What changed in this filing

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Item 1. Financial Statements

2026-05-12 compared with 2025-11-06 · 313 added, 390 removed, 347 unchanged (67% of the section changed)

3 unchanged sentences

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

September 30,

Current assets:

13 unchanged sentences

Total current liabilities

Long-term debt, net

Deferred tax liability

6 unchanged sentences

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

44,579,665 shares issued and outstanding at September 30, 2025;

4,510,182 shares issued and outstanding at March 31, 2026;

4,471,989 shares issued and outstanding at December 31, 2025;

4 unchanged sentences

Total liabilities and stockholders' equity

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

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of revenues

6 unchanged sentences

Total operating expenses

Operating income (loss)

Operating loss

Other expense:

Interest expense

Loss on pension settlement

Loss on equity securities - Note 6

Other expense, net

6 unchanged sentences

Basic and diluted *

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

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

Defined benefit pension plans

Derivative instruments

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

Other comprehensive (loss) income

6 unchanged sentences

Stockholders’

Balance at June 30, 2025

Vesting of restricted stock units

Shares withheld for taxes

Stock-based compensation

Other comprehensive loss

Balance at September 30, 2025

Comprehensive

Stockholders’

Balance at June 30, 2024

Stock option exercises

Stock-based compensation

Other comprehensive income

Balance at September 30, 2024

Comprehensive

Stockholders’

Balance at December 31, 2025

Stock purchase plan

Warrant exercises

Vesting of restricted stock units

2 unchanged sentences

Other comprehensive loss

Balance at September 30, 2025

Balance at March 31, 2026

Comprehensive

1 unchanged sentence

Balance at December 31, 2024

Stock option exercises

Stock purchase plan

Vesting of restricted stock units

2 unchanged sentences

Other comprehensive income

Balance at September 30, 2024

Balance at March 31, 2025

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

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

5 unchanged sentences

Deferred income taxes and other

Loss on equity securities - Note 6

Loss on pension settlement - Note 8

Changes in operating assets and liabilities:

2 unchanged sentences

Contract liabilities

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities:

1 unchanged sentence

Capitalized software development costs

Proceeds from sale of marketable equity securities

Net cash used in investing activities

Cash flows from financing activities:

Borrowing from revolving line of credit

Repayment of revolving line of credit

Repayment of term debt

2 unchanged sentences

Taxes paid related to net share settlement of equity awards

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash

Increase in cash and cash equivalents

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

See accompanying notes to condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Basis of Presentation and Summary of Significant Accounting Policies

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation and Summary of Significant Accounting Policies

The unaudited consolidated financial statements of Harvard Bioscience, Inc.

and its wholly-owned subsidiaries (collectively, the “Company”) as of September 30, 2025, and for the three and nine months ended September 30, 2025 and 2024, 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 March 31, 2026 and for the three months ended March 31, 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.

1 unchanged sentence

GAAP”) have been condensed or omitted pursuant to such rules and regulations.

The December 31, 2024, consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by U.S.

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.

However, the Company believes that the disclosures are adequate to make the information presented not misleading.

These condensed 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, 2024.

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, 2025, results of operations and comprehensive loss for the three and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024, as applicable, have been made.

The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the anticipated operating results for the full year ending December 31, 2025, or any future periods.

The accounting policies underlying the accompanying condensed 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, 2024.

There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2025.

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 March 31, 2026, results of operations and comprehensive loss for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025, as applicable, have been made.

The results of operations for the three months ended March 31, 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 three months ended March 31, 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 and 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 has 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.

Going Concern

The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025, have been prepared assuming that the Company will continue as a going concern.

A going-concern basis assumes that the Company will continue its operations for the foreseeable future and contemplate the realization of assets and the settlement of liabilities in the normal course of business.

As noted below, there is substantial doubt about the Company’s ability to continue as a going concern.

As of September 30, 2025, there was indebtedness of $ 34.0 million outstanding under the Company's term loan and senior revolving credit facility (collectively, the “Credit Agreement”).

On August 8, 2025, the Company entered into an amendment (the “August 2025 Amendment”) to the Credit Agreement, pursuant to which the Lenders (defined below) and administrative agent agreed, subject to the terms contained in the August 2025 Amendment, to waive the events of default under the Credit Agreement due to the Company’s failure to achieve certain refinancing milestones (the “Refinancing Milestones”) and its failure to comply with certain financial covenants.

In connection with the August 2025 Amendment, the Company has agreed to accomplish steps towards the refinancing (the “Refinancing”) or repayment of the Credit Agreement by no later than December 5, 2025.

The Company continues to make progress on these steps, and is working actively to reach a definitive agreement that will accomplish one of these outcomes.

The failure to accomplish such steps on the agreed timeline shall constitute an event of default under the Credit Agreement.

In such event, in addition to other actions the lenders may require, the amounts outstanding under the Credit Agreement may become immediately due and payable.

The Company continues to explore alternative sources of capital that would allow it to refinance the outstanding indebtedness due under the Credit Agreement, but its ability to access such other sources of capital is uncertain.

There is no assurance that such capital will be available, be obtainable on commercially acceptable terms, or provide the Company with sufficient funds to meet its objectives.

Based on its anticipated cash flows from operations, unless the Company is able to access other sources of capital or extend the date for repayment under the Credit Agreement, the Company will be unable to pay its debt obligations and fund its operations for at least twelve months from the date of issuance of the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

As a result, there is substantial doubt about the Company's ability to continue as a going concern.

The consolidated financial statements have been prepared in accordance with U.S.

GAAP and on a going concern basis, which assumes the Company will continue to operate in the normal course of business.

Management has evaluated the Company’s ability to continue as a going concern under ASC 205-40 for the twelve months following the issuance of these financial statements and concluded that the conditions and events that initially raised substantial doubt have been alleviated and that substantial doubt does not exist as of the date of issuance.

These financial statements are therefore prepared on a going-concern basis.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S.

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.

On an ongoing basis, the Company assesses its previous estimates based upon currently available information.

Actual results could differ materially from the 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 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.

