Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1162

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 1162
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’s pharmacy services includes: (i) the portion
of the price the client pays directly to the Company, net of any volume-related or other discounts paid back to the client, (ii) the
price paid to the Company 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, the Company has identified the following:

    1.
    Identify the contract(s) with a customer: A contract is deemed
    to exist when the customer places an order through receipt of a prescription, via an online order or via receipt of a purchase order
    from a customer. For branded products, orders are received through the Company’s 3PL partner, and the customer takes title
    of the products via formal purchase orders placed and fulfilled.

    2.
    Identify the performance obligations in the contract: Obligations
    for fulfillment of the Company’s contracts consist of delivering the product to customers at their specified destination. For
    shipping and handling activities under ASC 606, if the customer takes control of the goods after shipment, shipping and handling
    activities would always be considered a fulfillment activity and not treated as a separate performance obligation. If the customer
    takes control of the goods before shipment, entities must make an accounting policy election to treat shipping and handling activities
    as either a fulfillment cost or as a separate performance obligation. The Company has elected to treat its shipping and handling
    activities as a fulfillment cost.

    F-19

    3.
    Determine the transaction price: The transaction price is based
    on an amount that reflects the consideration to which the Company expects to be entitled, net of accruals for estimated rebates,
    wholesaler chargebacks, discounts, copay assistance and other deductions (collectively, sales deductions) and an estimate for returns
    and replacements established at the time of sale. The Company utilizes the services of a third-party professional services firm to
    estimate rebates and chargebacks associated with sales of its branded products. The transfer of promised goods is satisfied within
    a year, and therefore there are no significant financing components. There is no non-cash consideration related to product sales.

    4.
    Allocate the transaction price to the performance obligations in
    the contract: Because there is only one performance obligation for product sales, no allocation is necessary.

    5.
    Recognize revenue when (or as) the entity