HARVARD BIOSCIENCE INC

HARVARD BIOSCIENCE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Harvard Bioscience, Inc., a Delaware corporation (the “Company”), is a leading developer, manufacturer and seller of technologies, products and services that enable fundamental advances in life science applications, including research, pharmaceutical and therapy discovery, bioproduction and preclinical testing for pharmaceutical and therapy development. The Company’s products and services are sold globally to customers ranging from renowned academic institutions and government laboratories to the world’s leading pharmaceutical, biotechnology and contract research organizations. With operations in the United States, Europe and China, the Company sells through a combination of direct and distribution channels to customers around the world.

Principles of Consolidation

The consolidated financial statements include the accounts of Harvard Bioscience, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the use of management estimates. Such estimates include the determination and establishment of certain accruals and provisions, including those for income taxes, credit losses on receivables. and defined benefit pension obligations. Estimates are also required to evaluate the value for inventories reported at lower of cost or net realizable value, stock-based compensation expense, and the recoverability of long-lived and intangible assets, including goodwill. On an ongoing basis, the Company reviews its estimates based upon currently available information. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with original maturities ofthree months or less to be cash equivalents. The Company has cash holdings in financial institutions that exceed insured limits for such financial institutions. The Company mitigates this risk by utilizing financial institutions of high credit quality.

Approximately 49% of the Company’s cash and cash equivalents at* December 31, 2023*was held by the Company’s foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were held primarily by subsidiaries in the United Kingdom, Germany and Spain.

Marketable Equity Securities

Equity securities traded in active markets are marked to market at each balance sheet date based on prices as quoted on the relevant stock exchange. Fair value mark-to-market adjustments are recorded as non-operating gains (losses) in the consolidated statement of operations. The Company’s investments in marketable equity securities are classified in the consolidated balance sheet based on the nature of the securities and their availability for use in current operations.

Allowance for Expected Credit Losses on Receivables

The allowance for expected credit losses on receivables is used to present accounts receivable, net, at an amount that represents the Company’s estimate of the receivables expected to be collected from customers. The allowance represents an estimate of expected credit losses over the lifetime of the receivables, even if the loss is considered remote, and reflects expected recoveries of amounts previously written off. The Company estimates the allowance on the basis of specifically identified receivables that are evaluated individually for impairment and an analysis of the remaining receivables determined by reference to past default experience. The Company considers the need to adjust historical information to reflect the extent to which current conditions and reasonable forecasts are expected to differ from the conditions that existed for the historical period considered. Losses on receivables havenot historically been significant.

Management judgments are used to determine when to charge off uncollectible trade accounts receivable. The Company bases these judgments on the age of the receivable, credit quality of the customer, current economic conditions, and other factors that* mayaffect a customer’s ability and intent to pay. Customers are generallynot* required to provide collateral for purchases.

F-8

Inventories

The Company values inventories at the lower of cost (determined on afirst-in,first-out method) or net realizable value. The Company regularly reviews inventory quantities on hand and writes down excess and obsolete inventories to estimated net realizable value if less than cost, based primarily on historical inventory usage and estimated forecast of product demand.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets as follows:

Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset.

Leases

The Company leases office space, manufacturing facilities, automobiles and equipment. The Company concludes on whether an arrangement is a lease at inception. This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right for the Company to control the use of the identified property, plant or equipment for a period of time in exchange for consideration. Leases with an initial term of12 months or less arenot recorded on the balance sheet. The Company recognizes these lease expenses on a straight-line basis over the lease term.

The Company has assessed its contracts and concluded that its leases consist of operating leases. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the leases’ commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases donot provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company’s credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company’s borrowing rate on its most recent loan. The Company uses the implicit rate when readily determinable. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company uses the flow-through method to account for investment tax credits. Under this method, the investment tax credits are recognized as a reduction of income tax expense.

The Company recognizes the effect of income tax positions only if those positions are more likely thannot of being sustained. Recognized income tax positions are measured at the largest amount that is more than50% likely of being realized. Changes in recognition are reflected in the period in which the judgement occurs. The Company’s policy is to account for Global Intangible Low-Taxed income as a period cost.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is generally their local currency. All assets and liabilities of foreign subsidiaries are translated at exchange rates in effect at period-end. Income and expenses are translated at rates which approximate those in effect on the transaction dates. The resulting translation adjustment is recorded as a separate component of stockholders’ equity in accumulated other comprehensive income (loss) (“AOCI”) in the consolidated balance sheets. Gains and losses resulting from foreign currency transactions are included in other expense (income), net, in the Company’s consolidated statements of operations.

F-9

Earnings per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the periods presented. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and other potentially dilutive securities using the treasury stock method unless the effect is antidilutive.

The following table sets forth the computation of basic and diluted earnings per share:

Comprehensive Income (Loss)

Comprehensive income (loss) represents the change in equity resulting from items other than shareholder investments and distributions. The Company’s foreign currency translation adjustments, interest rate swap - cash flow hedge and minimum pension liability adjustments are included in AOCI. The components of other comprehensive income are reclassified as net income, net of tax, when the underlying component impacts earnings. Comprehensive income (loss) and the components of AOCI are presented in the accompanying consolidated statements of comprehensive loss and consolidated statements of equity.

Revenue Recognition

Nature of contracts and customers

The Company’s contracts are primarily of short duration and are mostly based on the receipt and fulfilment of purchase orders. The purchase orders are binding and include pricing and all other relevant terms and conditions.

