Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 528

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 2
Chunk 528
---

we establish a valuation allowance or increase or decrease this allowance in a period, the impact will be included in income tax expense
in the consolidated statements of operations.

We account for income taxes under
the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740,
Income Taxes. As of December 31, 2024 and 2023, there was $2,858,000 and $2,822,000, respectively, of unrecognized tax benefits
included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. Our practice is to recognize interest
and/or penalties related to income tax matters in income tax expense. We had an accrual for interest or penalties of $69,000 and $40,000
in the consolidated balance sheets at December 31, 2024 and 2023, respectively, and have recognized interest and/or penalties in the
consolidated statements of operations for the years ended December 31, 2024 and 2023 of $69,000 and $40,000, respectively. We are subject
to taxation in the U.S., California, New Jersey, Tennessee, and various other states. Our tax years since 2000 may be subject to examination
by the federal and state tax authorities due to the carryforward of unutilized net operating losses.

Goodwill and Intangible Assets

Patents and trademarks are recorded
at cost and capitalized at a time when the future economic benefits of such patents and trademarks become more certain. At that time,
we capitalize third-party legal costs and filing fees associated with obtaining and prosecuting claims related to its patents and trademarks.
Once the patents have been issued, we amortize these costs over the shorter of the legal life of the patent or its estimated economic
life, generally 20 years, using the straight-line method. Acquired product rights, including NDAs, are amortized over their estimated
useful lives, generally 4-15 years, based on a straight-line method. Trademarks are an indefinite-lived intangible asset and are assessed
for impairment based on future projected cash flows as further described below.

We review our goodwill and indefinite-lived
intangible assets for impairment as of January 1 of each year and when an event or a change in circumstances indicates the fair value
of a reporting unit may be below its carrying amount. Events or changes in circumstances considered as impairment indicators include
but are not limited to the following:

    ●
    significant under