Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1355

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 8
Chunk 1355
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3-09 on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income
Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures, to improve the disclosures by a public
business entity about the types of expenses in commonly presented expense captions. This ASU is effective for annual reporting periods
beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The
Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified
for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. A reclassification
has been made to the consolidated balance sheet at December 31, 2023, to reclassify the Oaktree Loan exit fee to
be included in the net debt amount (see Note 13).

NOTE 3. REVENUES

The Company accounts for contracts with customers
in accordance with ASC 606, Revenues from Contracts with Customers. The Company has three primary streams of revenue: (1) product
revenues, including revenue recognized from sales of products through its pharmacy and outsourcing facility and sales of branded products
to wholesalers through a third-party logistics (“3PL”) partner, (2) revenue recognized from transfer of acquired product
sales and profits, and (3) revenue recognized from intellectual property licenses.

Product Revenues

The Company sells prescription medications directly
through its pharmacy, outsourcing facility and 3PL partner. Revenue from the Company’s pharmacy services includes: (i) the portion
of the price the client pays directly to the Company, net of any volume-related or other discounts paid back to the client, (ii) the
price paid to the Company by individuals, and (iii) customer copayments made directly to the pharmacy network. Sales taxes are not included
in revenue. Following the core principles of ASC 606, the Company has identified the following:

    1.
    Identify the contract(s) with a customer: A contract is deemed
    to exist when the customer places an order through receipt of a prescription, via an online order or via receipt of a purchase order
    from a customer. For branded products, orders are received through the Company’s 3PL partner, and the customer takes title
    of the products via formal purchase orders placed