HARVARD BIOSCIENCE INC

Previous wording

This Quarterly Report on Form 10-Q contains statements that are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the“Exchange Act”). The forward-looking statements are principally, but not exclusively, contained in“Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.”These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about management’s confidence or expectations, and our plans, objectives, expectations, and intentions that are not historical facts. In some cases, you can identify forward-looking statements by terms such as“may,” “will,” “should,” “could,” “would,” “seek,” “expects,” “plans,” “aim,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “intends,” “think,” “potential,” “objectives,” “optimistic,” “strategy,” “goals,” “sees,” “new,” “guidance,” “future,” “continue,” “drive,” “growth,” “long-term,” “projects,” “develop,” “possible,” “emerging,” “opportunity,” “pursue”and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We discuss many of these risks in detail in our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the SEC. You should carefully review all of these factors, as well as other risks described in our public filings, and you should be aware that there may be other factors, including factors of which we are not currently aware, that could cause these differences. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this report. We may not update these forward-looking statements, even though our situation may change in the future, unless we have obligations under the federal securities laws to update and disclose material developments related to previously disclosed information. Harvard Bioscience, Inc. is referred to herein as“we,” “our,” “us,”and“the Company.”

Current wording

This Quarterly Report on Form 10-Q contains statements that are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the“Exchange Act”). The forward-looking statements are principally, but not exclusively, contained in“Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.”These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about management’s confidence or expectations, and our plans, objectives, expectations, and intentions that are not historical facts. In some cases, you can identify forward-looking statements by terms such as“may,” “will,” “should,” “could,” “would,” “seek,” “expects,” “plans,” “aim,” “anticipates,” “believes,” “estimates,” “is likely,”* *“projects,” “forecasts,” “predicts,” “intends,” “think,” “potential,” “objectives,” “optimistic,” “strategy,” “goals,” “sees,” “new,” “guidance,” “future,” “continue,” “drive,” “growth,” “long-term,” “projects,” “develop,” “possible,” “emerging,” “opportunity,” “pursue”and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We discuss many of these risks in detail in our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the SEC. You should carefully review all of these factors, as well as other risks described in our public filings, and you should be aware that there may be other factors, including factors of which we are not currently aware, that could cause these differences. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this report. We may not update these forward-looking statements, even though our situation may change in the future, unless we have obligations under the federal securities laws to update and disclose material developments related to previously disclosed information. Harvard Bioscience, Inc. is referred to herein as“we,” “our,” “us,”and“the Company.”

Previous wording

Our business is affected by global and regional economic trends and uncertainties. Our revenue has been and may continue to be affected by our customers forgoing or delaying purchases of our products and services as a result of ongoing uncertainty with respect to the level and timing of funding from the U.S. National Institutes of Health (the “NIH”) or similar government sources. Our business has also been affected by the imposition of increased tariffs on shipments of products between the United States and other countries, and in particular between the United States and China. Our revenue has been and may continue to be affected by greater restrictions and economic disincentives on international trade, including these tariffs. Products and services that we obtain from overseas sources has been and may continue to be affected by these tariffs, resulting in increased costs to our business.

Current wording

Our business is affected by global and regional economic trends and uncertainties. Our revenue has been and may continue to be affected by our customers forgoing or delaying purchases of our products and services as a result of ongoing uncertainty with respect to the level and timing of funding from the U.S. National Institutes of Health (the “NIH”) or similar government sources. Our business has also been affected by the imposition of increased tariffs on shipments of products between the United States and other countries, and in particular between the United States and China. Our revenue has been and may continue to be affected by greater restrictions and economic disincentives on international trade, including these tariffs. Products and services that we obtain from overseas sources have been and may continue to be affected by these tariffs, resulting in increased costs to our business.

Previous wording

Revenues decreased $2.7 million, or 11.2%, to $21.8 million for the three months ended March 31, 2025, compared to $24.5 million for the three months ended March 31, 2024. The decrease in revenues was primarily due to continued softening of worldwide demand primarily from academic research institutions and CROs.