The Company’s customers are primarily research scientists at pharmaceutical and biotechnology companies, universities, hospitals, government laboratories and contract research organizations. The Company also has global and regional distribution partners, and original equipment manufacturer customers who incorporate its products into their products under their own brands.

Performance obligations

The Company’s performance obligations under its revenue contracts consist of its instruments, equipment, accessories, services, software licenses and enhancements, maintenance and extended warranties. Equipment also includes software that functions together with the tangible equipment to deliver its essential functionality. Contracts with customers* maycontain multiple promises such as delivery of hardware, software, professional services or post-contract support services. These promises are accounted for as separate performance obligations if they are distinct. For contracts with customers that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on estimated relative standalone selling price, which doesnot* materially differ from the stated price in the contract. In general, the Company’s list prices are indicative of standalone selling price, and the majority of the Company's contracts have a term of less thanone year.

Instruments, equipment and accessories consist of a range of products that are used in life sciences research. Revenues from the sales of these items are recognized when transfer of control of these products to the customer occurs. Transfer of control occurs when the Company has a right to payment and the customer has legal title to the asset and the customer or their selected carrier has possession, which is typically upon shipment. Sales of these items are therefore generally recognized at a point in time.

F-10

The Company’s equipment revenue also includes the sale of wireless implantable monitors that are used for life science research purposes. The Company sells these wireless implantable monitors to pharmaceutical companies, contract research organizations and academic laboratories. In addition to sales generated from new and existing customers, these implantable devices are also sold under a program called the “exchange program.” Under this program, customers* mayreturn an implantable monitor to the Company after use, and if the returned monitor can be reprocessed and resold, they may,in exchange, purchase a replacement implantable monitor of the same model at a lower price than a new monitor. The implantable monitors that are returned by customers are reprocessed and made available for future sale. The initial sale of implantable monitors and subsequent sale of replacement implantable monitors are independent transactions. The Company hasno* obligation in connection with the initial sale to sell replacement implantable monitors at any future date under any fixed terms and* mayrefuse returned implantable monitors that cannot be recovered or are obsolete. The Company has concluded that the offer to its customers that they maypurchase a discounted product in the future isnot* a material right.

Service revenue consists of installation, training, data analysis and surgeries performed on research animals. Service revenue is recognized when the service is performed. Maintenance revenue consists of post-contract support provided in relation to software that is embedded within the equipment that is sold to the customer. The Company provides standard warranties that promise the customer that the product will work as promised and arenot a separate performance obligation. Extended warranties relate to warranties that are separately priced and purchased in addition to a standard warranty, and are therefore a separate performance obligation. The Company has made the judgment that the customer benefits as the Company performs over the period of the contract, and therefore revenues from maintenance and warranty contracts are recognized over time. The Company uses the input method to recognize revenue over time, which is generally on a straight-line basis over the service period.

For sales for which transfer of control occurs upon shipment, the Company accounts for shipping and handling costs as fulfilment costs. As such, the Company records the amounts billed to the customer for shipping costs as revenue and the costs within cost of revenues upon shipment. For sales, for which control transfers to customers after shipment, the Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the goods to the customer. The Company therefore accrues for the costs of shipping undelivered items in the period of shipment.

Variable Consideration

The nature of the Company's contracts gives rise to certain types of variable consideration, including in limited cases volume and payment discounts. The Company analyzes sales that could include variable consideration and estimates the expected or most likely amount of revenue after returns, trade-ins, discounts, rebates, credits, and incentives. Product returns are estimated and accrued for, based on historical information. In making these estimates, the Company considers whether the amount of variable consideration is constrained and is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized willnot occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration, and its impact on the Company’s revenue recognition, wasnot material in any of the periods presented.

The Company’s payment terms are generally from zero tosixty days from the time of invoicing, which occurs at the time of shipment or prior to services being performed. Payment terms vary by the type of customers and the products or services offered.

Sales taxes, value added taxes, and certain excise taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are therefore excluded from revenues.

Contract Liabilities

The Company records contract liabilities when cash is collected from customers prior to satisfaction of the Company’s performance obligation to the customer. Contract liabilities consist of amounts deferred related to service contracts and revenue deferred as a result of payments received in advance from customers. Contract liabilities are generally expected to be recognized withinone year.

The amounts included in contract liabilities from advanced payments relate to amounts that are prepaid for wireless implantable monitors under the exchange program. The Company has made the judgment that these payments donot represent a significant financing component as the customer can exercise their discretion as to when they can obtain the products for which they have made a prepayment.

Disaggregation of revenue

Refer to Note13 for revenue disaggregated by type and by geographic location as well as further information about the deferred revenue balances.

F-11

Software Development

Software development costs for software products to be sold, leased or otherwise marketed that are incurred before establishing technological feasibility are charged to operations. Software development costs incurred after establishing technological feasibility are capitalized on a product-by-product basis until the product is available for general release to customers at which time amortization begins.

Annual amortization, charged to cost of goods sold, is the amount computed using the ratio that current revenues for a product bear to the total current and anticipated future revenues for that product. In the event that future revenues arenot estimable, such costs are amortized on a straight-line basis over the remaining estimated economic life of the product.

Intangible Assets

Intangible assets are comprised of existing technology, customer contracts and contractual relationships, and other definite-lived intangible assets. Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are estimated by the Company based on the fair value of assets received. Identifiable definite-lived intangible assets are being amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from four tofifteen years.