Other Operating Expenses

The components of other operating expenses for the three and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

The components of other operating expenses for the three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31,

(in thousands)

Employee retention tax credit fees (see Note 5)

Unclaimed property audits expense (see Note 13)

Restructuring expenses (see Note 12)

Employee retention tax credit fees (see Note 5)

Total other operating expenses

Recently Adopted Accounting Pronouncements

In July 2025, 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 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 guidance is intended to improve certain aspects of the accounting for and disclosure of internally developed software costs specific to website development.

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 December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax (“ASU No.

2023-09”), which enhances disclosures related to the effective tax rate reconciliation, income taxes paid, as well as other disclosures.

The new standard impacts footnote disclosures and is effective for the Company’s annual financial statements for the year ending December 31, 2025.

The Company is continuing to assess the impact adopting ASU No.

2023-09 will have on the footnote disclosures in its consolidated financial statements.

In November 2024, the FASB issued ASU No.

4 unchanged sentences

The Company is continuing to assess the impact adopting ASU No.

2024-03 will have on the footnote disclosures in its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), requiring election of a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets.

ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted in both interim and annual reporting periods.

The Company is evaluating the impact that ASU 2025-05 will have on its consolidated financial statements.

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.

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.

Earnings (Loss) per Share

2 unchanged sentences

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share data)

1 unchanged sentence

Dilutive effect of equity awards

Dilutive effect of convertible Term C loan

Dilutive effect of warrants

Weighted average shares outstanding - diluted *

1 unchanged sentence

Diluted loss per share *

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

The following tables represent a disaggregation of revenues from contracts with customers for the three and nine months ended September 30, 2025 and 2024:

Shares excluded from diluted loss per share

due to their anti-dilutive effect *

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

The following tables represent a disaggregation of revenues from contracts with customers for the three months ended March 31, 2026 and 2025:

Revenues by type were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

3 unchanged sentences

Revenues by timing of recognition were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

Total revenues

Revenues by geographic region were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Revenues by geographic destination were as follows:

Three Months Ended March 31,

(in thousands)

4 unchanged sentences

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

September 30,

(in thousands)

7 unchanged sentences

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.

Additionally, customer advances have decreased due to the recognition of amounts under the Company’s exchange program, which allows customers to purchase a replacement implantable monitor of the same model at a lower price than a new monitor if the customer returns an implantable monitor to the Company after use, and the returned monitor can be reprocessed and resold.

During the three months ended September 30, 2025 and 2024, the Company recognized revenues of $ 0.4 million and $ 0.4 million from contract liabilities existing at December 31, 2024 and 2023, respectively.

During the nine months ended September 30, 2025 and 2024, the Company recognized revenue of $ 3.2 million and $ 3.0 million from contract liabilities existing at December 31, 2024 and 2023, respectively.

The following table represents the Company's remaining performance obligations from contracts that are recognized over time as of September 30, 2025:

Additionally, customer advances have decreased due to the recognition of amounts under the Company’s equipment exchange program.

During the three months ended March 31, 2026 and 2025, the Company recognized revenues of $ 1.4 million and $ 1.7 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 March 31, 2026:

Remaining Performance Obligations

4 unchanged sentences

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

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

4 unchanged sentences

Concentrations

No customer accounted for more than 10% of revenues for the three and nine months ended September 30, 2025 and 2024.

At September 30, 2025 and December 31, 2024, no customer accounted for more than 10% of net accounts receivable.

No customer accounted for more than 10% of revenues for the three months ended March 31, 2026 and 2025.

At March 31, 2026 and December 31, 2025, no customer accounted for more than 10% of net accounts receivable.

Activity in the product warranties accrual was as follows:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

4 unchanged sentences

Goodwill and Long-Lived Assets

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 are the Company’s recent operating results, liquidity risk and the current macroeconomic conditions 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.

The recoverability of assets or an asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or the asset group.

Based on its recoverability assessment, the Company determined that there was no impairment of its other long-lived assets as of March 31, 2025 and June 30, 2025.

Based on its qualitative analysis the Company determined that there was no impairment of its other long-lived assets as of September 30, 2025.

For the purpose of its goodwill impairment analysis, the Company has one reporting unit.

The Company estimated the fair value of the reporting unit using an income-based valuation approach by means of a discounted cash flow (“DCF”) model.

Under this model, the fair value of the reporting unit is determined based on the present value of estimated future cash flows, discounted at a risk-adjusted rate of return.

The Company used internal forecasts and strategic long-term plans to estimate future cash flows, including projections of revenue and EBITDA, capital expenditure and working capital requirements, terminal growth rates, statutory tax rates and a market-participant discount rate.

The goodwill impairment analysis also includes a reconciliation of the aggregate estimated fair value of the reporting unit to the Company’s total market capitalization.

Based on this 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.

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 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 an interim quantitative impairment test on its goodwill and other long-lived assets as of March 31, 2025 and 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.

The inputs and assumptions used in determining the fair value of the reporting unit are subjective and require management’s use of significant judgment.

Certain future events and circumstances, including further deterioration of the Company’s stock price, operating results, and macroeconomic conditions, and a higher cost of capital, among others, could result in changes to these inputs and assumptions.

A revision of these inputs and assumptions could cause the fair value of the reporting unit to fall further below its carrying value, resulting in additional impairment charges, which could have a material adverse effect on the Company’s results of operations.

The change in the carrying amount of goodwill for the nine months ended September 30, 2025 was as follows:

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 may not be recoverable.

Based on its quantitative goodwill impairment test and recoverability assessment of long-lived assets, the Company determined that there was no impairment of its goodwill and other long-lived assets as of March 31, 2026.

The change in the carrying amount of goodwill for the three months ended March 31, 2026 was as follows:

(in thousands)

Carrying amount at December 31, 2025

Goodwill impairment

Effect of change in currency translation

Carrying amount at September 30, 2025

Intangible assets, net at September 30, 2025 and December 31, 2024 consisted of the following:

September 30, 2025

Carrying amount at March 31, 2026

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

March 31, 2026

December 31, 2025

7 unchanged sentences

Total intangible assets

Intangible asset amortization expense for the three and nine months ended September 30, 2025 and 2024 was as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Intangible asset amortization expense for the three months ended March 31, 2026 and 2025 was as follows:

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

Total amortization of intangible assets

As of September 30, 2025, estimated future amortization expense of amortizable intangible assets is as follows:

As of March 31, 2026, estimated future amortization expense of amortizable intangible assets is as follows:

(in thousands)

2 unchanged sentences

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

September 30,

(in thousands)

3 unchanged sentences

Other Current Liabilities:

September 30,

(in thousands)

7 unchanged sentences

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 applying the principles of International Accounting Standards Topic 20, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”).

