Inotiv, Inc. Completes Equity Offering for Net Proceeds of Approximately $24.0 Million

Rhea-AI Summary

Inotiv (NOTV) has successfully completed an equity offering, raising approximately $24.0 million in net proceeds through the sale of 6,000,000 common shares at $4.25 per share. The offering closed on December 19, 2024, with Lake Street Capital Markets acting as the sole book-running manager. The company has granted underwriters an option to purchase up to 900,000 additional shares until January 17, 2025.

The proceeds will be used for working capital, capital expenditures, and general corporate purposes. CEO Robert Leasure Jr. emphasized that this additional liquidity strengthens the company's balance sheet and enhances financial flexibility, supporting ongoing strategic initiatives aimed at improving customer experience and shareholder value.

Positive

• Raised $24.0 million in net proceeds through equity offering
• Additional liquidity strengthens balance sheet
• Option for underwriters to purchase 900,000 additional shares

Negative

• Potential dilution for existing shareholders due to 6,000,000 new shares issuance
• Share offering price of $4.25 indicates relatively low valuation

Insights

Financial Analyst

<p>The <money>$24 million</money> equity raise at <money>$4.25</money> per share represents a significant capital injection for Inotiv, though it comes with notable dilution of approximately <percent>23.7%</percent> based on the current market cap. The pricing indicates a <percent>15%</percent> discount to recent trading levels, reflecting current market conditions and investor sentiment. </p><p>This capital raise strengthens Inotiv's working capital position but also signals potential cash flow pressures. For a CRO with a <money>$101M</money> market cap, securing <money>$24M</money> through equity suggests a strategic need to bolster the balance sheet, possibly to fund growth initiatives or address operational requirements. The additional potential dilution of 900,000 shares through the underwriter's option could further impact existing shareholders.</p><p>For retail investors, while the capital raise provides operational runway, the significant dilution and pricing below market rate indicates some near-term challenges. The focus on "operational improvements" and "financial flexibility" suggests a company in transition, working to strengthen its market position in the competitive CRO space.</p>

Market Research Analyst

<p>The timing and structure of this offering reveals important dynamics in the CRO market. Contract research organizations are experiencing increased demand for nonclinical services, but many face operational challenges and margin pressures. Inotiv's move to strengthen its balance sheet aligns with industry trends where CROs are investing in capabilities and infrastructure to meet evolving sponsor demands.</p><p>The market's reception of this offering at a discount suggests some skepticism about near-term growth prospects, but also reflects broader market conditions where investors are demanding higher returns for capital deployment. Lake Street Capital's involvement as sole book-runner, rather than a larger investment bank, indicates the deal's size and scope within the small-cap biotech services sector.</p>

WEST LAFAYETTE, Ind., Dec. 23, 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 that it had raised approximately $24.0 million in net proceeds from its underwritten public offering of 6,000,000 common shares at a price to the public of $4.25 per share. All the shares were offered and sold by the Company. The Company closed on the sale of the initial 6,000,000 common shares on December 19, 2024.

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

Robert Leasure Jr., President and Chief Executive Officer, commented, “We believe this additional liquidity represents another important step in strengthening our balance sheet and enhancing our financial flexibility. It positions us to continue investing in our strategic initiatives, focused on improving Inotiv’s customer experience and delivering value for our shareholders. Adding this to the operational improvements we implemented, and previously discussed through 2023 and 2024, we anticipate a stronger 2025 delivering for our customers, employees, suppliers and shareholders.”

Lake Street Capital Markets, LLC is acting as the sole book-running manager for the proposed offering. We have granted to the underwriter an option to purchase up to 900,000 additional common shares at the public offering price, less the underwriting discount. This option is exercisable for a period of 30 days which ends January 17, 2025.

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. Copies of the final prospectus supplement and accompanying prospectus relating to the offering may be obtained by visiting the SEC’s website at www.sec.gov, 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 use of proceeds from the public offering.  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 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 did Inotiv (NOTV) raise in its December 2024 equity offering?

Inotiv raised approximately $24.0 million in net proceeds through the sale of 6,000,000 common shares at $4.25 per share.

What is the purpose of Inotiv's (NOTV) December 2024 equity offering?

The proceeds will be used for working capital, capital expenditures, and other general corporate purposes to strengthen the company's balance sheet and enhance financial flexibility.

What is the underwriter option in Inotiv's (NOTV) December 2024 offering?

The underwriters have an option to purchase up to 900,000 additional common shares at the public offering price, exercisable until January 17, 2025.

What was the share price for Inotiv's (NOTV) December 2024 equity offering?

The shares were offered to the public at a price of $4.25 per share.