Company: HROW
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001641172-25-009263
Chunk: 40

Company: HARROW, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 40
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 agreements provide that the Inventors will cooperate
with the Company in obtaining patent protection for the acquired intellectual property and that the Company will use commercially reasonable
efforts to research, develop and commercialize a product based on the acquired intellectual property. In addition, the Company has acquired
a right of first refusal on additional intellectual property and drug development opportunities presented by these Inventors.

In consideration for the acquisition of these
intellectual property rights, the Company is obligated to make payments to the Inventors based on the completion of certain milestones,
generally consisting of: (1) a payment payable within 30 to 45 days after the issuance of the first patent in the United States arising
from the acquired intellectual property (if any); (2) a payment payable within 30 days after the Company files the first investigational
new drug application (“IND”) with the U.S. Food and Drug Administration (“FDA”) for the first product arising
from the acquired intellectual property (if any); (3) for certain of the Inventors, a payment payable within 30 days after the Company
files the first new drug application with the FDA for the first product arising from the acquired intellectual property (if any); and
(4) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product
based on the acquired intellectual property (if any), after deducting (among other things) the Company’s development costs associated
with such product. If, following five years after the date of the applicable asset purchase agreement, the Company either (a) for certain
of the Inventors, has not filed an IND or, for the remaining Inventors, has not initiated a study where data is derived, or (b) has failed
to generate royalty payments to the Inventors for any product based on the acquired intellectual property, the Inventors may terminate
the applicable asset purchase agreement and request that the Company re-assign the acquired technology to the Inventors. During the three
months ended March 31, 2025 and 2024, $277,000 and $180,000 were incurred under these agreements as royalty expenses, respectively.

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Contract Manufacturing

The Company had entered into manufacturing agreements
with respect to third-party contract manufacturers for its FDA approved pharmaceutical products. Some of these contract manufacturing
agreements require minimum annual order amounts. The Company has committed to pay approximately $8,527,000 related to contract manufacturing
agreements for the year ending December