Company: HROW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001641172-25-022980
Chunk: 46

Company: HARROW, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 1
Chunk 46
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 45 days after the issuance of the
first patent in the United States arising from the acquired intellectual property (if any); (2) a payment payable within 30 days after
the Company files the first investigational new drug application (“IND”) with the U.S. Food and Drug Administration (“FDA”)
for the first product arising from the acquired intellectual property (if any); (3) for certain of the Inventors, a payment payable within
30 days after the Company files the first new drug application with the FDA for the first product arising from the acquired intellectual
property (if any); and (4) certain royalty payments based on the net receipts received by the Company in connection with the sale or
licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company’s
development costs associated with such product. If, following five years after the date of the applicable asset purchase agreement, the
Company either (a) for certain of the Inventors, has not filed an IND or, for the remaining Inventors, has not initiated a study where
data is derived, or (b) has failed to generate royalty payments to the Inventors for any product based on the acquired intellectual property,
the Inventors may terminate the applicable asset purchase agreement and request that the Company re-assign the acquired technology to
the Inventors. During the three and six months ended June 30, 2025, $287,000 and $564,000, respectively, were incurred under these agreements
as royalty expenses, and $316,000 and $496,000, respectively, during the same periods in 2024.

Contract
Manufacturing

The
Company is a party to manufacturing agreements with respect to third-party contract manufacturers for its FDA approved pharmaceutical
products. Some of these contract manufacturing agreements require minimum annual order amounts. The Company has committed to pay approximately
$8,527,000 related to contract manufacturing agreements for the year ending December 31, 2025.

    26

NOTE
14. SEGMENTS AND CONCENTRATIONS

The
Company operates in two reportable segments which are generally determined based on the decision-making structure of the Company and
the grouping of similar products and services: Branded and ImprimisRx.

    ●
    The
    Branded segment includes activities of the Company’s FDA-approved ophthalmology pharmaceutical products, including
    the out-licensing of rights to certain of our branded products.

    ●