What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-05-05 compared with 2021-11-09 · 6 added, 155 removed, 3 unchanged (98% of the section changed)

should carefully consider the following risk factors in addition to the other information contained in this Quarterly Report.

Our business,

financial condition, results of operations and stock price could be materially adversely affected by any of these risks.

You should consider

all of the factors described in this section when evaluating our business as well as the risk factors and the other information in our

Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and in our Annual Report on Form 10-K for the

year ended December 31, 2020, including our audited financial statements and the related notes and “Management’s Discussion

and Analysis of Financial Condition and Results of Operations.” If any of the following risks actually occurs, our business, financial

condition, results of operations and future growth prospects would likely be materially and adversely affected.

In these circumstances,

the market price of our common stock would likely decline and you may lose all or part of your investments.

Additional risks and uncertainties

not presently known to us or that we currently deem immaterial also may impair our business operations.

Related to the Senior Notes

have incurred significant indebtedness, which will require substantial cash to service and which subjects us to certain financial requirements

and business restrictions.

April, May and June 2021, we issued $75,000,000 aggregate principal amount of 8.625% senior notes due 2026.

We may incur additional indebtedness

in the future.

Our ability to make scheduled payments on our indebtedness depends on our future performance and ability to raise additional

capital, which is subject to economic, financial, competitive and other factors, some of which are beyond our control.

If we are unable

to generate sufficient cash to service our debt, we may be required to adopt one or more alternatives, such as selling assets, restructuring

our debt or obtaining additional capital through equity sales or incurrence of additional debt on terms that may be onerous or highly

dilutive to our stockholders.

Our ability to engage in any of these activities would depend on the capital markets and our financial

condition at such time, and we may not be able to do so when needed, on desirable terms or at all, which could result in a default on

our debt obligations.

Additionally, our debt instruments contain or, from time to time, may contain various restrictive covenants, including,

among others, our obligation to deliver certain financial and other information, our obligation to comply with certain notice and insurance

requirements, and our inability, without prior consent, to dispose of certain of our assets, incur certain additional indebtedness, enter

into certain merger, acquisition or change of control transactions, pay certain dividends or distributions on or repurchase any of our

capital stock or incur any lien or other encumbrance on our assets, subject to certain permitted exceptions.

Any failure by us to comply

with any of these covenants, subject to certain cure periods, or to make all payments under the debt instruments when due, would cause

us to be in default under the applicable debt instrument.

In the event of any such default, lenders may be able to foreclose on our assets

that secure the debt or declare all borrowed funds, together with accrued and unpaid interest, immediately due and payable, thereby potentially

causing all of our available cash to be used to pay our indebtedness or forcing us into bankruptcy or liquidation if we do not then have

sufficient cash available.

Any such event or occurrence could severely and negatively impact our operations and prospects.

may need additional capital in order to continue operating our business, and such additional funds may not be available when needed,

on acceptable terms, or at all.

only recently started generating cash from operations, but we do not currently earn sufficient revenues to support our operations.

may need significant additional capital to execute our business plan and fund our proposed business operations.

Additionally, our plans

may change or the estimates of our operating expenses and working capital requirements could be inaccurate, we may pursue acquisitions

of pharmacies or other strategic transactions that involve large expenditures, or we may experience growth more quickly or on a larger

scale than we expect, any of which may result in the depletion of capital resources more rapidly than anticipated and could require us

to seek additional financing earlier than we expect to support our operations.

have raised over $85,000,000 in funds through equity and debt financings in April, May and June 2021.

We may seek to obtain additional

capital through equity or debt financings, funding from corporate partnerships or licensing arrangements, sales of assets or other financing

transactions.

If we issue additional equity or debt securities to raise funds, our existing stockholders may experience substantial dilution,

and the newly issued equity or debt securities may have more favorable terms or rights, preferences and privileges senior to those of

our existing stockholders.

If we raise additional funds through collaboration and licensing arrangements or sales of assets, we may have

to relinquish potentially valuable rights to our drug candidates or proprietary technologies, or grant licenses on terms that are not

favorable to us.

If we raise funds by incurring additional debt, we may be required to pay significant interest expenses and our leverage

relative to our earnings or to our equity capitalization may increase.

Obtaining commercial loans, assuming those loans would be available,

would increase our liabilities and future cash commitments and may impose restrictions on our activities.

Further, we may incur substantial

costs in pursuing future capital and/or financing transactions, including investment banking fees, legal fees, accounting fees, printing

and distribution expenses and other costs.

We may also be required to recognize non-cash expenses in connection with certain securities

we may issue, such as options, convertible notes and warrants, which would adversely impact our financial results.

Notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur

in the future.

Notes are not secured by any of our assets or any of the assets of our subsidiaries.

As a result, the Notes are effectively subordinated

to any secured indebtedness that we or our subsidiaries have currently outstanding or may incur in the future (or any indebtedness that

is initially unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness.

