HARVARD BIOSCIENCE INC

The unaudited consolidated financial statements of Harvard Bioscience, Inc. and its wholly-owned subsidiaries (collectively, the “Company”) as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2025 consolidated balance sheet included herein was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

In the opinion of management, all adjustments, which include normal recurring adjustments necessary to present a fair statement of financial position as of September 30, 2026, results of operations and comprehensive loss for the three and nine months ended September 30, 2026 and 2025, and cash flows for the nine months ended September 30, 2026 and 2025, as applicable, have been made. The results of operations for the three and nine months ended September 30, 2026, are not necessarily indicative of the anticipated operating results for the full year ending December 31, 2026, or any future periods.

The accounting policies underlying the accompanying unaudited consolidated financial statements are set forth in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2026.

Reverse Stock Split

On March 6, 2026, stockholders approved an amendment to the Harvard Bioscience, Inc. Second Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, $0.01 par value per share, at a ratio within the range of 1-for-5 to 1-for-15. On March 6, 2026, the Company’s board of directors determined to effectuate the reverse stock split at a ratio of 1-for-10, effective March 13, 2026.

Each holder of common stock owned fewer shares of common stock as a result of the reverse stock split. However, the reverse stock split affected all holders of common stock uniformly and did not affect any stockholder’s percentage ownership interest in the Company, except to the extent that the reverse stock split resulted in an adjustment to a stockholder’s ownership of common stock due to the treatment of fractional shares in the reverse stock split. Therefore, voting rights and other rights and preferences of the holders of common stock were not affected by the reverse stock split (other than as a result of the treatment of fractional shares).

No fractional shares were issued as a result of the reverse stock split. Instead, each stockholder received a cash payment equal to the fraction of a share to which such stockholder was otherwise entitled multiplied by the closing price per share of the common stock on the effective date of the reverse stock split as reported by Nasdaq (as adjusted to give effect to the reverse stock split). The common stock began trading on a reverse stock split-adjusted basis on The Nasdaq Capital Market on March 16, 2026. The trading symbol for the common stock remained “HBIO.” This reverse stock split reduced the number of shares of common stock as of March 13, 2026 from 44,719,894 shares to 4,471,927 shares, net of 62 shares cash in lieu. All share and per share data in the accompanying condensed consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the effect of the reverse stock split.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP 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 assess the value for inventories reported at the lower of cost or net realizable value, stock-based compensation expense, and the recoverability of long-lived and intangible assets, including goodwill. The Company assesses its previous estimates based upon currently available information. Actual results could differ materially from those estimates.

Liquidity

For the nine months ended September 30, 2026, the Company reported an operating loss of $3.3 million and a net loss of $9.0 million. Net cash used in operating activities was $0.6 million. As of September 30, 2026, the Company had cash and cash equivalents of approximately $4.9 million.

Management has evaluated the Company’s ability to continue as a going concern in accordance with ASC 205-40, Presentation of Financial Statements – Going Concern. This evaluation considered the Company’s current financial condition, forecasted cash flows, obligations due within twelve months after the date these condensed consolidated financial statements are issued, forecasted compliance with the financial covenants under the 2025 Loan Agreement (See Note 7) and available sources of liquidity.

Although management has identified the existence of adverse conditions with respect to its liquidity, including recurring net losses, negative cash flows from operating activities and a decline in cash and cash equivalents, it has concluded that these conditions, when considered in the aggregate, do not raise substantial doubt about the Company’s ability to continue as a going concern within twelve months from the issuance date of these condensed consolidated financial statements. Accordingly, the Company’s unaudited condensed consolidated financial statements as of September 30, 2026, have been prepared on a going concern basis.