Current wording

Revenues decreased $2.6 million, or 11.5%, to $20.5 million for the three months ended June 30, 2025, compared to $23.1 million for the three months ended June 30, 2024. The decrease in revenues was primarily due to the continued softening of worldwide demand primarily from academic research institutions and CROs and impact of reciprocal tariffs.

Previous wording

Gross profit decreased $2.6 million, or 17.5%, to $12.2 million for the three months ended March 31, 2025, compared with $14.8 million for the three months ended March 31, 2024, primarily due to the decrease in revenues as well as the associated lower absorption of fixed manufacturing costs. Gross margin was 56.0% for the three months ended March 31, 2025, compared to 60.3% for the three months ending March 31, 2024. The decrease in gross margin was primarily the result of under-absorption of fixed manufacturing overhead costs due to the decrease in revenues, increases in purchase price variance as well as a higher mix of lower margin products.

Current wording

Gross profit decreased $1.7 million, or 12.7%, to $11.5 million for the three months ended June 30, 2025, compared with $13.2 million for the three months ended June 30, 2024, primarily due to the decrease in revenues as well as the associated lower absorption of fixed manufacturing costs. Gross margin was 56.4% for the three months ended June 30, 2025, compared to 57.2% for the three months ending June 30, 2024. The decrease in gross margin was primarily the result of under-absorption of fixed manufacturing overhead costs due to the decrease in revenues, increases in purchase price variance as well as a higher mix of lower margin products.

Previous wording

Sales and marketing expenses decreased $0.9 million, or 15.8%, to $5.0 million for the three months ended March 31, 2025, compared with $5.9 million for the three months ended March 31, 2024. This decrease was primarily due to reduced compensation, travel and entertainment, consulting and trade show expenses.

Current wording

Sales and marketing expenses decreased $0.9 million, or 15.9%, to $4.5 million for the three months ended June 30, 2025, compared with $5.4 million for the three months ended June 30, 2024. This decrease was primarily due to reduced compensation, travel and entertainment, consulting and trade show expenses.

Previous wording

General and administrative expenses decreased $0.8 million, or 13.0%, to $5.2 million for the three months ended March 31, 2025, compared with $6.0 million for the three months ended March 31, 2024. The decrease was primarily due to reduced compensation, partially offset by higher professional fees.

Current wording

General and administrative expenses decreased $1.4 million, or 25.0%, to $4.3 million for the three months ended June 30, 2025, compared with $5.7 million for the three months ended June 30, 2024. The decrease was primarily due to reduced compensation costs.

Previous wording

Other operating expenses for the three months ended March 31, 2025 were $0.3 million, compared with $1.0 million for the three months ended March 31, 2024. During the three months ended March 31, 2025, other operating expenses included a fee of $0.2 million in connection with the receipt of employee retention credits and $0.1 million of restructuring costs in connection with headcount reductions in North America and Europe. During the three months ended March 31, 2024 other operating expenses included a fee of $0.5 million in connection with the receipt of employee retention credits and an estimated loss of $0.5 million related to an unclaimed property audit.

Current wording

Other operating expenses for the three months ended June 30, 2025 were $0.2 million, compared with $0.2 million for the three months ended June 30, 2024. During the three months ended June 30, 2025, other operating expenses included a fee of $0.2 million in connection with the receipt of employee retention credits. During the three months ended June 30, 2024 other operating expenses included $0.4 million of restructuring costs in connection with headcount reductions in Europe and North America, which was partially offset by a credit of $0.1 million related to closure of an unclaimed property audit.

Previous wording

Interest expense was $0.8 million for both the three months ended March 31, 2025 and March 31, 2024.

Current wording

Interest expense was $0.8 million for the three months ended June 30, 2025, compared with $0.7 million for the three months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2024, we recorded a loss on equity securities of $1.3 million consisting of a realized loss of $0.3 million for shares sold and an unrealized loss of $1.0 million for shares held of common stock of Harvard Apparatus Regenerative Technology Inc. (“HRGN”). We did not hold any shares of HRGN stock during the three months ended March 31, 2025.