Goodwill

Goodwill acquired in a business combination and determined to have an indefinite useful life isnot amortized, but instead is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

For the purpose of its goodwill analysis, the Company hasone reporting unit. The Company conducts its annual impairment analysis in thefourth quarter of the fiscal year and more frequently if there is an indicator of impairment. The Company assesses qualitative factors of the reporting unit to determine whether it is more likely thannot that the fair value of the reporting unit is less than its carrying value. If the qualitative assessment indicates a potential impairment, a quantitative analysis is performed. The Company compares the fair value of the reporting unit with its carrying amount. The Company typically estimates fair value using the income approach but will also consider market approaches when appropriate. Under the income approach, the Company uses a discounted cash flows model, which indicates the fair value of the reporting unit based on the present value of the cash flows that the Company expects the reporting unit to generate in the future. The Company's significant estimates in the discounted cash flows model include weighted average cost of capital, long-term rate of growth and profitability of the reporting unit, expected income tax rates and working capital effects. If the carrying amount of a reporting unit exceeds its fair value, goodwill is impaired, and the Company would recognize a loss equal to the excess.

The Company evaluated its goodwill for impairment as of* October 1, 2023by performing a qualitative analysis and determined that it was more likely thannot* that the fair value of the reporting unit exceeded the carrying value.

Impairment of Long-Lived Assets

The Company assesses recoverability of its long-lived assets that are held for use, such as property, plant and equipment and amortizable intangible assets when events or changes in circumstances indicate that the carrying amount of an asset or asset group* may*not be recoverable. Factors which could trigger an impairment review include significant negative industry or economic trends, significant loss of clients, and significant changes in the manner of the Company’s use of the assets or the strategy for its overall business.

The recoverability of assets or an asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or the asset group. Cash flow projections are based on trends of historical performance and management’s estimate of future performance. The Company’s estimate of future cash flows requires significant judgment based on historical and anticipated results and are subject to many factors.

When the Company determines that the carrying value of the assets* may**not* be recoverable based upon the existence ofone or more of the above indicators of impairment, the Company measures the potential impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in its current business model. An impairment loss is recognized only if the carrying amount of the asset isnot recoverable and exceeds its fair value. Different assumptions and judgments could materially affect the calculation of the fair value of our assets. For the years ended* December 31, 2023and2022,* the Company concluded that there wereno triggering events requiring the Company to assess the recoverability of its long-lived assets.

Derivatives

The Company uses interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company only enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge) and doesnot use derivative financial instruments for trading or speculative purposes. The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values.

F-12

The Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

By using derivative financial instruments to hedge exposure to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, the Company isnot exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with major financial institutions based upon their credit profile. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that* may*be undertaken. The Company monitors interest rate risk attributable to both its outstanding and forecasted debt obligations by the use of cash flow sensitivity analysis, which estimates the expected impact of changes in interest rates on the Company’s future cash flows.

Fair Value of Financial Instruments

Financial reporting standards define a fair value hierarchy that consists ofthree levels:

The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable and short-term debt approximate their fair values because of the short maturities of those instruments. The fair value of the Company’s long-term debt approximates its carrying value and is based on the amount of future cash flows associated with the debt discounted using current borrowing rates for similar debt instruments of comparable maturity (Level2).

Stock-based Compensation

The Company recognizes compensation expense for all stock-based payment awards made to employees and directors including stock options, restricted stock units, and restricted stock units with a market condition. The Company issues awards under the2021 Incentive Plan (the*“2021* Incentive Plan”) and the Fourth Amended and Restated2000 Stock Option and Incentive Plan (the*“2000* Incentive Plan” and together with the2021 Incentive Plan, the “Incentive Plans”), as well as issues shares for employee stock purchases related to its Employee Stock Purchase Plan (as amended, the “ESPP”). The Company issues new shares from its registered but unissued stock pool to satisfy stock option exercises and vesting of the restricted stock units. Stock-based compensation expense is recorded on a straight-line basis over the applicable service period, which ranges fromone tofour years. The Company has elected as an accounting policy to account for forfeitures for service-based awards as they occur, withno adjustment for estimated forfeitures.

The fair value of restricted stock units is based on the market price of the Company’s stock on the date of grant. The Company values restricted stock units with a market condition using a Monte-Carlo valuation simulation. The determination of fair value of stock-based payment awards on the date of grant using a Monte-Carlo valuation simulation is affected by the Company’s stock price as well as assumptions regarding certain variables including, but arenot limited to, the Company’s expected stock price volatility over the term of the awards, interest rate assumptions, and discounts to adjust for any holding period post-vest restrictions.

Preferred Stock

The Company’s board of directors has the authority to issue up to 5.0 million shares of preferred stock and to determine the price privileges and other terms of the shares. The board of directors* mayexercise this authority without any further approval from stockholders. As of December 31, 2023and2022,* the Company hadno preferred stock issued or outstanding.

F-13

Business Segment Information

The Company operates inone segment which involves the design, development, production and distribution of products and services that enable fundamental advances in life science applications, including research, pharmaceutical and therapy discovery, bioproduction and preclinical testing for pharmaceutical and therapy development. The Company has a single, company-wide management team that administers all properties as a whole rather than as discrete operating segments. The chief operating decision maker, who is the Company's chief executive officer, measures financial performance as a single enterprise and allocates resources across the Company to maximize profitability, andnot on geography, legal entity, or end market basis. The Company operates in a number of countries throughout the world in a variety of product lines. Information regarding product lines and geographic financial information is provided in Note13, “Revenues” and Note5, "Balance Sheet Information."

