29			10.67			18.41
Total Interest and Other Income (Expense), net		2.00			(30.72)			(12.28)			476.56
Loss from Operations before Provision for Income Taxes		(529.43)			(1,596.72)			(844.26)			(1,613.93)
Provision for Income Taxes		0.06			0.18			0.26			0.21
Net Loss including Noncontrolling Interest		(529.48)			(1,596.90)			(844.52)			(1,614.13)
Net Loss – Noncontrolling Interest		(0.16)			(0.53)			(0.38)			(1.28)
Net Loss – attributed to 60 Degrees Pharmaceuticals, Inc.		(529.32)	%		(1,596.38)	%		(844.14)	%		(1,612.86)	%

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Comparison of the Three Months Ended September 30, 2025 and 2024

Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross (Loss) Profit, and Gross Margin

		For the Three Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Product Revenues – net of Discounts and Rebates		$	437,602		$	135,293		$	302,309		223.45	%
Cost of Revenues			537,690			111,687			426,003		381.43
Gross (Loss) Profit		$	(100,088)		$	23,606		$	(123,694)		(523.99)	%
Gross Margin %			(22.87)	%		17.45	%

Product Revenues - net of Discounts and Rebates

Our product revenues - net of discounts and rebates were $437,602 for the three months ended September 30, 2025, as compared to $135,293 for the three months ended September 30, 2024. For the three months ended September 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 80% and 8% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 7% of total net product sales (92%, 0% and 8% for the three months ended September 30, 2024, respectively). Domestic, commercial product sales increased substantially in the period due to refilling the supply chain after stocking out in Q2 2025.

We offer discounts and rebates to the civilian U.S. supply chain distribution channel. We record sales when our 3PL partner transfers boxes into their title model. Discounts and rebates offered to our 3PL partner amount to 12% (lower rates available upon reaching larger revenue tiers) along with a $5,500 fixed monthly fee. The product is then transferred usually to one of the three large U.S. pharmaceutical distributors where rebates are 10%. Lastly, we have relationships with several large pharmacy benefit managers (“PBMs”) that allow patients to purchase Arakoda at a discount. The rebate associated with PBMs ranges from 30% to 41.25% depending on the amount of coverage provided. For the three months ended September 30, 2025, discounts and rebates were $150,532 compared to $122,862 for the three months ended September 30, 2024. The rebate on Kodatef sales was only 10% and there were no PBM-related discounts on sales of Kodatef.

Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. Since the introduction of the new 8-ct bottle in June 2025, we will be reporting Arakoda unit sales in terms of 16-ct box equivalents. For the three months ended September 30, 2025, the equivalent of 1,505 16-ct boxes were sold to pharmacies and dispensaries. Sales volume increased by 14% from 1,319 16-ct box equivalents sold to pharmacies and dispensaries for the three months ended September 30, 2024.

Kodatef sales to our distributor Biocelect in Australia for the three months ended September 30, 2025 were $29,490 ($10,691 for the three months ended September 30, 2024). A historical portion of sales to Biocelect remained subject to a profit share distribution once the original transfer price has been recouped. Biocelect, which acts as a distributor in the Australian and New Zealand markets, reported a 33% quarter-over-quarter increase, with 552 boxes sold for the three months ended September 30, 2025, compared to 414 boxes for the three months ended September 30, 2024. As of September 30, 2025, Biocelect has no inventory left that remains subject to profit share. Additionally, under a new agreement executed during the second quarter, Biocelect began to purchase from the latest manufactured lot of Kodatef at $49.50 AUD per box which are not subject to historical profit share. For the quarter ended September 30, 2025, 900 boxes of Kodatef were sold to Biocelect (none for the quarter ended September 30, 2024). As of September 30, 2025, $16,331 of receivables were due to us ($9,444 as of December 31, 2024).

Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. SB reported 66 boxes sold during the three months ended September 30, 2025, representing a 22% increase from the 54 boxes sold during the three months ended September 30, 2024. According to our distributor, the stock out experienced in the US during the second quarter of 2025 also negatively impacted sales for the quarter in Europe. This only became rectified in late August when we sent 1,000 bottles of Arakoda to Europe.

