HARVARD BIOSCIENCE INC 10-K

Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “HBIO.” Stockholders There were 82 holders of record of our common stock as of March 5, 2026. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. Dividend Policy We have never declared or paid cash dividends on our common stock in the past and do not intend to pay cash dividends on our common stock in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors our board of directors deems relevant. Item 6 . [Reserved] Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking Statements The following section of this Annual Report on Form 10-K contains statements that are not statements of historical fact and are forward-looking statements within the meaning of federal securities laws. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, financial performance or achievements to be materially different from any future results, financial performance or achievements expressed or implied by the forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Factors that may cause our actual results to differ materially from those in the forward-looking statements include those factors described in “Item 1A. Risk Factors” in this Annual Report on Form 10-K. You should carefully review all of these factors, as well as the comprehensive discussion of forward-looking statements on page 1 of this Annual Report on Form 10-K. 15 Table of Contents Overview Harvard Bioscience, Inc., a Delaware corporation, is a leading developer, manufacturer and seller of technologies, products and services that enable fundamental advances in life science applications, including research, pharmaceutical and therapy discovery, bioproduction and preclinical testing for pharmaceutical and therapy development. Our products and services are sold globally to customers ranging from renowned academic institutions and government laboratories to the world’s leading pharmaceutical, biotechnology and CROs. With operations in the United States, Europe and China, we sell through a combination of direct and distribution channels to customers around the world. As the life sciences industry accelerates toward New Approach Methodologies (“NAMs”), Harvard Bioscience expects to evolve from a traditional tools provider into a leading enabler of Translational Medicine – positioned to bridge the gap between laboratory research and human clinical success. Building on its gold-standard preclinical foundation, the Company plans to align its portfolio, innovation pipeline, and operating model around four strategic pillars: ● Leading the Translational Bridge: bridging in vivo and in vitro research by leveraging the Company’s strong preclinical position to facilitate the industry’s transition into the organoid and 3D biology markets, improving the translational relevance of early-stage research, and offering customers an integrated solution across critical stages of discovery and development. ● New Product Introduction (“NPI”) Pipeline: modernizing preclinical and translational workflows through differentiated and innovative high-margin platforms such as SoHo™ telemetry, and proprietary MeshMEA and Incub8 platforms both of which are designed for organoid and tissue recording. ● Consumables Revenue Expansion: shifting mix toward higher-margin consumables and software with a path to increasing recurring revenue from 55% of total revenues as of December 31, 2025. ● Operational Excellence and Disciplined Growth: driving consistent profitability by utilizing preclinical business as a cash-generating foundation to fund research and development (“R&D”) and inorganic bolt-on acquisitions. The Company will also focus on maintaining cost discipline and operational efficiency, supported by its recent manufacturing consolidation and the stronger balance sheet created by the December 17, 2025 debt refinancing. In addition, we have taken steps to rationalize our product portfolio and improve our operating cost structure. These activities have included the discontinuation of certain non-strategic products, the consolidation of our global operating footprint, and the reduction of our headcount in Europe and North America. In January 2026, the Company developed 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 expects to close its manufacturing facility in Holliston, MA and transition U.S. production to its manufacturing hub in Minneapolis, MN, and to relocate certain operations to facilities in Germany, Sweden, and the UK, aligning specific product lines with their designated center of excellence and most strategically advantageous logistical location. The Company expects the initiative to deliver approximately $3 million in cost savings in 2027, and approximately $4 million in annual cost savings beginning in 2028, while improving throughput and execution. The Company expects to incur pre-tax restructuring charges related to Project Viking in