Harrow Health(US:HROW)2025-11-10 22:16Financing Activities - The company entered into a senior secured revolving credit facility with Fifth Third Bank for an initial principal amount of $40,000,000, with an additional uncommitted line of credit of up to $20,000,000[141]. - The company closed a private offering of $250,000,000 in senior notes due 2030, resulting in net proceeds of approximately $242,794,000 after expenses[149]. - The company plans to use proceeds from the senior notes offering to prepay $107,500,000 in senior debt and other outstanding loans[150]. - The company completed the sale of the 2030 Notes in September 2025, receiving net proceeds of $242,794,000, which were used to prepay outstanding borrowings[178]. - The 2030 Notes issued in September 2025 have a fixed coupon rate of 8.625%, which mitigates interest rate risk for the company[183]. - The company currently has no borrowings against its 5/3 Revolver, which is based on SOFR plus an interest rate spread, thus avoiding immediate interest rate exposure[183]. - The company believes that its interest rate risk related to cash and cash equivalents is not material, with no significant downside risk from falling interest rates[184]. - The company faces potential challenges in obtaining financing due to its limited history of profitability and general economic conditions[180]. - Any downgrade in the company's corporate or senior unsecured debt rating may increase borrowing costs and negatively impact the ability to raise additional debt capital[181]. - The company may need to modify operations to reduce spending if unable to raise necessary funds, potentially delaying or eliminating ongoing investments[180]. Revenue and Profitability - Total revenues for the three months ended September 30, 2025, increased to $71,638,000, up $22,381,000 (45.4%) from $49,257,000 in 2024[158]. - Branded revenue, net for the nine months ended September 30, 2025, was $121,636,000, reflecting an increase of $51,856,000 (74.4%) compared to $69,780,000 in 2024[158]. - Gross profit for the three months ended September 30, 2025, was $42,091,000, an increase of $18,708,000 (80.0%) from $23,383,000 in 2024[160]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $35,453,000, compared to $(4,423,000) in 2024, indicating a significant improvement[174]. - Cash on hand at September 30, 2025, was $74,290,000, an increase from $47,247,000 at December 31, 2024[170]. Acquisitions and Partnerships - The company agreed to acquire the remaining equity interests in Melt Pharmaceuticals for an initial cash payment of approximately $4,300,000, with contingent payments based on FDA approval and sales milestones[145]. - The company entered a commercialization agreement with Samsung Bioepis for the development of BYOOVIZ and OPUVIZ, with additional payments based on sales milestones[151]. - The company acquired exclusive U.S. commercial rights to BYQLOVI, expected to be available in Q4 2025, marking the first new ophthalmic steroid in over 15 years[153]. Research and Development - Research and development expenses for the nine months ended September 30, 2025, rose to $9,217,000, an increase of $1,742,000 (23.3%) from $7,475,000 in 2024[166]. - The company initiated Project Beagle to transition approximately 25,000 patients from compounded formulations to FDA-approved products, discontinuing certain compounded formulations[155]. Corporate Ratings and Financial Covenants - Harrow, Inc. received a Long-Term Corporate Family Rating of B3 from Moody's and a Long-Term Issuer Default Rating of B- from Fitch, both with a Stable outlook as of September and October 2025 respectively[181]. - The company is subject to a financial covenant requiring a fixed charge coverage ratio of at least 1.10 to 1.0 under the new credit facility[143]. - The company anticipates achieving various sales milestones that could total up to approximately $261,000,000 based on annual net sales ranging from $100,000,000 to $1,000,000,000 for the MELT-300 product candidate[152]. Expenses - Selling, general and administrative expenses for the three months ended September 30, 2025, were $35,856,000, up $2,211,000 (6.6%) from $33,645,000 in 2024[163]. - The company recorded a loss on extinguishment of debt of $7,750,000 during the three and nine months ended September 30, 2025, related to the payoff of various notes[169].