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Cost of Revenues, Gross (Loss) Profit, and Gross Margin

Cost of revenues was $537,690 for the three months ended September 30, 2025, as compared to $111,687 for the three months ended September 30, 2024.  The significant increase in cost of goods sold was primarily due to higher write-offs of inventory not expected to be sold prior to its expiration date. Write-offs of expiring inventory were $436,561 for the three months ended September 30, 2025, as compared to $1,165 for the three months ended September 30, 2024. The excess inventory resulted from our strategic decision to validate a new, larger-scale production method with then soon to be expiring raw materials (API), with the offsetting assistance from our USAMMDA grant. The development proved successful but the dating on the produced inventory is already considered in the industry to be short-dated and will have to be replaced by the beginning of the second quarter of 2026. The temporary increase in inventory write-offs was a necessary step in scaling our operations and is not expected to be recurring. Our new larger-scale production processes are expected to help keep inventory costs lower than otherwise. As a result of these factors, the Gross Margin % decreased from 17.45% for the three months ended September 30, 2024 to a Gross Loss % of 22.87% for the three months ended September 30, 2025.

Other Operating Revenues

		For the Three Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Research Revenues		$	90,960		$	12,818		$	78,142		609.63	%

The research revenues earned by us were $90,960 for the three months ended September 30, 2025, as compared to $12,818 for the three months ended September 30, 2024. The increase in research revenues is due to the new USAMMDA contract we were awarded in July 2024 to facilitate commercial validation of a new bottle and replacement blister packaging of Arakoda. We recognized research revenues of $90,960 related to the USAMMDA grant for the three months ended September 30, 2025 ($12,994 for the three months ended September 30, 2024).

Operating Expenses

		For the Three Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Research and Development		$	809,777		$	940,063		$	(130,286)		(13.86)	%
General and Administrative Expenses			1,506,620			1,215,053			291,567		24.00
Total Operating Expenses		$	2,316,397		$	2,155,116		$	161,281		7.48	%

Research and Development

Research and development costs decreased by $130,286 for the three months ended September 30, 2025 when compared to the three months ended September 30, 2024. The decline is partially attributable to a non-cash charge of $600,000 recognized during the three months ended September 30, 2024 upon the delivery from Trevally of 8.8 kilograms of castanospermine, for which we had previously issued fully vested shares as advance consideration for the research materials. Otherwise, research and development costs incurred for the three months ended September 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trials for tafenoquine. Direct trial-related costs represent 81% of the total research and development costs at $656,754 for the three months ended September 30, 2025, compared to 29% of the costs at $270,497 for the three months ended September 30, 2024.

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General and Administrative Expenses

For the three months ended September 30, 2025, our general and administrative expenses increased by approximately 24.00% or $291,567 from the three months ended September 30, 2024. For the three months ended September 30, 2025, we incurred higher sales, advertising and promotion expenses at $414,718, up from $47,645 for the three months ended September 30, 2024. Additionally, for the three months ended September 30, 2025, we incurred higher legal and professional fees at $177,401 ($86,335 for the three months ended September 30, 2024).

Interest and Other Income, net

		For the Three Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Interest Expense		$	(1,708)		$	(1,467)		$	(241)		16.43	%
Change in Fair Value of Derivative Liabilities			(21,103)			(56,712)			35,609		(62.79)
Other Income, net			31,550			16,623			14,927		89.80
Total Interest and Other Income (Expense), net		$	8,739		$	(41,556)		$	50,295		(121.03)	%

Interest Expense

For the three months ended September 30, 2025, we recognized $1,708 of interest expense ($1,467 for the three months ended September 30, 2024). Our interest expense for the periods presented primarily relates to our single outstanding loan from the SBA. Cash paid for interest expense was $2,193 and $2,193 for the three months ended September 30, 2025 and September 30, 2024, respectively.

Change in Fair Value of Derivative Liabilities

For the three months ended September 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $21,103 compared to the loss of $56,712 for the three months ended September 30, 2024. During the periods presented, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. We use a probability-weighted expected return method to estimate the fair value of this derivative liability.  Generally in the valuation model as we get closer to potential milestones the value of the derivative increases.

Other Income, net

For the three months ended September 30, 2025, we recognized $31,550 in other income compared to $16,623 for the three months ended September 30, 2024. For the three months ended September 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $32,566 ($16,635 for the three months ended September 30, 2024).

31

Comparison of the Nine Months Ended September 30, 2025, and 2024

Product Revenues - net of Discounts and Rebates, Cost of Revenues, Gross Profit, and Gross Margin

		For the Nine Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Product Revenues – net of Discounts and Rebates		$	702,086		$	365,939		$	336,147		91.86	%
Cost of Revenues			661,013			266,688			394,325		147.86
Gross Profit		$	41,073		$	99,251		$	(58,178)		(58.62)	%
Gross Margin %			5.85	%		27.12	%

Product Revenues - net of Discounts and Rebates

Our product revenues - net of discounts and rebates were $702,086 for the nine months ended September 30, 2025, as compared to $365,939 for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, our U.S. pharmaceutical distributor and Infuserve America accounted for 73% and 18% of our total net product sales of Arakoda, respectively, and Kodatef sales to our Australian distributor accounted for 6% of total net product sales (94%, 0%, and 6% for the nine months ended September 30, 2024, respectively). Despite a shortage of Arakoda 16-ct boxes starting in April 2025, which resulted from a delay in completing commercial validation of a new packaging format, domestic, commercial product sales increased during the period, primarily due to the combination of rising sales, price increases and fewer returns.

