Business Context and Reporting Period
This Form 8-K, dated June 4, 2026, reports that Inotiv, Inc. (NOTV) commenced voluntary Chapter 11 bankruptcy proceedings on June 3, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas. The filing details the entry into a Debtor-In-Possession (DIP) financing facility and the subsequent delisting of the company's common shares from The Nasdaq Stock Market.
Key Financial Metrics and Obligations
The filing does not provide historical revenue, profit, or cash flow metrics. Key financial terms relate to the new financing structure:
- DIP Facility Total: $65.5 million aggregate principal amount.
- New Money Term Loans: $25 million ($16 million immediate availability; $9 million delayed draw).
- Roll-Up Loans: $40.52 million (cashless substitution of prepetition bridge facility loans).
- Interest Rate: Adjusted Term SOFR (2.5% floor) + 11.5%, payable in kind (PIK).
- Upfront Premiums: 4.5% on New Money Term Loans; 3.5% on Roll-Up Loans (both PIK).
- Liquidity Covenant: Minimum average liquidity of $5 million over a five-business-day period.
- Exit Facility: Anticipated senior secured first lien exit term loan facility up to $150 million upon emergence.
Material Changes
The most significant material change is the company's entry into Chapter 11 bankruptcy protection. Consequently, the company has been notified by Nasdaq that its common shares will be delisted effective June 11, 2026. The company has entered into a superpriority secured DIP credit agreement, which supersedes previously anticipated terms and establishes a new capital structure with significant interest and fee obligations paid in kind.
Outlook, Risks, and Management Commentary
Outlook and Plan: The company expects to emerge from Chapter 11 as a private company. The reorganization plan contemplates the cancellation of all existing equity interests without any distribution to current equity holders. The DIP Facility is expected to terminate upon the effective date of the Chapter 11 plan, with obligations converting dollar-for-dollar into the Exit Term Loan Facility.
Risks and Contingencies:
- Equity Wipeout: Existing shareholders face a total loss of investment as equity will be cancelled.
- Trading Suspension: Trading of common shares will be suspended on June 11, 2026.
- Covenant Compliance: The company must adhere to strict variance testing covenants regarding operating receipts, disbursements, and non-recurring costs.
- Bankruptcy Risks: Risks include the ability to obtain court approvals, consummate the plan, and manage increased professional costs.
Investor Verification Checklist
- Verify the final terms of the Chapter 11 Plan of Reorganization regarding the treatment of existing equity and debt.
- Confirm the status of the $65.5 million DIP Facility and the company's compliance with the $5 million minimum liquidity covenant.
- Monitor the Bankruptcy Court docket in the Southern District of Texas for rulings on the DIP Credit Agreement and the Plan.
- Assess the feasibility of the proposed $150 million Exit Term Loan Facility and the conditions required to secure it.
- Review the company's ability to meet the strict variance testing covenants (e.g., operating receipts not less than 70% of budget).