Current wording

During the three months ended June 30, 2024, we sold all of our remaining Harvard Apparatus Regenerative Technology Inc. (“HRGN”) stock and recorded a loss on equity securities of $0.3 million. We did not hold any shares of HRGN stock during the three months ended June 30, 2025.

Previous wording

The income tax (benefit) expense was $(0.5) million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively. The effective tax rates for the three months ended March 31, 2025 and 2024 were 0.9% and (4.7)%, respectively. The higher effective tax rate during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to the tax effect of goodwill impairment and the release of reserves related to uncertain tax positions. The Company’s effective tax rate for the three months ended March 31, 2025, was different than the U.S. statutory rate primarily due to the tax effect of goodwill impairment and changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets.

Current wording

The income tax expense (benefit) was $0.0 million and ($0.4) million for the three months ended June 30, 2025 and 2024, respectively. The effective tax rates for the three months ended June 30, 2025 and 2024 were 1.2% and 10.8%, respectively. The lower effective tax rate during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily due to the change in the mix of income by jurisdiction. The Company’s effective tax rate for the three months ended June 30, 2025, was different than the U.S. statutory rate primarily due to a Global Intangible Low-Tax Income (“GILTI”) inclusion to taxable income, and changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets.

Previous wording

During the three months ended March 31, 2025, we identified a triggering event, including the sustained decrease in our stock price, our recent operating results, liquidity risk and the current macroeconomic conditions impacting the life sciences industries, requiring an interim impairment test. We recorded a non-cash goodwill impairment charge of $48.0 million in connection with the interim impairment test.

Current wording

Goodwill impairment expenses increase by $48.0 million for the six months ended June 30, 2025. We identified a triggering event, including the sustained decrease in our stock price, our recent operating results, liquidity risk and the current macroeconomic conditions impacting the life sciences industry, requiring an interim impairment test. We recorded a non-cash goodwill impairment charge of $48.0 million in connection with the interim impairment test.

Previous wording

Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and our shelf registration statement that provides for the issuance of common stock, preferred stock, warrants and units up to an amount equal to $100 million. Our expected cash outlays relate primarily to cash payments due under our Credit Agreement described below as well as salaries, inventory, and capital expenditures. We held cash and cash equivalents of $5.5 million and $4.1 million as of March 31, 2025 and December 31, 2024, respectively. Borrowings outstanding were $36.4 million and $37.4 million as of March 31, 2025 and December 31, 2024, respectively.

Current wording

Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and our shelf registration statement that provides for the issuance of common stock, preferred stock, warrants and units up to an amount equal to $100 million. Our expected cash outlays relate primarily to cash payments due under our Credit Agreement described below as well as salaries, inventory, and capital expenditures. We held cash and cash equivalents of $7.4 million and $4.1 million as of June 30, 2025 and December 31, 2024, respectively. Borrowings outstanding were $34.9 million and $37.0 million as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

The Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) provided an employee retention tax credit (“ERTC”) that was a refundable tax credit against certain employer taxes. The Company has received ERTC refunds of $4.2 million as of March 31, 2025 with $1.1 million received during the three months ended March 31, 2025. The Company’s compliance with the program’s qualifications may be subject to audit until May 2028, which is when the statute of limitation expires.

Current wording

The Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) provided an employee retention tax credit (“ERTC”) that was a refundable tax credit against certain employer taxes. The Company has received ERTC refunds of $5.4 million as of June 30, 2025 with $1.1 million received during the three months ended June 30, 2025. The Company’s compliance with the program’s qualifications may be subject to audit until May 2028, which is when the statute of limitation expires.