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 received ERTC refunds of $ 2.2 million and $ 3.2 million during the nine months ended September 30, 2025 and 2024, respectively.

The Company has included the refunds received in other current liabilities in the consolidated balance sheets as of September 30, 2025 and 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 ERTC refunds and accumulating the necessary support that was used as a basis in the filing.

The Company paid fees of $ 0.3 million and $ 0.5 million during the nine months September 30, 2025 and 2024, respectively, for these services, which are included in other operating expenses in the consolidated statement of operations.

Marketable Equity Securities

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.

During the nine months ended September 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 nine months ended September 30, 2024, respectively.

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

The Company determined the fair value of its HRGN common stock based on the closing price as quoted on the OTCQB Marketplace at the reporting date.

The Company did not hold any shares of HRGN stock during the nine months ended September 30, 2025.

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 credit, the Company has included the refunds received in other current liabilities in the consolidated balance sheets as of March 31, 2026 and December 31, 2025, subject to a determination that the refunds are recognizable.

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, 2025 and 2024, were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

The components of lease expense for the three months ended March 31, 2026 and 2025, were as follows:

Three Months Ended March 31,

(in thousands)

1 unchanged sentence

Short-term lease cost

Sublease income

Total lease cost

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

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

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

September 30,

(in thousands)

5 unchanged sentences

Weighted average discount rate

Future minimum lease payments for operating leases, with initial terms in excess of one year at September 30, 2025, are as follows:

Future minimum lease payments for operating leases, with initial terms in excess of one year at March 31, 2026, are as follows:

Year Ending December 31,

(in thousands)

2025 (remainder of the year)

2026 (remainder of year)

Total lease payments

1 unchanged sentence

Total operating lease liabilities

The Company’s debt, which was included within current liabilities as of September 30, 2025 and December 31, 2024, was as follows:

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

(in thousands)

September 30, 2025

December 31, 2024

Revolving line

unamortized deferred financing costs

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

Principal amount

Deferred financing cost and discount

Exit fee accretion

Net carrying amount

Principal amount

Deferred financing cost and discount

Exit fee accretion

Net carrying amount

Principal amount

Deferred financing cost and discount

Amortization of warrants

Net carrying amount

Long-term debt

Current portion of long-term debt

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 are 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 Company’s obligations under the Credit Agreement are guaranteed by certain of the Company’s direct, domestic wholly owned subsidiaries; none of the Company’s direct or indirect foreign subsidiaries has guaranteed the Company’s obligations under the Credit Agreement.

Issuance costs of $ 2.0 million are amortized over the contractual term to maturity date on a straight-line basis, which approximates the effective interest method.

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

As of the date of these financial statements, the Company was unable to make additional borrowings under its revolving credit facility due to net leverage ratio requirements set forth in the August 6, 2024 amendment to the Credit Agreement and the terms of the March 10, 2025 amendment to the Credit Agreement (the “March 2025 Amendment”), as described below.

Borrowings under the Credit Facility, at the option of the Company, bear interest at either (i) a rate per annum based on the Secured Overnight Financing Rate (“SOFR”) for an interest period of one, two, three or six months, plus an applicable interest rate margin determined as provided in the Credit Agreement (a “SOFR Loan”), subject to a floor of 0.50 %, or (ii) an alternative base rate plus an applicable interest rate margin, each as determined as provided in the Credit Agreement.

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 %.

Pursuant to the March 2025 Amendment, the applicable interest rate margin was increased such that interest rate was equal to a rate per annum based on the SOFR plus 400 bps effective as of March 10, 2025.

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’s borrowings for the three months ended September 30, 2025 and 2024, was 11.0 % and 8.7 %, respectively, and for the nine months ended September 30, 2025 and 2024 was 9.4 % and 8.1 %, respectively.

The weighted average interest rate as of September 30, 2025, net of the effect of the Company’s interest rate swap agreement, was 10.0 %.

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.

The term loan required quarterly installment payments of $ 1.0 million with a balloon payment at maturity on December 22, 2025.

Pursuant to the March 2025 Amendment, amortization payments were revised so that a proportionate payment must be made on a monthly rather than a quarterly basis.

The Credit Agreement includes various customary financial covenants and other affirmative and negative covenants binding on the Company.

The negative covenants limit 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 include a maximum consolidated net leverage ratio and a minimum consolidated fixed charge coverage ratio.

The Credit Agreement also includes customary events of default.

The March 2025 Amendment provided, among other things, that the Lenders’ commitment under the revolving credit facility would be capped at $ 12.65 million, which was the amount outstanding thereunder as of the date thereof, and thus we are unable to make additional borrowings under our revolving credit facility.

The March 2025 Amendment also established certain Refinancing Milestones in connection with the Refinancing, including, by June 30, 2025, the closing of the Refinancing.

The Lenders also agreed not to assert any breaches of the financial covenants included in the Credit Agreement for the first quarter of 2025 provided that the Company continued to comply with its payment obligations, achieved the Refinancing Milestones, maintained minimum liquidity (defined as the sum of (a) unrestricted cash and cash equivalents and (b) the amount by which the aggregate amount committed under the Company’s revolving credit facility exceeds the total amount drawn under the credit facility) of $ 3.5 million and provided the administrative agent with certain financial reports.

As of June 30, 2025, the Company was not in compliance with the Refinancing Milestones and quarterly financial covenants included in the March 2025 Amendment.

On August 8, 2025, the Company entered into the August 2025 Amendment, pursuant to which the Lenders and administrative agent agreed, subject to the terms contained in the August 2025 Amendment, to waive the events of default due to the Company’s failure to achieve certain Refinancing Milestones and its failure to comply with the consolidated net leverage ratio covenant and the consolidated fixed charge coverage ratio covenant as of the June 30, 2025 test date.