Recently Adopted Accounting Pronouncements

In July 2025, the Financial Accounting Standards Board (the “FASB”) issued ASU 2025-05,Credit Losses (Topic 326)–* Measurement of Credit Losses for Accounts Receivable and Contract Assets*, which provides a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606,Revenue from Contracts with Customers. The Company adopted ASU 2025-05 on January 1, 2026, on a prospective basis. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this update are intended to modernize the accounting for internal-use software costs accounted for under ASC Subtopic 350-40. The amendment removes all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) funding has been committed and management authorization has been granted, and (ii) it is probable the project will be completed. The standard is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We early adopted ASU 2025-06 effective January 1, 2026 on a prospective basis and the adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Yet to Be Adopted

In November 2024, the FASB issued ASU No. 2024-03,Income Statement (Subtopic 220-40): Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU No. 2024-03”), which requires enhanced disclosure of income statement expense categories to improve transparency and provide financial statement users with more detailed information about the nature, amount and timing of expenses impacting financial performance. This new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is continuing to assess the impact adopting ASU No. 2024-03 will have on the disclosures in its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10,Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”), to provide guidance on how business entities should recognize, measure, and present government grants received. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. Early adoption is permitted, and the amendments may be applied using a modified prospective, modified retrospective, or full retrospective adoption. The Company is currently evaluating the impact the adoption of ASU 2025-10 may have on the Company’s consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU No. 2025-11,Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with U.S. GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the impact the adoption of ASU 2025-11 may have on the Company’s consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU No. 2025-12,Codification Improvements (“ASU 2025-12”). The guidance in ASU 2025-12 provides incremental improvements to accounting standards for a broad range of topics. The standard is effective for annual fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2026, with early adoption permitted. Upon adoption, ASU 2025-12 may be applied prospectively or retrospectively on an issue-by-issue basis. The Company is currently evaluating the impact that the adoption of ASU 2025-12 may have on its consolidated financial statements and disclosures.

Prior Period Financial Statement Reclassifications

Certain immaterial reclassifications have been made to the prior year financial statements to conform to the current presentation.

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the periods presented. The computation of diluted earnings (loss) 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 summarizes the calculation of basic and diluted net loss per share of common stock:

The following tables represent a disaggregation of revenues from contracts with customers for the three and nine months ended September 30, 2026 and 2025:

Revenues by type were as follows:

Revenues by timing of recognition were as follows:

Revenues by geographic destination were as follows:

Contract Liabilities

The following table provides details of contract liabilities as of the dates indicated:

Changes in the Company’s contract liabilities are primarily due to the volume of service, maintenance and warranty contracts. Additionally, customer advances have decreased due to the recognition of amounts under the Company’s equipment exchange program. During the three months ended September 30, 2026 and 2025, the Company recognized revenues of $0.6 million and $0.4 million from contract liabilities existing at December 31, 2025 and 2024, respectively. During the nine months ended September 30, 2026 and 2025, the Company recognized revenue of $3.0 million and $3.2 million from contract liabilities existing at December 31, 2025 and 2024, respectively.

The following table represents the Company's remaining performance obligations from contracts that are recognized over time as of September 30, 2026:

*remainder of the year

Provision for Expected Credit Losses on Receivables

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

Concentrations

One customer accounted for 11% of revenues for the three months ended September 30, 2026 andno customer accounted for more than 10% of revenue for the three months ended September 30, 2025. No customer accounted for more than 10% of revenue for nine months ended September 30, 2026 and 2025. At September 30, 2026 one customer accounted for 10% of net accounts receivable and at December 31, 2025, no customer accounted for more than 10% of net accounts receivable.

Warranties

Activity in the product warranties accrual was as follows:

During the quarter ended March 31, 2025, the Company determined that a sustained decrease in its stock price that occurred during that quarter indicated that the carrying values of its goodwill and other long-lived assets might not be recoverable. Additional factors that contributed to this conclusion were the Company’s recent operating results, liquidity risk and the macroeconomic conditions then impacting the life sciences industry. Based on this determination, the Company performed an interim quantitative impairment test on its goodwill and other long-lived assets as of March 31, 2025 and, while there wasno impairment of its other long-lived assets as of March 31, 2025, determined that the carrying value of the reporting unit exceeded its fair value by $48.0 million. Accordingly, the Company recorded such amount as a goodwill impairment charge for the three months ended March 31, 2025.