Previous wording

We maintain a Credit Agreement that provides for a term loan of $40.0 million and a $25.0 million revolving credit facility with an original maturity of December 22, 2025. On March 10, 2025, we entered into an amendment to the Credit Agreement (the “March 2025 Amendment”). The March 2025 Amendment provides, among other things, that the lender’s commitment under our revolving credit facility is capped at the amount outstanding thereunder as of the date thereof and thus we are unable to make additional borrowings under our revolving credit facility. The March 2025 Amendment also establishes certain milestones with respect to the refinancing of the debt underlying the Credit Agreement (the “Refinancing”) and dates by which such milestones must be met. These milestones (the “Refinancing Milestones”) include: (1) continuing to retain an investment banker for the purpose of assisting with the consummation of the Refinancing; (2) by March 14, 2025, the engagement of a financial advisor acceptable to the administrative agent; (3) by April 30, 2025, the delivery to the administrative agent of an executed bona fide indication of interest from one or more potential lenders with respect to the Refinancing on terms and conditions acceptable to the administrative agent; (4) by May 23, 2025, the delivery to the administrative agent of a term sheet or commitment letter from one or more potential lenders that provides for the Refinancing on terms and conditions acceptable to the administrative agent; (5) by June 13, 2025, delivery to the administrative agent of: (i) a statement of sources and uses of transaction proceeds; and (ii) evidence that the potential lender’s conditions to closing (other than customary closing deliveries) of the Refinancing, such as business commitments, are satisfied; and (6) by June 30, 2025, the closing of the Refinancing. the lenders also agreed not to assert the financial covenants included in the Credit Agreement for the first quarter of fiscal year 2025 provided that we continue to comply with our payment obligations, achieve the Refinancing Milestones, maintain minimum liquidity (the “Minimum Liquidity Requirement”) (defined as the sum of (a) unrestricted cash and cash equivalents and (b) the amount by which the aggregate amount committed under the Company’s revolving credit facility exceeds the total amount drawn under the credit facility) of $3.5 million and provide the administrative agent with certain financial reports. In addition, pursuant to the terms of the March 2025 Amendment the applicable interest rate margin is increased such that interest rate is equal to a rate per annum based on the Secured Overnight Financing Rate (“SOFR”) plus 400 bps and amortization payments were revised so that a proportionate payment must be made on a monthly rather than a quarterly basis. As of May 12, 2025,we were in compliance with the Refinancing Milestones applicable as of such date and the Minimum Liquidity Requirement.

Current wording

We maintain the Credit Agreement, which provides for a term loan of $40.0 million and a $25.0 million revolving credit facility with an original maturity of December 22, 2025. On March 10, 2025, we entered into an amendment to the Credit Agreement (the “March 2025 Amendment”). The March 2025 Amendment provided, among other things, that the Lenders’ commitment under our revolving credit facility would be capped at the amount outstanding thereunder as of the date thereof and thus we are unable to make additional borrowings under our revolving credit facility. The March 2025 Amendment also established certain Refinancing Milestones in connection with the refinancing of the Credit Agreement (the “Refinancing”), including receipt of a term sheet or commitment letter from one or more potential lenders, by the dates provided in the March 2025 Amendment, and the Company's consummation of the Refinancing by June 30, 2025. Pursuant to the March 2025 Amendment, the Lenders also agreed not to assert any breaches of the financial covenants included in the Credit Agreement for the first quarter of fiscal year 2025 provided that we continued to comply with our payment obligations, achieved the Refinancing Milestones, maintained minimum liquidity (defined as the sum of (a) unrestricted cash and cash equivalents and (b) the amount by which the aggregate amount committed under the Company’s revolving credit facility exceeds the total amount drawn under the credit facility) of $3.5 million and provided the administrative agent with certain financial reports. In addition, pursuant to the terms of the March 2025 Amendment the applicable interest rate margin was increased such that interest rate was equal to a rate per annum based on the Secured Overnight Financing Rate (“SOFR”) plus 400 bps and amortization payments were revised so that a proportionate payment must be made on a monthly rather than a quarterly basis.

Previous wording

We are exploring alternative sources of capital that would allow us to refinance the outstanding indebtedness by June 30, 2025, in order to avoid default under the Credit Agreement, but our ability to access such other sources of capital is uncertain. There is no assurance that such capital will be available, be obtainable on commercially acceptable terms, or provide sufficient funds to meet our objectives. Based on our anticipated cash flows from operations, unless we are able to access other sources of capital or extend the date for repayment under the Credit Agreement, we will be unable to pay our debt obligations and fund our operations for at least twelve months from the date of issuance of the unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about our ability to continue as a going concern.

