Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 449

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1B
Chunk 449
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 was $0 and $8,681,000, respectively.

Accounts Receivable

Accounts receivable is stated net of allowances for
credit losses and contractual adjustments. The accounts receivable balance primarily includes amounts due from customers the Company
has invoiced or from third-party providers (e.g., insurance companies and governmental agencies), but for which payment has not been
received. The Company’s gross product revenues are subject to a variety of contractual deductions, which generally are estimated
and recorded in the same period that the revenues are recognized. These deductions represent estimates of the related obligations and,
as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period.
Accounts receivable at December 31, 2024 are presented net of allowances for credit losses of $416,000 and $19,731,000 for contractual
adjustments (in aggregate $20,147,000) and at December 31, 2023, net of allowances for credit losses of $371,000 and $14,875,000 for
contractual adjustments (in aggregate $15,246,000).

    F-13

Inventories

Inventories are stated at the lower of cost or net
realizable value. Cost is determined on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular
basis, based on the price expected to be obtained for products in their respective markets compared with historical cost. Write-downs
of inventories are considered to be permanent reductions in the cost basis of inventories.

The Company also regularly evaluates its inventories
for excess quantities and obsolescence (expiration), taking into account such factors as historical and anticipated future sales or use
in production compared to quantities on hand and the remaining shelf life of products and active pharmaceutical ingredients on hand.
The Company establishes reserves for excess and obsolete inventories as required based on its analyses.

Investment in Melt Pharmaceuticals, Inc. –
Related Party

The Company owns 3,500,000 shares of common stock
and 2,334,256 shares of preferred stock of Melt (representing in aggregate approximately 45% of the equity interests as of December 31,
2024). The Company analyzes its investment in Melt and related agreements on a regular basis to evaluate its position of variable interests
in Melt. The Company has determined that it does not have the ability to control Melt, however it has the ability to exercise significant
in