During the quarter ended March 31, 2026, the Company’s decision in January 2026 to initiate the Project Viking restructuring plan was determined to be a triggering event indicating that the carrying values of its goodwill and other long-lived assets might not be recoverable. The Company performed a quantitative goodwill impairment test and long-lived asset recoverability assessment as of March 31, 2026 and determinedno impairment existed. The Company evaluated events and circumstances through September 30, 2026 and determined no additional triggering events occurred during the three months ended September 30, 2026 and June 30, 2026.

The change in the carrying amount of goodwill for the nine months ended September 30, 2026 was as follows:

Intangible assets, net at September 30, 2026 and December 31, 2025 consisted of the following:

Intangible asset amortization expense for the three and nine months ended September 30, 2026 and 2025 was as follows:

As of September 30, 2026, estimated future amortization expense of amortizable intangible assets is as follows:

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

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 elected to account for the credit as a government grant. As there is no 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 Topic 20,Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”). Under IAS 20, government grants are recognized when there is reasonable assurance that the grant will be received and that all conditions related to the grant will be met. The Company’s compliance with the program’s qualifications may be subject to audit until May 2029, which is when the statute of limitation expires.

The Company received ERTC refunds of $3.6 million and $3.2 million during fiscal year 2025 and 2024, respectively. Due to the subjectivity of the accounting for the credit, the Company has included the refunds received in other current liabilities in the consolidated balance sheets as of September 30, 2026 and December 31, 2025, subject to a determination that the refunds are reasonably assured to be retained by the Company.

The Company has noncancelable operating leases for offices, manufacturing facilities, warehouse space, automobiles and equipment expiring at various dates through 2030.

The components of lease expense for the three and nine months ended September 30, 2026 and 2025, were as follows:

Supplemental cash flow information related to the Company's operating leases is as follows:

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

Future minimum lease payments for operating leases, with initial terms in excess of one year at September 30, 2026, are as follows:

As of September 30, 2026 and December 31, 2025, the Company’s debt consisted of the following:

The Company previously maintained a Credit Agreement with Citizens Bank, N.A., Wells Fargo Bank, N.A., and First-Citizens Bank & Trust Company, through December 17, 2025 (the “Credit Agreement”). The Credit Agreement originally provided for a term loan of $40.0 million and a $25.0 million 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 were secured by substantially all of its assets, including all or a portion of the equity interests in certain of the Company’s domestic and foreign subsidiaries.

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

On December 17, 2025, the Company entered into a Loan and Security Agreement (the “2025 Loan Agreement”) with certain financial institutions party thereto as lenders (the “Lenders”) and BroadOak Income Fund, L.P., as the administrative agent and collateral agent. The 2025 Loan Agreement provides for the following term loans: (i) a term loan in an aggregate principal amount of $10.0 million (the “Term A Loan”), (ii) a term loan in an aggregate principal amount of $22.5 million (the “Term B Loan”) and (iii) a term loan in an aggregate principal amount of $7.5 million (the “Term C Loan” and, together with the Term A Loan and Term B Loan, the “Term Loans”). The Term A Loan and Term B Loan are senior secured obligations maturing on December 31, 2029 (the “Maturity Date”). Commencing December 31, 2027 (the “Amortization Date”), the Company is required to make quarterly principal amortization payments on the Term A Loan and Term B Loan. The Amortization Date and Maturity Date may be extended by one year if the Company achieves a certain adjusted EBITDA milestone. The Term C Loan is a senior secured convertible term loan maturing on the Maturity Date that is convertible, together with accrued and unpaid interest, into shares of common stock of the Company at a conversion price of $10.00 per share (as adjusted to reflect the reverse stock split) from January 2, 2026 until the maturity of the Term Loans. The conversion right may be exercised at the Lenders’ option, or automatically if the share price of the common stock exceeds $15.00 per share for thirty consecutive trading days. The Term C Loan may not be prepaid by the Company prior to maturity, except in the event of a repayment in full of all of the Term Loans or a change of control of the Company, in which case the Lenders may elect whether to convert their Term C Loan into Common Stock or to be repaid in full in cash. The proceeds of the Term Loans were used to repay all obligations under the Credit Facility, to pay transaction fees and expenses and for working capital and other general corporate purposes.