the range of approximately $3.4 to $4.4 million, including non-cash asset write-off and/or accelerated depreciation charges in the range of approximately $0.6 to $0.7 million, primarily related to the exit of production activities and manufacturing operations at the Holliston, MA manufacturing site. These amounts are estimates and are subject to future changes. Selected Results of Operations In the table below, we provide an overview of selected operating metrics for the year ended December 31, 2025, compared to the year ended December 31, 2024. Year Ended December 31, (dollars in thousands) 2025 % of revenue 2024 % of revenue Revenues $ 86,550 $ 94,135 Gross profit 49,910 57.7 % 54,766 58.2 % Sales and marketing expenses 19,216 22.2 % 22,212 23.6 % General and administrative expenses 17,742 20.5 % 21,493 22.8 % Research and development expenses 8,825 10.2 % 10,406 11.1 % Amortization of intangible assets 4,027 4.7 % 5,255 5.6 % Goodwill impairment 47,951 55.4 % - 0.0 % Other operating expenses 729 0.8 % 1,611 1.7 % Interest expense 4,917 5.7 % 3,536 3.8 % Loss on pension settlement 1,233 1.4 % - 0.0 % Loss on equity securities - 0.0 % 1,593 1.7 % Other expense, net 2,656 3.1 % 325 0.3 % Income tax (benefit) expense (686 ) -0.8 % 740 0.8 % Revenues Revenues decreased $7.5 million, or 8.1%, to $86.6 million for the year ended December 31, 2025, compared to $94.1 million for the year ended December 31, 2024. The decrease in revenues was primarily due to softening of worldwide demand from distributors, CROs and academic medical research institutions. Changes in foreign currency exchange rates had a $1.2 million favorable effect on revenues during the year ended December 31, 2025. 16 Table of Contents Gross profit Gross profit decreased $4.9 million, or 8.9%, to $49.9 million for the year ended December 31, 2025, compared with $54.8 million for the year ended December 31, 2024, primarily due to the decreases in revenues. Gross margin decreased to 57.7% for the year ended December 31, 2025, compared with 58.2% for the year ended December 31, 2024. Gross margin was unfavorably impacted by the under-absorption of fixed manufacturing overhead costs due to the decrease in revenues which was partially offset by a better mix of high margin products and lower labor costs. Sales and marketing expenses Sales and marketing expenses decreased $3.0 million, or 13.5%, to $19.2 million for the year ended December 31, 2025, compared to $22.2 million for the year ended December 31, 2024. The decrease was primarily due to a decrease in compensation costs of $1.9 million, a decrease in travel and entertainment costs of $0.4 million, and a decrease in tradeshow costs of $0.4 million, in each case as compared to the year ended December 31, 2024. General and administrative expenses General and administrative expenses decreased by $3.8 million, or 17.5%, to $17.7 million for the year ended December 31, 2025, compared with $21.5 million for the year ended December 31, 2024. The decrease was primarily due to a decrease in compensation costs of $1.7 million, a decrease in stock based compensation costs of $2.2 million, partially offset by increases in professional fees of $0.2 million and legal fees of $0.2 million, in each case as compared to the year ended December 31, 2024. Research and development expenses Research and development expenses decreased $1.6 million, or 15.2%, to $8.8 million for the year ended December 31, 2025, compared with $10.4 million for the year ended December 31, 2024. The decrease was primarily due to a decrease in compensation costs of $1.3 million and a decrease of $0.3 million in project costs and consulting fees, as compared to the year ended December 31, 2024. Amortization of intangible assets Amortization of intangible assets decreased $1.3 million, or 23.4%, to $4.0 million for the year ended December 31, 2025, compared with $5.3 million for the year ended December 31, 2024. Goodwill impairment Based on the Company’s quantitative impairment analysis as of March 31, 2025, the Company 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. Other operating expenses Other operating expenses for the year ended December 31, 2025, were $0.7 million, including a fee of $0.5 million in connection with the receipt of employee retention tax credits and restructuring costs of $0.2 million in connection with headcount reductions. Other operating expenses for the year ended December 31, 2024, were $1.6 million, including $0.8 million in connection with headcount reductions, a fee of $0.5 million in connection with the receipt of employee retention tax credits, and $0.3 million related to settlement of an unclaimed property audit. Interest expense Interest expense increased $1.4 million, or 39.1%, to $4.9 million for the year ended December 31, 2025, compared with $3.5 million for the year ended December 31, 2024. The increase was primarily due to the