Inotiv - Chapter 11 Case Summary

Business Description

Headquartered in West Lafayette, Indiana, Inotiv, Inc. ("Inotiv"), together with its debtor affiliates (the "Debtors") and non-debtor affiliates (collectively, the "Company"), is a vertically integrated, full-service contract research organization ("CRO") supporting the entire preclinical drug development continuum—from early-stage target identification and discovery through regulatory submission-ready safety studies.

• The Company is one of the few CROs in the world capable of offering both nonclinical testing services and a proprietary supply of purpose-bred laboratory animals used in preclinical safety and efficacy testing ("Research Models").
• This integrated platform enables pharmaceutical and biotechnology clients to conduct essential preclinical work—required before any medication or medical device may be administered to human patients—under a single provider.

The Company operates through two segments: Discovery and Safety Assessment ("DSA") and Research Models and Services ("RMS"). Its common shares trade on the NASDAQ under the ticker symbol $NOTV.

• For the six months ended March 31, 2026, the Company generated total revenue of approximately $238.5 million, comprising roughly $118.2 million in service revenue and $120.4 million in product revenue.
• As of March 31, 2026, the Company reported total assets of approximately $702.4 million.

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Corporate History

The Company began operations in 1975 as Bioanalytical Systems, Inc., and completed an initial public offering in 1997. On March 18, 2021, it changed its corporate name to Inotiv, Inc. to reflect a broader strategic vision: building a vertically integrated, full-service CRO spanning the full preclinical drug development continuum.

Acquisition-Driven Expansion

To realize that vision, the Company executed fourteen strategic acquisitions over approximately 48 months between July 2018 and July 2022, transforming Inotiv from a single-site analytical services provider into a two-segment platform of meaningful scale. This investment phase built a full-service drug discovery and development CRO by adding access to critical Research Model supply chains and initiating organic investments to create capacity for growth.

• Establishing the RMS Segment: Most notably, the Company completed its acquisition of Envigo RMS Holding Corp. ("Envigo") on November 5, 2021. A leader in the breeding, supply, and distribution of purpose-bred laboratory animals, Envigo established the Company's RMS segment and positioned Inotiv among the few CROs able to pair nonclinical testing services with a proprietary supply of Research Models.
  • The Envigo acquisition was funded through borrowings under (i) a new senior secured credit agreement dated November 5, 2021 among the Company, as borrower, the subsidiary guarantors, the lenders, and Acquiom Agency Services LLC, as successor administrative agent and collateral agent (the "Prepetition Secured Loan Credit Agreement"), and (ii) the net proceeds of the $140.0 million aggregate principal offering of 3.25% Convertible Senior Notes due 2027 among the Company, BAS Evansville, Inc., as guarantor, and U.S. Bank National Association, as trustee (the "Prepetition Unsecured Convertible Notes").
• Strengthening the RMS Platform: In January 2022, the Company completed two additional acquisitions. It acquired Orient BioResource Center, Inc. ("OBRC") pursuant to a Stock Purchase Agreement dated January 27, 2022 among Envigo Global Services, Inc., Inotiv, Inc., and Orient Bio, Inc., expanding its non-human primate ("NHP") supply chain capabilities. It also acquired Robinson Services Inc. ("Robinson Services"), further broadening its Research Model logistics and NHP-related services.
• Building DSA Capabilities: The Company's remaining acquisitions were a series of DSA-focused transactions—including Seventh Wave Laboratories, Integrated Laboratory Systems, Histion, Bolder BioPATH, HistoTox Labs, Gateway Pharmacology, Pre-Clinical Research Services, Protypia, Plato BioPharma, certain assets from BioReliance, and the Gaithersburg, Maryland operations of Smithers Avanza. These deals added specialized scientific expertise across toxicology, pathology, in vivo pharmacology, bioanalytical method development, surgical modeling, and related disciplines, while establishing the Company's geographic presence across key U.S. life sciences markets.

