Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1038

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 6
Chunk 1038
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ensed as incurred. Internal-use software is amortized on a straight-line basis over the
estimated useful life of the asset, which ranges from two to five years. When internal-use software that was previously capitalized is
abandoned, the cost less the accumulated amortization, if any, is recorded as amortization expense. Fully amortized capitalized internal-use
software costs are removed from their respective accounts.

Goodwill and Intangible Assets

Patents and trademarks are recorded at cost and
capitalized at a time when the future economic benefits of such patents and trademarks become more certain. At that time, the
Company capitalizes third-party legal costs and filing fees associated with obtaining and successfully prosecuting claims related to
its patents and trademarks. Once the patents have been issued, the Company amortizes these costs over the shorter of the legal life
of the patent or its estimated economic life, generally 20
years, using the straight-line method. Acquired product rights, including new drug applications (“NDAs”), are amortized
over their estimated useful lives, generally 4-15
years, based on a straight-line method. Trademarks are an indefinite-lived intangible asset and are assessed for impairment based on
future projected cash flows as further described below.

    F-15

The Company reviews its goodwill and indefinite-lived
intangible assets for impairment as of January 1 of each year and when an event or a change in circumstances indicates the fair value
of a reporting unit may be below its carrying amount. Events or changes in circumstances considered as impairment indicators include
but are not limited to the following:

    ●
    significant underperformance of the Company’s business relative
    to expected operating results;

    ●
    significant adverse economic and industry trends;

    ●
    significant decline in the Company’s market capitalization for
    an extended period of time relative to net book value; and

    ●
    expectations that a reporting unit will be sold or otherwise disposed.

The goodwill impairment test consists of a two-step
process as follows:

Step 1. The Company compares the fair value of each
reporting unit to its carrying amount, including the existing goodwill. The fair value of each reporting unit is determined using a discounted
cash flow valuation analysis. The carrying amount of each reporting unit is determined by specifically identifying and allocating the
assets and liabilities to each reporting unit based on headcount, relative revenues or other methods as deemed appropriate by management.
If the carrying amount of a reporting unit exceeds its fair value, goodwill is