Pursuant to the terms of the August 2025 Amendment, the Lenders also agreed not to test the net leverage ratio financial covenant and the consolidated fixed charge coverage ratio financial covenant for the fiscal quarter ended September 30, 2025, and to reduce the Company’s covenant to maintain minimum liquidity (defined as the sum of (a) unrestricted cash and (b) the amount by which the aggregate amount committed under the Company’s revolving credit facility exceeds the total amount drawn under the credit facility) of $ 3.0 million.

The August 2025 Amendment also added, as a mandatory prepayment event, the receipt of cash proceeds upon a Refinancing or upon the sale of the equity interests or all or substantially all of the assets of the Company.

In addition, pursuant to the terms of the August 2025 Amendment, the applicable interest rate margin was increased such that the interest rate is equal to a rate per annum based on the SOFR plus 700 bps.

In connection with the August 2025 Amendment, the Company has agreed to accomplish steps towards the Refinancing or repayment of the Credit Agreement by no later than December 5, 2025.

The Company continues to make progress on these steps, and is working actively to reach a definitive agreement that will accomplish one of these outcomes.

The failure to accomplish such steps on the agreed timeline shall constitute an event of default under the Credit Agreement.

The Company agreed to pay fees of $ 0.4 million, or 1.00 % of the outstanding debt, to the Lenders in connection with the August 2025 Amendment, of which 25% was paid upon the signing of the August 2025 Amendment and the remaining 75% will be payable upon a Refinancing or repayment of the Credit Agreement or upon the occurrence of an event of default.

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 $ 17.6 million as of September 30, 2025 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, 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 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 September 30, 2025 and December 31, 2024:

(in thousands)

September 30, 2025

December 31, 2024

Derivatives Instruments

Balance Sheet Classification

Notional Amount

Fair Value (a)

Notional Amount

Fair Value (a)

Interest rate swap

Other current liabilities

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

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) the prime 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 minimum liquidity covenants and the minimum adjusted EBITDA covenant, each as defined in the 2025 Loan Agreement, of $ 3 million and $ 6 million, respectively, measured on a trailing 12-month basis, for the fiscal quarters ending March 31, 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 a seven -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 (the “Underlying Shares”) were not initially registered under the Securities Act of 1933, as amended.

Within 45 days of the date of the 2025 Loan Agreement, the Company was required to prepare and file with the SEC a registration statement covering the resale of the Underlying Shares.

The Company filed this registration statement covering the Underlying Shares on January 30, 2026, and it was 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 $ 0.15 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.

For the three months ended March 31, 2026 and 2025 contractual interest expense was $ 1.3 million and $ 0.8 million and non-cash interest expense was $ 0.4 million and $ 0.1 million, respectively.

The effective interest rate on the Company’s borrowings for the three months ended March 31, 2026 and 2025 was 17.3 % and 8.6 %, respectively.

The weighted average interest rate as of March 31, 2026 was 17.3 % and for December 31, 2025 was 13.7 %, net of the effect of the Company’s interest rate swap agreement.

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:

Three Months Ended September 30,

Nine Months Ended September 30, 2025

Three Months Ended March 31,

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

1 unchanged sentence

Amounts reclassified from AOCI 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 September 30, 2025

Assets (Liabilities) (in thousands)

Interest rate swap agreement

Fair Value as of December 31, 2024

Interest rate swap agreement

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

The fair value of the Company’s interest rate swap agreement was based on SOFR yield curves at the reporting date and is included within other current liabilities on the consolidated balance sheets at both September 30, 2025 and December 31, 2024.

Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024 was allocated as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Stock-based compensation expense for the three months ended March 31, 2026 and 2025 was allocated as follows:

Three Months Ended March 31,

(in thousands)

4 unchanged sentences

Total stock-based compensation

As of September 30, 2025, the total compensation costs related to unvested awards not yet recognized was $ 1.8 million and the weighted average period over which such costs are expected to be recognized is approximately 1.7 years.

The Company did not capitalize any stock-based compensation.

Restricted stock unit (“RSU”) activity for the nine months ended September 30, 2025 was as follows:

As of March 31, 2026, the total compensation costs related to unvested awards not yet recognized was $ 2.2 million and the weighted average period over which it is expected to be recognized is approximately 2.2 years.

The Company did not capitalize any stock-based compensation during these quarters.

Restricted stock unit (“RSU”) activity for the three months ended March 31, 2026 was as follows:

Balance at December 31, 2025

Balance at September 30, 2025

The aggregate fair value of RSUs that vested during the nine months ended September 30, 2025, and 2024 was $ 0.3 million and $ 0.5 million, respectively.

Balance at March 31, 2026

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 three months ended March 31, 2026, and 2025 was $ 0.1 million and $ 0.2 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.

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.

The weighted average estimated fair value of the market condition restricted stock awards that were granted during the nine months ended September 30, 2025 was $0.67 per unit.

The estimate of the fair value was determined using a Monte-Carlo valuation simulation, which included the following assumptions:

Risk-free interest rate

Correlation coefficient

Dividend yield

Stock option activity for the nine months ended September 30, 2025 was as follows:

Stock option activity for the three months ended March 31, 2026 was as follows:

Number of Options

4 unchanged sentences

Cancelled/Forfeited

Outstanding and exercisable at September 30, 2025

There is no aggregate intrinsic value at September 30, 2025 because the Company’s closing stock price of $ 0.44 is below the exercise price of the outstanding options.

Outstanding and exercisable at March 31, 2026

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

There is no aggregate intrinsic value at March 31, 2026 because the Company’s closing stock price of $ 4.87 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.

1 unchanged sentence

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

Income tax expense (benefit) was $ 0.1 million and $ 0.3 million for the three months ended September 30, 2025 and 2024, respectively, and was ($ 0.3 ) million and $ 0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

The Company’s effective tax rate of ( 8.6 )% and 0.6 % for the three and nine months ended September 30, 2025, respectively, were lower than the U.S statutory rate due to the tax effect of goodwill impairment.

The Company’s effective tax rates of ( 6.9 )% and ( 1.4 )% for the three and nine months ended September 30, 2024, respectively, were different than the U.S.

statutory rate primarily due to the inclusion of non-deductible executive compensation.