We offer discounts and rebates to the civilian U.S. supply chain distribution channel. We record sales when our 3PL partner transfers boxes into their title model. Discounts and rebates offered to our 3PL partner amount to 12% (lower rates available upon reaching larger revenue tiers) along with a $5,500 fixed monthly fee. The product is then transferred usually to one of the three large U.S. pharmaceutical distributors where rebates are 10%. Lastly, we have relationships with several large pharmacy benefit managers (“PBMs”) that allow patients to purchase Arakoda at a discount. The rebate associated with PBMs ranges from 30% to 41.25% depending on the amount of coverage provided. For the nine months ended September 30, 2025, discounts and rebates were $324,948 compared to $324,486 for the nine months ended September 30, 2024.

Arakoda entered the U.S. civilian supply chain in the third quarter of 2019. Since the introduction of the new 8-ct bottle in June 2025, we will be reporting Arakoda unit sales in terms of 16-ct box equivalents. For the nine months ended September 30, 2024, 3,642 16-ct box equivalents were sold to pharmacies and dispensaries. Sales volume increased by 14% to 4,166 16-ct box equivalents sold to pharmacies and dispensaries for the nine months ended September 30, 2025.

Kodatef sales to our distributor Biocelect in Australia for the nine months ended September 30, 2025 were $42,775 ($20,697 for the nine months ended September 30, 2024). A historical portion of sales to Biocelect remained subject to a profit share distribution once the original transfer price has been recouped. Biocelect, which acts as a distributor in the Australian and New Zealand market, reported 10% year-over-year decline, the equivalent of 1,334 boxes sold for the nine months ended September 30, 2025, compared to 1,489 boxes for the nine months ended September 30, 2024. As of September 30, 2025, Biocelect has no inventory left that remains subject to profit share. Additionally, under a new agreement executed during the period, Biocelect began to purchase from the latest manufactured lot of Kodatef at $49.50 AUD per box which are not subject to historical profit share. For the nine months ended September 30, 2025, 1,100 boxes of Kodatef were sold to Biocelect (None for the nine months ended September 30, 2024). As of September 30, 2025, $16,331 of receivables was due to us ($9,444 as of December 31, 2024).

Arakoda sales volume in Europe continues to grow. We first shipped Arakoda to our distributor Scandinavian Biopharma (“SB”) in September 2022. For the nine months ended September 30, 2025, SB reported 249 boxes sold (109 boxes sold for the nine months ended September 30, 2024). According to our distributor, this is due to greater interest in treating babesiosis. Additionally, we received another purchase order of product from Europe and shipped 1,000 bottles towards the end of August 2025.

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Cost of Revenues, Gross Profit, and Gross Margin

Cost of revenues was $661,013 for the nine months ended September 30, 2025, as compared to $266,688 for the nine months ended September 30, 2024. The significant increase in cost of goods sold was primarily due to higher write-offs of inventory not expected to be sold prior to its expiration date. Write-offs of expiring inventory were $436,596 for the nine months ended September 30, 2025, as compared to $18,490 for the nine months ended September 30, 2024. The excess inventory resulted from our strategic decision to validate a new, larger-scale production method with then soon to be expiring raw materials (API), with the offsetting assistance from our USAMMDA grant. The development proved successful but the dating on the produced inventory is already considered in the industry to be short-dated and will have to be replaced by the beginning of the second quarter 2026. The temporary increase in inventory writeoffs was a necessary step in scaling our operations and is not expected to be recurring. Our new larger-scale production processes are expected to help keep inventory costs lower than otherwise. Due to these factors, the Gross Margin % decreased from 27.12% for the nine months ended September 30, 2024 to 5.85% for the nine months ended September 30, 2025.

Other Operating Revenues

		For the Nine Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Research Revenues		$	390,630		$	43,177		$	347,453		804.72	%

The research revenues earned by us were $390,630 for the nine months ended September 30, 2025, as compared to $43,177 for the nine months ended September 30, 2024. The increase in research revenues is primarily due to the new USAMMDA contract we were awarded in July 2024 to facilitate commercial validation of a new bottle and replacement blister packaging of Arakoda and the contract we signed with the University of Kentucky for tafenoquine clinical trial supply. We recognized research revenues of $285,874 related to the USAMMDA grant for the nine months ended September 30, 2025 ($12,994 for the nine months ended September 30, 2024). We recognized research revenues of $89,302 from the University of Kentucky for the nine months ended September 30, 2025 ($0 for the nine months ended September 30, 2024). Other research revenues were $15,454 for the nine months ended September 30, 2025 ($30,183 for the nine months ended September 30, 2024).

