What Harrow, Inc. told the SEC could break it.

Harrow sells its branded ophthalmic products through third-party distributors/wholesalers and a 3PL partner, and that channel is concentrated: two customers each exceeded 10% of Branded revenue in 2025 and 2024, and at December 31, 2025, three customers accounted for 90% of accounts receivable. Loss of, or a payment failure/destocking by, one of these large distributors would materially disrupt revenue and receivables collection. The customers are not named, so this is a concentration risk rather than a named edge. A high distributor-channel concentration.

“There were two customers who comprised more than 10 % of the Company's Branded revenues for the years ended December 31, 2025 and 2024 and one customer in 2023.”

Harrow's branded ophthalmic franchise is exposed to U.S. drug-pricing policy. IHEEZO (a Medicare Part B drug, ~30% of 2025 revenue) and its other products face the Inflation Reduction Act's Medicare Part B inflation-rebate scheme (manufacturers owe rebates if a Part B drug's average sales price rises faster than inflation), the required 70% manufacturer discount on brand-name Part D drugs in the coverage gap, and Part B 'discarded drug' refund obligations (refunds on amounts exceeding 10% of allowed charges). Failure to comply carries civil monetary penalties. These regimes compress net realized price on Medicare utilization of its products. A specific, indication-relevant drug-pricing policy exposure.

“established a Medicare Part B inflation rebate scheme, effective in 2023, under which, generally speaking, manufacturers will owe rebates if the average sales price of a Part B drug increases faster than the pace of inflation.”

Harrow does not manufacture any of its branded pharmaceutical products and relies entirely on third-party manufacturing partners to make finished goods, with products sourced from contract manufacturers in various countries (only its ImprimisRx compounded products are made in-house in New Jersey). A cGMP failure, capacity loss, regulatory action, or supply interruption at a key CMO — or at a single-source vendor for services/components — would disrupt supply of its growth products (IHEEZO, VEVYE and others). The manufacturers are not named, so this is a contract-manufacturing/sole-source dependence rather than a named edge. A material outsourced-manufacturing supply dependence.

“We do not manufacture any of our branded pharmaceutical products and rely on third party manufacturing partners to make finished goods.”