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In a recent filing with the Securities and Exchange Commission, Harvard Bioscience Inc. (NASDAQ:HBIO) disclosed amendments to its credit agreement, including a waiver for non-compliance with a financial covenant and a cap on its revolving credit facility. The filing, dated March 10, 2025, outlines key refinancing milestones the company must meet by June 30, 2025, to avoid potential liquidity issues. The announcement comes as the company’s stock trades near its 52-week low of $0.76, having declined over 82% in the past year. According to InvestingPro analysis, the stock appears undervalued at current levels, though significant risks remain.
The company, a Delaware-incorporated provider of laboratory analytical instruments, entered into the Fifth Amendment of its credit agreement with lenders and the administrative agent. This amendment waives the company’s non-compliance with the consolidated net leverage ratio as of December 31, 2024. It also sets a cap equal to the amount outstanding under the company’s revolving credit facility as of the amendment date. The company’s total debt stands at $45.91 million, with a current ratio of 2.06, indicating that liquid assets currently exceed short-term obligations - one of several key metrics tracked by InvestingPro’s comprehensive financial health assessment system.
The amendment lays out a series of milestones related to the refinancing of its debt, with deadlines ranging from retaining an investment banker to closing the refinancing by the end of June 2025. Among these milestones, the company must engage a financial advisor by March 14, 2025, and provide a bona fide indication of interest from potential lenders by April 30, 2025.
Financial covenants will not be tested for the fiscal quarter ending March 31, 2025, provided the company maintains a minimum liquidity of $3.5 million and complies with its payment obligations. The interest rate margin under the agreement has increased, resulting in an interest rate based on the Secured Overnight Financing Rate plus 400 basis points. Additionally, the company must now make monthly amortization payments.
Harvard Bioscience paid $0.1 million in fees to the lenders in connection with the Fifth Amendment. The company is actively exploring alternative sources of capital to refinance its outstanding indebtedness. However, it acknowledges substantial doubt about its ability to continue as a going concern if it fails to refinance its debt or extend the repayment deadline beyond June 30, 2025.
The company’s ability to access other sources of capital is uncertain, and it is dependent on its ability to finance operations and capital expenditures from its cash flow while seeking to refinance the credit agreement.
The information in this article is based on the company’s SEC filing and contains forward-looking statements that involve risks and uncertainties. The actual future financial and operational performance may vary significantly from the expectations outlined in these statements.
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