Income tax expense (benefit) was $ 0.1 million and $( 0.5 ) million for the three months ended March 31, 2026 and 2025, respectively.

The Company’s effective tax rate of ( 3.6 %) for the three months ended March 31, 2026, differed from the U.S statutory rate primarily due to a benefit to reserves related to uncertain tax positions, partially offset by the tax effect of non-deductible stock compensation.

The Company’s effective tax rate of 0.9 % for the three months ended March 31, 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.

On July 4, 2025, subsequent to the end of the second quarter of fiscal 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law.

The Act includes several significant tax-related provisions, including the permanent extension of certain elements of the Tax Cuts and Jobs Act.

The legislation features staggered effective dates beginning in 2025 and continuing through 2027.

The Company has incorporated the provisions from the Act into the Q3 2025 income tax provision and has concluded that these changes did not have a significant impact on its consolidated financial statements and related disclosures.

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.

Commitments and Contingent Liabilities

The Company is occasionally subject to claims and lawsuits which typically arise in the normal course of business.

While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

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

State escheat laws generally require entities to report and remit abandoned and unclaimed property to the state.

Failure to timely report and remit the property can result in assessments that could include interest and penalties, in addition to the payment of the escheat liability itself.

The Company recorded an expense of $ 0.3 million during the nine months ended September 30, 2024 related to unclaimed property audits which have been included in other operating expenses in the consolidated statement of operations.

The unclaimed property audit was completed during the second quarter of fiscal 2024.

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.

Although unfavorable outcomes in the proceedings are possible, the Company has not accrued loss contingencies relating to any such matters as they are not considered to be probable and reasonably estimable.

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 March 31, 2026 and December 31, 2025.

Restructuring Costs

On an ongoing basis, the Company reviews the global economy, the life sciences 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 achieve these goals, the Company undertakes activities from time to time to optimize its business.

During the nine months ended September 30, 2025, the Company initiated additional restructurings for which it incurred $ 0.2 million of costs, primarily consisting of severance incurred in connection with headcount reductions in North America and Europe.

The Company expects the restructuring to be completed during the year ending December 31, 2025.

During the nine months ended September 30, 2024, the Company completed a restructuring and incurred expenses of $ 0.6 million, primarily consisting of severance incurred in connection with headcount reductions in North America and Europe.

Severance and other costs have been included as a component of other operating expenses (see Note 1).

The changes in the accrued liability for restructuring and other charges for the nine months ended September 30, 2025 were as follows:

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.

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 site.

These amounts are estimates and are subject to future changes.

During the three months ended March 31, 2026 and 2025, the Company completed restructurings and incurred expenses of $ 0.2 million and $ 0.1 million, respectively.

These costs primarily consisted of retention and severance incurred in connection with headcount reductions in Europe and North America.

The changes in the accrued liabilities for restructuring and other charges for the three months ended March 31, 2026 were as follows:

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.

(in thousands)

2 unchanged sentences

Cash payments

Effect of change in currency translation

Balance at September 30, 2025

Balance at March 31, 2026

Segment Information

3 unchanged sentences

The following table presents the significant revenue and expense categories of the Company’s single operating segment:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of revenues (1)

4 unchanged sentences

Interest expense

Loss on pension settlement

Income tax expense (benefit)

2 unchanged sentences

(1) Excludes stock-based compensation expense

(2) Includes stock-based compensation, other operating expenses, loss on equity securities and other expenses

(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.

19 unchanged sentences

With operations in the United States, Europe and China, we sell through a combination of direct and distribution channels to customers around the world.

Trends and Developments

Our business is affected by global and regional economic trends and uncertainties.

5 unchanged sentences

If these trends are prolonged or are more severe than anticipated, our business, results of operations, and cash flow may be materially impacted.

As of June 30, 2025, the Company was not in compliance with certain refinancing milestones (the “Refinancing Milestones”) and quarterly financial covenants contained in the Company's term loan and senior revolving credit facility, dated as of December 22, 2020 (collectively, as amended, the “Credit Agreement”).

On August 8, 2025, the Company entered into an amendment to the Credit Agreement (the “August 2025 Amendment”), pursuant to which the lenders party to the Credit Agreement (the “Lenders”) and the administrative agent agreed to waive the events of default due to the Company’s failure to achieve the Refinancing Milestones and its failure to comply with the consolidated net leverage ratio covenant and the consolidated fixed charge coverage ratio covenant as of the June 30, 2025 test date.

See “Part I, Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” of this report for additional information.

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, new product introduction, consumables revenue expansion and operational excellence and disciplined growth.

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.

Selected Results of Operations

Three months ended September 30, 2025, compared to three months ended September 30, 2024

Three Months Ended September 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 pension settlement

Income tax expense

Revenues decreased $1.4 million, or 6.3%, to $20.6 million for the three months ended September 30, 2025, compared to $22.0 million for the three months ended September 30, 2024.

The decrease in revenues was primarily due to the continued softening of worldwide demand primarily from academic research institutions and CROs and the impact of reciprocal tariffs.

Gross profit decreased $0.8 million, or 5.8%, to $12.0 million for the three months ended September 30, 2025, compared with $12.8 million for the three months ended September 30, 2024, primarily due to the decrease in revenues as well as the associated lower absorption of fixed manufacturing costs.

Gross margin was 58.4% for the three months ended September 30, 2025, compared to 58.1% for the three months ending September 30, 2024.

The increase in gross margin was primarily due to favorable product mix.

Sales and marketing expenses

Sales and marketing expenses decreased $0.9 million, or 16.4%, to $4.6 million for the three months ended September 30, 2025, compared with $5.5 million for the three months ended September 30, 2024.

This decrease was primarily due to reduced compensation, travel and entertainment, and trade show expenses.

General and administrative expenses

General and administrative expenses decreased $0.8 million, or 17.2%, to $4.2 million for the three months ended September 30, 2025, compared with $5.0 million for the three months ended September 30, 2024.

The decrease was primarily due to reduced compensation costs.

Research and development expenses

Research and development expenses decreased $0.5 million, or 16.9%, to $2.1 million for the three months ended September 30, 2025, compared with $2.6 million for the three months ended September 30, 2024.

This decrease was primarily due to reduced compensation costs.

