Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 642

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 3
Chunk 642
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s for government rebates are recorded as a reduction to gross revenues in the consolidated statements
of operations and as an increase to accrued government rebates in the consolidated balance sheets.

Returns

A returns policy is in place
that allows customers to return product within a specified period prior to and after 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. We continually monitor estimates for returns and adjust 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 return goods reserve 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 NPPs. To evaluate the adequacy of the administrative fee accruals, on-hand inventory
counts are obtained from the wholesalers. We continually monitor administrative fee activity and adjust 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.

 64 

Co-payment
Assistance

Patients
who meet certain eligibility requirements may receive co-payment assistance funded by us. We record 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. 

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 consolidated statements of operations and accounts