Company: HROW
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001493152-25-021562
Chunk: 17

Company: HARROW, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 1
Chunk 17
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U 2023-09 on its
consolidated financial statements.

In
November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation
Disclosures, to improve the disclosures by a public business entity about the types of expenses in commonly presented expense captions.
This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December
15, 2027, with early adoption permitted. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial
statements.

NOTE
3. REVENUES

The
Company accounts for contracts with customers in accordance with ASC 606, Revenues from Contracts with Customers. The Company
has two 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, and (2)
revenue recognized from intellectual property licenses and related arrangements.

Product
Revenues

The
Company sells prescription medications directly through its pharmacy, outsourcing facility and 3PL partner. Revenue from the Company’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.