Company: HROW
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001493152-25-021562
Chunk: 12

Company: HARROW, INC.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 1
Chunk 12
---
’s expectation of the future
status of such economic and industry-specific factors. Also, specific allowance amounts are established based on review of outstanding
invoices to record the appropriate provision for customers that have a higher probability of default.

The
following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts
receivable to present the net amount expected to be collected at September 30, 2025:

  SCHEDULE
OF ACCOUNTS RECEIVABLE ALLOWANCE OF CREDIT LOSS  

    Balance at January 1, 2025 
    $416,000 
  
    Change in expected credit losses 
     548,000 
  
    Write-offs, net of recoveries 
     (110,000)
  
    Balance at September 30, 2025 
    $854,000 

Fair
Value Measurements

Fair
value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP
establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes
the use of inputs used in valuation methodologies into the following three levels:

    ●
    Level
    1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active
    markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value
    whenever available.
  
    ●
    Level
    2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted
    prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can
    be corroborated by observable market data for substantially the full term of the assets or liabilities.
  
    ●
    Level
    3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own
    assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs
    would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.

    8

The
2030 Notes (as defined in Note 10) are carried at face value