Company: HROW
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001641172-25-009263
Chunk: 17

Company: HARROW, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 17
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 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 and other rebates are recorded as a reduction in both
gross revenues in the consolidated statements of operations and accounts receivable or accrued expenses in the consolidated balance sheets.

Co-payment Assistance

Patients who meet certain eligibility requirements
may receive co-payment assistance funded by the Company. The Company records contra-revenue for co-payment assistance based on actual
program participation and estimates of program redemption using data provided by third-party administrators. An accrued liability is recorded
on unredeemed co-payment assistance related to products for which control has been transferred to the customer.

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Prompt Payment Discounts

Sales discounts may be
granted to customers for prompt payment. The reserve for prompt payment discounts is based on invoices outstanding. Based on past experience,
it is assumed that all available discounts will be taken. Accruals for prompt payment discounts are recorded as a reduction in both gross
revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets.

The following table summarizes activity and ending
balances of the Company’s variable consideration provisions in the consolidated financial statements for the three months ended
March 31, 2025, and 2024:

SCHEDULE
OF ACCRUALS AND ALLOWANCES

    Accruals for Chargebacks, Returns, and Other Allowances 

    Chargebacks  
    Government Rebates  
    Returns  
    Administrative Fees and Other Rebates  
    Co-Pay Assistance