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the Company discloses the possible loss. If a loss is probable and the loss or range of loss cannot be reasonably estimated, the Company discloses or states that such an estimate cannot be made. Refer to Note15 Commitments and Contingencies for additional information. The Company accrues and expenses legal costs associated with contingencies when incurred.

Recent Accounting Pronouncements

Accounting Pronouncements Adopted in2023

In* January**2017,* the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU2017-04, Intangibles—Goodwill and Other (Topic350*): Simplifying the Test for Goodwill Impairment (ASU2017*-04), which eliminates the performance of Step2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The Company adopted ASU2017-04 effective* January 1, 2023,withno* impact to the consolidated financial statements.

In* September 2016,the FASB issued ASUNo.* 2016-13, Financial Instruments—Credit Losses (Topic326*): Measurement of Credit Losses on Financial Instruments (ASU2016*-13), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This* mayresult in the earlier recognition of allowances for losses. The FASB issued several ASUs after ASU2016*-13 to clarify implementation guidance and to provide transition relief for certain entities. The Company adopted ASU2016-13 effective* January 1, 2023,*which resulted in an immaterial impact to the consolidated financial statements.

Accounting Pronouncements yet to be Adopted

In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740*): Improvements to Income Tax*, which enhances disclosures related to the effective tax rate reconciliation, income taxes paid, as well as other disclosures. The new standard impacts footnote disclosures and is effective for the Company’s annual financial statements for the year ended* December 31, 2025.The Company is currently evaluating the potential impact of adopting ASU2023*-09 will have on the disclosures in its consolidated financial statements.

Prior Period Financial Statement Reclassifications

During the year ended* December 31, 2023,the Company identified immaterial misclassification errors in the financial statement footnote describing the components of AOCI as of December 31, 2022and2021.* These misclassifications overstated the amount attributed to the defined benefit pension plans, net of tax, by $5.4 million and $5.1 million and understated the amount attributed to foreign currency translation adjustments by $(5.4) million and $(5.1) million as of* December 31, 2022and2021,* respectively. These misclassifications hadno impact on total OCI for the year ended* December 31, 2022,included in the consolidated statements of comprehensive loss, or the total AOCI included in the consolidated balance sheets as of December 31, 2022,and also hadno* impact on any of the Company’s previously reported consolidated statements of operations, stockholders’ equity, or cash flows. The correction of these offsetting misclassifications is included in these consolidated financial statements. See Note3 below for further details.

F-14

Changes in the components of accumulated other comprehensive loss, net of tax, for the years ended* December 31, 2023and2022,* respectively, are as follows:

***** See Note2 –Prior Period Financial Statement Reclassifications

The change in the carrying amount of goodwill is as follows:

Intangible assets at* December 31, 2023and2022* consist of the following:

• Weighted average life in years as of* December 31, 2023*

During the year ended* December 31, 2023,the Company wrote off approximately $3.7 million of fully amortized intangible assets of certain existing technology and other intangibles related to discontinued product lines. The Company capitalized $0.5 million of software development costs during the year ended December 31, 2023.*

Intangible asset amortization expense was $5.5 million and $6.1 million for the years ended* December 31, 2023and2022,* respectively. Estimated amortization expense of existing amortizable intangible assets for each of thefive succeeding years and thereafter is as follows:

F-15

The following tables provide details of selected balance sheet items as of the periods indicated:

Depreciation expense was $1.5 million for each of the years ended* December 31, 2023and2022.* During the year ended* December 31, 2023,*the Company wrote off approximately $2.0 million of fully depreciated property and equipment from its fixed asset records.

Long-lived Assets by Geographic Area:

Long-lived assets by geographic area, which include operating lease right-of-use assets, property, plant and equipment, and amortizable intangible assets, are as follows:

F-16

On an ongoing basis, the Company reviews the global economy, the healthcare industry, and the markets in which it competes to identify operational efficiencies, enhance commercial capabilities and align its cost base and infrastructure with customer needs and its strategic plans. In order to realize these opportunities, the Company undertakes activities from time to time to transform its business. A portion of these transformation activities are considered restructuring costs under ASC420,** Exit or Disposal Cost Obligations, and are discussed below.

During the year ended* December 31, 2022,the Company reviewed its product portfolio and identified certain non-strategic products for discontinuation and incurred severance expenses in connection with headcount reductions in Europe and North America. The following table summarizes the restructuring activity for the years ended December 31, 2023and2022:*

Substantially all of the severance and other costs detailed above have been included as a component of general and administrative expenses, and all inventory-related charges are included in cost of revenues.

Employee Retirement Savings Plans

The Company sponsors various qualified employee retirement savings plans and makes discretionary contributions to match a certain portion of employee contributions. The Company contributed $1.1 million to these plans for each of the years ended* December 31, 2023and2022.*

Employee Pension Plans

The Company’s subsidiary in the United Kingdom, Biochrom Ltd., maintainstwo defined benefit pension plans for its employees. In2014, these defined benefit pension plans were closed to new employees, as well as closed to the future accrual of benefits for existing employees. The Company recognizes the funded status of the pension plans as an asset or liability in the consolidated balance sheets. The funded status equals the difference between the fair value of the plan’s assets and their benefit obligations and has historically measured each year as of* December 31.*The Company records net period benefit expense (credit) as a component of other expense in the Consolidated Statement of Operations.

