Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 682

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 3
Chunk 682
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Investment in Eton Pharmaceuticals, Inc.

The Company’s investment in Eton Pharmaceuticals,
Inc. (“Eton”) consisted of common stock with a readily determinable fair value which was carried at fair value with changes
in fair value recognized in earnings. In accordance with ASC 321, Investments — Equity Securities, the Company recorded
an unrealized holding gain from its Eton common stock position of $3,092,000 during the year ended December 31, 2023 related to the change
in fair market value of its investment in Eton during the measurement period.

At December 31, 2023, the Company owned 1,982,000 shares
of Eton common stock, which represented less than 10% of the equity interests of Eton. In April 2024, the Company sold all
of its shares for $5,510,000 and recognized a loss of $3,171,000. As of December 31, 2024 and 2023, the fair market value of the Company’s
investment in Eton was $0 and $8,681,000, respectively.

Accounts Receivable

Accounts receivable is stated net of allowances for
credit losses and contractual adjustments. The accounts receivable balance primarily includes amounts due from customers the Company
has invoiced or from third-party providers (e.g., insurance companies and governmental agencies), but for which payment has not been
received. The Company’s gross product revenues are subject to a variety of contractual deductions, which generally are estimated
and recorded in the same period that the revenues are recognized. These deductions represent estimates of the related obligations and,
as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period.
Accounts receivable at December 31, 2024 are presented net of allowances for credit losses of $416,000 and $19,731,000 for contractual
adjustments (in aggregate $20,147,000) and at December 31, 2023, net of allowances for credit losses of $371,000 and $14,875,000 for
contractual adjustments (in aggregate $15,246,000).

    F-13

Inventories

Inventories are stated at the lower of cost or net
realizable value. Cost is determined on a first-in, first-out basis. The Company evaluates the carrying value of inventories on a regular
basis, based on the price expected to be obtained