Amortization of intangible assets

Amortization of intangible assets included in operating expenses was $0.9 million for the three months ended September 30, 2025, compared with $1.3 million for the three months ended September 30, 2024.

Other operating expenses

Other operating expenses for the three months ended September 30, 2024 were $0.2, which consisted of restructuring costs in connection with headcount reductions in Europe and North America.

Interest expense

Interest expense was $1.0 million for the three months ended September 30, 2025, compared with $0.9 million for the three months ended September 30, 2024.

Loss on pension settlement

During the three months ended September 30, 2024, we settled our obligations under one of our defined benefit plans by using plan assets to purchase non-participating annuity contracts.

The settlement resulted in the recognition of a non-cash charge of $1.2 million, which has been presented as a component of other income (expense), net.

This amount includes the immediate recognition of the portion of the accumulated other comprehensive income (“AOCI”) balance related to this plan.

Income tax expense (benefit)

The income tax expense (benefit) was $0.1 million and $0.3 million for the three months ended September 30, 2025 and 2024, respectively.

The effective tax rates for the three months ended September 30, 2025 and 2024 were (8.6)% and (6.9)%, respectively.

The higher effective tax rate during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was primarily due to the change in the mix of income by jurisdiction.

The Company’s effective tax rate for the three months ended September 30, 2025, was different than the U.S.

statutory rate primarily due to a Global Intangible Low-Tax Income (“GILTI”) inclusion to taxable income, and changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets.

Nine months ended September 30, 2025, compared to nine months ended September 30, 2024

Nine Months Ended September 30,

Three months ended March 31, 2026, compared to three months ended March 31, 2025

Three Months Ended March 31,

(dollars in thousands)

6 unchanged sentences

Interest expense

Loss on pension settlement

Loss on equity securities

Income tax (benefit) expense

Revenues decreased $6.8 million, or 9.7%, to $62.8 million for the nine months ended September 30, 2025, compared to $69.6 million for the nine months ended September 30, 2024.

The decrease in revenues was primarily due to the continued softening of worldwide demand primarily from academic research institutions and CROs and the impact of reciprocal tariffs.

Gross profit decreased $5.1 million, or 12.3%, to $35.7 million for the nine months ended September 30, 2025, compared with $40.8 million for the nine months ended September 30, 2024, primarily due to the decrease in revenues as well as the associated lower absorption of fixed manufacturing costs.

Gross margin decreased to 56.9% for the nine months ended September 30, 2025, compared with 58.6% for the nine months ended September 30, 2024.

The decrease in gross margin was primarily the result of under-absorption of fixed manufacturing overhead costs due to the decrease in revenues, increases in purchase price variance as well as a higher mix of lower margin products.

Income tax expense (benefit)

Revenues decreased $1.0 million, or 4.7%, to $20.8 million for the three months ended March 31, 2025, compared to $21.8 million for the three months ended March 31, 2025.

The decrease in revenues was primarily due to lower sales from academic research institutions in the Americas and distributors in Asia Pacific.

Gross profit was $12.2 million for both the three months ended March 31, 2026 and the three months ended March 31, 2025, primarily due to cost reductions in previous year plus favorable product mix.

Gross margin was 59.0% for the three months ended March 31, 2026, compared to 56.0% for the three months ending March 31, 2025.

The increase in gross margin was primarily the result of favorable product mix.

Sales and marketing expenses

Sales and marketing expenses decreased $2.7 million, or 16.0%, to $14.1 million for the nine months ended September 30, 2025, compared with $16.8 million for the nine months ended September 30, 2024.

This decrease was primarily due to reduced compensation, travel and entertainment, and trade show expenses.

Sales and marketing expenses increased $0.3 million, or 7.3%, to $5.3 million for the three months ended March 31, 2026, compared with $5.0 million for the three months ended March 31, 2025.

This increase was primarily due to additional personnel, and an increase in travel, trade show, and other promotional expenses.

General and administrative expenses

General and administrative expenses decreased $3.1 million, or 18.4%, to $13.6 million for the nine months ended September 30, 2025, compared with $16.7 million for the nine months ended September 30, 2024.

The decrease was primarily due to reduced compensation costs, partially offset by an increase of $0.2 million in audit and legal fees.

General and administrative expenses decreased $0.5 million, or 9.3%, to $4.7 million for the three months ended March 31, 2026, compared with $5.2 million for the three months ended March 31, 2025.

The decrease was primarily due to reduced compensation costs and professional fees.

Research and development expenses

Research and development expenses decreased $1.5 million, or 17.8%, to $6.6 million for the nine months ended September 30, 2025, compared with $8.1 million for the nine months ended September 30, 2024.

This decrease was primarily due to reduced compensation costs.

Research and development expenses were $2.3 million for both the three months ended March 31, 2026 and the three months ended March 31, 2025.

An increase in project and travel costs in the three months ended March 31, 2026 was offset by reduced compensation costs.

Amortization of intangible assets

Amortization of intangible assets included in operating expenses decreased $0.8 million, or 20.5%, to $3.2 million for the nine months ended September 30, 2025, compared with $4.0 million for the nine months ended September 30, 2024.

Amortization of intangible assets included in operating expenses was $0.8 million for the three months ended March 31, 2026, compared with $1.2 million for the three months ended March 31, 2025.

Goodwill impairment

Goodwill impairment expenses increase by $48.0 million for the nine months ended September 30, 2025.

We identified a triggering event, including the sustained decrease in our stock price, our recent operating results, liquidity risk and the current macroeconomic conditions impacting the life sciences industry, requiring an interim impairment test.

We recorded a non-cash goodwill impairment charge of $48.0 million in connection with the interim impairment test.

During the three months ended March 31, 2025, we identified a triggering event for goodwill impairment, including the sustained decrease in our stock price, our recent operating results, liquidity risk and the current macroeconomic conditions impacting the life sciences industry, requiring an interim impairment test.

We recorded a non-cash goodwill impairment charge of $48.0 million in connection with the interim impairment test in the three months ended March 31, 2025.

Other operating expenses

Other operating expenses decreased by $0.9 million, or 63.3% to $0.5 million for the nine months ended September 30, 2025, compared to $1.4 million for the nine months ended September 30, 2024.

