8-K/A - NOTV - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment No. 1

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 30, 2021


INOTIV, INC.
(Exact name of registrant as specified in its charter)


Indiana		0-23357		35-1345024
(State or other jurisdiction<br>of incorporation or<br>organization)		(Commission File Number)		(I.R.S. Employer Identification<br>No.)


2701 KENT AVENUE<br>WEST LAFAYETTE, INDIANA		47906-1382
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (765) 463-4527

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17CFR240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17CFR240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of exchange on which registered
Common Shares	NOTV	NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

EXPLANATORY NOTE

As previously disclosed, on April 30, 2021, Inotiv, Inc. (the “Company”) closed the acquisition of Bolder BioPath, Inc. (“Bolder”) through a merger of Bolder with a wholly owned subsidiary of the Company and the acquisition of Histotox Laboratories, LLC (“Histotox”) through a purchase of the outstanding equity interests in Histotox (collectively, the “Acquisitions”).

This Amendment No.1 to the Current Report on Form 8-K/A (“Amendment No. 1”) amends and supplements Item 9.01 of the original Form 8-K filed on April 30, 2021 (the “Initial Form 8-K”) to provide certain pro forma financial information in connection with the Acquisitions. Any information required to be set forth in the Initial Form 8-K which is not being amended or supplemented pursuant to this Amendment No. 1 is hereby incorporated by reference. Except as set forth herein, no modifications have been made to the information contained in the Initial Form 8-K and the Company has not updated any information contained therein to reflect the events that have occurred since the date of the Initial Form 8-K. Accordingly, this Amendment No. 1 should be read in conjunction with the Initial Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(a)	Financial Statements of Businesses or Funds Acquired.
1.	The audited financial statements of HistoTox Labs, Inc. as of and for the fiscal year ended December 31, 2020, together with the notes thereto and the report of the independent auditor thereon, were filed as Exhibit 99.3 to the Company’s Current Report on Form 8-K filed April 20, 2021 and are incorporated herein by reference.
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2.	The audited financial statements of Bolder BioPATH, Inc. as of and for the fiscal years ended December 31, 2019 and 2020, together with the notes thereto and the report of the independent auditor thereon, were filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed April 20, 2021 and are incorporated herein by reference.
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(b)	Pro Forma Financial Information.
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1.	The unaudited pro forma condensed combined financial information of the Company, Bolder and Histotox is filed as Exhibit 99.1 to this Amendment No. 1.
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(c)	None.
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(d)	Exhibits
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The following exhibits are being filed as part of this report:

Exhibit No.	Description
99.1	Unaudited pro forma condensed combined financial information of the Company, Bolder and Histotox.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Inotiv, Inc.


Date:	August 10, 2021	By:	/s/ Beth A. Taylor
			Beth A. Taylor
			Chief Financial Officer
			Vice President - Finance

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

The following unaudited pro forma condensed combined financial information gives effect to the acquisition and the financing effectuated (the “Acquisition”) related to the business of HistoTox Labs, Inc., a Colorado corporation (“HistoTox Labs”), by Inotiv – Boulder HTL, LLC (“Inotiv – Boulder HTL”), a wholly owned subsidiary of Inotiv, Inc. (“Inotiv”), pursuant to the terms of the Asset Purchase Agreement (the “Purchase Agreement”), dated as of April 30, 2021, between Inotiv – Boulder HTL and HistoTox Labs and the merger and financing effectuated (the “Merger”) related to the business of Bolder BioPATH, Inc., a Colorado corporation (“Bolder BioPATH”), by Inotiv – Boulder, LLC (“Inotiv – Boulder”), an Indiana limited liability company and wholly owned subsidiary of Inotiv, Inc., pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), closed as of April 30, 2021 and consummated on May 3, 2021, between Inotiv – Boulder and Bolder BioPATH. The unaudited pro forma condensed combined financial data set forth below gives effect to the following (dollars in thousands):

