Inotiv, Inc. Announces Pricing of Public Offering of 6,000,000 Common Shares

Rhea-AI Summary

Inotiv (NOTV), a contract research organization focused on drug discovery services and research models, has announced the pricing of its public offering of 6,000,000 common shares at $4.25 per share. The company has granted underwriters a 30-day option to purchase up to an additional 900,000 shares at the same price.

The offering is expected to close on December 19, 2024. Lake Street Capital Markets is serving as the sole book-running manager. Inotiv plans to use the net proceeds for working capital, capital expenditures, and general corporate purposes.

Positive

• Successful pricing of public offering, raising approximately $25.5 million (before underwriting costs)
• Additional potential proceeds from 900,000 share overallotment option if exercised
• Strengthening of working capital and capital expenditure capabilities

Negative

• Significant shareholder dilution through issuance of 6 million new shares
• Potential additional dilution from 900,000 share overallotment option
• Share price set at $4.25 indicates relatively low valuation

Insights

Financial Analyst

This public offering represents a significant capital raise for Inotiv, potentially bringing in $25.5 million (before underwriting costs) at $4.25 per share, with an additional $3.8 million possible if the overallotment option is exercised. The pricing reflects current market conditions and sits below recent trading levels, indicating some dilution for existing shareholders. While the capital injection strengthens the balance sheet and provides operational flexibility, the 16% increase in share count (potentially 18.4% with overallotment) represents substantial dilution. The stated use of proceeds for working capital and general corporate purposes suggests a need to shore up liquidity rather than specific growth initiatives, which could raise some concerns about cash burn rate and operational efficiency.

Market Research Analyst

The timing and structure of this offering are noteworthy within the context of the CRO industry. The decision to raise capital through equity rather than debt suggests management's strategic preference for financial flexibility over leverage. The pricing at $4.25 per share indicates current market sentiment and valuation challenges facing small-cap CROs. The sole book-runner arrangement with Lake Street Capital Markets, rather than a larger syndicate, might reflect institutional interest or the deal's size. This capital raise could help Inotiv maintain competitive positioning in the nonclinical research space, though the dilutive impact may pressure near-term stock performance.

WEST LAFAYETTE, Ind., Dec. 18, 2024 (GLOBE NEWSWIRE) -- Inotiv, Inc. (Nasdaq: NOTV) (the “Company”), a leading contract research organization specializing in nonclinical and analytical drug discovery and development services and research models and related products and services, today announced the pricing of its underwritten public offering of 6,000,000 common shares at a price to the public of $4.25 per share. In addition, the Company has granted the underwriter a 30-day option to purchase up to an additional 900,000 common shares at the public offering price less underwriting discounts and commissions. All the shares are being offered by the Company. The offering is expected to close on December 19, 2024, subject to customary closing conditions.

The Company intends to use the net proceeds from this offering for working capital, capital expenditures and other general corporate purposes.

Lake Street Capital Markets, LLC is acting as the sole book-running manager for the proposed offering.

A shelf registration statement on Form S-3 relating to the securities being sold in this offering was declared effective by the Securities and Exchange Commission (the “SEC”) on August 31, 2022. Before you invest, you should read the prospectus in the registration statement and related prospectus supplement for more complete information about the Company and this offering. An electronic copy of the preliminary prospectus supplement and accompanying prospectus relating to the offering are available on the SEC website at www.sec.gov. Copies of the final prospectus supplement and accompanying prospectus relating to the offering may be obtained, when available, by visiting the SEC’s website, or from Lake Street Capital Markets, LLC, Attn: Syndicate Department, 920 Second Avenue South, Suite 700, Minneapolis, MN 55402, by calling (612) 326-1305.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About the Company

Inotiv, Inc. is a leading contract research organization dedicated to providing nonclinical and analytical drug discovery and development services and research models and related products and services. The Company’s products and services focus on bringing new drugs and medical devices through the discovery and preclinical phases of development, all while increasing efficiency, improving data, and reducing the cost of taking new drugs and medical devices to market. Inotiv is committed to supporting discovery and development objectives as well as helping researchers realize the full potential of their critical research and development projects, all while working together to build a healthier and safer world.

Forward-Looking Statements

This release contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, statements regarding our expectations about the timing of the public offering and with respect to granting the underwriter a 30-day option to purchase additional shares.  These statements are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements, including risks and uncertainties related to completion of the public offering on the anticipated terms or at all, the satisfaction of customary closing conditions related to the public offering, and those factors detailed in the Company's filings with the U.S. Securities and Exchange Commission. Further discussion of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in our Annual Report on Form 10-K as filed on December 4, 2024, as well as other filings we make with the Securities and Exchange Commission.

Company Contact	Investor Relations
Inotiv, Inc.	LifeSci Advisors
Beth A. Taylor, Chief Financial Officer	Steve Halper
(765) 497-8381	(646) 876-6455
Beth.Taylor@inotiv.com	shalper@lifesciadvisors.com

FAQ

How much money will Inotiv (NOTV) raise from its December 2024 public offering?

Inotiv will raise approximately $25.5 million (before underwriting costs) from the offering of 6 million shares at $4.25 per share, with potential additional proceeds if the 900,000 share overallotment option is exercised.

What is the price per share for Inotiv's (NOTV) December 2024 public offering?

Inotiv priced its public offering at $4.25 per share.

How will Inotiv (NOTV) use the proceeds from its December 2024 share offering?

Inotiv plans to use the net proceeds for working capital, capital expenditures, and other general corporate purposes.

When will Inotiv's (NOTV) December 2024 public offering close?

The offering is expected to close on December 19, 2024, subject to customary closing conditions.

How many additional shares can be purchased through Inotiv's (NOTV) overallotment option?

The underwriter has a 30-day option to purchase up to an additional 900,000 common shares at the public offering price.