increase in the interest rate margin pursuant to the March 2025 and August 2025 amendments to the Company’s prior term loan and senior revolving credit facility. Loss on pension settlement For the year ended December 31, 2025, the Company used $1.4 million of plan assets to purchase non-participating annuity contracts resulting in the full settlement of the benefit obligations for one of its pension programs in the UK. As a result, the Company recorded a non-cash pension settlement charge of approximately $1.2 million, primarily consisting of unrecognized actuarial losses. Loss on equity securities As of December 31, 2023, we held shares of common stock of Harvard Apparatus Regenerative Technology, Inc. (“HRGN”) with an estimated fair value of $3.5 million. These shares were received in connection with the settlement of indemnification obligations related to litigation which was resolved during the year ended December 31, 2022. During the year ended December 31, 2024, we sold all of our HRGN shares for $1.9 million and recorded a loss on sale of $1.6 million. 17 Table of Contents Other expense, net Other expense, net for the year ended December 31, 2025, was $2.7 million and included costs of $1.8 million in connection with exploring alternative sources of capital that would allow the Company to refinance the outstanding indebtedness due to its former lenders, $0.6 million related to loss on foreign currency, and a $0.1 million loss on extinguishment of debt. Other expenses, net for the year ended December 31, 2024, were $0.3 million, which was primarily related to $0.2 million of loss on foreign currency. Income tax expense Income tax (benefit) expense for the year ended December 31, 2025, was ($0.7) million benefit compared to $0.7 million expense for the year ended December 31, 2024. The effective tax rates for the years ended December 31, 2025 and 2024, were (1.1%) and 6.3%, respectively. The lower effective tax rate during the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily attributable to goodwill impairment, an increase in the Company’s GILTI inclusion, and a decrease in the change in the Company’s valuation allowance. Our effective tax rates for the years ended December 31, 2025 and December 31, 2024 were different than the U.S. statutory rates primarily due to changes in valuation allowances associated with our assessment of the likelihood of the recoverability of deferred tax assets and the impact of changes to prior year tax accruals. Liquidity and Capital Resources Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and our shelf registration statement that provides for the issuance of common stock, preferred stock, warrants and units up to an amount equal to $100 million (the “2024 Shelf Registration Statement”). Our expected cash outlays relate primarily to cash payments due under our Loan and Security Agreement (the “2025 Loan Agreement”), entered into with certain financial institutions party thereto as lenders and BroadOak Income Fund, L.P., as the administrative agent and collateral agent on December 17, 2025, as well as salaries, inventory, capital expenditures, and other operating costs. We held cash and cash equivalents of $8.6 million and $4.1 million as of December 31, 2025 and December 31, 2024, respectively. Borrowings outstanding were $40.0 million and $37.4 million as of December 31, 2025 and December 31, 2024, respectively. Under the 2025 Loan Agreement, the Company is required to maintain certain financial covenants that are based on financial measures not presented in accordance with U.S. generally accepted accounting principles. The Company was in compliance with the minimum liquidity requirement and the minimum adjusted EBITDA requirement, each as defined in the 2025 Loan Agreement, measured on a trailing 12-month basis, of at least $6,000,000 for the fiscal quarter ending December 31, 2025. The Coronavirus Aid, Relief, and Economic Security Act of 2020 provided an employee retention tax credit (“ERTC”) that was a refundable tax credit against certain employer taxes. The Company received ERTC refunds of $3.6 million and $3.2 million during the year ended December 31, 2025 and December 31, 2024. 