Company: HROW
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001641172-25-009263
Chunk: 39

Company: HARROW, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 39
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 than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest,
and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the
individual may be entitled to indemnification by the Company. Several of the Company’s asset purchase and license agreements contain
customary representations, warranties, covenants and confidentiality provisions, and also contain mutual indemnification obligations related
primarily to performance under the respective agreements. The Company also indemnifies its lessors in connection with its facility leases
for certain claims arising from the use of the facilities. These indemnities do not provide for any limitation of the maximum potential
future payments the Company could be obligated to make. Historically, the Company has not incurred any payments for these obligations
and, therefore, no liabilities have been recorded for these indemnities in the accompanying condensed consolidated balance sheets.

Asset Purchase, License and Related Agreements

FDA Approved Product Acquisitions

In recent years, the Company has acquired commercial
and product rights to various FDA approved ophthalmic medications and products through asset purchase, licenses, supply and/or other related
agreements. In general, in exchange for product and commercial rights these agreements provide the counterparties with certain upfront
and contingent milestone payments typically related to certain annual sales amounts and manufacturing events, and in certain cases, per
unit transfer prices and royalties on sales of some of the products. During the three months ended March 31, 2025 and 2024, $2,173,000
and $274,000 were incurred under these agreements as royalty expenses, respectively. The Company incurred $0 and $0 related to upfront
and milestone payments under these agreements during the three months ended March 31, 2025 and 2024. As of March 31, 2025,
the remaining contingent consideration payable pursuant to these agreements were not considered probable and reasonably estimable and
therefore, no amount was accrued related to these contingent obligations during the three months ended March 31, 2025. At the time contingent
consideration payable becomes probable and reasonably estimable, the additional consideration, if any, paid will be allocated to the assets
based on their initial estimated fair values as a percent of total purchase price.

Formulation Acquisitions

The Company has acquired and sourced intellectual
property rights related to certain proprietary innovations from certain inventors, innovator companies and related parties (the “Inventors”)
through multiple asset purchase agreements and license agreements. In general, these