Company: HROW
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001493152-25-021562
Chunk: 20

Company: HARROW, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 1
Chunk 20
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 based on historical experience with Medicare rebates for products. Medicare rebates are
billed quarterly for drugs dispensed to Medicare beneficiaries in the prior quarter, which is typically 120 days after the product is
shipped. As a result of the delay between selling the products, dispensing the products and rebate billing, Medicare rebate reserve includes
both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed,
as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicare Part
D participants.

To
evaluate the adequacy of the government rebate reserves, reserves are reviewed on a quarterly basis against actual claims data to ensure
the liability is fairly stated. The Company continually monitors the government rebate reserve and adjusts estimates if it is expected
that actual government rebates may differ from established accruals. Accruals for government rebates are recorded as a reduction to gross
revenues in the consolidated statements of operations and as an increase to accrued rebates in the consolidated balance sheets.

Returns

A
returns policy is in place that allows customers to return product within a specified period prior to and subsequent to the expiration
date. Generally, product may be returned for a period beginning six months prior to its expiration date to up to one year after its expiration
date. Product returns are settled through the issuance of a credit to the customer. The estimate for returns is based upon historical
experience with actual returns. While such experience has allowed for reasonable estimation in the past, history may not always be an
accurate indicator of future returns. The Company continually monitors estimates for returns and adjusts when it is expected that actual
product returns may differ from the established accruals. Accruals for returns are recorded as a reduction to gross revenues in the consolidated
statements of operations and as an increase to the accrued expenses in the consolidated balance sheets.

Administrative
Fees and Other Rebates

Administrative
fees or rebates are offered to wholesalers, group purchasing organizations, and indirect customers. Fees and rebates are accrued, by
product by wholesaler, at the time of sale based on contracted rates and NPP. To evaluate the adequacy of the administrative fee accruals,
on-hand inventory counts are obtained from the wholesalers. The Company continually monitors administrative fee activity and adjusts
accruals when it is expected that actual administrative fees may differ from the accruals. Accruals for administrative fees