Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1361

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 8
Chunk 1361
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    9,612,000

     2,377,000

    59,631,000 

(1)Chargebacks and other allowances are included as an offset to accounts
                                                                                           receivable in the consolidated balance sheets. Administrative Fees and Other Rebates, Prompt Payment Discounts and Returns are
                                                                                           included as a reduction to accounts receivable, net of chargebacks and other allowances or accrued expenses and other in the
                                                                                           consolidated balance sheets. Government Rebates are included in accrued government rebates and copay assistance in the consolidated
                                                                                           balance sheets.

Revenues From Transfer of Acquired Product Sales and Profits

The Company has entered into agreements whereby it
purchased the exclusive commercial rights to assets associated with certain ophthalmic products from other pharmaceutical companies (the
“Sellers”). During a temporary, transition period, the Sellers continue to manufacture and market these products and transfer
the net profit from the sale of the products to the Company. The revenue recognized by the Company from the transfer of net profit was
recognized at the time profit from the product sales were calculated by the Sellers and confirmed by the Company, typically on a monthly
basis, at which point there is no future performance obligation required by the Company and no consequential continuing involvement on
the Company’s part to recognize the associated revenue. On a quarterly basis, the Sellers invoice the Company for all credits and
reimbursements (“Chargebacks”) made to customers related to the products. The Company uses historical actual experience to
estimate Chargebacks associated with the net sales and profit transferred. The estimated Chargebacks are recorded as a reduction in revenues
from transfer of acquired product sales and profits in the Company’s consolidated statements of operations, and recorded as a reduction
to accounts receivable in the consolidated balance sheets, at the time the revenue is recognized.

Intellectual Property License Revenues

The Company currently holds five intellectual property
licenses and related agreements pursuant to which the Company has agreed to license or sell to a customer with the right to access the
Company’s intellectual property. License arrangements may consist of non-refundable upfront license fees, data transfer fees, research
reimbursement payments, exclusive license rights to patented or patent pending compounds, technology access fees, and various performance
or sales milestones. These arrangements can be multiple-element arrangements, the revenue of which is recognized at the point in time
that the performance obligation is met.

Non-refundable fees that are not contingent on any
future performance by the