Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1269

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7A
Chunk 1269
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 scope of ASC 730, Research and Development.

NOTE 5. INVESTMENT IN MELT PHARMACEUTICALS, INC.
AND AGREEMENTS – RELATED PARTY TRANSACTIONS

In December 2018, the Company
entered into an asset purchase agreement with Melt (the “Melt APA”). Pursuant to the terms of the Melt APA, Melt was assigned
certain intellectual property and related rights from the Company to develop, formulate, make, sell, and sub-license certain Company
conscious sedation and analgesia related formulations (collectively, the “Melt Products”). Under the terms of the Melt APA,
Melt is required to make mid-single digit royalty payments to the Company on net sales of the Melt Products while any patent rights remain
outstanding, as well as other conditions.

    F-24

In February 2019, the Company
entered into the Melt MSA, whereby the Company provided to Melt certain administrative services and support, including bookkeeping, web
services and human resources related activities, and Melt was required to pay the Company a monthly amount of $10,000. The Melt MSA was
terminated effective July 1, 2023. During the years ended December 31, 2024, and 2023, the Company recorded $0 and $89,000, respectively, due
from Melt for reimbursable expenses and amounts payable pursuant to the Melt MSA, which are included in prepaid expenses and other current
assets in the accompanying consolidated balance sheets. As of each of December 31, 2024 and 2023, the Company was due $228,000 from
Melt for reimbursable expenses and amounts due under the Melt MSA. Melt did not make any payments to the Company during the year ended
December 31, 2024. The Company made a cash advance to Melt of $500,000 and Melt repaid the $500,000 cash advance during the year ended
December 31, 2023.

During the years ended December
31, 2024 and 2023, Melt raised over $3,300,000 and $20,586,000, respectively, in gross proceeds from third party investors related to
its Series B Preferred Stock offerings.

The Company’s Chief
Executive Officer, Mark L. Baum, is a member of the Melt board of directors. The Melt board