Optimization and Consolidation

Since 2023, the Company has focused on optimization, consolidation, and integration across both the DSA and RMS segments. This included reducing the RMS operating footprint from 23 to 11 facilities to increase efficiency and facility-level revenue while enhancing quality of services and animal welfare.

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Operations Overview

The Company is headquartered in West Lafayette, Indiana and operates across 22 locations encompassing 24 owned or leased facilities in four countries. Approximately 86% of its facilities are located in the United States, with the remainder across Europe and the Middle East. The Company also maintains 11 distribution hubs and warehouse facilities to support its Research Model and NHP logistics operations.

Inotiv's operations are organized into two segments (together, the "Operating Segments"), enabling the Company to deliver specialized services and products that support the full spectrum of nonclinical drug discovery and development, from early-stage target identification through regulatory submission-ready safety studies.

Discovery and Safety Assessment (DSA) Segment

• The DSA segment provides discovery and translational sciences services and safety assessment services—including nonclinical development and, in certain cases, clinical development—primarily for small molecule drug candidates, as well as biotherapeutics and biomedical devices.
• Its capabilities span analytical chemistry, drug metabolism, pharmacokinetics, toxicology, histology, pathology, physiology, and surgery services.
• For the six months ended March 31, 2026, the DSA segment generated revenue of approximately $95.04 million.

Research Models and Services (RMS) Segment

• The RMS segment offers access to a wide range of purpose-bred Research Models essential to basic research and drug discovery, specialized models for specific diseases and therapeutic areas, and diet, bedding, and enrichment products, all supported by the Company's deep animal husbandry expertise.
• The segment also provides genetically engineered models and services, client-owned animal colony management, and health monitoring and diagnostics services.
• These Research Models play a vital role in advancing human health by enabling researchers to evaluate the safety and efficacy of potential new therapies before they enter human clinical trials.
• For the six months ended March 31, 2026, the RMS segment generated revenue of approximately $143.44 million.

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Prepetition Obligations

As of the Petition Date, the Debtors report approximately $488.7 million in total debt obligations, comprising secured loans, two series of notes, and a Department of Justice settlement. The Company’s prepetition capital structure is summarized below:

Prepetition Secured Loan Credit Agreement

• The Debtors’ senior funded debt consists of approximately $315.4 million outstanding under a first lien credit agreement originally entered into on November 5, 2021. The facility is secured by substantially all of the Company’s and its domestic subsidiaries’ assets, is guaranteed on a senior secured first lien basis by the Prepetition Secured Loan Guarantors, and is administered by Acquiom Agency Services LLC as successor administrative and collateral agent (succeeding Jefferies Finance LLC).
  • First Lien Claims: Approximately $274.9 million in term loans maturing November 5, 2026, bearing interest at Adjusted Term SOFR plus 6.75% (0.25% payable in kind).
  • Bridge Facility Delayed Draw Term Loans: Approximately $40.5 million extended under the May 14, 2026 Ninth Amendment, maturing October 15, 2026, and bearing interest at Adjusted Term SOFR plus 7.75% (6.25% payable in kind). These loans hold payment priority over the other Prepetition Secured Loans.
  • The agreement was amended numerous times to fund acquisitions—including the 2022 purchase of Orient BioResource Center, Inc.—and to adjust rates, covenants, and compliance terms. The Ninth Amendment also terminated the original $15.0 million revolving facility in full.

Prepetition PIK Notes

• Approximately $28.3 million remains outstanding under a September 13, 2024 indenture with U.S. Bank Trust Company, National Association, as trustee and notes collateral agent.
  • The notes mature February 4, 2027 and bear interest at a fixed 15.00% per annum, payable quarterly in kind.
  • They constitute the Company’s senior secured second lien obligations, secured by substantially all assets of the Company and its domestic subsidiaries and guaranteed on a second lien basis by the subsidiary guarantors.