Operating Expenses

		For the Nine Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Research and Development		$	1,467,283		$	4,372,571		$	(2,905,288)		(66.44)	%
General and Administrative Expenses			4,805,648			3,419,747			1,385,901		40.53
Total Operating Expenses		$	6,272,931		$	7,792,318		$	(1,519,387)		(19.50)	%

Research and Development

Research and development costs decreased by $2,905,288 for the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024. The decline is primarily attributable to a non-cash charge of $3,225,000 recognized during the nine months ended September 30, 2024 related to share-based payments issued to vendors in January 2023 as advance consideration, which payments were initially deferred and capitalized. Kentucky Technology, Inc. delivered us a report on the potential development of SJ733 + tafenoquine in the second quarter of 2024 and Trevally completed the synthesis of 8.8 kilograms of castanospermine in the third quarter of 2024, resulting in $2,625,000 and $600,000, respectively, of research and development expense recognized for the nine months ended September 30, 2024. Otherwise, research and development costs incurred for the nine months ended September 30, 2025 and 2024 primarily consisted of costs related to our babesiosis trial for tafenoquine. Direct trial-related costs represent 76% of the total research and development costs at $1,109,279 for the nine months ended September 30, 2025, compared to 19% of the costs at $846,323 for the nine months ended September 30, 2024. We also recorded $204,112 in research and development expenses related to commercial validation and packaging of Arakoda, for which a majority qualifies for reimbursement under the USAMMDA grant discussed above.

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General and Administrative Expenses

For the nine months ended September 30, 2025, our general and administrative expenses increased by approximately 40.53% or $1,385,901 from the nine months ended September 30, 2024. For the nine months ended September 30, 2025, we incurred significantly higher sales, advertising and promotion expenses and investor outreach expenses at $1,095,102 and $992,044, up from $226,024 and $684,808 for the nine months ended September 30, 2024, respectively. Additionally, for the nine months ended September 30, 2025, we recognized $212,030 in stock-based compensation expense ($15,246 for the nine months ended September 30, 2024). This increase was in part due to new partially vested option grants awarded to two executives in January 2025, as well as the ongoing quarterly expense recognized for additional stock options granted in the third quarter of 2024.

Interest and Other (Expense) Income, net

		For the Nine Months Ended September 30,
Consolidated Statements of Operations Data:		2025			2024			$ Change			% Change
Interest Expense		$	(4,719)		$	(6,490)		$	1,771		(27.29)	%
Change in Fair Value of Derivative Liabilities			(156,445)			1,683,034			(1,839,479)		(109.30)
Other Income, net			74,938			67,358			7,580		11.25
Total Interest and Other Income (Expense), net		$	(86,226)		$	1,743,902		$	(1,830,128)		(104.94)	%

Interest Expense

For the nine months ended September 30, 2025, we recognized $4,719 of interest expense ($6,490 for the nine months ended September 30, 2024). Our interest expense for the periods presented relates primarily to our single outstanding loan from the SBA. Cash paid for interest expense was $6,579 and $6,579 for the nine months ended September 30, 2025 and 2024, respectively.

Change in Fair Value of Derivative Liabilities

For the nine months ended September 30, 2025, we recognized a loss on the change in fair value of derivative liabilities of $156,445 compared to the gain of $1,683,034 for the nine months ended September 30, 2024. During the periods presented, derivative liabilities include the contingent milestone payment due to Knight upon a future sale of Arakoda or a Change of Control. We use a probability-weighted expected return method to estimate the fair value of this derivative liability.

Other Income, net

For the nine months ended September 30, 2025, we recognized $74,938 in other income compared to $67,358 for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, we recognized interest income from cash invested in interest-bearing accounts and investments in certificates of deposit of $80,150 ($59,192 for the nine months ended September 30, 2024). Other income for the nine months ended September 30, 2024 also included $10,789 of storage revenue recognized in association with final payment under the legacy contract with the USAMMDA for storing Arakoda purchases. We did not recognize storage revenue for the nine months ended September 30, 2025.

