Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 456

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1B
Chunk 456
---
 $37,413,000  
    $40,363,000 
  
    Oaktree Loan 
    $107,407,000  
    $112,932,000  
    $75,254,000  
    $78,633,000 

The Company’s other financial instruments include
cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred
revenue and customer deposits and operating lease liabilities. The carrying amount of these financial instruments, except for operating
lease liabilities, approximates fair value due to the short-term maturities of these instruments. Based on borrowing rates currently
available to the Company, the carrying values of the operating lease liabilities approximate their respective fair values.

    F-17

Stock-Based Compensation

All stock-based payments to employees, directors
and consultants, including grants of stock options, warrants, restricted stock units (“RSUs”), performance stock units (“PSUs)
and restricted stock, are recognized in the consolidated financial statements based upon their estimated fair values. The Company uses
the Black-Scholes-Merton option pricing model and Monte Carlo simulation model to estimate the fair value of stock-based awards. The
estimated fair value is determined at the date of grant. The financial statement effect of forfeitures is estimated at the time of grant
and revised, if necessary, if the actual effect differs from those estimates. The Company provides newly issued shares of common stock
to satisfy the exercise and vesting for stock-based compensation awards.

Basic and Diluted Net Loss per Common Share

Basic net loss per common share is computed by dividing
net loss attributable to Harrow, Inc. for the year by the weighted average number of common shares outstanding during the year. Diluted
net loss per share is computed by dividing the net loss attributable to Harrow, Inc. for the year by the weighted average number of common
and common equivalent shares, such as stock options, RSUs, PSUs, and warrants, outstanding during the year.

Common stock equivalents (using the treasury stock
or “if converted” method) from stock options, unvested RSUs, and unvested PSUs were 4,390,124 and 4,642,259 at December 31,
2024 and 2023, respectively, and are excluded in the calculation of diluted net loss per share for the periods presented, because the
effect is anti-dilutive for that time period. Included in the basic and diluted net loss