What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-07 · 280 added, 189 removed, 385 unchanged (55% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(Unaudied, in thousands, except share and per share data)

(Unaudited, in thousands, except share and per share data)

June 30, 2024

December 31, 2023

Current assets:

Cash and cash equivalents

$ 4,255 $ 4,283

Accounts receivable, net

15,309 16,099

24,136 24,716

Other current assets

Total current assets

48,148 49,038

Property, plant and equipment, net

Operating lease right-of-use assets

56,699 57,065

Intangible assets, net

14,678 16,036

Other long-term assets

$ 133,161 $ 137,366

Liabilities and Stockholders' Equity

1 unchanged sentence

Current portion of long-term debt

$ 3,720 $ 5,859

Current portion of operating lease liabilities

Accounts payable

2 unchanged sentences

Total current liabilities

25,677 26,542

Long-term debt, net

31,890 30,704

Deferred tax liability

2 unchanged sentences

Total liabilities

64,349 64,292

Commitments and contingencies - Note 13

2 unchanged sentences

Common stock, par value $ 0.01 per share, 80,000,000 shares authorized:

43,421,251 shares issued and outstanding at March 31, 2024;

43,610,883 shares issued and outstanding at June 30, 2024;

43,394,509 shares issued and outstanding at December 31, 2023

Additional paid-in-capital

233,451 232,435

Accumulated deficit

( 150,299 ) ( 145,605 )

Accumulated other comprehensive loss

( 14,774 ) ( 14,190 )

Total stockholders' equity

68,812 73,074

Total liabilities and stockholders' equity

$ 133,161 $ 137,366

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenues

3 unchanged sentences

Amortization of intangible assets

Other operating expenses

Other operating expenses – Note 1

Total operating expenses

Operating (loss) income

Other (expense) income:

Other income (expense):

Interest expense

1 unchanged sentence

Other (expense) income, net

Total other (expense) income

(Loss) income before income taxes

Income tax expense

Net (loss) income

(Loss) income per share:

Basic (loss) income per share

Diluted (loss) income per share

Total other expense

Loss before income taxes

Income tax benefit

Loss per share:

Basic and diluted

Weighted-average common shares:

Basic and diluted

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Net (loss) income

$ ( 4,694 ) $ 622

Other comprehensive (loss) income:

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive income (loss):

Foreign currency translation adjustments

Derivative instruments qualifying as cash flow hedges, net of tax of $- 0 -

Derivative instruments qualifying as cash flow hedges, net of tax

Other comprehensive (loss) income

Comprehensive (loss) income

$ ( 5,278 ) $ 1,019

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudied, in thousands)

Three Months Ended

March 31, 2024

(Unaudited, in thousands)

Comprehensive

Stockholders’

Balance at December 31, 2023

Balance at March 31, 2024

Stock option exercises

Stock purchase plan

Vesting of restricted stock units

2 unchanged sentences

Other comprehensive loss

Balance at June 30, 2024

Comprehensive

Stockholders’

Balance at March 31, 2023

Three Months Ended

March 31, 2023

Stock option exercises

Stock purchase plan

Vesting of restricted stock units

Shares withheld for taxes

Stock-based compensation expense

Other comprehensive income

Balance at June 30, 2023

Comprehensive

2 unchanged sentences

Stock option exercises

Stock purchase plan

Vesting of restricted stock units

1 unchanged sentence

Stock-based compensation expense

Other comprehensive loss

Balance at June 30, 2024

Comprehensive

Stockholders’

Balance at December 31, 2022

Stock option exercises

Stock purchase plan

Vesting of restricted stock units

Shares withheld for taxes

Stock-based compensation expense

Other comprehensive income

Balance at March 31, 2023

Balance at June 30, 2023

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Amortization of intangible assets

15 unchanged sentences

Proceeds from sale of marketable equity securities

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

17 unchanged sentences

The unaudited consolidated financial statements of Harvard Bioscience, Inc.

and its wholly-owned subsidiaries (collectively, the “Company”) as of March 31, 2024 and for the three months ended March 31, 2024 and 2023, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

and its wholly-owned subsidiaries (collectively, the “Company”) as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 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.

4 unchanged sentences

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, 2023.

In the opinion of management, all adjustments, which include normal recurring adjustments necessary to present a fair statement of financial position as of March 31, 2024, results of operations and comprehensive income (loss) and cash flows for the three months ended March 31, 2024 and 2023, as applicable, have been made.

The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the operating results for the full fiscal year or any future periods.

In the opinion of management, all adjustments, which include normal recurring adjustments necessary to present a fair statement of financial position as of June 30, 2024, results of operations and comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023, as applicable, have been made.

The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the operating results for the full fiscal year 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, 2023.

There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2024.

There have been no material changes in the Company’s significant accounting policies during the six months ended June 30, 2024.

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.

The preparation of financial statements in conformity with generally 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.

3 unchanged sentences

Other Operating Expenses

Other operating expenses for the three months ended March 31, 2024 included a fee of $ 0.5 million in connection with the receipt of employee retention credits (See Note 5 ) and an estimated loss of $ 0.5 million related to an unclaimed property audit (See Note 13 ).