DOJ Settlement

• Approximately $13.3 million remains outstanding under a settlement reached on or around June 3, 2024, when Inotiv and certain affiliates entered into a Resolution Agreement and Plea Agreement with the Department of Justice.
  • The parties pleaded guilty to violations of the Animal Welfare Act and the Clean Water Act and agreed to a $22.0 million fine, payable in annual installments through June 3, 2028. The fine accrues interest at the weekly average 1-year constant maturity Treasury yield, with the balance due June 3, 2028.
  • The settlement is the DOJ Settlement Parties’ senior secured third lien obligation, secured by substantially all of their assets.
  • Separately, the Plea Agreement required payments totaling $6.5 million to parties that assisted the investigation: $1,143,991 to the Virginia Animal Fighting Task Force, $1,856,009 to the Humane Society of the United States, and $3,500,000 to the National Fish and Wildlife Foundation.

Intercreditor Agreement

• A September 13, 2024 Intercreditor Agreement governs the relative rights of the Prepetition Secured Lenders and the Prepetition PIK Noteholders, addressing priority, debtor-in-possession financing, use of cash collateral, and adequate protection.
  • Liens securing the Prepetition Secured Loan Credit Agreement rank senior in priority to liens securing the Prepetition PIK Notes.

Prepetition Unsecured Convertible Notes

• Approximately $131.7 million in principal remains outstanding under a September 27, 2021 indenture with U.S. Bank National Association, as trustee.
  • The notes mature October 15, 2027 and bear interest at a fixed 3.25% per annum, payable semi-annually.
  • The notes are not convertible prior to April 15, 2027 absent certain triggering events; thereafter, holders may convert at their discretion, with the Company electing to settle in cash, common stock, or a combination thereof.

General Unsecured Claims

• As of the Petition Date, the Debtors estimate approximately $21.9 million in accounts payable owed to vendors, suppliers, and trade counterparties, before any setoffs, credits, or deductions.
  • Under the proposed Plan, general unsecured creditors are unimpaired and are slated to receive a 100% recovery on or about the Plan’s effective date.

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Events Leading to Bankruptcy

Inotiv, Inc. commenced these chapter 11 cases as the culmination of a deliberate process to right-size its capital structure and position the business for sustainable long-term growth.

Over-Leveraged Capital Structure

• The Company’s financial challenges are rooted in an over-leveraged capital structure—approximately $488.7 million in total funded debt—that has prevented the execution of strategic alternatives and constrained refinancing options on favorable terms.
• The annual debt service burden has been extraordinary:
  • The weighted average effective interest rate on the Company’s term loans exceeds 11.6%, while the Prepetition PIK Notes accrue interest at 15.00% per annum (payable in kind).
  • For the six months ended March 31, 2026, the Company incurred approximately $27.5 million in interest expense. Absent the restructuring, this burden threatened to divert capital away from operational investments and growth initiatives.

Industry Headwinds — Market Competition

• The CRO and Research Model industries are highly competitive and have undergone significant consolidation, with more than 1,000 CROs worldwide ranging from small regional laboratories to global, comprehensive service providers.
  • Consolidation accelerated competitive pressures, while the expansion of offshore CROs in lower-cost and less-regulated markets intensified pressure on domestic providers like the Company.
  • In the DSA segment, the Company competes with numerous CROs, including two U.S. public companies and three public companies in China. In the RMS segment, competitors range from academics and large biopharmaceutical companies that maintain their own rodent colonies to a U.S. public company, four privately-held domestic companies, a government-funded not-for-profit, and a European competitor.
• Although the RMS segment is protected by significant barriers to entry—bio-secure barrier and flexible-film isolator production facilities, colonies spanning over 250 species and strains (including over 80 genetically engineered rodent models), and rigorous biosecurity protocols requiring years of capital investment—mounting pressure from lower-cost international competitors underscored the importance of the contemplated balance-sheet restructuring.

