Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 736

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 3
Chunk 736
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 legal process, which in complex
proceedings of the sort the Company face often extend for several years. While it is not possible to accurately predict or determine
the eventual outcomes of matters that have not concluded, an adverse determination in one or more of these matters (whether
discussed in this footnote or not) currently pending may have a material adverse effect on the Company’s consolidated results
of operations, financial position or cash flows. Legal costs incurred for loss contingencies are expensed as incurred.

Certain recent developments concerning the Company’s
legal proceedings it believes are or were material to its business and other matters are discussed below:

Ocular Science, Inc. et. al

In July 2021, ImprimisRx,
LLC, a subsidiary of the Company, filed a lawsuit against Ocular Science, Inc. and OSRX, Inc. (together, “OSRX”) in the U.S.
District Court for the Southern District of California, asserting claims for copyright infringement, trademark infringement, unfair competition
and false advertising (Lanham Act). Since July 2021, the complaint had been amended and OSRX added counterclaims alleging ImprimisRx,
LLC was violating the Lanham Act with false advertising. The Court granted cross motions for summary judgement on each party’s
Lanham Act claims thus leaving only ImprimisRx, LLC’s copyright infringement, trademark infringement and unfair competition claims
for trial. Following a jury trial in November 2024, a jury found OSRX acted with malice, fraud, or oppression, willfully engaging in
trademark infringement and unfair competition under California and federal law and ImprimisRx, LLC received a $34,900,000 jury verdict
award, which includes $20,400,000 in punitive damages and $14,500,000 in actual damages. Due to uncertainty regarding probability of
collection, the Company did not record any gains associated with the verdict award during the year ended December 31, 2024.

    F-42

Product and Professional Liability

Product and professional liability litigation represents
an inherent risk to all firms in the pharmaceutical and pharmacy industry. The Company utilizes traditional third-party insurance policies
with regard to our product and professional liability claims. Such insurance coverage at any given time reflects current market conditions,
including cost and availability, when the policy is written.

Indemnities

In addition to the indemnification provisions contained
in the Company’s charter documents, the Company generally enters into separate indemnification agreements with each