Company: HROW
Filing Date: 2025-04-25
Form Type: DEF 14A
Source: 0001641172-25-006102
Chunk: 29

Company: HARROW, INC.
Filing Date: 2025-04-25
Form: DEF 14A
Chunk 29
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representing approximately 20% of Surface’s equity interests following the closing of a round of financing completed by Surface in July 2021) and uses the equity method of accounting for this investment, as management has determined that the Company has the ability to exercise significant influence over the operating and financial decisions of Surface. Under this method, the Company recognizes earnings and losses in Surface in its consolidated financial statements and adjusts the carrying amount of its investment in Surface accordingly. The Company’s share of earnings and losses are based on the Company’s ownership interest of Surface. Any intra-entity profits and losses are eliminated. During the year ended December 31, 2021, the Company reduced its common stock investment in Surface to $0 as a result of the Company recording its share of equity losses of Surface. The Company has no other investments in Surface and no other requirements to advance funds to Surface.

The following table summarizes the Company’s investment in Surface as of December 31, 2024 and 2023:

|              |     | Cost  
 Basis |           |     | Share of Equity 
 Method Losses   |            |   |     | Net            
 Carrying value |   |
|:-------------|:----|:------|----------:|:----|:----------------|:-----------|:--|:----|:---------------|:--|
| Common stock |     | $     | 5,320,000 |     | $               | (5,320,000 | ) |     | $              | - |

Mark L. Baum was a director of Surface until 2023 and Adrienne Graves was a director of Surface until 2024. Perry J. Sternberg, director of the Company, is currently a director of Surface.

Investment in Melt Pharmaceuticals, Inc.

The Company owns 3,500,000 shares of common stock and 2,334,256 shares of preferred stock of Melt (representing in aggregate approximately 45% of the equity interests as of December 31, 2024). The Company analyzes its investment in Melt and related agreements on a regular basis to evaluate its position of variable interests in Melt. The Company has determined that it does not have the ability to control Melt. However, it has the ability to exercise significant influence over the operating and financial decisions of Melt and uses the equity method of accounting for this investment. Under this method, the Company recognizes earnings and losses in Melt in its consolidated financial statements and adjusts the carrying amount of its investment in Melt