HBIO receives covenant waivers but faces $0.4M fee and refinancing deadline
Rhea-AI Filing Summary
Harvard Bioscience entered into a Sixth Amendment to its Credit Agreement that waived defaults tied to missed refinancing milestones and the company's failure to meet its consolidated net leverage and fixed charge coverage covenants as of the June 30, 2025 test date. Lenders agreed not to test the financial covenants for the quarter ended September 30, 2025 provided the company remains current on payments, maintains minimum liquidity of $3.0 million and delivers certain financial reports.
The amendment raises the interest margin to SOFR + 700 bps, adds mandatory prepayment on receipt of refinancing or sale proceeds, and requires the company to take steps to refinance or repay the Credit Agreement by December 5, 2025 or face an event of default. The company will pay a fee of $0.4 million (1.00% of outstanding debt), with 25% paid at signing and the remainder payable on refinancing, repayment or default. The company discloses substantial doubt about its ability to continue as a going concern absent additional capital or refinancing.
Positive
- Lenders waived defaults tied to missed refinancing milestones and covenant breaches as of the June 30, 2025 test date
- Temporary suspension of covenant testing for the quarter ended September 30, 2025 if the company maintains payments, provides reports, and keeps minimum liquidity of $3.0 million
Negative
- Interest margin increased to SOFR + 700 bps, raising borrowing costs materially
- Mandatory refinancing/repayment deadline of December 5, 2025; failure to accomplish refinancing steps constitutes an event of default
- $0.4 million fee (1.00% of outstanding debt) with 75% contingent on refinancing/repayment or default
- Company discloses substantial doubt about its ability to continue as a going concern without access to additional capital or refinancing
Insights
TL;DR: Covenant waivers provide short-term relief but higher borrowing costs and a hard refinancing deadline materially increase near-term credit risk.
The Sixth Amendment delivers immediate forbearance by waiving breaches as of the June 30, 2025 test date and suspending covenant testing for the September quarter if conditions are met, which avoids an immediate default. However, the effective interest rate increase to SOFR+700bps materially raises financing costs and the $3.0 million minimum liquidity test is a tight operational threshold. The December 5, 2025 refinancing/repayment deadline and the $0.4 million amendment fee concentrate risk into a near-term execution event; failure to refinance will trigger default remedies.
TL;DR: Amendment buys runway and contractual clarity but places a firm refinancing milestone that will drive strategic urgency.
By codifying forbearance and adding a mandatory prepayment on refinancing or sale proceeds, the amendment clarifies lender rights and creates a defined window for restructuring or recapitalization options. The increased margin (SOFR+700bps) and $0.4 million fee raise the cost of capital, while the December 5, 2025 deadline imposes an explicit timeline for executing a refinancing or sale. These terms are actionable and materially affect transaction timing and valuation considerations for any potential recapitalization or asset-sale scenarios.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “may,” “will,” “expect,” “plan,” “anticipate,” “estimate,” “intend” “believe” and similar expressions or statements that do not relate to historical matters. Forward-looking statements include, but are not limited to, information concerning expected future financial and operational performance and matters relating to our ability to continue as a going concern, fund our operations, or refinance our outstanding indebtedness. Forward-looking statements are not guarantees of future performance and involve known and unknown uncertainties, risks, assumptions, and contingencies, many of which are outside the Company’s control. Risks and other factors that could cause the Company’s actual results to differ materially from those described in its forward-looking statements include those described in the “Risk Factors” section of the Company’s most recently filed Annual Report on Form 10-K as well as in the Company’s other filings with the Securities and Exchange Commission. Forward-looking statements are based on the Company’s expectations and assumptions as of the date of this report. Except as required by law, the Company assumes no obligation to update forward-looking statements to reflect any change in expectations, even as new information becomes available.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |
| 10.1 | Sixth Amendment to Credit Agreement dated August 8, 2025, among Harvard Bioscience, Inc., Citizen Bank, N. A., as the administrative agent, and the lenders party thereto. | |
| 104 | Cover Page Interactive Data File (embedded within the XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HARVARD BIOSCIENCE, INC. | |||
| Date: August 11, 2025 | By: | /s/ Mark Frost | |
| Mark Frost | |||
| Interim Chief Financial Officer | |||
FAQ
What did Harvard Bioscience (HBIO) agree with lenders in the Sixth Amendment?
What liquidity requirement did HBIO accept under the amendment?
How did the amendment change HBIO's interest costs?
Are there fees tied to the Sixth Amendment for HBIO?
What is the refinancing deadline in the amendment for HBIO?
Does HBIO disclose going-concern issues in this filing?