The components of the Company’s net period benefit expense (credit) were as follows:

F-17

The following provides a reconciliation of the changes in the plans’ fair value of assets and benefit obligations for the years ended* December 31, 2023and2022,* and a summary of the funded status as of* December 31, 2023and2022:*

Changes in the actuarial loss (gain) disclosed above are primarily the result of changes in the discount rate and inflation assumptions due to underlying market conditions.

The amounts recognized in the consolidated balance sheets consist of:

The weighted average assumptions used in determining the net pension cost for these plans follows:

The discount rate assumptions used for pension accounting reflect the prevailing rates available on high-quality, fixed-income debt instruments with terms that match the average expected duration of the Company’s defined benefit pension plan obligations.

The Company’s mix of pension plan investments among asset classes also affects the long-term expected rate of return on plan assets. As of* December 31, 2023,the Company’s actual asset mix approximated its target mix. Differences between actual and expected returns are recognized in the calculation of net periodic pension cost over the average remaining expected future working lifetime, which is approximately7* years for active plan participants.

F-18

The asset allocations and fair value of the Company’s pension benefits as of* December 31, 2023and2022,* were as follows:

Level1 assets consist of cash and cash equivalents held in the pension plans. The Level2 assets primarily consist of investments in private investment funds that are valued using the net asset values provided by the trust or fund, including an insurance contract. Although these funds arenot traded in an active market with quoted prices, the investments underlying the net asset value are based on quoted prices.

The Company expects to contribute approximately $0.6 million to its pension plans during2024. The benefits expected to be paid from the pension plans are $0.9 million in2024, $0.7 million in2025, $0.8 million in2026, $1.0 million in2027 and $0.8 million in2028. The expected benefits to be paid in thefive years from2029 to2033 are $5.0 million. The expected benefits are based on the same assumptions used to measure the Company’s benefit obligations at* December 31, 2023.*

The Company has noncancelable operating leases for office space, manufacturing facilities, warehouse space, automobiles and equipment expiring at various dates through2030.

The components of lease expense for the years ended* December 31, 2023and2022,* are as follows:

Supplemental balance sheet information related to the Company’s operating leases was as follows:

F-19

Supplemental cash flow information related to the Company’s operating leases was as follows:

Future minimum lease payments for operating leases, with initial terms in excess ofone year at* December 31, 2023,*are as follows:

As of* December 31, 2023and2022,* the Company’s borrowings were comprised of the following:

The aggregate amounts of debt maturities are as follows:

On* December 22, 2020,the Company entered into a Credit Agreement (the “Credit Agreement”) with Citizens Bank, N.A., Wells Fargo Bank, National Association, and Silicon Valley Bank, (together, the “Lenders”). Effective March 27, 2023,all commitments and obligations under the Credit Agreement previously held by Silicon Valley Bank were assumed by First Citizens Bank & Trust Company. The Credit Agreement provides for a term loan of $40.0 million and a $25.0 million senior revolving credit facility (including a $10.0 million sub-facility for the issuance of letters of credit and a $10.0 million swingline loan sub-facility) (collectively, the “Credit Facility”). The Company’s obligations under the Credit Agreement are guaranteed by certain of the Company’s direct, domestic wholly-owned subsidiaries;none of the Company’s direct or indirect foreign subsidiaries has guaranteed the Credit Facility. The Company’s obligations under the Credit Agreement are secured by substantially all of the assets of Harvard Bioscience, Inc. and each guarantor (including all or a portion of the equity interests in certain of the Company’s domestic and foreign subsidiaries). The Credit Facility matures on December 22, 2025.Issuance costs of $1.4 million are amortized over the contractual term to maturity date on a straight-line basis, which approximates the effective interest method. Available and unused borrowing capacity under the revolving line of credit was $10.8 million as of December 31, 2023,based on the Credit Agreement, as amended pursuant to the April 2022Amendment and November 2022*Amendment as described below. Total revolver borrowing capacity is limited by the consolidated net leverage ratio as defined under the amended Credit Agreement.

F-20

Borrowings under the amended Credit Facility will, at the option of the Company, bear interest at either (i) a rate per annum based on the Secured Overnight Financing Rate (“SOFR”) for an interest period of one, two,three orsix months, plus an applicable interest rate margin determined as provided in the Credit Agreement, as amended (a “SOFR Loan”), or (ii) an alternative base rate plus an applicable interest rate margin, each as determined as provided in the Credit Agreement (an “ABR Loan”). SOFR interest under the Credit Agreement is subject to applicable market rates and a floor of 0.50%. The alternative base rate is based on the Citizens Bank prime rate or the federal funds effective rate of the Federal Reserve Bank of New York and is subject to a floor of 1.0%. The applicable interest rate margin varies from 2.0% per annum to 3.25% per annum for SOFR Loans, and from 1.5% per annum to 3.0% per annum for ABR Loans, in each case depending on the Company’s consolidated leverage ratio and is determined in accordance with a pricing grid set forth in the Credit Agreement. Interest on SOFR Loans is payable in arrears on the last day of each applicable interest period, and interest on ABR Loans is payable in arrears at the end of each calendar quarter. There areno prepayment penalties in the event the Company elects to prepay and terminate the Credit Facility prior to its scheduled maturity date, subject to SOFR Loan breakage and redeployment costs in certain circumstances.

