Company: HROW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001641172-25-022980
Chunk: 18

Company: HARROW, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 1
Chunk 18
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 through its pharmacy, outsourcing facility and 3PL partner. Revenue from the Company’s
pharmacy services includes: (i) the portion of the price the client pays directly to the Company, net of any volume-related or other
discounts paid back to the client, (ii) the price paid to the Company 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, the Company has identified the
following:

    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 the Company’s
    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 the Company’s 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. The
    Company has elected to treat its shipping and handling activities as a fulfillment cost.

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    3.
    Determine
    the transaction price: The transaction price is based on an amount that reflects the consideration to which the Company expects
    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. The Company utilizes the services
    of a third-party professional services firm to estimate rebates and chargebacks associated with sales of its branded products. The
    transfer of promised goods is satisfied within a year, and therefore there are no significant financing components. There is no non-cash
    consideration related to product sales.

    4.
    Allocate
    the transaction price to the performance obligations in the contract: Because there is only one performance obligation for product
    sales