The Term Loans bear interest at a per annum rate equal to the greater of (i)12.80% from the date of the 2025 Loan Agreement through the 2025 Loan Agreement’s second anniversary, then 12.50% thereafter and (ii) theprime rate detailed in the 2025 Loan Agreement plus 5.25%. Interest on the Term Loans is payable in cash in arrears on the last calendar day of each month; however, at the Company’s option, interest on the Term C Loan may be payable in kind. If any portion of the Term Loans are prepaid prior to maturity, the Company will be required to pay a prepayment premium in an amount equal to (a)3.00% of the principal amount of such prepaid Term Loans if such prepayment occurs on or before the first anniversary of the closing of the transaction, (b)2.00% of the principal amount of such prepaid Term Loans if such prepayment occurs after the first anniversary but on or prior to the second anniversary of the closing of the transaction, (c)1.00% of the principal amount of such prepaid Term Loans if such prepayment occurs after the second anniversary but on or prior to the third anniversary of the closing of the transaction and (d)0.00% thereafter. However, no prepayment premium will be payable with respect to any Term A Loan prepaid before March 31, 2027. Additionally, an exit fee of 10.00% will be payable on any Term Loan amounts that are prepaid or repaid, including at maturity, except that no exit fee will be payable with respect to any Term C Loan that convert into common stock. With respect to the principal amount of the Term A Loan and the Term B Loan that are outstanding as of the fifteen month anniversary of the closing date, the exit fee percentage shall be reduced by 1.00% for every $2.0 million of the principal amount of Term A Loan that had been repaid or prepaid prior to the fifteen month anniversary of the closing date.

The Company’s obligations under the 2025 Loan Agreement are guaranteed by certain of the Company’s domestic subsidiaries, and are secured by substantially all of the assets of the Company and each guarantor.

The 2025 Loan Agreement includes customary affirmative, negative, and financial covenants binding on the Company and its subsidiaries, including delivery of financial statements and other reports and maintenance of existence. The negative covenants limit the ability of the Company and its subsidiaries, among other things, to incur debt, incur liens, make investments, sell assets and pay dividends on its capital stock. The financial covenants set forth in the 2025 Loan Agreement include a minimum liquidity covenant, which will apply at all times, and a minimum adjusted EBITDA covenant, which will be tested at the end of each fiscal quarter of the Company. The 2025 Loan Agreement also includes customary events of default.

The Company was in compliance with the covenants in the 2025 Loan Agreement requiring minimum liquidity of $3 million at all times and minimum adjusted EBITDA of $6 million, measured on a trailing 12-month basis, at the end of each of the fiscal quarters ended September 30, 2026 and December 31, 2025.

In connection with the 2025 Loan Agreement, the Company issued detachable warrants to the Lenders and its participants to purchase up to an aggregate 200,000 shares of common stock at an exercise price equal to $5.00 per share. The warrants are exercisable for aseven-year period beginning December 17, 2025. The warrants may also be exercised on a cashless basis under certain circumstances under the 2025 Loan Agreement.

The shares of common stock issuable upon the exercise of such warrants and conversion of the Term C Loan are registered for resale under the Securities Act of 1933, as amended, pursuant to a registration statement filed by the Company on January 30, 2026 and declared effective on February 9, 2026.

The Company determined that warrants issued in connection with 2025 Loan Agreement met the definition of a freestanding financial instrument and qualified for treatment as permanent equity. Warrants recorded as equity are recorded at the fair market value determined at issuance date and are not remeasured after that. The fair value of these 200,000 warrants was $1.4 million and was estimated using the Black-Scholes valuation model with the following assumptions: fair value of the Company’s common stock at issuance of $6.90 per share; four year expected term;140.4% volatility;0% dividend rate; and a risk-free interest rate of 3.6%. The Company allocated the value of warrants between the relative fair value of the notes payable without the warrants, and the warrants themselves at the time of issuance. The allocated portion of the warrants was treated as a debt discount and amortized over the term of the note. The amortization of the debt discount is recognized as interest expense.