The effective interest rate on the Company’s borrowings for the years ended* December 31, 2023and2022,* was 8.1% and 5.0%, respectively. The weighted average interest rate as of* December 31, 2023,*inclusive of the effect of the Company’s interest rate swaps, was 7.4%. The carrying value of the debt approximates fair value because the interest rate under the obligation approximates market rates of interest available to the Company for similar instruments.

As of* December 31, 2023,the term loan amortizes in quarterly installments of $1.0 million with a balloon payment at maturity. Furthermore, withinninety* days after the end of the Company’s fiscal year, the term loans* maybe permanently reduced pursuant to certain mandatory prepayment events including an annual “excess cash flow sweep”, as defined in the agreement; provided that, in any fiscal year, any voluntary prepayments of the term loans shall be credited against the Company’s “excess cash flow” prepayment obligations on a dollar-for-dollar basis for such fiscal year. As of December 31, 2023,the current portion of long-term debt includes an excess cash flow sweep of $2.1 million to be paid by March 31, 2024.As of December 31, 2022,the current portion of long-term debt included an excess cash flow sweep of $1.1 million which was paid on March 31, 2023.*Amounts outstanding under the revolving credit facility can be repaid at any time but are due in full at maturity.

The Credit Agreement, as amended, includes customary affirmative, negative, and financial covenants binding on the Company. The negative covenants limit the ability of the Company, among other things, to incur debt, incur liens, make investments, sell assets and pay dividends on its capital stock. The financial covenants include a maximum consolidated net leverage ratio and a minimum consolidated fixed charge coverage ratio. The Credit Agreement, as amended, also includes customary events of default.

In* April 2022,the Company entered into an amendment to the Credit Agreement (the “April 2022Amendment”) which modified, among other things, the financial covenant relating to the consolidated net leverage ratio, and provided consent for the HRGN Settlement (as defined in Note16*). In* November 2022,the Company entered into a subsequent amendment to the Credit Agreement which modified, among other things, the financial covenant relating to the consolidated net leverage ratio, and the definition of Consolidated EBITDA used in the calculation of certain financial covenants (the “November 2022Amendment”). The Company was in compliance with the covenants of the Credit Agreement, as amended, as of December 31, 2023.*

On* February 28, 2023,the Company entered into an interest rate swap contract to improve the predictability of cash flows from interest payments related to its variable, SOFR-based debt. The swap contract has a notional amount of $27.4 million as of December 31, 2023,and matures on December 22, 2025.This swap contract effectively converts the SOFR-based variable portion of the interest payable under the Credit Agreement into fixed-rate debt at an annual rate of 4.75%. The swap contract doesnot* impact the additional interest related to the applicable interest rate margin as discussed above in Note9, Long-Term Debt. The swap contract is considered an effective cash flow hedge, and as a result, net gains or losses are reported as a component of OCI in the consolidated financial statements and are reclassified as net income when the underlying hedged interest impacts earnings. An assessment is performed quarterly to evaluate the ongoing hedge effectiveness.

The following table presents the notional amount and fair value of the Company’s derivative instrument as of* December 31, 2023:*

(a) See Note11 for the fair value measurements related to this financial instrument.

F-21

The following table summarizes the effect of derivatives designated as cash flow hedging instruments for the year ended* December 31, 2023:*

The following tables present the fair value hierarchy for those assets or liabilities measured at fair value on a recurring basis:

The Company uses the market approach technique to value its financial assets and liabilities. The Company’s financial assets and liabilities carried at fair value include, when applicable, investments in common stock and derivative instruments used to hedge the Company’s interest rate risks. The fair value of the Company’s investment in common stock of Harvard Apparatus Regenerative Technologies (“HRGN” formerly known as Biostage, Inc.) (see Note16 for information regarding the HRGN Settlement) was based on the closing price as quoted on the OTCQB Marketplace at the reporting date. The fair value of the Company’s interest rate swap agreements was based on SOFR-yield curves at the reporting date.

Stock-based compensation expense for the years ended* December 31, 2023and2022,* is allocated as follows:

As of* December 31, 2023,the total compensation costs related to unvested awardsnot* yet recognized is $4.7 million and the weighted average period over which it is expected to be recognized is approximately 1.6 years. During the years ended* December 31, 2023and2022,* the Company didnot capitalize any stock-based compensation.

Equity Incentive Plans

During2021, the Company’s board of directors and stockholders adopted the2021 Incentive Plan which authorized additional shares available for grants to officers, employees, non-employee directors and other key persons of the Company and its subsidiaries. As of* December 31, 2023,there were approximately 3.1 million shares available for issuance under the2021* Incentive Plan.

Restricted Stock Units with a Market Condition

The Company grants deferred awards of market condition restricted stock units (the “Market Condition RSUs”) to certain members of the Company’s management team. The vesting of the Market Condition RSUs is linked to the achievement of a relative total shareholder return (“TSR”) of the Company’s common stock measured from the earlier of (i) the measurement period as set out in the award agreement or (ii) upon a change of control (measured relative to the Nasdaq Biotechnology or Russell2000 index and based on a20-day trading average price) and is subject to aone-year holding period after vesting.

For Market Condition RSUs with a measurement period that concluded during the years ended* December 31, 2023,the TSR of the Company’s common stock relative to the applicable index resulted in achieving 100% of the target. Market Condition RSUs outstanding as of December 31, 2023*remain subject to a TSR measurement which can result in vesting rates ranging from 0% to 150% of the target number.

