Inotiv Inc.
09/25/2025 | Press release | Distributed by Public on 09/25/2025 15:03
Material Event (Form 8-K)
Item 8.01. Other Events.
Securities Class Action and Derivative Actions
On September 25, 2025, Inotiv, Inc. (the "Company") entered into a Stipulation and Agreement of Settlement to settle the securities class action pending in the United States District Court for the Northern District of Indiana, captioned In re Inotiv, Inc. Securities Litigation, Case No. 4:22-cv-00045-PPS-JEM (the "Securities Class Action" and the proposed settlement, the "Proposed Securities Settlement").
The Company entered into the Proposed Securities Settlement to eliminate the uncertainty, burden, and expense of protracted litigation. The Proposed Securities Settlement does not assign or reflect any admission of wrongdoing or liability by the Company or the individual defendants, all of whom deny any wrongdoing. The Proposed Securities Settlement is subject in all respects to court approval and there can be no assurance that the court will approve the Proposed Securities Settlement.
If approved by the court, the Proposed Securities Settlement will fully resolve the Securities Class Action claims against the Company and the individual defendants Robert Leasure, Jr., Beth Taylor, John Sagartz, and Carmen Wilbourn. As consideration for the Proposed Securities Settlement, the Company will cause to be paid a cash settlement payment of $8,750,000 ("Cash Payment") to the members of the putative class, which is expected to include all persons and entities who purchased or otherwise acquired shares of the Company's common stock between September 21, 2021 and May 20, 2022 or who held shares of the Company's common stock and were entitled to vote on matters necessary to effectuate the Company's acquisition of Envigo RMS, LLC at a special meeting of the Company's shareholders on November 4, 2021 (subject to certain exclusions). Plaintiff will seek attorneys' fees and costs, the amount of which will be determined by the court and funded from the Cash Payment. The Company expects the Cash Payment to be fully funded by available insurance.
Also on September 25, 2025, the Company reached an agreement in principle to settle the consolidated derivative action pending in the United States District Court for the Northern District of Indiana, captioned In re Inotiv Stockholder Derivative Litigation, Case No. 4:22-cv-64-PPS-AZ, and the consolidated derivative litigation pending in the State of Indiana Tippecanoe County Circuit Court, captioned Whitfield v. Gregory C. Davis, et al., Case No. 79C01-2304-PL-000048 (Tippecanoe Circuit Court) (together, the "Derivative Actions" and the proposed settlement, the "Proposed Derivative Settlement"). The Company agreed to the Proposed Derivative Settlement to eliminate the uncertainty, burden, and expense of protracted litigation. The Proposed Derivative Settlement does not assign or reflect any admission of wrongdoing or liability by the individual defendants or the Company as the nominal defendant, all of whom deny any wrongdoing. The Proposed Derivative Settlement is subject in all respects to court approval and there can be no assurance that the court will approve the Proposed Derivative Settlement.
If approved by the court, the Proposed Derivative Settlement will fully resolve the two consolidated derivative lawsuits, including all claims against individual defendants Robert W. Leasure, Beth A. Taylor, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, Scott Cragg, and Carmen Wilbourn, and the Company as a nominal defendant. The Proposed Derivative Settlement credits the plaintiffs in the Derivative Actions for the fact that the Company will receive $2,490,000 from certain of its insurers to facilitate the resolution of the Securities Class Action, which amount will be utilized by the Company as part of the Cash Payment to the members of the putative class in the Proposed Securities Settlement. The Proposed Derivative Settlement also involves the institution and maintenance of certain corporate governance measures by the Company, including, for a period of at least five years, having a separate Chief Executive Officer and Board Chairperson, maintaining a fully independent Board Chairperson, instituting certain guidelines for due diligence conducted in any future mergers and acquisitions, and maintaining a disclosure committee. Plaintiffs in the Derivative Actions will, in addition, seek attorneys' fees, the amount of which will not exceed $2,250,000 and will be subject to court approval. The Company expects any award of attorneys' fees to be funded by available insurance.
As disclosed in the Company's Quarterly Report on Form 10-Q filed on August 7, 2025, as of June 30, 2025, the Company had recorded a $10.0 million liability, and a $10.0 million receivable, related to the Securities Class Action and the Derivative Actions. As a result of the amounts included in the Proposed Securities Settlement and the Proposed Derivative
Settlement described above, the Company anticipates that it will increase the liability, and the related receivable, to $11.0 million as of September 30, 2025.
Privacy Class Actions
The Company has been named as a defendant in three putative class actions relating to the cybersecurity incident reported in the Current Report on Form 8-K filed by the Company on August 18, 2025 (the "2025 Cybersecurity Incident") pending in the United States District Court for the Northern District of Indiana: (1) Doyal v. Inotiv, Inc., Case No. 4:25-cv-00046 (filed on August 21, 2025); (2) Merrell v. Inotiv, Inc., Case No. 4:25-cv-00047 (filed on August 25, 2025); and (3) Wagner v. Inotiv, Inc., Case No. 4:25-cv-00049 (filed on September 2, 2025). The complaints filed in each action generally allege that the plaintiffs and the proposed class members were harmed when their personally identifying information and protected health information (together, "Private Information") was impacted by the 2025 Cybersecurity Incident. The purported class includes all persons in the United States whose Private Information allegedly was impacted by the 2025 Cybersecurity Incident. The complaints seek (i) an order certifying the cases as class actions, (ii) unspecified amounts of monetary damages, restitution, punitive damages, attorneys' fees and costs, and (iii) certain injunctive or equitable relief relating to (a) the safeguarding of proposed class members' Private Information, and (b) the implementation of technical and administrative cybersecurity programs, procedures and controls.
Update on Cybersecurity Incident
The 2025 Cybersecurity Incident has caused, and is expected to continue to cause, disruptions to certain business operations of the Company. The Company has restored availability and access to most of the Company's networks and systems. While the Company is working diligently to restore additional affected functions and systems access, the timeline for completion of restoration efforts is not yet known. The Company continues to accept, and execute on, requests for delivery of its products and services.
The Company's investigation of the 2025 Cybersecurity Incident is ongoing, and the full scope, nature and impacts, including operational and financial impacts, of the incident are not yet known. Accordingly, the Company has not yet determined whether the 2025 Cybersecurity Incident is reasonably likely to have a material impact on the Company.
Update on Strategic Review of Capital Structure
The Company recently engaged Perella Weinberg Partners to provide general financial advisory and investment banking services to assist the Company in exploring potential debt refinancing alternatives.
Inotiv Inc. published this content on September 25, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on September 25, 2025 at 21:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]