Company: HROW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001641172-25-022980
Chunk: 99

Company: HARROW, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 3
Chunk 99
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 in the financial system, tighter lending standards and higher interest rates have added
stress that may create additional vulnerabilities in the global economy, the effects of which may be of an extended duration. Additionally,
with higher interest rates, deficits (including those associated with the pandemic), and other fiscal pressures, governments may be unable
to sustain their previously high levels of fiscal spending. As a result of global economic conditions, some third-party payers may delay
or be unable to satisfy their reimbursement obligations. Job losses or other economic hardships (including inflation) may also affect
patients’ ability to afford healthcare as a result of increased co-pay or deductible obligations, greater cost sensitivity to existing
co-pay or deductible obligations, lost healthcare insurance coverage or for other reasons. We believe such conditions could lead to reduced
demand for our products, which could have a material adverse effect on our product sales, business and results of operations. The cumulative
effects of inflationary pressures, an uncertain trade environment with escalating and rapidly-changing tariffs, and the effects from
the armed conflict in Ukraine (including the effects of the sanctions that were implemented in response to the conflict and the resulting
impacts on the commodity market and supply chains) and the Middle East may also increase our operating expenses. Some of our operational
costs, including the cost of energy, cost of goods, other materials, labor, distribution and our other operational costs are subject
to market conditions and have been adversely affected by inflationary pressures. Although we monitor our distributors’, customers’
and suppliers’ financial condition and their liquidity to mitigate our business risks, some of our distributors, customers and
suppliers may become insolvent, which could have a material adverse effect on our product sales, business and results of operations.

Changes
in U.S. trade policy—including the possible imposition of significant tariffs on pharmaceuticals and raw materials—could
materially increase our costs, disrupt our supply chain, and impair our competitive position.

Recent
public statements by U.S. policymakers contemplate phased tariff rates of up to 150% (or more) on imported finished drugs, active pharmaceutical
ingredients (“APIs”), and key excipients. Although we manufacture a significant amount of our finished ophthalmic products
in the United States, we rely on third-party suppliers, many of which source APIs, sterile bottles, dropper tips, and other critical
components from non-U.S. jurisdictions. If one or more rounds of tariffs are enacted, we could experience:

    ●
    Higher
    input costs that we may