Other operating expenses for the nine months ended September 30, 2025, included a fee of $0.3 million in connection with the receipt of employee retention credits and restructuring costs of $0.2 million in connection with headcount reductions in North America and Europe.

Other operating expenses for the nine months ended September 30, 2024, included a fee of $0.5 million in connection with the receipt of employee retention tax credits, restructuring costs of $0.6 million in connection with headcount reductions, and $0.3 million related to settlement of an unclaimed property audit.

Other operating expenses for the three months ended March 31, 2026 were $0.2 million, compared with $0.3 million for the three months ended March 31, 2025.

During the three months ended March 31, 2026, other operating expenses included $0.2 million of restructuring costs in connection with Project Viking.

During the three months ended March 31, 2025, other operating expenses included a fee of $0.2 million in connection with the receipt of employee retention credits under the CARES Act and $0.1 million of restructuring costs in connection with headcount reductions in North America and Europe.

Interest expense

Interest expense increased $0.2 million, or 8.6%, to $2.6 million for the nine months ended September 30, 2025, compared with $2.4 million for the nine months ended September 30, 2024.

The increase was primarily due to a higher effective interest rate during the period compared to the prior year.

Loss on equity securities

During the nine months ended September 30, 2024, we sold all of our remaining Harvard Apparatus Regenerative Technology Inc.

(“HRGN”) stock for $1.9 million and recorded a loss on equity securities of $1.6 million.

We did not hold any shares of HRGN stock during the nine months ended September 30, 2025.

Income tax benefit

The income tax expense (benefit) was $(0.3) million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

The effective tax rates for the nine months ended September 30, 2025 and 2024 were 0.6% and (1.4)%, respectively.

The higher effective tax rate during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to the tax effect of goodwill impairment and the release of reserves related to uncertain tax positions.

Interest expense increased $0.8 million, or 85.2%, to $1.7 million for the three months ended March 31, 2026, compared with $0.9 million for the three months ended March 31, 2025.

The increase was primarily due to the higher interest rate and amortization of deferred financing costs related to the 2025 Loan Agreement discussed above.

Other expense, net

Other expense, net for the three months ended March 31, 2026, was $0.4 million and included costs of $0.4 million in connection with the Company’s reverse stock split.

Other expenses, net for the three months ended March 31, 2025, were $0.2 million, which was primarily related to a $0.2 million loss on foreign currency.

Income tax expense (benefit)

The income tax expense (benefit) was $0.1 million and $(0.5) million for the three months ended March 31, 2026 and 2025, respectively.

The effective tax rates for the three months ended March 31, 2026 and 2025 were (3.6%) and 0.9%, respectively.

The higher effective tax rate during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to the tax effect of nondeductible stock compensation and the release of reserves related to uncertain tax positions.

The Company’s effective tax rate for the three months ended March 31, 2026, was different than the U.S.

statutory rate primarily due to changes in valuation allowances associated with the Company’s assessment of the likelihood of the recoverability of deferred tax assets.

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.

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

We held cash and cash equivalents of $6.8 million and $4.1 million as of September 30, 2025 and December 31, 2024, respectively.

Borrowings outstanding, net of unamortized deferred financing costs, were $34.0 million and $37.0 million as of September 30, 2025 and December 31, 2024, respectively.

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

The Company has received ERTC refunds of $5.4 million as of September 30, 2025.

The Company’s compliance with the program’s qualifications may be subject to audit through May 2029, which is when the statute of limitation expires.

We maintain the Credit Agreement, which originally provided for a term loan of $40.0 million and a $25.0 million revolving credit facility with an original maturity of December 22, 2025.

On March 10, 2025, we entered into an amendment to the Credit Agreement (the “March 2025 Amendment”).

The March 2025 Amendment provided, among other things, that the Lenders’ commitment under our revolving credit facility would be capped at $12.65 million, which was the amount outstanding thereunder as of the date thereof, and thus we are unable to make additional borrowings under our revolving credit facility.

The March 2025 Amendment also established certain Refinancing Milestones in connection with the refinancing of the Credit Agreement (the “Refinancing”), including receipt of a term sheet or commitment letter from one or more potential lenders, by the dates provided in the March 2025 Amendment, and the Company's consummation of the Refinancing by June 30, 2025.

Pursuant to the March 2025 Amendment, the Lenders also agreed not to assert any breaches of the financial covenants included in the Credit Agreement for the first quarter of fiscal year 2025 provided that we continued to comply with our payment obligations, achieved the Refinancing Milestones, maintained minimum liquidity (defined as the sum of (a) unrestricted cash and cash equivalents and (b) the amount by which the aggregate amount committed under the Company’s revolving credit facility exceeds the total amount drawn under the credit facility) of $3.5 million and provided the administrative agent with certain financial reports.

In addition, pursuant to the terms of the March 2025 Amendment the applicable interest rate margin was increased such that interest rate was equal to a rate per annum based on the Secured Overnight Financing Rate (“SOFR”) plus 400 bps and amortization payments were revised so that a proportionate payment must be made on a monthly rather than a quarterly basis.

As of June 30, 2025, we were not in compliance with the Refinancing Milestones and quarterly financial covenants contained in the March 2025 Amendment.

On August 8, 2025, we entered into the August 2025 Amendment Agreement, pursuant to which the Lenders and administrative agent agreed, subject to the terms contained in the August 2025 Amendment, to waive the events of default due to the Company’s failure to achieve certain Refinancing Milestones and its failure to comply with the consolidated net leverage ratio covenant and the consolidated fixed charge coverage ratio covenant as of the June 30, 2025 test date.

The August 2025 Amendment also added as a mandatory prepayment event the receipt of cash proceeds upon a Refinancing or upon the sale of the equity interests or all or substantially all of the assets of the Company.

In connection with the August 2025 Amendment, the Company has also agreed to accomplish steps towards the Refinancing or repayment of the Credit Agreement by no later than December 5, 2025.

The Company continues to make progress on these steps, and is working actively to reach a definitive agreement that will accomplish one of these outcomes.

The failure to accomplish such steps on the agreed timeline shall constitute an event of default under the Credit Agreement.

In such event, in addition to other actions the Lenders may require, the amounts outstanding under the Credit Agreement may become immediately due and payable.

