Company: HROW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001641172-25-022980
Chunk: 29

Company: HARROW, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 1
Chunk 29
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 with Oaktree (“Second Amendment”).
Upon satisfaction of certain conditions to funding, the Company drew down the principal amount of the Tranche B commitment of $30,000,000
(the “$30,000,000 Draw”) to partially fund a one-time milestone payment to Novartis. Under its asset purchase agreement with
Novartis, the Company made a one-time milestone payment to Novartis equal to $37,000,000 upon the commercial availability of TRIESENCE,
which the Company paid in October 2024. In connection with the Second Amendment and following the $30,000,000 Draw, the Company has drawn
down a total principal loan amount of $107,500,000 under the Oaktree Loan and no additional principal loan amount remains available to
the Company under the Oaktree Loan.

    17

The
Oaktree Loan is secured by nearly all of the assets, including intellectual property, of the Company and its material subsidiaries. The
Oaktree Loan has a maturity date of January 19, 2026 and carries an interest rate equal to the Secured Overnight Financing Rate plus
6.5% per annum (totaling 10.84 % at June 30, 2025). The Oaktree Loan also carries an exit fee equal to 3.5% of the aggregate principal
amount owed, payable at maturity. The total exit fee of $3,763,000 has been recorded as a debt discount. The original issue discount,
fees and expenses (including the exit fee) are being amortized over the term of the Oaktree Loan using the effective interest rate method.
The Oaktree Loan requires quarterly interest-only payments with all of the unpaid principal, interest and fees due on the maturity date,
January 19, 2026.

The
Oaktree Loan contains customary guarantees and covenants, including financial covenants related to minimum liquidity and minimum net
revenues. As of June 30, 2025, the Company was in compliance with the financial covenants.

Interest
expense related to the Oaktree Loan totaled $3,827,000 and $7,686,000 for the three and six months ended June 30, 2025, respectively,
and included the amortization of debt issuance costs and discount of $916,000 and $1,822,000, respectively. Interest expense related
to the Oaktree Loan totaled $2,944,000 and $5,897,000 for the three and