Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 565

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 2
Chunk 565
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 if recognized, affect the
effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income
tax expense. The Company 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. The Company is subject to taxation in the U.S.,
New Jersey, Tennessee, and various other states. The Company’s 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.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid
investments with maturities of three months or less at the time of acquisition.

Concentrations of Credit Risk

The Company places its cash with financial institutions
deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit
coverage with limits up to $250,000 per owner. The Company believes the majority of its cash deposits are covered under FDIC limits,
however there are various accounts in which the Company has deposits in excess of FDIC limits.

Investment in Eton Pharmaceuticals, Inc.

The Company’s investment in Eton Pharmaceuticals,
Inc. (“Eton”) consisted of common stock with a readily determinable fair value which was carried at fair value with changes
in fair value recognized in earnings. In accordance with ASC 321, Investments — Equity Securities, the Company recorded
an unrealized holding gain from its Eton common stock position of $3,092,000 during the year ended December 31, 2023 related to the change
in fair market value of its investment in Eton during the measurement period.

At December 31, 2023, the Company owned 1,982,000 shares
of Eton common stock, which represented less than 10% of the equity interests of Eton. In April 2024, the Company sold all
of its shares for $5,510,000 and recognized a loss of $3,171,000. As of December 31, 2024 and 2023, the fair market value of the Company’s
investment in Eton