HARROW, INC. Leases Disclosure
NOTE 14. LEASES
The Company leases office and laboratory space under the non-cancelable operating leases listed below. These lease agreements have remaining terms between one to five years and contain various clauses for renewal at the Company’s option.
| ● | An operating lease for 5,800 square feet of office space in Carlsbad, California, which commenced in January 2022 and expired in March 2025. |
| ● | An operating lease for 38,200 square feet of lab, warehouse and office space in Ledgewood, New Jersey that expires in July 2027, with an option to extend the term for two additional five-year periods. This lease was amended, effective July 2020, to extend the term of the original lease and add 1,400 of additional square footage to the lease, amended again in May 2021 to extend the term of the lease to July 2027 and add 8,900 square feet of space, and amended in May 2023 to add another 2,861 square feet of space to the existing lease, which the Company took possession of in January 2024. |
| ● | An operating lease for 17,700 square feet of office space in Nashville, Tennessee that expires in June 2032, and includes options to extend the lease term to June 2042. |
| ● | An operating lease for 11,600 square feet of lab and office space in Nashville, Tennessee which commenced in September 2022 and expires in September 2027. |
At December 31, 2025 and 2024, the weighted-average discount rate and the weighted-average remaining lease term for the operating leases held by the Company were 8.0% and 8.0%, respectively, and 9.3 years and 10.2 years, respectively.
During the years ended December 31, 2025, 2024 and 2023, cash paid for amounts included for the operating lease liabilities were $1,169,000, $1,301,000 and $1,231,000, respectively. The Company recorded operating lease expense of $1,462,000, $1,515,000 and $1,232,000 during the years ended December 31, 2025, 2024 and 2023, respectively, and is included in selling, general and administrative expenses.
Future lease payments under operating leases as of December 31, 2025 were as follows:
| Year Ending December 31, | ||||
| 2026 | $ | 1,551,000 | ||
| 2027 | 1,425,000 | |||
| 2028 | 1,288,000 | |||
| 2029 | 1,304,000 | |||
| 2030 | 1,320,000 | |||
| Thereafter | 5,343,000 | |||
| Total minimum lease payments | 12,231,000 | |||
| Less: amount representing interest payments | (3,439,000 | ) | ||
| Total operating lease liabilities | 8,792,000 | |||
| Less: current portion, operating lease liabilities | (887,000 | ) | ||
| Operating lease liabilities, net of current portion | $ | 7,905,000 | ||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2023 | Mar 19, 2024 | |
| 2022 | Mar 23, 2023 | |
| 2021 | Mar 10, 2022 | |
| 2020 | Mar 8, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 12, 2019 | |
| 2017 | Mar 8, 2018 | |
| 2016 | Mar 21, 2017 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.