Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1674

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 9B
Chunk 1674
---
 price on December 31, 2024 and 2023,
based on the closing price of the Company’s common stock of $33.55 and $11.20, respectively, on that date.

The intrinsic value of the options exercised in 2024
and 2023 was $7,011,000
and $4,580,000,
respectively. During 2024 and 2023, the Company recognized no tax benefit from stock options exercised during these periods.

During the year ended December 31, 2024, the Company
granted stock options to certain employees. The stock options were granted with an exercise price equal to the current market price of
the Company’s common stock, as reported by the securities exchange on which the common stock was then listed, at the grant date
and have contractual terms of 10 years. Vesting terms for options granted to employees during the year ended December
31, 2024 generally included one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable
on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly
in equal installments thereafter over three years; and 100% of the shares subject to the option vest on a quarterly basis in equal installments
over three years. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plans) and
in the event of certain modifications to the option award agreement.

    F-36

The fair value of each option award is estimated
on the date of grant using the Black-Scholes-Merton option pricing model. The Company calculates expected volatility based solely on
the historical volatilities of the common stock of the Company. The expected term of options granted was determined in accordance with
the “simplified approach,” as the Company has limited, relevant, historical data on employee exercises and post-vesting employment
termination behavior. The expected risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected
term of the option in effect at the time of the grant. The financial statement effect of forfeitures is estimated at the time of grant
and revised, if necessary, if the actual effect differs from those estimates. For option grants to employees and directors, the Company
assigns a forfeiture factor of 10%. These factors could change in the future, which would affect