The components of other operating expenses for the three and six months ended June 30, 2024 were as follows:

Three Months Ended

Six Months Ended

(in thousands)

June 30, 2024

Restructuring expenses (see Note 15)

Unclaimed property audits (credit) expense (see Note 13)

Employee retention credit fees (see Note 5)

Total other operating expenses

Recently Issued Accounting Pronouncements Yet to Be Adopted

7 unchanged sentences

Basic earnings (loss) per share (EPS) is calculated by dividing net income (loss) by the number of weighted average shares of common stock outstanding during the period.

The calculation of diluted earnings per share assumes conversion of stock options and restricted stock units into common stock using the treasury method.

The following table summarizes the calculation of basic and diluted net income (loss) per share of common stock:

Three Months Ended March 31,

The calculation of diluted earnings per share assumes conversion of stock options and restricted stock units into common stock using the treasury method, unless the effect is antidilutive.

The following table summarizes the calculation of basic and diluted net loss per share of common stock:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands, except per share data)

Net (loss) income

Weighted average shares outstanding - basic

1 unchanged sentence

Weighted average shares outstanding - diluted

Basic (loss) income per share

Diluted (loss) income per share

Shares excluded from diluted (loss) income per share due to their anti-dilutive effect

The following tables represent a disaggregation of revenue from contracts with customers for the three months ended March 31, 2024 and 2023:

Basic loss per share

Diluted loss per share

Shares excluded from diluted loss per share

due to their anti-dilutive effect

The following tables represent a disaggregation of revenue from contracts with customers for the three and six months ended June 30, 2024 and 2023:

Revenues by type were as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

3 unchanged sentences

Revenues by timing of recognition were as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

3 unchanged sentences

Revenue by geographic destination were as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

6 unchanged sentences

(dollars in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

2 unchanged sentences

Total contract liabilities

Changes in the Company’s contract liabilities are primarily due to the timing of receipt of payments under service, maintenance and warranty contracts.

During the three months ended March 31, 2024 and 2023, the Company recognized revenue of $ 1.6 million and $ 1.0 million from contract liabilities existing at December 31, 2023 and 2022, respectively.

Changes in the Company’s contract liabilities are primarily due to the timing of receipt of payments under service, maintenance and warranty contracts and lower sales volumes.

During the three months ended June 30, 2024 and 2023, the Company recognized revenue of $ 1.0 million and $ 0.6 million from contract liabilities existing at December 31, 2023 and 2022, respectively.

During the six months ended June 30, 2024 and 2023, the Company recognized revenue of $ 2.6 million and $ 1.6 million from contract liabilities existing at December 31, 2023 and 2022, respectively.

Provision for Expected Credit Losses on Receivables

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

Concentrations

No customer accounted for more than 10% of revenues for the three months ended March 31, 2024 and 2023.

At March 31, 2024 and December 31, 2023, no customer accounted for more than 10% of net accounts receivable.

Activity in the product warranty accrual was as follows:

Three Months Ended March 31,

No customer accounted for more than 10% of revenues for the three and six months ended June 30, 2024 and 2023.

At June 30, 2024 and December 31, 2023, no customer accounted for more than 10% of net accounts receivable.

Activity in the product warranties accrual was as follows:

Six Months Ended June 30,

(in thousands)

Balance, beginning of period

Provision for warranties

Warranty claims

1 unchanged sentence

Goodwill and Intangible Assets

The change in the carrying amount of goodwill for the three months ended March 31, 2024 was as follows:

The change in the carrying amount of goodwill for the six months ended June 30, 2024 was as follows:

(in thousands)

1 unchanged sentence

Effect of change in currency translation

Carrying amount at March 31, 2024

Intangible assets at March 31, 2024 and December 31, 2023 consisted of the following:

March 31, 2024

Carrying amount at June 30, 2024

Intangible assets at June 30, 2024 and December 31, 2023 consisted of the following:

June 30, 2024

December 31, 2023

1 unchanged sentence

Amortizable intangible assets:

Distribution agreements/customer relationships

Customer relationships

Technology and software development

3 unchanged sentences

Total intangible assets

Intangible asset amortization expense for the three months ended March 31, 2024 and 2023 was as follows:

Three Months Ended March 31,

Intangible asset amortization expense for the three and six months ended June 30, 2024 and 2023 was as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

2 unchanged sentences

Total amortization of intangible assets

As of March 31, 2024, estimated future amortization expense of amortizable intangible assets is as follows:

As of June 30, 2024, estimated future amortization expense of amortizable intangible assets is as follows:

(in thousands)

3 unchanged sentences

(in thousands)

June 30, 2024

December 31, 2023

Finished goods

3 unchanged sentences

(in thousands)

June 30, 2024

December 31, 2023

Customer credits

Current portion of operating lease liabilities

Employee retention credit funds

2 unchanged sentences

The Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”) provided an employee retention credit (“ERC”) that was a refundable tax credit against certain employer taxes.

The Company has elected to account for the credit as a government grant.

The Company elected to account for the credit as a government grant.

As there is no authoritative guidance under U.S.

1 unchanged sentence

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 received an ERC refund of $ 3.2 million during the quarter ended March 31, 2024.