Cash Flows

		For the Nine Months Ended September 30,
		2025			2024			$ Change			% Change
Net Cash (Used In) Provided By :
Operating Activities		$	(5,156,566)		$	(4,009,871)		$	(1,146,695)		28.60	%
Investing Activities			1,625,347			(1,887,016)			3,512,363		(186.13)
Financing Activities			5,979,077			7,052,598			(1,073,521)		(15.22)
Effect of Foreign Currency Translation on Cash Flow			8,568			2,492			6,076		243.82
Net Increase (Decrease) in Cash and Cash Equivalents		$	2,456,426		$	1,158,203		$	1,298,223		112.09	%

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Cash Used in Operating Activities

Net cash used in operating activities was $5,156,566 for the nine months ended September 30, 2025, as compared to $4,009,871 for the nine months ended September 30, 2024. Our net cash used in operating activities increased primarily due to higher general and administrative expenses at $4,805,648 for the nine months ended September 30, 2025 ($3,419,747 for the nine months ended September 30, 2024), as a result of higher sales, advertising and promotion costs and investor outreach expenses, as discussed above, and higher research and development costs for our babesiosis trial at $1,109,279 for the nine months ended September 30, 2025 ($846,323 for the nine months ended September 30, 2024).

Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was $1,625,347 for the nine months ended September 30, 2025, as compared to net cash used in investing activities of $1,887,016 for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, we received proceeds of $1,708,000 from maturities of certain short-term investments in certificates of deposit ($0 for the nine months ended September 30, 2024). The cash proceeds are partially offset by capitalized patent costs of $20,868 and fixed asset purchases of $60,000 for the nine months ended September 30, 2025 ($49,869 and $103,773 for the nine months ended September 30, 2024, respectively). Additionally, we capitalized less website development costs for the nine months ended September 30, 2025 at $1,785 ($25,374 capitalized for the nine months ended September 30, 2024) associated with enhancements to the functionality of our corporate website.

Cash Provided by Financing Activities

Net cash provided by financing activities was $5,979,077 for the nine months ended September 30, 2025, as compared to $7,052,598 for the nine months ended September 30, 2024. The decrease in net cash provided by financing activities is mainly attributable to net proceeds aggregating to $7,042,608 received in connection with (i) our common stock and warrant offering in January 2024, (ii) the sale of common stock pursuant to the At-the-Market Sales Agreement in July and August 2024, and (iii) the sale of warrants in our Private Placement offering that closed in September 2024, which exceeded the aggregate net proceeds of $5,994,273 received in connection with our common stock and warrant offerings completed in January, February, and July 2025.

We also received lower proceeds from the exercise of warrants at $2,804 for the nine months ended September 30, 2025, compared to $9,990 for the nine months ended September 30, 2024. Additionally, for the nine months ended September 30, 2025, we withheld shares valued at $18,000 to cover tax withholdings for net share settlement of certain 2024 performance bonuses awarded to our executives ($0 for the nine months ended September 30, 2024).

Effect of Foreign Currency Translation on Cash

Our foreign operations were small relative to U.S. operations for the nine months ended September 30, 2025 and September 30, 2024, thus effects of foreign currency translation have been minor.

Critical Accounting Policies, Significant Judgments, and Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

We recognize 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 we expect 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, we 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.

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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. We determine the amount of variable consideration by using either the expected value method or the most-likely-amount method. We include the unconstrained amount of 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 the expected term assumption. We generally use the simplified method as prescribed by the SEC Staff Accounting Bulletin Topic 14, Share-Based Payment, to estimate the expected term for stock options, whereby, the expected term equals the midpoint of the weighted average remaining time to vest, vesting period and the contractual term of the options due to our lack of historical exercise data. For certain options granted out-of-the-money, our best estimate of the expected term is the contractual term of the award. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as we have never paid dividends and have no current plans to pay any dividends on our common stock. The assumptions used in calculating the fair value of share-based awards represent our best estimates and involve inherent uncertainties and the application of significant judgment.

We recognize compensation expense for restricted stock units (“RSUs”) with only service-based vesting conditions on a straight-line basis over the vesting period. Compensation cost for service-based RSUs is based on the grant date fair value of the award, which is the closing market price of our common stock on the grant date multiplied by the number of shares awarded.

For awards that vest upon a liquidity event or a change in control, the performance condition is not probable of being achieved until the event occurs. As a result, no compensation expense is recognized until the performance-based vesting condition is achieved, at which time the cumulative compensation expense is recognized. Compensation cost related to any remaining time-based service for share-based awards after the liquidity-based event is recognized on a straight-line basis over the remaining service period.

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For fully vested, nonforfeitable equity instruments that are granted at the date we enter into an agreement for goods or services with a nonemployee, we recognize the fair value of the equity instruments on the grant date. The corresponding cost is recognized as an immediate expense or a prepaid asset and expensed over the service period depending on the specific facts and circumstances of the agreement with the nonemployee.

