Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 498

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1B
Chunk 498
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     2,893,000 
  
    Section 174 capitalized expenses 
     2,276,000  
     1,261,000 
  
    ASC 842 lease liability 
     2,304,000  
     1,710,000 
  
    ASC 842 ROU asset 
     (2,121,000) 
     (1,582,000)
  
    Total deferred tax assets, net 
     17,610,000  
     15,631,000 
  
    Valuation allowance 
     (17,610,000) 
     (15,631,000)
  
    Net deferred tax assets 
    $-  
    $- 

Realization of deferred tax assets is dependent
upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully
offset by a valuation allowance. The valuation allowance increased by approximately $1,979,000
during 2024 and decreased by $1,391,000
during 2023.

As of December 31, 2024, the Company had federal
and state net operating loss carryforwards of approximately $27,669,000,
which will begin to expire in 2036 for federal purposes,
unless previously utilized, and will begin to expire for state purposes in 2028. In addition, the
Company has federal net operating loss carryforward of $2,875,000 generated after 2017 that can be carried over indefinitely and may
be used to offset up to 80% of federal taxable income.

As of December 31, 2024, the Company had federal
and state research and development credit carryforwards of approximately $577,000 and $99,000, respectively, which will begin to expire
in 2031, unless previously utilized. For state purposes, the state research and development credit carryforwards can be carried over
indefinitely.

Utilization of the net operating losses and
research and development carryforwards may be subject to a substantial annual limitation due to ownership change limitations that
might have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended
(the “Code”), as well as similar state and foreign provisions. These ownership changes may limit the amount of NOL and
R&D credit carryforward that can be utilized annually to offset future