Due to the subjectivity of the credit, the Company has included the refund received in other current liabilities in the consolidated balance sheet as of March 31, 2024, subject to a determination that the refund is recognizable under IAS 20.

The Company engaged a professional services firm under a commission fee arrangement to assist with determining program eligibility and in accumulating the necessary support that was used as a basis in the filing.

During the three months ended March 31, 2024, the Company paid a fee of $ 0.5 million for these services, which is included in other operating expenses in the consolidated statement of operations.

The Company received ERC refunds of $ 3.2 million during the six months ended June 30, 2024.

Due to the subjectivity of the credit, the Company has included the refunds received in other current liabilities in the consolidated balance sheet as of June 30, 2024, subject to a determination that the refunds are recognizable.

The Company engaged a professional services firm under a commission fee arrangement to assist with determining the Company’s eligibility to claim the ERC refunds and accumulating the necessary support that was used as a basis in the filing.

During the six months ended June 30, 2024, the Company paid fees of $ 0.5 million for these services, which are included in other operating expenses in the consolidated statement of operations.

Marketable Equity Securities

In April 2023, the Company obtained shares of common stock of Harvard Apparatus Regenerative Technologies, Inc.

(“HRGN” formerly known as Biostage, Inc.) in connection with settlement of indemnification obligations related to litigation which occurred during the year ended December 31, 2022.

These shares had an estimated fair value of $ 1.7 million and $ 3.5 million, as of March 31, 2024, and December 31, 2023, respectively, and are included in the consolidated balance sheets as a component of other long-term assets.

The Company received cash proceeds of $ 0.5 million from the sale of HRGN shares sold during the three months ended March 31, 2024, which resulted in a realized loss on sale of $ 0.3 million.

The Company incurred an unrealized loss of $ 1.0 million on HRGN shares held during the three months ended March 31, 2024.

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.

In April 2023, the Company received shares of common stock of Harvard Apparatus Regenerative Technology, Inc.

(“HRGN”, formerly known as Biostage, Inc.) in connection with settlement of indemnification obligations related to litigation which was resolved during the year ended December 31, 2022.

These shares had an estimated fair value $ 3.5 million and are included in the consolidated balance sheet as a component of other long-term assets as of December 31, 2023.

During the six months ended June 30, 2024, the Company sold all of its remaining HRGN shares.

The Company received cash proceeds of $ 1.4 million and $ 1.9 million from HRGN shares sold during the three and six months ended June 30, 2024, respectively.

The Company recorded losses on equity securities of $ 0.3 million and $ 1.6 million during the three and six months ended June 30, 2024, respectively.

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 months ended March 31, 2024 and 2023, were as follows:

Three Months Ended March 31,

The components of lease expense for the three and six months ended June 30, 2024 and 2023, were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities

Right-of-use assets obtained in exchange for lease obligations

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

(in thousands)

June 30, 2024

December 31, 2023

Operating lease right-of-use assets

4 unchanged sentences

Weighted average discount rate

Future minimum lease payments for operating leases, with initial terms in excess of one year at March 31, 2024, are as follows:

Future minimum lease payments for operating leases, with initial terms in excess of one year at June 30, 2024, are as follows:

(in thousands)

4 unchanged sentences

Long-Term Debt

As of March 31, 2024 and December 31, 2023, the Company’s borrowings were as follows:

As of June 30, 2024 and December 31, 2023, the Company’s borrowings were as follows:

(in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Long-term debt

The aggregate amounts of debt maturities are as follows:

(in thousands)

The Company maintains a Credit Agreement (as amended, the “Credit Agreement”) with Citizens Bank, N.A., Wells Fargo Bank, National Association, and First Citizens Bank & Trust Company (together, the “Lenders”).

2 unchanged sentences

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 $ 4.4 million as of March 31, 2024 based on the Credit Agreement, as amended pursuant to the March 2024 Amendment as described below.

Available and unused borrowing capacity under the revolving line of credit was $ 5.4 million as of June 30, 2024, based on the Credit Agreement, as amended on August 6, 2024 (the “August 2024 Amendment”), as described below.

Total revolver borrowing capacity is limited by the consolidated net leverage ratio as defined under the amended Credit Agreement.

2 unchanged sentences

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 net leverage ratio and is determined in accordance with a pricing grid set forth in the Credit Agreement.

Pursuant to the August 2024 Amendment, the applicable interest rate margin varies from 2.0 % per annum to 3.75 % per annum for SOFR Loans, and from 1.5 % per annum to 3.5 % per annum for ABR Loans, in each case depending on the Company’s consolidated net leverage ratio, and is determined in accordance with a pricing grid set forth in the Credit Agreement.

There are no 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 borrowings for the three months ended March 31, 2024 and 2023, was 7.7 % and 7.9 %, respectively, and the weighted average interest rate as of March 31, 2024, net of the effect of the Company’s interest rate swaps, was 7.4 %.

The effective interest rate on the Company borrowings for the three months ended June 30, 2024 and 2023, was 7.9 % and 8.3 %, respectively, and for the six months ended June 30, 2024 and 2023, was 7.8 % and 8.1 %, respectively.

The weighted average interest rate as of June 30, 2024, net of the effect of the Company’s interest rate swaps, was 7.7 %.