Derivative Liabilities

We analyze all financial instruments with features of both liabilities and equity under ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The classification of derivative financial instruments is reassessed each reporting period. 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 (other income/expense) as change in fair value of derivative liabilities. As of September 30, 2025, derivative liabilities consist of contingent payment arrangements. We use 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), we record the equity shares at fair value on the date of conversion, relieve all related debt, derivative liabilities, and unamortized debt discounts, and recognize 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.

Off-Balance Sheet Arrangements

During 2025 and 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

JOBS Act Accounting Election

In April 2012, the JOBS Act was enacted. Section 107(b) of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Recent Accounting Pronouncements

From time to time, the FASB issues Accounting Standards Updates (“ASU”) to amend the authoritative literature in the ASC. The Company regularly evaluates new ASUs to determine the impact that these pronouncements may have on the consolidated condensed financial statements. Other than the pronouncements listed below, management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, or (iii) are not applicable to the Company’s consolidated condensed financial statements or related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses and segment profit or loss. ASU 2023-07 also requires entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new required disclosures under the ASU. We adopted ASU 2023-07 on a retrospective basis for the 2024 annual period, and for interim periods beginning in 2025. The impact is limited to our financial statement disclosures, which are presented in Note 2 to the accompanying consolidated condensed financial statements.

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In December 2023, the FASB issued ASU 2023-09, Income Taxes (ASC 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. We will adopt this standard for the annual period ending December 31, 2025. The impact of ASU 2023-09 will be limited to our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which applies to all public business entities that file financial statements with the SEC. The amendments in this ASU require public business entities to disclose on an annual and interim basis, disaggregated information about certain income statement expense line items. The new standard is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We are currently evaluating the impact that ASU 2024-03 will have on our financial statement disclosures.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act of 1934, as amended and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

ITEM 4. Controls and Procedures. Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2025. Based on that evaluation, the Company’s Chief Executive Officer and the Company’s Chief Financial Officer have concluded that as of September 30, 2025, due to the existence of the material weakness in the Company’s internal control over financial reporting described below, the Company’s disclosure controls and procedures were not effective.

Management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Management has used the framework set forth in the report entitled “Internal Control-Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control over financial reporting. Based on that assessment, our management has identified certain material weaknesses in our internal control over financial reporting.

Our management concluded that as of September 30, 2025, our internal control over financial reporting was not effective, and that material weaknesses existed in the following areas:

(1) we do not employ full time in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With respect to material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

(2) we have inadequate segregation of duties consistent with the control objectives including but not limited to the disbursement process, transaction or account changes, and the performance of account reconciliations and approval; and

(3) we have ineffective controls over the period end financial disclosure and reporting process caused by insufficient accounting staff.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. 

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEDINGS

From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. There were no reportable litigation events during the quarter ended September 30, 2025.

ITEM 1A. RISK FACTORS

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item. In any event, there have been no material changes in our risk factors as previously disclosed in our Registration Statement.

We may issue a substantial number of shares of common stock upon exercise of the warrants issued in our July 2025 Offering, which would cause dilution to our stockholders and may affect the market price of our common stock.

In connection with our July 2025 Offering, we issued (i) 878,264 pre-funded warrants, (ii) Series A-1 warrants to purchase up to 2,631,578 shares of common stock, and (iii) Series A-2 warrants to purchase up to 2,631,578 shares of common stock. We also issued placement agent warrants to purchase up to 197,368 shares of common stock. The exercise of these warrants will results in the issuance of a substantial number of additional shares of common stock, which will dilute the ownership interests of existing stockholders. The sale of such shares, or the perception that such sales could occur, could also cause the market price of our common stock to decline.

If we fail to maintain compliance with Nasdaq’s continued listing requirements, including the minimum bid price rule, our common stock could be delisted, which would adversely affect the liquidity and market price of our shares.

In February 2025, we effected a 1-for-5 reverse stock split in order to regain compliance with Nasdaq’s $1.00 minimum bid price requirement. There can be no assurance that we will be able to maintain compliance with Nasdaq’s continued listing standards in the future. A Delisting of our common stock from The Nasdaq Capital Market would likely result in decreased liquidity for our stockholders. Could make it more difficult for us to raise additional capital, and might adversely affect the market price of our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(A) Unregistered Sales of Equity Securities

January 2025 Securities Purchase Agreement

On January 28, 2025, the Company entered into a securities purchase agreement (the “January 2025 Securities Purchase Agreement”) with certain institutional investors (the “January 2025 Purchasers”) pursuant to which the Company sold an aggregate of 204,312 shares of common stock at a purchase price of $5.105 per share in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market LLC.