The indenture governing the Notes does not prohibit us or our subsidiaries from incurring additional secured (or unsecured) indebtedness

in the future.

In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future

secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness

and may consequently receive payment from these assets before they may be used to pay other creditors, including the holders of the Notes.

indenture under which the Notes were issued contains limited protection for holders of the Notes.

indenture under which the Notes were issued offers limited protection to holders of the Notes.

The terms of the indenture and the Notes

do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions,

circumstances or events that could have an adverse impact on the holders of the Notes.

In particular, the terms of the indenture and

the Notes do not place any restrictions on our or our subsidiaries’ ability to:

debt securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations

that would be equal in right of payment to the Notes, (2) any indebtedness or other obligations that would be secured and therefore

rank effectively senior in right of payment to the Notes to the extent of the values of the assets securing such debt, (3) indebtedness

of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the Notes and (4) securities,

indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries

and therefore rank structurally senior to the Notes with respect to the assets of our subsidiaries;

dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities subordinated in right of

payment to the Notes;

assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);

into transactions with affiliates;

liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;

restrictions on the payment of dividends or other amounts to us from our subsidiaries.

addition, the indenture does not include any protection against certain events, such as a change of control, leveraged recapitalization,

“going private” transaction (which may result in a significant increase of our indebtedness), restructuring or similar transactions.

Furthermore, the terms of the indenture and the Notes do not protect holders of the Notes in the event that we experience changes (including

significant adverse changes) in our financial condition, results of operations or credit ratings, as they do not require that we or our

subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity.

an event of default or acceleration under our other indebtedness would not necessarily result in an event of default under the Notes.

ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the Notes may

have important consequences for the holders of the Notes, including making it more difficult for us to satisfy our obligations with respect

to the Notes or negatively affecting the trading value of the Notes.

debt we issue or incur in the future could contain more protections for its holders than the indenture and the Notes, including additional

covenants and events of default.

The issuance or incurrence of any such debt with incremental protections could affect the market for

and trading levels and prices of the Notes.

increase in market interest rates could result in a decrease in the value of the Notes.

general, as market interest rates rise, notes bearing interest at a fixed rate decline in value.

Consequently, if the market interest

rates increase, the market value of the Notes may decline.

We cannot predict the future level of market interest rates.

active trading market for the Notes may not develop, which could adversely affect the market price of the Notes or limit a holder’s

ability to sell them.

Notes are quoted on Nasdaq under the symbol “HROWL.” We cannot provide any assurances that an active trading market will

develop for the Notes or that a holder will be able to sell the Notes.

If the Notes are traded, they may trade at a discount from their

initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, general economic

conditions, our financial condition, performance and prospects and other factors.

The underwriters of the Notes may make a market in

the Notes, but they are not obligated to do so.

The underwriters may discontinue any market-making in the Notes at any time at their

sole discretion.

Accordingly, we cannot assure a holder that a liquid trading market will develop for the Notes, that a holder will be

able to sell the Notes at a particular time or that the price received will be favorable.

To the extent an active trading market does

not develop, the liquidity and trading price for the Notes may be harmed.

Accordingly, a holder may be required to bear the financial

risk of an investment in the Notes for an indefinite period of time.

may issue additional notes.

the terms of the indenture governing the Notes, we may from time to time without notice to, or the consent of, the holders of the Notes,

create and issue additional notes which will be equal in rank to the Notes.

rating for the Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.

have obtained a rating for the Notes.

Ratings only reflect the views of the issuing rating agency or agencies and such ratings could

at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.

A rating is not a recommendation

to purchase, sell or hold the Notes.

Ratings do not reflect market prices or suitability of a security for a particular investor and

the rating of the Notes may not reflect all risks related to us and our business, or the structure or market value of the Notes.

elect to issue other securities for which we may seek to obtain a rating in the future.

If we issue other securities with ratings lower

than market expectations or that are subsequently lowered or withdrawn, the market for or the market value of the Notes could be adversely

could enter into various transactions that could increase the amount of our outstanding debt, or adversely affect our capital structure

or credit rating.

to certain limited exceptions, the terms of the Notes do not prevent us from entering into a variety of acquisition, divestiture, refinancing,

recapitalization or other highly leveraged transactions.

As a result, we could enter into any such transaction even though the transaction

could increase the total amount of our outstanding indebtedness, adversely affect our capital structure or credit rating or otherwise

adversely affect the holders of the Notes.

addition to the other information contained in this Quarterly Report you should consider the risk factors and the other information in

our Annual Report on Form 10-K for the year ended December 31, 2021, including our audited financial statements and the related notes

and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If any such risks actually

occur, our business, financial condition, results of operations and future growth prospects would likely be materially and adversely

In these circumstances, the market price of our common stock would likely decline and you may lose all or part of your investments.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Unregistered Sales of Equity Securities and Use of Proceeds

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors