Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 443

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1B
Chunk 443
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 the Oaktree Loan (see Note 13) becomes due which totals $107,500,000 principal amount outstanding at December 31, 2024.
The maturity of this debt obligation without a refinancing event could raise substantial doubt about the Company’s ability to continue
as a going concern.

The Company is currently in discussions with its
current senior lender, Oaktree Fund Administration, LLC, as administrative agent for the lenders (together, “Oaktree”),
and other potential lenders about refinancing the Oaktree Loan. Management expects to move into more definitive discussions and
negotiations with Oaktree and potential lenders in the summer and fall of 2025. Management believes it is probable that the Company
will be able to refinance the Oaktree Loan based on the Company’s collateral strength and expected cash flows from operations;
however, there can be no assurance that the Company will obtain the refinancing on terms acceptable to it, or at all. If the Company
is unable to successfully refinance the Oaktree Loan, the Company does not expect to have the ability to repay the Oaktree Loan in
full.

The Company believes that one of the other alternatives
available to it in lieu of refinancing the Oaktree Loan is the sale of one or more of the Company’s assets. There can be no assurance
that any sale could be completed on a timely basis or on terms acceptable to the Company.

The accompanying consolidated financial statements
are prepared on a going concern basis and do not include any adjustments that might result from the outcome of the uncertainty regarding
the Company’s ability to refinance the Oaktree Loan or sell some of its assets to meet its obligations.

Credit Losses

The Company estimates and records a provision for
its expected credit losses related to its financial instruments, including its trade receivables. Management considers historical collection
rates, the current financial status of the Company’s customers, macroeconomic factors, and other industry-specific factors when
evaluating current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit
losses. However, because of the short time to the expected receipt of accounts receivable, management believes that the carrying value,
net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments,
including its trade receivables.

To determine the provision for credit losses for
accounts receivable, the Company has disaggregated its accounts receivable by class of customer at the business component level, as management
determined