The shares were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-280796), which was declared effective by SEC on July 18, 2024 as supplemented by a prospectus supplement dated January 28, 2025, filed with the SEC on January 30, 2025, and accompanying base prospectus, pursuant to Rule 424(b)(5) promulgated under the Securities Act.

In a concurrent private placement, the Company also issued to the January 2025 Purchasers unregistered warrants (the “January 2025 Warrants”) to purchase up to an aggregate of 408,621 shares of common stock at an exercise price of $3.855 per share. The January 2025 Warrants are exercisable upon issuance and expire twenty-four months from the date of issuance.

Any holder will not have the right to exercise any portion of the January 2025 Warrants if the holder (together with its affiliates) would beneficially own more than 4.99% (or, upon the election of the holder, 9.99%) of the number of shares of the common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage, provided that any increase will not be effective until the 61st day after such election.

The exercise price of the January 2025 Warrants is subject to customary adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock and also upon any distributions of assets, including cash, stock or other property to the stockholders of the Company.

The issuance of the January 2025 Warrants pursuant to the January 2025 Securities Purchase Agreement and issuance of the January 2025 Placement Agent Warrants, as defined below, and the shares of common stock issuable thereunder were made pursuant to the exemption from the registration requirements under the Securities Act, available to the Company under Section 4(a)(2) promulgated thereunder and Rule 506 of Regulation D promulgated under the Securities Act due to the fact that the offering of the January 2025 Warrants and the January 2025 Placement Agent Warrants thereunder did not involve a public offering of securities.

The January 2025 Securities Purchase Agreement contained customary representations and warranties. The offering closed on January 30, 2025.

Pursuant to an engagement letter agreement between the Company and the Placement Agent dated August 30, 2024, as amended on September 3, 2024 and January 24, 2025 (the “Engagement Agreement”), the Placement Agent acted as the Company’s exclusive placement agent in connection with the offering.

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Pursuant to the terms of the Engagement Agreement, the Company paid the Placement Agent a cash transaction fee equal to 7.5% of the aggregate gross cash proceeds in the offering and a management fee equal to 1.0% of the aggregate gross cash proceeds in the offering. In addition, the Company paid for certain non-accountable expenses in the amount of $15,000 and a clearing fee in the amount of $10,000. The Company also issued to the Placement Agent (or its designees) warrants (the “January 2025 Placement Agent Warrants”) to purchase up to 15,325 shares of common stock. The January 2025 Placement Agent Warrants have an exercise price equal to $6.382 per share and are exercisable upon issuance and expire twenty-four months from the date of issuance.

The Company received net proceeds of approximately $804,346 from the offering, after deducting estimated offering expenses paid by the Company, including the Placement Agent fees. The Company intends to use the net proceeds from the offering for general corporate purposes, including working capital.

February 2025 Securities Purchase Agreement

On February 5, 2025, the Company entered into a securities purchase agreement (the “February 2025 Securities Purchase Agreement”) with certain institutional investors (the “February 2025 Purchasers”) pursuant to which the Company sold an aggregate of 300,700 shares of common stock at a purchase price of $3.575 per share in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market LLC.

The shares were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-280796), which was declared effective by the Securities and Exchange Commission (the “SEC”) on July 18, 2024 as supplemented by a prospectus supplement dated February 5, 2025, filed with the SEC on February 6, 2025, and accompanying base prospectus, pursuant to Rule 424(b)(5) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

In a concurrent private placement, the Company also issued to the February 2025 Purchasers unregistered warrants (the “February 2025 Warrants”) to purchase up to an aggregate of 300,700 shares of common stock at an exercise price of $2.95 per share. The February 2025 Warrants are exercisable upon issuance and expire twenty-four months from the date of issuance.

Any holder will not have the right to exercise any portion of the February 2025 Warrants if the holder (together with its affiliates) would beneficially own more than 4.99% (or, upon the election of the holder, 9.99%) of the number of shares of the common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage, provided that any increase will not be effective until the 61st day after such election.

The exercise price of the February 2025 Warrants is subject to customary adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distributions of assets, including cash, stock or other property to the stockholders of the Company.

The issuance of the February 2025 Warrants pursuant to the February 2025 Securities Purchase Agreement and the issuance of the February 2025 Placement Agent Warrants, as defined below, and the shares of common stock issuable thereunder, were made pursuant to the exemption from the registration requirements under the Securities Act, available to the Company under Section 4(a)(2) promulgated thereunder and Rule 506 of Regulation D promulgated under the Securities Act due to the fact that the offering of the February 2025 Warrants and the February 2025 Placement Agent Warrants thereunder did not involve a public offering of securities.