F-22

The weighted average assumptions used in the valuation of the Market Condition RSUs granted during the years ended* December 31, 2023and2022,* are as follows:

The Company used historical volatility to calculate the expected volatility matching the expected holding period. The risk-free interest rate assumption is based upon observed U.S. Treasury bill interest rates (risk-free) appropriate for the term of the award. Additionally, the Company assumes a liquidity discount to adjust the fair value for theone-year holding period post-vest restrictions.

Stock-Based Payment Awards

RSU and Market Condition RSU activity for the years ended* December 31, 2023and2022,* is as follows:

Stock option activity for the years ended* December 31, 2023and2022,* is as follows:

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $5.35 as of* December 31, 2023,which would have been received by the option holders had all option holders exercised their options as of that date. The aggregate intrinsic value of options exercised was $0.6 million and $0.1 million for the years ended December 31, 2023and2022,* respectively.

Employee Stock Purchase Plan (“ESPP”)

The Company has an employee stock purchase plan under which eligible employees* maypurchase a limited number of shares of common stock at a discount of up to 15% of the market value of such stock at pre-determined and plan-defined dates. There were 0.1 million and 0.2 million shares issued under the ESPP during the years ended December 31, 2023and2022,* respectively. As of* December 31, 2023,*there were 0.3 million shares available for issuance under the ESPP.

F-23

The following table represents a disaggregation of revenue from contracts with customers for the years ended* December 31, 2023and2022:*

Revenues by timing of recognition are as follows:

Revenues by geographic destination are as follows:

Contract Liabilities

The following tables provide details of contract liabilities as of the periods indicated:

Changes in the Company’s contract liabilities are primarily due to the timing of receipt of payments under service and warranty contracts. During the years ended* December 31, 2023and2022,* the Company recognized revenue of $2.1 million and $2.5 million from contract liabilities existing at* December 31, 2022and2021,* respectively.

Provision for Expected Credit Losses on Receivables

Activity in the provision for expected losses on receivables is as follows:

Concentrations

No customer accounted for more than10% of the revenues for the years ended* December 31, 2023and2022,* or for more than10% of net accounts receivable at* December 31, 2023and2022.*

F-24

Warranties

Activity in the product warranty accrual is as follows:

Income tax expense for the years ended* December 31, 2023and2022,* consisted of:

The effective tax rate for the year ended* December 31, 2023was (33.5)% as compared with (3.7)% for the same period in2022.* The difference between the Company’s effective tax rate year over year was primarily attributable to changes in the mix of pre-tax income and losses at individual subsidiaries, and the impact of changes in uncertain tax positions.

Income tax expense for the years ended* December 31, 2023and2022,* differed from the amount computed by applying the U.S. federal income tax rate of21% to pre-tax loss as a result of the following:

F-25

Income tax expense is based on the following pre-tax (loss) income from operations:

The tax effects of temporary differences that give rise to significant components of the deferred tax assets and deferred tax liabilities at* December 31, 2023and2022,* are as follows:

Deferred income tax assets and liabilities by classification on the consolidated balance sheets were as follows:

At* December 31, 2023,the Company had state net operating loss carryforwards of $6.3 million, which expire between2024* and2043. The Company had net operating loss carryforwards of $7.8 million in certain foreign jurisdictions which* maybe carried forward indefinitely, partially offset by valuation allowances. The Company had $7.8 million of research and development tax credit carryforwards which begin to expire in2024,* and are partially offset by a reserve of $0.8 million for uncertain tax positions. The Company had a total of $2.7 million of state investment tax credit carryforwards, research and development tax credit carryforwards, and enterprise zone credit carryforwards, which begin to expire in2024. In addition, the Company had a total of $0.4 million international R&D credits which begin to expire in2037. The Internal Revenue Code (“IRC”) limits the amounts of net operating loss carryforwards or credits that a company* mayuse in anyone* year in the event of a change in ownership under IRC Sections382 or383. As a result of various acquisitions in prior years, certain losses and credit carryforwards are subject to these limitations.

F-26

As of* December 31, 2023and2022,* the Company maintained a total valuation allowance of $15.2 million and $14.5 million, respectively, which relates to foreign, federal, and state deferred tax assets in both years. The valuation allowance is based on estimates of taxable income in each of the jurisdictions in which the Company operates and the period over which deferred tax assets will be recoverable. The net change in the total valuation allowance for the years ended* December 31, 2023and2022,* was an increase of $0.7 million and a decrease of $0.2 million, respectively. During the year ended* December 31, 2023,*the Company increased the valuation allowance related to the estimate of realizability of German deferred tax assets and deferred tax assets related to the Employee Retention Credit, offset by the utilization and expiration of certain U.S. federal and state net operating losses and the expiration of certain U.S. credits.

As of* December 31, 2023and2022,* cash and cash equivalents held by the Company’s foreign subsidiaries were $2.1 million and $2.6 million, respectively. As of* December 31, 2023,*the Company has determined the potential income tax and withholding liability related to available cash balances at foreign subsidiaries to be immaterial.

