Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1497

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 9
Chunk 1497
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The Company has acquired and sourced intellectual
property rights related to certain proprietary innovations from certain inventors, innovator companies and related parties (the “Inventors”)
through multiple asset purchase agreements and license agreements. In general, these agreements provide that the Inventors will cooperate
with the Company in obtaining patent protection for the acquired intellectual property and that the Company will use commercially reasonable
efforts to research, develop and commercialize a product based on the acquired intellectual property. In addition, the Company has acquired
a right of first refusal on additional intellectual property and drug development opportunities presented by these Inventors.

 In consideration for the acquisition of
these intellectual property rights, the Company is obligated to make payments to the Inventors based on the completion of a
milestone, generally consisting of: (1) a payment payable within 30 to 45 days after the issuance of the first patent in the U.S.
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 years ended December 31, 2024 and 2023, $1,234,000 and
$1,130,000,
respectively, were incurred under these agreements as royalty expenses.

 Contract Manufacturing

The Company has entered into manufacturing agreements
with respect to