During the three months ended March 31, 2026, certain lender participants exercised their warrants for cash in full to purchase an aggregate of 30,000 shares of common stock, at an exercise price per share of $5.00, resulting in aggregate gross proceeds to us of approximately $0.1 million.

The Company accretes loan exit fees into interest expense over the contractual terms of the 2025 Loan Agreement, to the extent that such amounts are expected to be paid.

In connection with the debt refinancing transaction on December 17, 2025 as described above, the Company paid to the Lenders a customary closing fee of $0.8 million. The Company also incurred certain legal costs and other fees totaling $2.1 million. These fees and costs were deferred on the Company’s balance sheet as a reduction of the carrying value of the Term Loans and will be amortized to interest expense over the contractual terms of the Loan Agreement.

The refinancing of the Credit Facility is considered a debt extinguishment and, as such, $0.1 million of net deferred financing costs and fees primarily related to the Credit Facility were expensed in December 2025 and included in Other expense, net in the consolidated statement of operations.

The contractual interest expense for the three months ended September 30, 2026 and 2025 was $1.3 million and $1.0 million, respectively and for the nine months ended September 30, 2026 and 2025 was $3.9 million and $2.6 million, respectively. The non-cash interest expense for the three months ended September 30, 2026 and 2025 was $0.5 million and $0.3 million, respectively and for the nine months ended September 30, 2026 and 2025 was $1.4 million and $0.7 million, respectively.

The effective interest rate on the Company’s borrowings for the three months ended September 30, 2026 and 2025 was 17.8% and 15.1%, respectively and for the nine months ended September 30, 2026 and 2025 was 17.7% and 12.0%, respectively. The carrying value of the debt approximated fair value because the interest rate under the obligation approximates market rates of interest available to the Company for similar instruments.

In February 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 which was scheduled to mature on December 22, 2025. This swap contract effectively converted 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 was considered an effective cash flow hedge, and as a result, net gains or losses are reported as a component of other comprehensive income (“OCI”) in the consolidated financial statements and are reclassified when the underlying hedged interest impacts earnings. An assessment was performed quarterly to evaluate the ongoing hedge effectiveness. As part of the refinancing on December 17, 2025, the Company terminated the interest rate swap effective December 11, 2025.

The effect of the cash flow hedge on other comprehensive income (loss) and earnings for the periods presented was as follows:

Stock-based compensation expense for the three and nine months ended September 30, 2026 and 2025 was allocated as follows:

As of September 30, 2026, the total compensation cost related to unvested awards not yet recognized was $1.9 million and the weighted average period over which it is expected to be recognized is approximately 1.7 years. The Company didnot capitalize any stock-based compensation during the three and nine months ended September 30, 2026.

Restricted stock unit (“RSU”) activity for the nine months ended September 30, 2026 was as follows:

Retroactively presented to reflect 1-for-10 reverse stock split effective on March 13, 2026.

The aggregate fair value of RSUs that vested during the nine months ended September 30, 2026, and 2025 was $0.6 million and $0.3 million, respectively. Unvested shares related to market-based and performance-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Actual vesting could range from zero to 150% of their target amounts.

Performance-based RSU awards are contingent on the achievement of certain performance metrics. Compensation cost associated with performance-based RSUs is recognized based on the estimated number of shares that the Company ultimately expects will be earned. If the estimated number of shares to be earned is revised in the future, then stock-based compensation expense will be adjusted accordingly.

Stock option activity for the nine months ended September 30, 2026 was as follows:

Retroactively presented to reflect 1-for-10 reverse stock split effective on March 13, 2026.