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 March 31, 2024, the term loan requires quarterly installments of $ 1.0 million with a balloon payment at maturity.

Furthermore, within ninety days after the end of the Company’s fiscal year, the term loan may be 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 loan shall be credited against the Company’s “excess cash flow” prepayment obligations on a dollar-for-dollar basis for such fiscal year.

As of June 30, 2024, the term loan requires quarterly installment payments of $ 1.0 million with a balloon payment at maturity on December 22, 2025.

Furthermore, within ninety days after the end of the Company’s fiscal year, the term loan may be permanently reduced pursuant to certain mandatory prepayment events including an annual “excess cash flow sweep”, as defined in the Credit Agreement, provided that, in any fiscal year, any voluntary prepayments of the term loan 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 included amounts due under the excess cash flow sweep of $ 2.0 million which was paid on March 29, 2024.

4 unchanged sentences

The Credit Agreement also includes customary events of default.

In March, 2024, the Company entered into an amendment to the Credit Agreement (the “March 2024 Amendment”) pursuant to which the Lenders and administrative agent modified the definition of Consolidated EBITDA used in the calculation of certain financial covenants to adjust for charges related to the ongoing abandoned property audit (See Note 13 ) and commission fees expected to be paid in connection with the employee retention credit filings (See Note 5 ).

The Company was in compliance with the covenants of the Credit Agreement, as amended, as of March 31, 2024.

In March 2024, the Company entered into an amendment to the Credit Agreement pursuant to which the Lenders and administrative agent modified the definition of Consolidated EBITDA used in the calculation of certain financial covenants to adjust for charges related to an abandoned property audit (see Note 13) and commission fees expected to be paid in connection with the ERC filings (see Note 5).

On August 6, 2024, the Company entered into an amendment to the Credit Agreement that, among other things, modifies the financial covenants relating to the consolidated net leverage ratio and consolidated fixed charge coverage ratio through the period ended December 31, 2024.

The amendment also adds a net leverage ratio requirement with respect to additional borrowing under the Company’s revolving credit facility and restrictions on certain additional indebtedness and investments, in each case until the Company delivers to the Lenders the Company’s financial statements for the fiscal year ending December 31, 2024.

In addition, until delivery of the financial statements, the applicable interest rate margin will be increased by 50 bps during such time as the Company’s consolidated net leverage ratio is greater than 3.0 .

The Company paid fees of $ 0.2 million to the Lenders in connection with the amendment.

As a result of the August 2024 Amendment, the Company is in compliance with the financial covenants of the Credit Agreement.

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.

The swap contract had a notional amount of $ 25.9 million as of March 31, 2024 and matures on December 22, 2025.

The swap contract had a notional amount of $24.5 million as of June 30, 2024 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 does not impact the additional interest related to the applicable interest rate margin as discussed above in Note 8, 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 other comprehensive income (“OCI”) in the consolidated financial statements and are reclassified as net income when the underlying hedged interest impacts earnings.

The swap contract is 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 is performed quarterly to evaluate the ongoing hedge effectiveness.

The following table presents the notional amount and fair value of the Company’s derivative instruments as of March 31, 2024 and December 31, 2023:

The following table presents the notional amount and fair value of the Company’s derivative instruments as of June 30, 2024 and December 31, 2023:

(in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

6 unchanged sentences

Interest rate swap

Other long-term liabilities

$ 25,920 $ * $ 27,375 $ ( 199 )

* Amount not significant.

Other long-term assets (liabilities)

(a) See Note 10 for the fair value measurements related to these financial instruments.

1 unchanged sentence

Three Months Ended

Six Months Ended

Derivatives Qualifying as Hedges, net of tax (in thousands)

March 31, 2024

March 31, 2023

Gain (loss) recognized in OCI on derivatives (effective portion)

Gian (loss) reclassified from OCI to interest expense

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Gain recognized in OCI on derivatives (effective portion)

Gain reclassified from accumulated OCI to interest expense

Fair Value Measurements

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

Fair Value as of March 31, 2024

Fair Value as of June 30, 2024

Assets (Liabilities) (in thousands)

Equity securities - common stock

Interest rate swap agreements

Interest rate swap agreement

Fair Value as of December 31, 2023

Equity securities - common stock

Interest rate swap agreements

* Amount not significant.

Interest rate swap agreement

The Company uses the market approach technique to value its financial liabilities.

1 unchanged sentence

The fair value of the Company’s investment in HRGN common stock (see Note 6) was based on the closing price per 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.

The fair value of the Company’s interest rate swap agreement was based on SOFR yield curves at the reporting date.

Stock-Based Compensation

Stock-based compensation expense for the three months ended March 31, 2024 and 2023 was allocated as follows:

Three Months Ended March 31,

Stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 was allocated as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

Total stock-based compensation expense

As of March 31, 2024, the total compensation costs related to unvested awards not yet recognized was $ 8.4 million and the weighted average period over which it is expected to be recognized is approximately 2.3 years.

As of June 30, 2024, the total compensation costs related to unvested awards not yet recognized was $ 7.8 million and the weighted average period over which it is expected to be recognized is approximately 2.0 years.

The Company did not capitalize any stock-based compensation.

