Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 522

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 2
Chunk 522
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needs when needed, then we may need to forego pursuit of potentially valuable development or acquisition opportunities, we may not be
able to continue to operate our business pursuant to our business plan, which would require us to modify our operations to reduce spending
to a sustainable level by, among other things, delaying, scaling back or eliminating some or all of our ongoing or planned investments
in corporate infrastructure, business development, sales and marketing and other activities, or we may be forced to discontinue our operations
entirely.

Critical Accounting Policies and Estimates

We rely on the use of estimates
and make assumptions that impact our financial condition and results. These estimates and assumptions are based on historical results
and trends as well as our forecasts of how results and trends might change in the future. Although we believe that the estimates we use
are reasonable, actual results could differ materially from these estimates.

We believe that the accounting
policies described below are critical to understanding our business, results of operations and financial condition because they involve
the use of more significant judgments and estimates in the preparation of our consolidated financial statements. An accounting policy
is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and any changes in the assumptions used in making the accounting estimates that are reasonably likely
to occur could materially impact our consolidated financial statements.

Revenue Recognition and Deferred Revenue

We account
for contracts with customers in accordance with ASC 606, Revenues from Contracts with Customers. We have three primary streams
of revenue: (1) product revenues, including revenue recognized from sales of products through its pharmacy and outsourcing facility and
sales of branded products to wholesalers through a third-party logistics (“3PL”) partner, (2) revenue recognized from transfer
of acquired product sales and profits, and (3) revenue recognized from intellectual property licenses. 

Product Revenues 

We sell
prescription medications directly through our pharmacy, outsourcing facility and 3PL partner. Revenue from our pharmacy services includes:
(i) the portion of the price the client pays directly to us, net of any volume-related or other discounts paid back to the client, (ii)
the price paid to us by individuals, and (iii) customer copayments made directly to the pharmacy network. Sales taxes are not included
in revenue. Following the core principles of ASC 606, we have identified the following:

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    1.
    Identify the contract(s) with