Company: HROW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001641172-25-022980
Chunk: 21

Company: HARROW, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 1
Chunk 21
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 within a specified period prior to and subsequent to the expiration
date. Generally, product may be returned for a period beginning six months prior to its expiration date to up to one year after its expiration
date. Product returns are settled through the issuance of a credit to the customer. The estimate for returns is based upon historical
experience with actual returns. While such experience has allowed for reasonable estimation in the past, history may not always be an
accurate indicator of future returns. The Company continually monitors estimates for returns and adjusts when it is expected that actual
product returns may differ from the established accruals. Accruals for returns are recorded as a reduction to gross revenues in the consolidated
statements of operations and as an increase to the accrued expenses in the consolidated balance sheets.

Administrative
Fees and Other Rebates

Administrative
fees or rebates are offered to wholesalers, group purchasing organizations, and indirect customers. Fees and rebates are accrued, by
product by wholesaler, at the time of sale based on contracted rates and NPP. To evaluate the adequacy of the administrative fee accruals,
on-hand inventory counts are obtained from the wholesalers. The Company continually monitors administrative fee activity and adjusts
accruals when it is expected that actual administrative fees may differ from the accruals. Accruals for administrative fees and other
rebates are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable or accrued
expenses in the consolidated balance sheets.

Co-payment
Assistance

Patients
who meet certain eligibility requirements may receive co-payment assistance funded by the Company. The Company records contra-revenue
for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party
administrators. An accrued liability is recorded on unredeemed co-payment assistance related to products for which control has been transferred
to the customer.

    13

Prompt
Payment Discounts

Sales
discounts may be granted to customers for prompt payment. The reserve for prompt payment discounts is based on invoices outstanding.
Based on past experience, it is assumed that all available discounts will be taken. Accruals for prompt payment discounts are recorded
as a reduction in both gross revenues in the condensed consolidated statements of operations and accounts receivable in the condensed
consolidated balance sheets.

The
following table summarizes activity and ending balances of the Company’s variable consideration provisions in the condensed consolidated
financial statements for the six months ended June 30,