Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 2005

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 12
Chunk 2005
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 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
consolidated balance sheets.

    F-14

See Note 5 for more information and related party
disclosure regarding Melt.

Investment in Surface Ophthalmics, Inc. –
Related Party

The Company owns 3,500,000 common shares of Surface
(representing approximately 20% of Surface’s equity interests following the closing of a round of financing completed by Surface
in July 2021) and uses the equity method of accounting for this investment, as management has determined that the Company has the ability
to exercise significant influence over the operating and financial decisions of Surface. Under this method, the Company recognizes earnings
and losses