Current wording

The Company continues to explore alternative sources of capital that would allow it to refinance the outstanding indebtedness under the Credit Agreement, but its ability to access such other sources of capital is uncertain. There is no assurance that such capital will be available, be obtainable on commercially acceptable terms, or provide the Company with sufficient funds to meet its objectives. Based on its anticipated cash flows from operations, unless the Company is able to access other sources of capital or extend the date for repayment under the Credit Agreement, the Company will be unable to pay its debt obligations and fund its operations for at least twelve months from the date of issuance of the unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about the Company's ability to continue as a going concern.

Previous wording

Cash provided by operations was $3.0 million and $1.4 million for the three months ended March 31, 2025 and 2024, respectively. Cash flow from operations for the three months ended March 31, 2025 was positively impacted by cash inflows from accounts receivable of $0.7 million and inventories of $1.3 million compared with the three months ended March 31, 2024.

Current wording

Net cash provided by operations was $5.7 million and $0.6 million for the six months ended June 30, 2025 and 2024, respectively. Cash flow from operations for the six months ended June 30, 2025 was positively impacted by reduction in inventories of $3.4 million and $2.2 million cash inflows from ERTC refunds received compared with the six months ended June 30, 2024.

Previous wording

Cash used in investing activities was $0.7 million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively. Cash used in investing for the three months ended March 31, 2025 consisted of $0.7 million of capital expenditures for manufacturing and capitalized software development. Cash used in investing activities for the three months ended March 31, 2024 primarily consisted of capital expenditures in manufacturing and information technology infrastructure of $0.7 million, partially offset by $0.5 million from the proceeds from the sale of marketable equity securities.

Current wording

Net cash used in investing activities was $0.9 million for the six months ended June 30, 2025 compared to cash provided by investing activities of $0.2 million for the six months ended June 30, 2024. Cash used in investing for the six months ended June 30, 2025 consisted of $0.9 million of capital expenditures for manufacturing and capitalized software development. Cash provided by investing activities for the six months ended June 30, 2024 primarily consisted of $1.9 million in proceeds from the sale of marketable equity securities, offset by $1.7 million of capital expenditures in manufacturing and information technology infrastructure and software development.

Previous wording

Cash used in financing activities was $1.2 million and $1.1 million for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, we made $1.0 million in debt repayments on our term loan and paid $0.1 million in debt issuance costs as part of the March 2025 Amendment. During the three months ended March 31, 2024, debt outstanding under our credit facility decreased by $1.0 million, consisting of net borrowings under our revolver of $2.0 million, and payments of $3.0 million against the term loan.

Current wording

Net cash used in financing activities was $2.5 million and $0.9 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025, we made $2.0 million in debt repayments on our term loan and paid $0.4 million in debt issuance costs as part of the March 2025 Amendment. During the six months ended June 30, 2024, debt outstanding under our credit facility decreased by $1.0 million, consisting of net borrowings under our revolver of $3.0 million, and payments of $4.0 million against the term loan. We also received proceeds of $0.2 million from the exercise of stock options and employee stock purchases and paid $0.1 million for taxes related to net share settlement of equity awards.

Previous wording

During the three months ended March 31, 2025, changes in foreign currency exchange rates resulted in an unfavorable effect on revenues of $0.1 million and a favorable effect on expenses of $0.1 million. The loss associated with the translation of our foreign equity into U.S. dollars included as a component of other comprehensive loss was $1.3 million and $0.8 million for the three months ended March 31, 2025 and 2024, respectively. Currency exchange rate fluctuations included as a component of net loss resulted in losses of $0.2 million for the three months ended March 31, 2025. Currency exchange rate fluctuations included as a component of net loss during the three months ended March 31, 2024 were not significant.

Current wording

During the three months ended June 30, 2025, changes in foreign currency exchange rates resulted in a favorable effect on revenues of $0.4 million and an unfavorable effect on expenses of $0.4 million. During the six months ended June 30, 2025, changes in foreign currency exchange rates resulted in a favorable effect on revenues of $0.2 million and an unfavorable effect on expenses of $0.3 million.