Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1148

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 1148
---

acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for
such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are
then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, would
be recognized as a gain or loss and recorded in the consolidated statement of operations.

If determined to be an asset acquisition, the Company
accounts for the transaction under ASC 805-50, Business Combinations – Related Issues, which requires the acquiring entity
in an asset acquisition to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity or a relative
fair value basis, which includes transaction costs in addition to consideration given. No gain or loss is recognized as of the date of
acquisition unless the fair value of non-cash assets given as consideration differs from the assets’ carrying amounts on the acquiring
entity’s financial statements. Consideration transferred that is non-cash will be measured based on either the cost (which shall
be measured based on the fair value of the consideration given) or the fair value of the assets acquired, and liabilities assumed, whichever
is more clearly evident and more reliably measurable. The obligation for contingent consideration payments is recorded when probable
and reasonably estimable. Contingent consideration recognized is included in the initial cost of the assets acquired and any subsequent
changes in the recorded amount of contingent consideration are recognized as an adjustment to the cost basis of the acquired assets and
allocated to the acquired assets based on the relative fair value at the date of acquisition. Goodwill is not recognized in an asset
acquisition and any excess consideration transferred over the fair value of the net assets acquired is allocated to the identifiable
assets based on relative fair values.

Noncontrolling Interests

The Company recognizes any noncontrolling interest
as a separate line item in equity in the consolidated financial statements. A noncontrolling interest represents the portion of equity
ownership in a less-than-wholly-owned subsidiary not attributable to the Company. Generally, any interest that holds less than 50%
of the outstanding voting shares is deemed to be a noncontrolling interest; however, there are other factors that are considered as well,
such as decision-making rights. When applicable, and in prior periods, the Company includes the amount of net loss attributable
to noncontrolling interests in consolidated net loss on the face of the consolidated statements of operations.

    F-11

The Company provides