Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1551

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 9A
Chunk 1551
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 dispensed
to Medicare beneficiaries in the prior quarter, which is typically 120 days after the product is shipped. As a result of the delay between
selling the products, dispensing the products and rebate billing, Medicare rebate reserve includes both an estimate of outstanding claims
for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims
that will be made when inventory in the distribution channel is sold through to Medicare Part D participants.

To evaluate the adequacy of the government rebate
reserves, reserves are reviewed on a quarterly basis against actual claims data to ensure the liability is fairly stated. The Company
continually monitors the government rebate reserve and adjusts estimates if it is expected that actual government rebates may differ
from established accruals. Accruals for government rebates are recorded as a reduction to gross revenues in the consolidated statements
of operations and as an increase to accrued rebates in the consolidated balance sheets.

Returns

A returns policy is in place that allows customers
to return product within a specified period prior to and subsequent to the expiration date. Generally, product may be returned for a
period beginning six months prior to its expiration date to up to one year after its expiration date. Product returns
are settled through the issuance of a credit to the customer. The estimate for returns is based upon historical experience with actual
returns. While such experience has allowed for reasonable estimation in the past, history may not always be an accurate indicator of
future returns. The Company continually monitors estimates for returns and adjusts when it is expected that actual product returns may
differ 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 accrued expenses 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 NPP. To evaluate the adequacy of the administrative fee accruals, on-hand inventory counts are obtained from
the wholesalers. The Company continually monitors administrative fee activity and adjusts 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