Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 284

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 284
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 and
sales of branded products to wholesalers through a third-party logistics (“3PL”) partner, (2) revenue recognized from transfer
of acquired product sales and profits, and (3) revenue recognized from intellectual property licenses. 

Product Revenues 

We sell
prescription medications directly through our pharmacy, outsourcing facility and 3PL partner. Revenue from our pharmacy services includes:
(i) the portion of the price the client pays directly to us, net of any volume-related or other discounts paid back to the client, (ii)
the price paid to us by individuals, and (iii) customer copayments made directly to the pharmacy network. Sales taxes are not included
in revenue. Following the core principles of ASC 606, we have identified the following:

 62 

    1.
    Identify the contract(s) with a customer: A contract is deemed
    to exist when the customer places an order through receipt of a prescription, via an online order or via receipt of a purchase order
    from a customer. For branded products, orders are received through our 3PL partner, and the customer takes title of the products via
    formal purchase orders placed and fulfilled.

    2.
    Identify the performance obligations in the contract: Obligations
    for fulfillment of our contracts consist of delivering the product to customers at their specified destination. For shipping and
    handling activities under ASC 606, if the customer takes control of the goods after shipment, shipping and handling activities would
    always be considered a fulfillment activity and not treated as a separate performance obligation. If the customer takes control of
    the goods before shipment, entities must make an accounting policy election to treat shipping and handling activities as either a
    fulfillment cost or as a separate performance obligation. We have elected to treat its shipping and handling activities as a fulfillment
    cost.

    3.
    Determine the transaction price: The transaction price is based
    on an amount that reflects the consideration to which we expect to be entitled, net of accruals for estimated rebates, wholesaler
    chargebacks, discounts, copay assistance and other deductions (collectively, sales deductions) and an estimate for returns and replacements
    established at the time of sale. We utilize the services of a third-party professional services firm to estimate rebates and chargebacks
    associated with sales of our branded products. The transfer of promised goods is satisfied within a year, and therefore there are
    no significant financing components. There is no