Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 761

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 4
Chunk 761
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from the established accruals. Accruals for returns are recorded as a reduction to gross revenues in the consolidated statements of operations
and as an increase to the return goods reserve in the consolidated balance sheets.

Administrative Fees and Other Rebates

Administrative fees or rebates
are offered to wholesalers, group purchasing organizations, and indirect customers. Fees and rebates are accrued, by product by wholesaler,
at the time of sale based on contracted rates and NPPs. To evaluate the adequacy of the administrative fee accruals, on-hand inventory
counts are obtained from the wholesalers. We continually monitor administrative fee activity and adjust accruals when it is expected
that actual administrative fees may differ from the accruals. Accruals for administrative fees and other rebates are recorded as a reduction
in both gross revenues in the consolidated statements of operations and accounts receivable or accrued expenses in the consolidated balance
sheets.

 64 

Co-payment
Assistance

Patients
who meet certain eligibility requirements may receive co-payment assistance funded by us. We record contra-revenue for co-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 (“