Industry Headwinds — Regulatory Environment

• The Company operates in a highly regulated environment, with facilities subject to the Animal Welfare Act (USDA/APHIS), Good Laboratory Practice regulations (FDA and EPA), the Controlled Substances Act (DEA), and NHP import/export oversight by the U.S. Fish and Wildlife Service. Noncompliance can result in penalties ranging from fines to license revocation, data disqualification, or criminal prosecution.
• A significant federal shift in regulatory priorities introduced structural uncertainty around the Company’s services:
  • The FDA Modernization Act 2.0 (December 2022) removed certain references to mandatory animal testing, and in April 2025 the FDA published a roadmap to reduce animal testing in preclinical safety studies through new approach methodologies (“NAMs”)—raising industry-wide uncertainty over the future scope of traditional animal-based testing.
  • Tariffs ranging from 10% to 20% were imposed on imported NHPs—essential to preclinical safety testing—during fiscal year 2025 and the first two quarters of fiscal year 2026. With China having ceased exporting cynomolgus monkeys in 2020, the Company shifted to higher-priced suppliers in Vietnam and Mauritius Island, and the requirement to pay tariffs within roughly 30 days of import—well ahead of inventory turnover—strained operating liquidity.
  • Proposed reductions to government research funding, including an approximately 40% cut to the NIH’s fiscal year 2026 budget and a policy capping indirect overhead payments at 15%, threatened to reduce client demand for the Company’s services.
• These external pressures had a direct, measurable financial impact. For the six months ended March 31, 2026, RMS segment revenue declined approximately $12.6 million, or 8.0%, driven primarily by lower NHP volumes; total Company revenue fell approximately $5.7 million, or 2.3%, year-over-year; and the Company reported an operating loss of approximately $35.6 million, compared to an operating loss of approximately $18.4 million in the prior-year period.

DOJ Resolution and Ongoing Compliance Costs

• The Company’s financial position was further impacted by continuing obligations under a Resolution Agreement and Plea Agreement dated June 3, 2024 with the DOJ, arising from an investigation into a canine breeding facility in Cumberland, Virginia within the Company’s TMS Operating Segment. Cooperating fully, the Company consensually resolved the matter, agreeing to:
  • $22.0 million in fines and $6.5 million in community and environmental support obligations;
  • at least $7.0 million in facility and personnel improvements related to animal welfare; and
  • the appointment of a compliance monitor—with a term extending through at least January 20, 2028—charged with establishing industry-leading standards.
• The Company has made substantial investments in connection with these obligations, incurring approximately $5.3 million in third-party and legal costs for the six months ended March 31, 2026, and carrying approximately $18.1 million in related liabilities as of March 31, 2026 (with interest accruing at 4.18% per annum). While these ongoing costs strained liquidity and operational capacity, the Company views its animal welfare investments—often exceeding the agreements’ requirements—as positioning it as an industry leader over the long term.

Prepetition Operational Initiatives

• In response to these challenges, the Company implemented a series of proactive initiatives to strengthen its operational and financial position, including facility and system integrations from prior acquisitions, operational cost reductions, strategic site consolidations, workforce optimization, the start-up of new services, investment in technology and NAMs, rebranding alongside the development of an effective sales and marketing organization, and constructive engagement with existing lenders regarding potential recapitalization and refinancing transactions.

Strategic Review and Lender Engagement

• Recognizing the need for a comprehensive solution, the Company engaged Ropes & Gray LLP as legal counsel, Perella Weinberg Partners LP (“PWP”) as investment banker, and FTI Consulting, Inc. as financial advisor to explore strategic and financial alternatives.
  • Beginning in July 2025, PWP pursued alternatives to address the Company’s near-term objectives—deleveraging the balance sheet (starting with the Prepetition Secured Loans due October 2026), negotiating reductions with PIK and Unsecured Convertible Noteholders, and raising liquidity to support forecast growth.
  • The Prepetition First Lien Lenders engaged Davis Polk & Wardwell LLP and Berkeley Research Group, LLC, while the Ad Hoc Noteholder Group engaged Paul, Weiss, Rifkind, Wharton & Garrison LLP.
• On May 14, 2026, the Company established a Special Committee with exclusive authority to review, negotiate, and approve restructuring transactions, appointing independent fiduciaries Eugene I. Davis and John T. Young, Jr. to serve alongside existing independent director Michael J. Harrington.