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. As of December 31, 2024 and in the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025, the anticipated maturity of the Company’s Amended Credit Agreement (defined in Note 10) on December 22, 2025, together with uncertainty as to the Company’s ability to comply with future covenants under the terms of the Amended Credit Agreement, raised substantial doubt about the Company’s ability to continue as a going concern. On December 17, 2025, the Company entered into the 2025 Loan Agreement and completed a comprehensive refinancing of its credit facility, resulting in a new maturity date and improved covenant compliance. For additional details on the 2025 Loan Agreement and refinancing, see the discussion in Note 10 to the consolidated financial statements included in “Part IV, Item 15. Exhibits, Financial Statement Schedules” of this report. Management evaluated the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements and concluded that (1) the conditions and events that initially raised substantial doubt have been alleviated and (2) substantial doubt does not exist as of the issuance date. These financial statements are therefore prepared on a going-concern basis. Consolidated Cash Flow Statements Year Ended December 31, (in thousands) 2025 2024 Net cash provided by operating activities $ 6,729 $ 1,440 Net cash used in investing activities (1,863 ) (1,344 ) Net cash used in financing activities (1,291 ) (131 ) Effect of exchange rate changes on cash 931 (140 ) Increase (decrease) in cash and cash equivalents $ 4,506 $ (175 ) Cash provided by operations was $6.7 million and $1.4 million for the years ended December 31, 2025 and 2024, respectively, an increase of $5.3 million. Cash flow from operations, adjusted for non-cash items, for the year ended December 31, 2025 was $1.1 million, compared to $1.4 million for the year ended December 31, 2024. The increase in cash provided by operations was primarily due to a decrease in inventory of $3.0 million, an increase in accounts payable and other liabilities of $2.3 million compared to a decrease of $1.8 million in the prior year, and a decrease in contract liabilities of $0.2 million compared to a decrease of $0.7 million in the prior year, partially offset by an increase in accounts receivable of $0.9 million compared to a decrease of $1.0 million in the prior year. 18 Table of Contents Cash used in investing activities was $1.9 million for the year ended December 31, 2025, and consisted of $1.3 million of capital expenditures for manufacturing and information technology infrastructure and $0.6 million of capitalized software development. Cash used in investing activities was $1.3 million for the year ended December 31, 2024, and consisted of $2.6 million of capital expenditures for manufacturing and information technology infrastructure and $0.6 million of capitalized software development, partially offset by $1.9 million in proceeds from the sale of marketable equity securities. Cash used by financing activities was $1.3 million for the year ended December 31, 2025. During this period, the Company made total debt payments of $37.4 million, including repayment of debt outstanding of $33.7 million. Net borrowing under the new credit facility was $39.2 million and we paid debt issuance costs of $2.9 million. Additionally, we paid $0.1 million for taxes related to net share settlement of equity awards. Cash used by financing activities was $0.1 million for the year ended December 31, 2024. During this period, debt outstanding under our credit facility increased by $0.2 million, due to net borrowings under our revolver of $8.8 million and payments of $8.6 million against the revolver and term loan. Additionally, we paid debt issuance costs of $0.2 million. We also received proceeds of $0.4 million from the exercise of stock options and employee stock purchase plan purchases and paid $0.6 million for taxes related to net share settlement of equity awards. Impact of Foreign Currencies Our international operations in some instances operate as 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 the British pound. During the year ended December 31, 2025, changes in foreign currency exchange rates resulted in a favorable effect on revenues of $1.2 million and an unfavorable effect on expenses of $1.5 million. During the years ended December 31, 2025 and 2024, the translation of foreign currency into U.S. dollars included as a component of comprehensive income (loss) resulted in a gain (loss) of $3.2 million and $(1.4) million, respectively. In addition, the currency exchange rate fluctuations included as a component of net loss resulted in currency losses of $(0.6) million and $(0.2) million during the years ended December 31, 2025 and 2024, respectively. Recent Accounting Pronouncements For information on recent accounting pronouncements impacting our business, see “Recent Accounting Pronouncements” included in Note 2 to the consolidated financial statements included in “Part IV, Item 15. Exhibits, Financial Statement Schedules” of this report. Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, income taxes, litigation and other contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following is one of the more significant judgments and estimates used in the preparation of our consolidated financial statements: Impairment of Goodwill and Other Long-Lived Assets Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment analysis for goodwill consists of a qualitative assessment potentially followed by a quantitative analysis. If we determine that the carrying value of our reporting unit exceeds its fair value, an impairment charge to goodwill is recorded for the excess. The critical judgments involved in our annual test of goodwill include an assessment of unfavorable events and a judgment of whether those events put our goodwill at risk of impairment, which if determined to be at risk would require us to perform a quantitative test. The critical judgments and estimates in our quantitative tests for goodwill and long-lived assets include selection and weighting of available valuation methods and the selection of assumptions that may be used in those methods. During the year ended December 31, 2024, we determined that indicators of impairment were present for our goodwill and certain assets included in a long-lived asset group, including liquidity risk associated with inability to borrow under our Credit Agreement and reduced operating profits. Based on the quantitative analysis, we concluded that our goodwill and certain assets included in a long-lived asset group were not impaired due to the excess of fair value over the carrying value of these assets at December 31, 2024. During the quarter ended March 31, 2025, the Company determined that a sustained decrease in its stock price that occurred during the three months ended March 31, 2025 indicated that the carrying values of its goodwill and other long-lived assets may 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 interim quantitative impairment tests on its goodwill and other long-lived assets as of March 31, 2025 and June 30, 2025, as well as a qualitative analysis as of September 30, 2025. Based on the quantitative impairment analysis as of March 31, 2025, the Company 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. Based on the quantitative impairment analysis performed as of June 30, 2025 and qualitative analysis performed as of September 30, 2025, an additional impairment charge was not required during the three months ended June 30, 2025, and September 30, 2025. 19 Table of Contents The Company evaluated its goodwill for impairment as of October 1, 2025 by performing a qualitative analysis and determined that it was more likely than not that the fair value of the reporting unit exceeded the carrying value. Income Taxes and Valuation Allowance We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our annual tax rate is based on income, statutory tax rates, tax reserve changes and tax planning opportunities available to us in the various jurisdictions in which we operate. We regularly assess the likelihood of tax adjustments in each of the tax jurisdictions in which we have operations and account for the related financial statement implications. We have established tax reserves that we believe are appropriate given the possibility of tax adjustments. Determining the appropriate level of tax reserves requires significant judgment regarding the uncertain application of tax laws. Reserves are adjusted when information becomes available or when an event occurs indicating a change in the reserve is appropriate. Changes in tax reserves could have a material impact on our financial condition or results of operations. Significant judgment is also required in determining the amount of deferred tax assets that will ultimately be realized and any corresponding deferred tax asset valuation allowance. When estimating the necessary valuation allowance, we consider all available evidence for each jurisdiction including historical operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies. If new information becomes available that would alter our estimate of the amount of deferred tax assets that will ultimately be realized, we adjust the valuation allowance through income tax expense. Changes in the deferred tax asset valuation allowance could have a material impact on our financial condition or results of operations. Filer Status The Company performed its public float calculation pursuant to the SEC's Public Float Test as of the last business day of its second fiscal quarter ended June 30, 2025. Based on this calculation, the Company concluded that its public float did not exceed the threshold to retain its filer status as an accelerated filer. As a result, the Company's filer status has changed and it is now classified as a non-accelerated filer. Accordingly, the Company will be subject to the requirements within this classification, including a non-accelerated timeline to file certain periodic reports, and it will be eligible for the scaled-down financial disclosure requirements provided to entities that meet the definition of a non-accelerated filer. This change in filer status takes effect with this Form 10-K for the fiscal year ended December 31, 2025, which is the first annual report filed for the fiscal year in which the Company lost its accelerated filer status. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Not Applicable.