There isno aggregate intrinsic value of stock options at September 30, 2026 because the Company’s closing stock price of $7.92 was below the exercise price of the outstanding options.

The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which the Company operates and the development of tax planning strategies during the year. In addition, as a global commercial enterprise, the Company’s tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

Income tax (benefit) expense was $(0.1) million and $0.1 million for the three months ended September 30, 2026 and 2025, respectively, and was $0.1 million and $(0.3) million for the nine months ended September 30, 2026 and 2025, respectively. The Company’s effective tax rate of 2.7% and (0.7)% for the three and nine months ended September 30, 2026, differed from the U.S statutory rate primarily due to a benefit for reserves related to uncertain tax positions and non-deductible stock compensation. The Company’s effective tax rate of (8.6)% and 0.6% for the three and nine months ended September 30, 2025, was lower than the U.S statutory rate due to the tax effect of goodwill impairment. The effective tax rate for both periods was also impacted by changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets and changes in tax accruals and reserves related to prior year tax returns.

The Company is involved in various 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 is not likely to have a material adverse effect on its business, financial condition, results of operations or cash flows. If one 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 January 2026, the Company received notification from a third-party alleging a potential claim for breach of contract. The Company does not concede the validity of any allegations and is vigorously defending the matter. While the outcome is uncertain, it is reasonably possible a loss could be incurred. Management estimates the range of potential loss to be between $0.1 million and $0.8 million. The Company does not expect that this matter will have a material adverse impact on its financial position.

In addition, the Company has entered into indemnification agreements with its directors and officers. It is not possible to determine the maximum potential liability amount under these indemnification agreements due to the limited history of prior indemnification claims. The Company has not recorded any liability for costs related to contingent indemnification obligations as of September 30, 2026 and December 31, 2025.

The components of other operating expenses for the three and nine months ended September 30, 2026 and 2025 were as follows:

Restructuring expenses

On an ongoing basis, the Company reviews the global economy, the healthcare industry, and the markets in which it competes to identify operational efficiencies and align its cost base and infrastructure with customer needs and its strategic plans. In order to realize these goals, the Company undertakes activities from time to time to optimize its business.

In January 2026, the Company announced a comprehensive plan, referred to as Project Viking, for the strategic consolidation of its manufacturing operations to improve efficiency and support long-term growth. The Company is expected to close its manufacturing facility in Holliston, MA and transition U.S. production to its manufacturing hub in Minneapolis, MN. Certain operations will also be relocated to facilities in Germany, Sweden, and the UK, intended to align specific product lines with their designated center of excellence and most strategically advantageous logistical location.

In June 2026, the Company developed a comprehensive plan for the restructuring of our sales, services and marketing strategy.

During the three months ended September 30, 2026 and 2025, the Company incurred restructuring expenses of $0.7 million and $0.1 million, respectively and for the nine months ended September 30, 2026 and 2025 incurred $1.2 million and $0.2 million, respectively. These costs primarily consisted of retention and severance and other costs incurred in connection with the restructuring activities mentioned above.

The severance and other costs detailed above have been included as a component of other operating expenses, and all inventory-related charges are included in cost of revenues. The changes in the accrued liabilities for restructuring and other charges for the nine months ended September 30, 2026 were as follows:

The Company conducts business as asingle operating segment, which is based upon the Company’s organizational and management structure, as well as information used by the chief operating decision maker (“CODM”) to allocate resources and other factors. The key measure of segment profitability that the CODM uses to allocate resources and assess performance is consolidated net income (loss), as reported on the consolidated statements of operations. The CODM utilizes consolidated net loss by comparing actual results against budgeted amounts on a quarterly basis. The following table presents the significant revenue and expense categories of the Company’s single operating segment:

(1)Excludes stock-based compensation expense

(2)Includes stock-based compensation, other operating expenses and other expenses

Asset information provided to the CODM is consistent with that reported on the consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash, accounts receivable, and inventory, reduced by current liabilities. Information relating to the Company’s products and services and geographical distribution of revenues is disclosed in Note 3.