Restricted stock unit (“RSU”) activity for the three months ended March 31, 2024 was as follows:

Restricted stock unit (“RSU”) activity for the six months ended June 30, 2024 was as follows:

Balance at December 31, 2023

Balance at March 31, 2024

Balance at June 30, 2024

Unvested shares related to market-based and performance-based vesting conditions are reflected at 100 % of their target vesting amount in the table above.

3 unchanged sentences

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 three months ended March 31, 2024 was as follows:

Intrinsic Value

(in thousands)

Outstanding and Exerciseable at December 31, 2023

Outstanding and Exerciseable at March 31, 2024

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $ 4.24 as of the end of the reporting period, 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 during the three months ended March 31, 2024, was not significant.

Stock option activity for the six months ended June 30, 2024 was as follows:

Number of Options

Weighted-Average Exercise Price

Weighted-Average Remaining Contractual Term

Aggregate Intrinsic Value (in thousands)

Outstanding and exercisable at December 31, 2023

Cancelled/Forfeited

Outstanding and exercisable at June 30, 2024

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $ 2.85 as of the last trading day of the reporting period, 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 during the six months ended June 30, 2024, was not significant.

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.

1 unchanged sentence

As such, there can be significant volatility in interim tax provisions.

Income tax expense was $ 0.2 million and $ 0.6 million for the three months ended March 31, 2024 and 2023, respectively.

The Company’s effective tax rate of ( 4.7 %) for the three months ended March 31, 2024 was lower than the U.S.

The income tax benefit was $ 0.4 million and $ 1.1 million for the three months ended June 30, 2024 and 2023, respectively, and was $ 0.1 million and $ 0.5 million for the six months ended June 30, 2024 and 2023, respectively.

The Company’s effective tax rates of 10.8 % and 1.8 % for the three and six months ended June 30, 2024, respectively, were lower than the U.S.

statutory rate primarily due to the inclusion of non-deductible executive compensation and changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets.

The Company’s effective tax rate of 48.5 % for the three months ended March 31, 2023 was higher than the U.S.

The Company’s effective tax rates of 53.3 % and 59.8 % for the three and six months ended June 30, 2023 were higher than the U.S.

statutory rate primarily due to a Global Intangible Low-Taxed Income (“GILTI”) inclusion to taxable income and changes in valuation allowances.

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It is not 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 has not recorded any liability for costs related to contingent indemnification obligations as of March 31, 2024.

The Company has not recorded any liability for costs related to contingent indemnification obligations as of June 30, 2024.

The Company is subject to unclaimed property laws in the ordinary course of its business.

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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 Company’s evaluation of the current stage of the audit, the Company accrued $ 0.5 million of loss contingencies during the three months ended March 31, 2024, which has been included in other operating expenses in the consolidated statement of operations.

The Company recorded a credit of $( 0.1 ) million and an expense of $ 0.3 million during the three and six months ended June 30, 2024, respectively, related to unclaimed property audits which have been included in other operating expenses in the consolidated statement of operations.

Product Line Disposition

In February 2023, the Company sold its Hoefer product line for $ 0.5 million.

The carrying value of assets sold was $ 0.1 million resulting in a gain on disposition of $ 0.4 million which was recorded in Other income, net in the consolidated statement of operations for the three months ended March 31, 2023.

Revenue and gross profit of this disposed product line included in the condensed consolidated statement of operations for the three months ended March 31, 2023 were not significant.

The carrying value of assets sold was $ 0.1 million resulting in a gain on disposition of $ 0.4 million which was recorded in other income, net in the consolidated statement of operations for the six months ended June 30, 2023.

Revenue and gross profit of this disposed product line included in the condensed consolidated statement of operations for the six months ended June 30, 2023 were not significant.

Restructuring and Other Exit Costs

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 ASC 420, Exit or Disposal Cost Obligations , and are discussed below.

During the three and six months ended June 30, 2024, the Company completed a restructuring and incurred expenses of $ 0.4 million, primarily consisting of severance incurred in connection with headcount reductions in Europe and North America.

The changes in the accrued liability for restructuring and other charges for the six months ended June 30, 2024 were as follows:

(in thousands)

Inventory-Related

Balance at December 31, 2023

Restructuring and other exit costs

Non-cash charges

Cash payments

Balance at June 30, 2024

The inventory-related costs are included in cost of revenues and the severance costs have been included as a component of other operating expenses (see Note 1).

Subsequent Event

On August 6, 2024, the Company entered into the August 2024 Amendment to the Credit Agreement as described in Note 8 – Long-Term Debt.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

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Selected Results of Operations

Three months ended March 31, 2024 compared to three months ended March 31, 2023

Three Months Ended March 31,

Three months ended June 30, 2024, compared to three months ended June 30, 2023

Three Months Ended June 30,

(dollars in thousands)

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Loss on equity securities

Income tax expense

Revenues decreased $5.5 million, or 18.2%, to $24.5 million for the three months ended March 31, 2024, compared to $30.0 million for the three months ended March 31, 2023.

The decrease in revenue was primarily due to the softening of worldwide demand, in particular in the Asia-Pacific region compared to a strong first quarter in 2023.