The February 2025 Securities Purchase Agreement contained customary representations and warranties. The offering closed on February 6, 2025.

Pursuant to the Engagement Agreement between the Company and the Placement Agent dated August 30, 2024, as amended on September 3, 2024 and January 24, 2025, the Placement Agent acted as the Company’s exclusive placement agent in connection with the offering.

Pursuant to the terms of the Engagement Agreement, the Company paid the Placement Agent a cash transaction fee equal to 7.5% of the aggregate gross cash proceeds in the offering and a management fee equal to 1.0% of the aggregate gross cash proceeds in the offering. In addition, the Company paid for certain non-accountable expenses in the amount of $15,000 and a clearing fee in the amount of $10,000. The Company also issued to the Placement Agent (or its designees) warrants (the “February 2025 Placement Agent Warrants”) to purchase up to 22,554 shares of common stock. The February 2025 Placement Agent Warrants have an exercise price equal to $4.469 per share and are exercisable upon issuance and expire twenty-four months from the date of issuance.

The Company received net proceeds of approximately $908,627 from the offering, after deducting estimated offering expenses paid by the Company, including the Placement Agent fees. The Company intends to use the net proceeds from the offering for general corporate purposes, including working capital.

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Registration of the Shares of Common Stock Underlying Warrants

Pursuant to the January and February 2025 Securities Purchase Agreements, the Company was required to file a registration statement with the SEC within 45 days after the date of the respective Securities Purchase Agreements to register the shares underlying the warrants under the Securities Act. The Company agreed to use commercially reasonable efforts to cause such registration statement to become effective within 75 days following the respective closing dates, and to keep such registration statement effective at all times until no purchaser owns any warrants or warrant shares issuable upon exercise thereof. Subsequently, the Company filed a registration statement on Form S-1 (File No. 333-284983) on February 14, 2025, which was declared effective by the Securities and Exchange Commission on April 2, 2025 (the “Registration Statement”).

The Registration Statement covered the resale of: (i) 408,621 shares of our common stock issuable upon exercise of the January 2025 Warrants at an exercise price of $3.855 per share; (ii) 300,700 shares of our common stock issuable upon exercise of the February 2025 Warrants at an exercise price of $2.95 per share; (iii) 15,325 shares of our common stock issuable upon exercise of the January 2025 Placement Agent Warrants at an exercise price of $6.382 per share; and (iv) 22,554 shares of our common stock issuable upon exercise of the February 2025 Placement Agent Warrants at an exercise price of $4.469 per share.

(B) Use of Proceeds

None.

(C) Issuer Purchases of Equity Securities

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

Securities Trading Plans

During the three months ended September 30, 2025, none of our Section 16 officers or directors (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any “non-Rule 10b5-1 trading arrangement” (as defined in Section 408(c) of Regulation S-K).

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ITEM 6. EXHIBITS

EXHIBIT INDEX

Exhibit No.		Description
1.1		Engagement Agreement (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed on January 30, 2025)
1.2		Amendment to Engagement Agreement (incorporated by reference to Exhibit 1.2 of the Company’s Current Report on Form 8-K filed on January 30, 2025)
1.3		Extension to Engagement Agreement (incorporated by reference to Exhibit 1.3 of the Company’s Current Report on Form 8-K filed on January 30, 2025)
1.4		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed July 18, 2025)
1.5		Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K filed July 18, 2025)
1.6		At-The-Market Sales Agreement (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed September 5, 2025)
4.1		Form of Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on January 30, 2025)
4.2		Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on January 30, 2025)
4.3		Form of Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on February 6, 2025)
4.4		Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on February 6, 2025)
10.1		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on January 30, 2025)
10.2		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 6, 2025)
31.1*		Rule 13a-14(a)/15d-14(a) Certification of the President and Chief Executive Officer of 60 Degrees Pharmaceuticals, Inc.
31.2*		Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer of 60 Degrees Pharmaceuticals, Inc.
32.1**		Section 1350 Certification of the President and Chief Executive Officer of 60 Degrees Pharmaceuticals, Inc.
32.2**		Section 1350 Certification of the Chief Financial Officer of 60 Degrees Pharmaceuticals, Inc.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	60 DEGREES PHARMACEUTICALS, INC.
Dated: November 13, 2025	/s/ Geoffrey Dow
	Geoffrey Dow
	Chief Executive Officer and President, Director (Principal Executive Officer)
Dated: November 13, 2025	/s/ Tyrone Miller
	Tyrone Miller
	Chief Financial Officer (Principal Financial and Accounting Officer)

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