A summary of activity of unrecognized tax benefits is as follows:

We expect the amount of unrecognized tax benefits to change within the nexttwelve months, including the release of reserves of approximately $0.4 million. Substantially all of the liability for uncertain tax benefits related to various federal, state and foreign income tax matters would benefit the Company's effective tax rate, if recognized. The Company classifies interest and penalties related to unrecognized tax benefits as a component of income tax expense, which hasnot been significant during the years ended* December 31, 2023and2022,* respectively.

With a few exceptions, the Company isno longer subject to income tax examinations by tax authorities in foreign jurisdictions for the years before2019. In the U.S., the Company’s net operating loss and tax credit carryforward amounts remain subject to federal and state examination for tax years starting in2004 as a result of tax losses incurred in prior years. There are currentlyno pending federal or state tax examinations.

In* April 2022,the Company and HRGN executed a settlement with the plaintiffs in the HRGN Litigation (as defined below), which resolves all claims relating to the litigation as described in Note16,* Litigation Settlement.

The Company is involved in various other claims and legal proceedings arising in the ordinary course of business. After consultation with legal counsel, the Company has determined that the ultimate disposition of such proceedings isnot likely to have a material adverse effect on its business, financial condition, results of operations or cash flow. Although unfavorable outcomes in the proceedings are possible, the Company hasnot accrued loss contingencies relating to any such matters as they arenot considered to be probable and reasonably estimable. Ifone or more of these matters are resolved in a manner adverse to the Company, the impact on the Company’s business, financial condition, results of operations and cash flows could be material.

In addition, the Company has entered into indemnification agreements with its directors. It isnot possible to determine the maximum potential liability amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company hasnot recorded any liability for costs related to contingent indemnification obligations as of* December 31, 2023.*

The Company is subject to unclaimed property laws in the ordinary course of its business. State escheat laws generally require entities to report and remit abandoned and unclaimed property to the state. Failure to timely report and remit the property can result in assessments that could include interest and penalties, in addition to the payment of the escheat liability itself. The Company is currently undergoing an unclaimed property audit. Based on the current stage of the audits, the Company hasnot accrued any significant losses related to these audits as of* December 31, 2023.*

F-27

In* April 2022,the Company and HRGN entered into a settlement of a litigation related to injuries allegedly caused by products produced by the Company and HRGN and utilized in connection with surgeries performed bythird* parties (the “HRGN Settlement”). The HRGN Settlement resolved and dismissed all claims by and between the parties. HRGN has indemnified the Company for all losses and expenses that the Company incurred in connection with such litigation and settlement.

In connection with the HRGN Settlement, in* June 2022,HRGN issued 4,000 shares of Series E Convertible Preferred Stock (the “Series E Preferred Stock”) to the Company in satisfaction of $4.0 million of its total indemnification obligations. The Company recorded the Series E Preferred Stock at an estimated fair value of $3.9 million using a Monte Carlo valuation simulation incorporating information from selected guideline companies. As of December 31, 2022,*the book value of the shares of Series E Preferred Stock, inclusive of accrued dividends, was $4.1 million and was included in the consolidated balance sheet as a component of other long-term assets.

In* April 2023,*all of the shares of Series E Preferred Stock the Company held in HRGN were mandatorily converted into shares of HRGN common stock.

As of* December 31, 2023,the Company held shares of HRGN common stock with an estimated fair value of $3.5 million, which are included in the consolidated balance sheet as a component of other long-term assets. During the year ended December 31, 2023,*the Company recorded an unrealized loss related to these shares of $(0.6) million, which was recorded as other (expense) income, net, in the consolidated statements of operations. The Company determines the fair value of its HRGN common stock based on the closing price as quoted on the OTCQB Marketplace at the reporting date. Due to HRGN’s limited operating history, its overall financial condition and the limited trading volumes and liquidity of its common stock, the value of the Company’s investment in this common stock could fluctuate considerably or become worthless.

On* February 17, 2023,the Company completed the disposition of its Hoefer product line for cash consideration of $0.5 million. The carrying value of assets sold was $0.1 million resulting in a gain on disposition of $0.4 million which is recorded in other (expense) income, net, in the consolidated statement of operations for the year ended December 31, 2023.Revenue and gross profit of this disposed product line included in the condensed consolidated statement of operations for the years ended December 31, 2023and2022,* werenot significant.

As there isno authoritative guidance under U.S. GAAP on accounting for grants to for profit business entities from government entities, the Company accounts for government assistance by analogy to International Accounting Standards Topic20, Accounting for Government Grants and Disclosure of GovernmentAssistance (IAS20). Under IAS20, grants related to income are presented as part of the consolidated statements of operations either as a deduction of the related expense or reported separately in other income. The Company recognizes government assistance that supplements salaries or research activities as a reduction of the related operating expense over the period for which it is intended to compensate. Government assistance that isnot directly related to expense reimbursement or relates to costs incurred in a previous fiscal period is recorded as other income.

For the years ended* December 31, 2023and2022,* the Company received $0.2 million and $0.7 million, respectively, under government assistance programs. The majority of the assistance was a result of the Company’s German subsidiaries participating in programs established to offset the negative impact of COVID-19 on profitability, to support employment during the COVID-19 pandemic, and to offset the costs of qualifying research and development activities.

In* February 2024,the Company received and recorded $3.1 million for the Employee Retention Credit (“ERC”), which was enacted as part of the Coronavirus Aid, Relief, and Economic Security Act of2020* (“CARES Act”) to provide financial incentives to eligible businesses to retain their workforce through the period of financial hardship resulting from the COVID-19 pandemic.

F-28

**SIGNATURES