Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1165

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 1165
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 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 operations and accounts receivable or accrued expenses in the consolidated balance sheets.

Co-payment
Assistance

Patients
who meet certain eligibility requirements may receive co-payment assistance funded by the Company. The Company records 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.

    F-21

The
following table summarizes activity and ending balances of the Company’s variable consideration provisions in the consolidated
financial statements for the years ended December 31, 2024, and 2023:

SCHEDULE
OF ACCRUALS AND ALLOWANCES

    Chargebacks  
    Government Rebates  
    Returns  
    Administrative Fees and Other Rebates