Financing Efforts

• Beginning in the second half of 2025, the Company engaged in earnest discussions with its funded debt holders and potential third-party financing sources, pursuing alternatives that included refinancing the Prepetition Secured Loans, equitizing the PIK and Unsecured Convertible Notes in connection with a broader refinancing, and extending the Prepetition Secured Loans coupled with an equitization of the Notes.
• Despite significant efforts, the Company was unable to secure the requisite support among certain Prepetition First Lien Lenders to consummate an out-of-court transaction.
  • The First Lien Lenders were willing to provide financing only in the form of the Bridge Facility Delayed Draw Term Loans—funded pro rata to ensure sufficient immediate liquidity while negotiations toward a longer-term solution, including preparation for a potential chapter 11 filing, continued. To facilitate this, on May 14, 2026 the Company entered into the Ninth Amendment to the Prepetition Secured Loan Credit Agreement, providing for $40.5 million in delayed draw term loan commitments.

Path to Chapter 11 and the Prepackaged Plan

• After months of good-faith, arm’s-length negotiations and the exchange of multiple proposals, the Company—in consultation with its restructuring professionals and the Special Committee—drove consensus around a balance-sheet restructuring to be effectuated through a prepackaged plan of reorganization (the “Plan”), determining that a chapter 11 filing represented the most efficient and value-maximizing path after exhausting all viable out-of-court alternatives.
• The Company commenced these cases with a restructuring support agreement (the “RSA”) executed by a significant majority of its capital structure, supported by Prepetition First Lien Lenders holding greater than 99% of Prepetition Secured Loans and an Ad Hoc Noteholder Group holding greater than 85% of Prepetition PIK Notes and greater than 80% of Prepetition Unsecured Convertible Notes. Before filing, the Debtors solicited and obtained votes in favor of the Plan from holders exceeding these same thresholds.
• The Plan reduces prepetition debt by approximately $325.4 million and deleverages the balance sheet:
  • Holders of Prepetition First Lien Claims receive the substantial majority of New Equity Interests and Exit Term Loans, while holders of PIK Notes and Unsecured Convertible Notes Claims receive a minority equity allocation and New Warrants.
  • Critically, General Unsecured Creditors and the DOJ remain unimpaired, preserving key commercial relationships and enabling the Company to emerge as a stronger, deleveraged enterprise.

DIP Financing and Path Forward

• The Debtors’ immediate liquidity needs are supported by a DIP Facility—provided pro rata by all lenders under the Prepetition Secured Loan Credit Agreement, with Acquiom Agency Services LLC as agent—consisting of:
  • $25.0 million in “new money” senior secured superpriority commitments (with an initial draw of up to $16.0 million following the Interim DIP Order and a $9.0 million delayed draw), and a $40.5 million roll-up of Bridge Facility Delayed Draw Term Loans. The DIP Loans bear interest at SOFR plus 12.00% (subject to a 3.50% floor), paid monthly in kind, and the facility matures 60 days after the Petition Date, subject to one 30-day extension.
• Together with consensual use of cash collateral and cash on hand, the DIP Facility provides the liquidity needed to continue serving clients, fund the workforce and critical vendors, and satisfy the costs of these cases. Upon the Plan’s effective date, all DIP obligations will be terminated and replaced dollar-for-dollar by a new $150.0 million senior secured first lien term loan exit facility (the “Exit Facility”).
• The RSA and Plan provide a clear, cost-effective path to a timely emergence from chapter 11, with case milestones to drive a streamlined timeline and the strong support of a substantial majority of the Company’s prepetition capital structure—positioning the Company for sustained long-term growth.