Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1206

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 1206
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Product and professional liability litigation represents
an inherent risk to all firms in the pharmaceutical and pharmacy industry. The Company utilizes traditional third-party insurance policies
with regard to our product and professional liability claims. Such insurance coverage at any given time reflects current market conditions,
including cost and availability, when the policy is written.

Indemnities

In addition to the indemnification provisions contained
in the Company’s charter documents, the Company generally enters into separate indemnification agreements with each of the Company’s
directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified
expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with
any action, suit or proceeding arising out of the individual’s status or service as the Company’s director or officer, other
than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses
incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled
to indemnification by the Company. Several of the Company’s asset purchase and license agreements contain customary representations,
warranties, covenants and confidentiality provisions, and also contain mutual indemnification obligations related primarily to performance
under the respective agreements. The Company also indemnifies its lessors in connection with its facility leases for certain claims arising
from the use of the facilities. These indemnities do not provide for any limitation of the maximum potential future payments the Company
could be obligated to make. Historically, the Company has not incurred any payments for these obligations and, therefore, no liabilities
have been recorded for these indemnities in the accompanying consolidated balance sheets.

Asset Purchase, License and Related Agreements

FDA Approved Product Acquisitions

In recent years, the Company has acquired commercial
and product rights to various FDA approved ophthalmic medications and products through asset purchase, licenses, supply and/or other
related agreements. In general, in exchange for product and commercial rights these agreements provide the counterparties with certain
upfront and contingent milestone payments typically related to certain annual sales amounts and manufacturing events, and in certain
cases, per unit transfer prices and royalties on sales of some of the products. During the years ended December 31, 2024 and 2023, $4,126,000 and
$647,000, respectively, were incurred under these agreements as royalty expenses. During the year ended December 31, 2024,