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

Company: HARROW, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 10
---
 
     (77,000)
  
    Balance at March 31, 2025 
    $453,000 

Fair Value Measurements

Fair value measurements are determined based on
the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring
fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable
inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into
the following three levels:

    ●
    Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.
  
    ●
    Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
  
    ●
    Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.

     8 

The Company’s 2026 Notes (as defined in
Note 10) are carried at face value, including the unamortized premium, less unamortized debt issuance costs, the 2027 Notes (as described
in Note 10) are carried at face value less unamortized debt issuance costs, and the Oaktree Loan (as defined in Note 10) is carried at
face value less the original issue discount and unamortized debt issuance costs on the condensed consolidated balance sheets and the Company
presents fair value for disclosure purposes only. The 2026 Notes and the 2027 Notes are classified as Level 1 instruments as the fair
value is determined using quoted market prices in active markets for the same securities. The Oaktree Loan is classified as a Level 2
instrument and its fair value is determined through an income approach that considers collateral coverage, yield calibration,