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Item 1.01. Entry into a Material Definitive Agreement.
On August 8, 2025, Harvard Bioscience, Inc. (the "Company") entered into a Sixth Amendment (the "Sixth Amendment") to the Credit Agreement, dated as of December 22, 2020 among the Company, the lenders party thereto (the "Lenders"), and Citizens Bank, N.A., as administrative agent (as amended, the "Credit Agreement"). Pursuant to the Sixth Amendment, the Lenders and administrative agent agreed, subject to the terms contained in the Sixth 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 Sixth Amendment, the Lenders also agreed not to test the financial covenants for the fiscal quarter ended September 30, 2025, provided that the Company continues to comply with its payment obligations, 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 and provides the administrative agent with certain financial reports. The Sixth 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 Sixth Amendment, the applicable interest rate margin was increased such that the interest rate is equal to a rate per annum based on the Secured Overnight Financing Rate plus 700 bps. In connection with the Sixth 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 failure to accomplish such steps 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 Sixth Amendment, of which 25% was paid upon the signing of the Sixth 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.
The foregoing description of the Sixth Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Sixth Amendment, which is filed as Exhibit 10.1 to this current report.
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 beyond that date. As a result, there is substantial doubt about the Company's ability to continue as a going concern.
Posted In: HBIO