Gross profit decreased $3.5 million, or 19.5%, to $14.8 million for the three months ended March 31, 2024 compared with $18.3 million for the three months ended March 31, 2023, primarily due to the decrease in revenues.

Gross margin decreased to 60.3% for the three months ended March 31, 2024, compared with 61.2% for the three months ended March 31, 2023.

Income tax benefit

Revenues decreased $5.7 million, or 19.7%, to $23.1 million for the three months ended June 30, 2024, compared to $28.8 million for the three months ended June 30, 2023.

The decrease in revenue was primarily due to softening of worldwide demand compared to a strong second quarter in 2023 as well as decreased sales of preclinical products from contract research organizations (CRO’s).

Gross profit decreased $3.5 million, or 20.7%, to $13.2 million for the three months ended June 30, 2024, compared with $16.7 million for the three months ended June 30, 2023, primarily due to the decrease in revenues.

Gross margin decreased to 57.2% for the three months ended June 30, 2024, compared with 58.0% for the three months ended June 30, 2023.

The decrease in gross margin was primarily the result of under-absorption of fixed manufacturing overhead costs due to the decrease in revenues and lower mix of high margin products.

Sales and marketing expenses

Sales and marketing expenses decreased $0.8 million, or 12.7%, to $5.4 million for the three months ended June 30, 2024, compared with $6.2 million for the three months ended June 30, 2023.

The decrease was primarily due to lower compensation and travel costs.

General and administrative expenses

General and administrative expenses increased $0.3 million, or 6.2%, to $5.7 million for the three months ended June 30, 2024, compared with $5.4 million for the three months ended June 30, 2023.

The increase was primarily due to higher stock-based compensation expense as a result of forfeitures during the prior year period.

Research and development expenses

Research and development expenses decreased $0.4 million, or 11.2%, to $2.6 million for the three months ended June 30, 2024, compared with $3.0 million for the three months ended June 30, 2023.

The decrease was primarily due to lower compensation costs.

Amortization of intangible assets

Amortization of intangible assets included in operating expenses was $1.3 million for the three months ended June 30, 2024, compared with $1.4 million for the three months ended June 30, 2023.

Other operating expenses

Other operating expenses for the three months ended June 30, 2024 was $0.2 million and 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.

Interest expense

Interest expense decreased $0.2 million, or 20.4%, to $0.7 million for the three months ended June 30, 2024, compared with $0.9 million for the three months ended June 30, 2023.

The decrease was primarily due to lower average borrowings during the period.

Loss on equity securities

As of March 31, 2024, we held shares of common stock of HRGN with an estimated fair value of $1.7 million.

These shares were received in April 2023 in connection with settlement of indemnification obligations related to litigation which was resolved during the year ended December 31, 2022.

During the three months ended June 30, 2024, we sold all of our remaining HRGN shares for $1.4 million and recorded a loss of $0.3 million.

Income tax benefit

The income tax benefit was $0.4 million and $1.1 million for the three months ended June 30, 2024 and 2023, respectively.

The effective tax rates for the three months ended June 30, 2024 and 2023 were 10.8% and 53.3%, respectively.

The lower effective tax rate during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was related to a decrease in the Global Intangible Low Tax Income (“GILTI”) inclusion.

The effective tax rate for both the second quarters of 2024 and 2023 differed from the U.S.

statutory rate primarily due to the inclusion of non-deductible executive compensation and changes in valuation allowances associated with our assessment of the likelihood of the recoverability of deferred tax assets.

Six months ended June 30, 2024, compared to six months ended June 30, 2023

Six Months Ended June 30,

(dollars in thousands)

Sales and marketing expenses

General and administrative expenses

Research and development expenses

Amortization of intangible assets

Other operating expenses

Interest expense

Loss on equity securities

Income tax benefit

Revenues decreased $11.1 million, or 18.9%, to $47.6 million for the six months ended June 30, 2024, compared to $58.7 million for the six months ended June 30, 2023.

The decrease in revenue was primarily due to softening worldwide demand compared to a strong first half in 2023 as well as decreased sales of preclinical products from CRO’s.

Gross profit decreased $7.0 million, or 20.1%, to $28.0 million for the six months ended June 30, 2024 compared with $35.0 million for the six months ended June 30, 2023, primarily due to the decrease in revenues.

Gross margin decreased to 58.8% for the six months ended June 30, 2024, compared with 59.6% for the six months ended June 30, 2023.

The decrease in gross margin was primarily the result of under-absorption of manufacturing overhead costs due to the decrease in revenues.

Sales and marketing expenses

Sales and marketing expenses of $5.9 million for the three months ended March 31, 2024, were comparable to the $6.0 million during the same period in 2023.

Reduced variable compensation was offset by increased investments in personnel to support our growth strategy, product launches and travel costs related to industry trade shows.

Sales and marketing expenses decreased $0.9 million, or 7.1%, to $11.3 million for the six months ended June 30, 2024, compared with $12.2 million for the six months ended June 30, 2023.

The decrease was primarily due to lower compensation and travel costs.

General and administrative expenses

General and administrative expenses decreased $0.3 million, or 5.9%, to $6.0 million for the three months ended March 31, 2024, compared with $6.3 million for the three months ended March 31, 2023.