·	the completion of the Acquisition, which closed on April 30, 2021 with a total transaction value of $22,321, funded by $22,321 in cash;
·	the completion of the Merger, which closed on April 30, 2021 and consummated on May 3, 2021 with a total transaction value of $54,855, funded by $18,903 in cash, 1,588,235 of the Company’s common shares valued at $34,452 and seller notes in an aggregate principal amount of $1,500;
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·	the incurrence of $15,000 of additional debt to fund a portion of the cash portion of the Acquisition and the Merger consideration and pay fees and expenses related to the Acquisition and the Merger; and
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·	the completion of an underwritten public offering of 3,044,117 common shares, all of which were sold at a price to the public of $17.00 per share. Net proceeds to the Company from the offering were approximately $48,971, after deducting the underwriting discount and estimated offering expenses. A portion of the proceeds from the public offering were used to fund a portion of the cash consideration in connection with the Acquisition and the Merger.
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The unaudited pro forma condensed combined balance sheet gives effect to the Acquisition and the Merger as if they occurred on September 30, 2020 and the unaudited pro forma condensed combined statements of operations give effect to the Acquisition and the Merger as if it occurred as of the beginning of the period, October 1, 2019. The unaudited pro forma condensed combined financial data has been prepared by management in accordance with the regulations of the U.S. Securities and Exchange Commission (“SEC”) and is not necessarily indicative of what the combined financial position or results of operations actually would have been had the Acquisition and the Merger been completed as of the dates indicated, nor is it indicative of future results or financial position of the combined company. In addition, the unaudited pro forma condensed combined financial data do not purport to project the future financial position or results of operations of the combined entity. Differences between these preliminary estimates and the final acquisition accounting will likely occur and these differences could be material. The differences, if any, could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and Inotiv’s future results of operations and financial position. There were no material transactions between Inotiv and Bolder BioPath or HistoTox Labs during the period presented in the unaudited pro forma condensed combined financial data that would need to be eliminated; however, there were material sales transactions between HistoTox Labs and Bolder BioPath during the period presented in the unaudited pro forma condensed combined financial data that have been eliminated and described in the footnotes to the financial data.

The unaudited pro forma condensed combined financial data have been prepared using the acquisition method of accounting under U.S. generally accepted accounting principles (“U.S. GAAP”), with Inotiv being the accounting acquirer. The pro forma adjustments are preliminary and based on currently available information and are subject to change. Under the acquisition method generally all assets acquired and liabilities assumed are recorded at their respective fair values as of the date the acquisition is completed. For pro forma purposes, the fair value of the Bolder BioPATH and HistoTox Labs respective business’s tangible and identifiable intangible assets acquired and liabilities assumed are based on a preliminary estimate of fair value as of April 30, 2021. Any excess of the purchase price over the fair value of identified assets acquired and liabilities assumed will be recognized as goodwill. Management believes that the fair values recognized for the assets acquired and liabilities assumed are based on reasonable estimates and assumptions.

The unaudited pro forma condensed combined financial data gives pro forma effect to events that are directly attributable to the Acquisition and the Merger, are factually supportable, and with respect to the unaudited pro forma condensed combined statements of operations, are expected to have a continuing impact on the combined results. All financial data included in the unaudited condensed combined financial data is presented in thousands of U.S. dollars and has been prepared on the basis of U.S. GAAP and Inotiv’s accounting policies.

The pro forma adjustments in this document include the final terms of the additional debt funding, the issuance of shares to effect the Merger, and the preliminary determination of the fair value of the assets acquired and liabilities assumed. 1

The unaudited pro forma condensed combined financial data presented is for informational purposes only. The unaudited pro forma condensed combined statements of operations do not reflect any anticipated synergies or dis-synergies, operating efficiencies or cost savings that may result from the Acquisition and the Merger or any acquisition and integration costs that may be incurred. The pro forma adjustments, which Inotiv believes are reasonable under the circumstances, are preliminary and are based upon available information and certain assumptions described in the accompanying notes to the unaudited pro forma condensed combined financial data.

The unaudited pro forma financial data reflects cash paid at the closing of the Acquisition and the Merger, which is subject to a purchase price adjustment related to the final closing statement for assets acquired and liabilities assumed. The total cash consideration will be adjusted, as needed, based on the final net asset position per the terms of the Purchase Agreement and the Merger Agreement. Inotiv issued a set number of consideration shares with a value of $34,452 thousand at the closing of the Merger.

The unaudited pro forma condensed combined financial data should be read together with the Bolder BioPATH and HistoTox Labs respective business’s audited combined financial statements as of December 31, 2020 and for the year then ended, included as Exhibit 99.2 and Exhibit 99.3 to Inotiv's Current Report on Form 8-K, filed with the SEC on April 20, 2021, as well as Inotiv’s consolidated financial statements and related notes thereto contained in its Annual Report on Form 10-K for the year ended September 30, 2020.