The Company continues to explore alternative sources of capital that would allow it to refinance the outstanding indebtedness under the Credit Agreement, but its ability to access such other sources of capital is uncertain.

There is no assurance that such capital will be available, be obtainable on commercially acceptable terms, or provide the Company with sufficient funds to meet its objectives.

Based on its anticipated cash flows from operations, unless the Company is able to access other sources of capital or extend the date for repayment under the Credit Agreement, the Company will be unable to pay its debt obligations and fund its operations for at least twelve months from the date of issuance of the unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q.

As a result, there is substantial doubt about the Company's ability to continue as a going concern.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

Nine Months Ended September 30,

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 $7.1 million and $8.6 million as of March 31, 2026 and December 31, 2025, respectively.

Borrowings outstanding were $40 million as of March 31, 2026 and December 31, 2025, respectively.

On December 17, 2025, the Company entered into the 2025 Loan Agreement and completed a comprehensive refinancing of the Credit Facility, resulting in a new maturity date and improved likelihood of covenant compliance.

For additional details on the 2025 Loan Agreement and refinancing, see the discussion in Note 7 to the Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this report.

Management has 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.

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 these covenants, including the minimum liquidity requirement of $3.0 million at all times and the minimum adjusted EBITDA requirement, measured on a trailing 12-month basis, of at least $6.0 million for the fiscal quarters ending March 31, 2026 and 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 during the year ended December 31, 2025.

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 following table sets forth the significant sources and uses of cash for the periods set forth below:

Three Months Ended March 31,

(in thousands)

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash

Increase in cash and cash equivalents

Net cash provided by (used in) operations was $6.8 million and $(0.3) million for the nine months ended September 30, 2025 and 2024, respectively.

Cash flow from operations for the nine months ended September 30, 2025 was positively impacted by a reduction in accounts receivable of $2.8 million, a reduction in inventories of $1.6 million, and $2.2 million of cash inflows from ERTC refunds received.

Net cash used in investing activities was $1.3 million for the nine months ended September 30, 2025, compared to cash used in investing activities of $0.9 million for the nine months ended September 30, 2024.

Cash used in investing activities for the nine months ended September 30, 2025 consisted of $1.3 million of capital expenditures for manufacturing and capitalized software development.

Cash used in investing activities for the nine months ended September 30, 2024 consisted of $2.8 million of capital expenditures for manufacturing and information technology infrastructure and software development, offset by $1.9 million in proceeds from the sale of marketable equity securities.

Net cash (used in) provided by financing activities was $(3.7) million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 30, 2025, we made $3.0 million in debt repayments on our term loan and paid $0.7 million in debt issuance costs as part of the March 2025 Amendment and the August 2025 Amendment.

During the nine months ended September 30, 2024, debt outstanding under our credit facility increased by $1.2 million, consisting of net borrowings under our revolver of $6.2 million, and payments of $5.0 million against the term loan.

(Decrease) increase in cash and cash equivalents

Cash (used in) provided by operations was $(0.7) million and $3.0 million for the three months ended March 31, 2026 and 2025, respectively.

Cash flow from operations for the three months ended March 31, 2026 was negatively impacted by cash outflows from inventories of $1.5 million, compared with a favorable impact to cash flows of $0.7 million for the three months ended March 31, 2025.

Cash flow from operations was also negatively impacted by $0.4 million of prepaid inventory and insurance.

Cash used in investing activities was $0.6 million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively.

Cash used in investing for the three months ended March 31, 2026 consisted of $0.6 million of capital expenditures for manufacturing and capitalized software development.

Cash used in investing activities for the three months ended March 31, 2025 primarily consisted of capital expenditures in manufacturing and capitalized software development of $0.7 million.

Cash used in financing activities was $0.0 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively.

During the three months ended March 31, 2026, we paid $0.1 million in debt issuance costs as part of the 2025 Loan Agreement and we received $0.1 million in cash proceeds from the exercise of warrants.

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 September 30, 2025, changes in foreign currency exchange rates resulted in a favorable effect on revenues of $0.3 million and an unfavorable effect on expenses of $0.6 million.

During the nine months ended September 30, 2025, changes in foreign currency exchange rates resulted in a favorable effect on revenues of $0.6 million and an unfavorable effect on expenses of $0.9 million.

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

dollars included as a component of other comprehensive loss was $(0.8) million and $1.6 million for the three months ended September 30, 2025 and 2024, respectively, and $3.1 million and $0.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Currency exchange rate fluctuations included as a component of net loss resulted in currency gain (loss) of $0.0 million and $(0.4) million for three months ended September 30, 2025 and 2024, respectively, and $0.6 million and $(0.5) million for both the nine months ended September 30, 2025 and 2024, respectively.

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 British pound.

During the three months ended March 31, 2026, changes in foreign currency exchange rates resulted in a favorable effect on revenues of $0.6 million and an unfavorable effect on expenses of $0.1 million.

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

dollars included as a component of other comprehensive loss was $(0.6) million and $1.3 million for the three months ended March 31, 2026 and 2025, respectively.

Currency exchange rate fluctuations included as a component of net loss resulted in a gain of $0.1 million for the three months ended March 31, 2026.

Currency exchange rate fluctuations included as a component of net loss resulted in losses of $0.2 million for the three months ended March 31, 2025.

Critical Accounting Policies

There have been no material changes to the critical accounting policies underlying the accompanying unaudited consolidated financial statements and as set forth in Part II, Item 7 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

There have been no material changes to the critical accounting policies underlying the accompanying Condensed Unaudited Consolidated Financial Statements and as set forth in Part II, Item 7 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Recent Accounting Pronouncements

For information on recent accounting pronouncements impacting our business, see “Recently Issued Accounting Pronouncements Yet to Be Adopted” included in Note 1 to our Condensed Consolidated Financial Statements included in Part I, Item 1.

of this report.

For information on recent accounting pronouncements impacting our business, see “Recently Issued Accounting Pronouncements Yet to Be Adopted” included in Note 1 to our Condensed Unaudited Consolidated Financial Statements included in Part I, Item 1 of this report.

Quantitative and Qualitative Disclosures about Market Risk

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What changed 10-Q

Item 1. Financial Statements