The decrease was primarily due to reduced variable compensation.

General and administrative expenses remained relatively unchanged and were $11.6 million for the six months ended June 30, 2024, compared with $11.7 million for the six months ended June 30, 2023.

Decreases in compensation during the period were partially offset by increases in professional fees.

Research and development expenses

Research and development expenses were $2.9 million for both the three months ended March 31, 2024, and March 31, 2023.

Research and development expenses decreased $0.4 million, or 5.9%, to $5.5 million for the six months ended June 30, 2024, compared with $5.9 million for the six months ended June 30, 2023.

The decrease was primarily due to lower compensation costs.

Amortization of intangible assets

Amortization of intangible assets included in operating expenses remained relatively unchanged and decreased to $1.3 million for the three months ended March 31, 2024, compared with $1.4 million for the three months ended March 31, 2023.

Amortization of intangible assets included in operating expenses remained relatively unchanged and were $2.7 million for the six months ended June 30, 2024, compared with $2.8 million for the six months ended June 30, 2023.

Other operating expenses

Other operating expenses for the three months ended March 31, 2023 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.

Other operating expenses for the six months ended June 30, 2024, were $1.2 million and included a fee of $0.5 million in connection with the receipt of employee retention credits, $0.3 million related to settlement of an unclaimed property audit, and restructuring costs of $0.4 million in connection with headcount reductions in Europe and North America.

Interest expense

Interest expense decreased $0.2 million, or 22.9%, to $0.8 million for the three months ended March 31, 2024, compared with $1.0 million for the three months ended March 31, 2023.

Interest expense decreased $0.4 million, or 21.7%, to $1.5 million for the six months ended June 30, 2024, compared with $1.9 million for the six months ended June 30, 2023.

The decrease was primarily due to lower average borrowings during the period.

Loss on equity securities

As of March 31, 2024 and December 31, 2023 we held shares of common stock of HRGN with an estimated fair value of $1.7 million and $3.5 million, respectively.

These shares were received in April 2023 in connection with settlement of indemnification obligations related to litigation which occurred during the year ended December 31, 2022.

During the three months ended March 31, 2024, we recorded a loss 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.

We determine the fair value of our 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 our investment in this common stock could fluctuate considerably or become worthless.

Income tax expense

Income tax expense was $0.2 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively.

The effective tax rates for the three months ended March 31, 2024 and 2023 were (4.7)% and 48.5%, respectively.

The effective tax rate decreased in the first quarter of 2024 compared to 2023 due to a decrease in the GILTI inclusion.

The effective tax rate for both the first quarters of 2024 and 2023 differed from the U.S.

As of December 31, 2023, we held shares of common stock of HRGN with an estimated fair value of $3.5 million.

These shares were received in April 2023 in connection with settlement of indemnification obligations related to litigation which was resolved during the year ended December 31, 2022.

During the six months ended June 30, 2024, we sold all of our remaining HRGN shares for $1.9 million and recorded a loss of $1.6 million.

Income tax benefit

The income tax benefit was $0.1 million and $0.5 million for the six months ended June 30, 2024 and 2023, respectively.

The effective tax rates for the six months ended June 30, 2024 and 2023 were 1.8% and 59.8%, respectively.

The lower effective tax rate during the six months ended June 30, 2024, compared to the six months ended June 30, 2023 related to a decrease in the GILTI inclusion and changes to reserves for uncertain tax positions.

The effective tax rate for both the second quarters of 2024 and 2023 differed from the U.S.

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Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and our revolving credit facility.

Our expected cash outlays relate primarily to cash payments due under our Credit Agreement described below as well as capital expenditures, salaries, inventory, and capital expenditures.

We held cash and cash equivalents of $4.3 million at both March 31, 2024, and December 31, 2023.

Borrowings outstanding were $36.1 million and $37.1 million as of March 31, 2024 and December 31, 2023, respectively.

Our expected cash outlays relate primarily to cash payments due under our Credit Agreement described below as well salaries, inventory, and capital expenditures.

We held cash and cash equivalents of $4.0 million and $4.3 million as of June 30, 2024 and December 31, 2023, respectively.

Borrowings outstanding were $36.1 million and $37.1 million as of June 30, 2024 and December 31, 2023, respectively.

We maintain a Credit Agreement which provides for a term loan of $40.0 million and a $25.0 million senior revolving credit facility both maturing on December 22, 2025.

On March 28, 2024, we entered into an amendment to the Credit Agreement pursuant to which the Lenders and administrative agent modified the definition of Consolidated EBITDA used in the calculation of certain financial covenants to adjust for charges related to the ongoing abandoned property audit and commission fees expected to be paid in connection with our employee retention credit filings.

We were in compliance with the covenants of the Credit Agreement, as amended, as of March 31, 2024.

(See Note 8 to the Consolidated Condensed Financial Statements included in Part I, Item 1.

On August 6, 2024, we entered into an amendment to the Credit Agreement that, among other things, modifies the financial covenants relating to the consolidated net leverage ratio and consolidated fixed charge coverage ratio through the period ended December 31, 2024.

