Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 1036

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 6
Chunk 1036
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 common stock
investment in Melt to $0, the Company began recording 100% of the equity method losses of Melt, based on its ownership of Melt’s
total indebtedness. In addition, the Company treated interest paid in kind on the Melt Loan Agreement as an in-substance capital contribution
and reduced its investment in Melt accordingly, rather than recording interest income.

On a quarterly basis, management assesses whether
there are any indicators that the carrying value of the Company’s equity method investments may be other than temporarily impaired.
Indicators include financial condition, operating performance, and near-term prospects of the investee. To the extent indicators suggest
that a loss in value may have occurred, the Company will evaluate both quantitative and qualitative factors to determine if the loss
in value is other than temporary. If a potential loss in value is determined to be other than temporary, the Company will recognize an
impairment loss based on the estimated fair value of the equity method investments. During the year ended December 31, 2023, the Melt
Loan Agreement (as defined in Note 5) was settled in exchange for Melt preferred stock (see Note 5 for loan settlement disclosure). The
Company reduced the Melt Loan Agreement and subsequent preferred stock investment in Melt to $0 as a result of the Company recording
its share of equity losses of Melt. The Company has no other investments in Melt and no other requirements to advance funds to Melt.

The following table summarizes the Company’s
investments in Melt as of December 31, 2024 and 2023:

 SCHEDULE OF INVESTMENT

    Cost Basis  
    Share of Equity Method Losses  
    Net Carrying value 
  
    Common stock 
    $5,810,000  
    $(5,810,000) 
    $- 
  
    Preferred stock 
     18,397,000  
     (18,397,000) 
     - 

    $24,207,000  
    $(24,207,000) 
    $- 

At December 31, 2024 and 2023, the Company recorded
$0 and $89,000, respectively, due from Melt for reimbursable expenses and amounts due under a Management Services Agreement between
the Company and Melt (the “Melt MSA”), which are included in prepaid expenses and other current assets in the accompanying