Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 995

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 6
Chunk 995
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-payment assistance
based on actual program participation and estimates of program redemption using data provided by third-party administrators. An accrued
liability is recorded on unredeemed co-payment assistance related to products for which control has been transferred to the customer. 

Prompt Payment Discounts

Sales
discounts may be granted to customers for prompt payment. The reserve for prompt payment discounts is based on invoices outstanding.
Based on past experience, it is assumed that all available discounts will be taken. Accruals for prompt payment discounts are recorded
as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance
sheets.

Revenues From Transfer of Acquired Product Sales and Profits 

We entered
into agreements whereby we purchased the exclusive commercial rights to assets associated with certain ophthalmic products from other
pharmaceutical companies (the “Sellers”). During a temporary, transition period, the Sellers continue to manufacture and
market these products and transfer the net profit from the sale of the products to us. The revenue we recognized from the transfer of
net profit was recognized at the time profit from the product sales were calculated by the Sellers and confirmed by us, typically on
a monthly basis, at which point there is no future performance obligation required and no consequential continuing involvement on our
part to recognize the associated revenue. On a quarterly basis, the Sellers invoiced us for all credits and reimbursements (“Chargebacks”)
made to customers related to the products. We used historical actual experience to estimate Chargebacks associated with the net sales
and profit transferred. The estimated Chargebacks are recorded as a reduction in revenues from transfer of acquired product sales and
profits in our consolidated statements of operations, and recorded as a reduction to accounts receivable in the consolidated balance
sheets, at the time the revenue is recognized.

Intellectual Property License Revenues

We currently
hold five intellectual property licenses and related agreements pursuant to which we have agreed to license or sell to a customer with
the right to access our intellectual property. License arrangements may consist of non-refundable upfront license fees, data transfer
fees, research reimbursement payments, exclusive license rights to patented or patent pending compounds, technology access fees, and
various performance or sales milestones. These arrangements can be multiple-element arrangements, the revenue of which is recognized
at the point in time that the performance obligation is met.

Non-refundable
fees that are not contingent on any future performance and require no consequential continuing involvement on our part are recognized
as