Company: HROW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001641172-25-022980
Chunk: 16

Company: HARROW, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 1
Chunk 16
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 PER COMMON SHARE

    Three
                                                                  Months Ended 

    June 30, 2025 

    Numerator - net income 
    $4,995,000 
  
    Weighted average number of shares outstanding, basic 
     36,790,306 
  
    Dilutive common equivalents 
     2,063,549 
  
    Weighted average number of shares outstanding, diluted 
     38,853,855 
  
    Net income per share, diluted 
    $0.13 

Income
Taxes

The
Company’s effective tax rate was 0% and (3.38)% for the six months ended June 30, 2025 and 2024, respectively. The Company’s
effective tax rate for the six months ended June 30, 2025 and 2024 differs from the U.S. federal statutory tax rate of 21% due to state
taxes, permanent book-tax differences related to Internal Revenue Code of 1986, as amended (“IRC”), Section 162(m) excess
officer compensation limitation and share-based compensation and the change in valuation allowance.

As
of June 30, 2025 and December 31, 2024, there were $2,860,000 and $2,858,000, respectively, of unrecognized tax benefits included in
the condensed consolidated balance sheets that would, if recognized, affect the effective tax rate.

On
July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“OBBBA”), which, among other provisions,
permanently restores 100% bonus depreciation and modifies the limitation on business-interest expense under §163(j) to be based
on taxable income before interest, amortization, and depreciation. Based on preliminary analysis, management expects OBBBA to reduce
U.S. cash income-tax payments. There is not expected to be any material impact on the effective tax rate. The Company is continuing
to evaluate the Act’s impacts, including potential effects on deferred-tax balances, and will refine these estimates as
additional guidance becomes available.

    10

Accounting
Guidance Issued but Not Adopted at June 30, 2025

In
October 2023, FASB issued ASU 2023-06, Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure
Update and Simplification Initiative. This ASU modifies the disclosure or presentation requirements of a variety of topics in the