The amendment also adds a net leverage ratio requirement with respect to additional borrowing under our revolving credit facility and restrictions on certain additional indebtedness and investments, in each case until we deliver to the Lenders our financial statements for the fiscal year ending December 31, 2024.

In addition, until delivery of the financial statements, the applicable interest rate margin will be increased by 50bps during such time as the consolidated net leverage ratio is greater than 3.0.

We paid fees of $0.2 million to the Lenders in connection with the amendment.

As a result of the August 2024 Amendment, we are in compliance with the financial covenants of the Credit Agreement (see Note 8 to the Consolidated Condensed Financial Statements included in Part I, Item 1.

of this report).

As of March 31, 2024, the weighted average interest rate on our borrowings, net of the effect of the interest rate swaps, was 7.4%, and the available and unused borrowing capacity was $4.4 million.

Total revolver borrowing capacity is limited by our consolidated net leverage ratio as defined under the Credit Agreement, as amended.

As of June 30, 2024, the weighted average interest rate on our borrowings, net of the effect of the interest rate swaps, was 7.7%, and the available and unused borrowing capacity was $5.4 million.

Total revolver borrowing capacity is limited by our consolidated net leverage ratio as defined under the Credit Agreement, as amended on August 6, 2024.

Based on our current operating plans, we expect that our available cash, cash generated from current operations and debt capacity will be sufficient to finance current operations and capital expenditures for at least the next 12 months.

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CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

Cash provided by operating activities

Cash (used in) provided by investing activities

Cash provided by (used in) investing activities

Cash used in financing activities

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Decrease in cash and cash equivalents

Cash provided by operating activities was $1.4 million and $1.8 million for the three months ended March 31, 2024 and 2023, respectively.

Cash flow from operations for the three months ended March 31, 2024 was negatively impacted as a result of the decline in net income for the period adjusted for non-cash items and was positively impacted by the receipt of $3.2 million of employee retention credits.

Cash used in investing activities was $0.2 million for the three months ended March 31, 2024 and 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.

Cash provided by investing activities was $0.3 million for the three months ended March 31, 2023 and primarily consisted of $0.5 million from proceeds of the sale our Hoefer product line partially offset by $0.2 million of capital expenditures.

Cash used in financing activities was $1.1 million and $2.9 million for the three months ended March 31, 2024 and 2023, respectively.

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.

During the three months ended March 31, 2023, debt outstanding under our credit facility decreased by $2.8 million, consisting of net payments against our revolver of $1.0 million, and payments of $1.8 million against the term loan.

Cash provided by operating activities was $0.6 million and $5.4 million for the six months ended June 30, 2024 and 2023, respectively.

Cash flow from operations for the six months ended June 31, 2024 was negatively impacted as a result of the decline in net income for the period adjusted for non-cash items and was positively impacted by the receipt of $3.2 million of employee retention credits.

Cash provided by investing activities was $0.2 million for the six months ended June 30, 2024, and 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.

Cash used in investing activities was $0.3 million for the six months ended June 30, 2023, and consisted of $0.8 million of capital expenditures in manufacturing, information technology infrastructure, and software development, partially offset by $0.5 million from proceeds of the sale our Hoefer product line.

Cash used in financing activities was $0.9 million and $5.3 million for the six months ended June 30, 2024 and 2023, respectively.

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.

During the six months ended June 30, 2023, debt outstanding under our credit facility decreased by $5.5 million, consisting of net payments against our revolver of $2.9 million and payments of $2.6 million against the term loan.

During the six months ended June 30, 2023, we also received proceeds of $0.7 million from the exercise of stock options and employee stock purchases and paid $0.5 million for taxes related to net share settlement of equity awards.

Impact of Foreign Currencies

Our international operations in some instances operate in a natural hedge, as we sell our products in many countries and a substantial portion of our revenues, costs and expenses are denominated in foreign currencies, primarily the euro and British pound.

During the three months ended March 31, 2024, changes in foreign currency exchange rates had an insignificant effect on our revenues and expenses.

During the three months ended June 30, 2024 changes in foreign currency exchange rates had an insignificant effect on our revenues and expenses.

During the six months ended June 30, 2024, changes in foreign currency exchange rates resulted in an unfavorable effect on our revenue of approximately $0.1 million and a favorable effect on expenses of approximately $0.1 million.

The gain (loss) associated with the translation of our foreign equity into U.S.

dollars included as a component of other comprehensive income (loss) during the three months ended March 31, 2024 was a loss of $(0.8) million, compared to a gain of $0.8 million for the three months ended March 31, 2023.

Currency exchange rate fluctuations included as a component of net income (loss) during the three months ended March 31, 2024, and March 31, 2023 were not significant.

dollars included as a component of other comprehensive income (loss) was $(0.1) million and $0.2 million for the three months ended June 30, 2024 and June 30, 2023, respectively, and $(0.9) million and $1.0 million for the six months ended June 30, 2024 and 2023, respectively.

Currency exchange rate fluctuations included as a component of net loss resulted in currency losses of $(0.1) million for both the three months ended June 30, 2024 and 2023, respectively, and $(0.1) million for both the six months ended June 30, 2024 and 2023, respectively.

Critical Accounting Policies

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

What changed 10-Q

Item 1. Financial Statements