Company: HROW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001641172-25-022980
Chunk: 43

Company: HARROW, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 1
Chunk 43
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 extent that it concludes it is probable that a liability has been incurred and
the amount of the related loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings
and other matters that could cause an increase or decrease in the amount of a liability that has been accrued previously.

    24

The
Company’s legal proceedings involve various aspects of its business and a variety of claims, some of which present novel factual
allegations and/or unique legal theories. Typically, a number of the matters pending against the Company are at early stages of the legal
process, which in complex proceedings of the sort the Company faces often extend for several years. While it is not possible to accurately
predict or determine the eventual outcomes of matters that have not concluded, an adverse determination in one or more of the matters
(whether discussed in this footnote or not) currently pending may have a material adverse effect on the Company’s condensed consolidated
results of operations, financial position or cash flows. Legal costs incurred for loss contingencies are expensed as incurred.

Ocular
Science, Inc. et. al

In
July 2021, ImprimisRx, LLC, a subsidiary of the Company, filed a lawsuit against Ocular Science, Inc. and OSRX, Inc. (together, “OSRX”)
in the U.S. District Court for the Southern District of California, asserting claims for copyright infringement, trademark infringement,
unfair competition and false advertising (Lanham Act). Since July 2021, the complaint had been amended and OSRX added counterclaims alleging
ImprimisRx, LLC was violating the Lanham Act with false advertising. The Court granted cross motions for summary judgement on each party’s
Lanham Act claims thus leaving only ImprimisRx, LLC’s copyright infringement, trademark infringement and unfair competition claims
for trial. Following a jury trial in November 2024, a jury found OSRX acted with malice, fraud, or oppression, willfully engaging in
trademark infringement and unfair competition under California and federal law and ImprimisRx, LLC received a $34,900,000 jury verdict
award, which includes $20,400,000 in punitive damages and $14,500,000 in actual damages. Due to uncertainty regarding probability of
collection, the Company has not recognized any gains associated with the verdict award in the accompanying condensed consolidated financial
statements.

Product
and Professional Liability

Product
and professional liability litigation represents an inherent risk