Unaudited Pro Forma Condensed Combined Statement of Operations For the Year Ended September 30, 2020


	****	Inotiv, Inc.<br>Historical		****	Bolder BioPATH<br>Inc.<br>Historical		****	HistoTox Labs<br>Inc.<br>Historical
		Fiscal<br>Year<br>Ended<br>September 30,<br>2020			Fiscal<br>Year<br>Ended<br>December 31,<br>2020			Fiscal<br>Year<br>Ended<br>December 31,<br>2020		Pro Forma<br>Adjustments<br>Increase<br>(Decrease)			Notes	Inotiv, Inc.<br>Pro Forma<br>Combined
Total Revenue		$	60,469		$	12,932		$	9,116	$	(778)		(f)	$	81,739
Cost of Revenue			42,232			7,855			5,217		(1,273)		(a)(f)		54,031
Gross profit			18,237			5,077			3,899		495				27,708
Operating expenses:
Selling			3,373			—			44		—				3,417
Research and development			950			—			—		—				950
General and administrative			16,977			3,486			1,588		2,538		(a)(d)		24,589
Total operating expenses			21,300			3,486			1,632		2,538				28,956
Operating income (loss)			(3,063)			1,591			2,268		(2,044)				(1,248)
Other income			15			5			6						26
Interest expense			(1,490)			(96)			(44)		(604)		(b)		(2,234)
Net income (loss) before income taxes			(4,538)			1,500			2,230		(2,648)				(3,456)
Income tax expense			147			390			580		(688)		(c)		428
Net (loss) income		$	(4,685)		$	1,110		$	1,650	$	(1,959)			$	(3,885)
Other comprehensive income			—			—			—		—				—
Comprehensive (loss) income		$	(4,685)		$	1,110		$	1,650	$	(1,959)			$	(3,885)

Basic net income (loss) per share		$	(0.43)											$	(0.29)
Diluted net income (loss) per share		$	(0.43)											$	(0.29)

Weighted common shares outstanding:
Basic			10,851								4,632	(e)			15,483
Diluted			10,851								4,632	(e)			15,483

(a)	Reflects the impact of net changes in Bolder BioPATH and HistoTox Labs number of employees, employee (including previous owners) wages, salaries and benefits in order to align with Inotiv's internal human resource policies based upon job description and related responsibilities of employees that transferred with the Acquistion and the Merger.
(b)	Reflects the impact on the net change in borrowings resulting from the Acquisition and the Merger and the associated impact of additional interest expense (in thousands).
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(c)	The estimated tax impact is based on an assumed tax rate of 26%, which is a blended average statutory rate based on the assumed jurisdiction for the pro forma adjustments and current structure.
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(d)	Represents the incremental amortization expense for intangible assets of approximately $2,753 thousand resulting from the Acquisition and the Merger. Amortization expense is based on the estimated fair value of the customer relationships and non-compete agreements and assuming an average life of 8 years and 5 years, respectively. If the fair value changed by 10%, amortization expense would change by $0.3 million for the year ended September 30, 2020.
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(e)	The weighted average number of shares outstanding reflects the issuance of 3,044 thousand common shares in connection with Inotiv's underwritten public offering in April 2021, from which a portion of the proceeds were used to fund the Acquisition and the Merger. Additionally, the weighted average number of shares outstanding also reflects the issuance of 1,588 thousand common shares to the holders of all of the outstanding common shares of Bolder BioPATH at closing of the merger. Total weighted average shares of 15,483 thousand is calculated as 3,044 thousand shares as a result of the public offer plus 1,588 thousand shares issued to the holders of all of the outstanding common shares of Bolder BioPATH plus 10,851 thousand shares issued and outstanding as of September 30, 2020. During certain periods we have a reported net loss. Therefore, dilutive common shares are not assumed to have been issued since their effect is anti-dilutive. As a result, basic and diluted weighted average shares are the same, causing diluted net loss per share to be equivalent to basic net loss per share.
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(f)	Reflects the impact on sales from HistoTox Labs to Bolder BioPATH and the related cost of sales for the year-ended December 31, 2020 (in thousands).
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Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2020


	****	Inotiv, Inc.Historical		****	Bolder BioPATHInc.Historical		****	HistoTox LabsInc.Historical
		As ofSeptember 30,2020			As ofDecember 31,2020			As ofDecember 31,2020		Pro FormaAdjustments		Notes	Inotiv, Inc.Pro FormaCombined
Assets
Current assets
Cash		$	1,406		$	41		$	924	$	22,925	(h)	$	24,372
Account receivables
Trade, net of allowance			8,681			2,887			1,157					11,568
Unbilled revenues			2,142			1,456			9					3,598
Inventories, net			700			—			—					700
Prepaid expenses			2,371			45			—					2,416
Total current assets			15,300			4,429			2,090		22,925			42,654
Property and equipment, net			28,729			5,094			3,130		2,657	(g)		36,480
Operating lease right-of-use assets, net			4,001			1,846			1,218					5,847
Financing lease right-of-use assets, net			4,778			—			—					4,778
Lease rent receivable			75			—			—					75
Deferred tax asset			—			—			—					—
Goodwill			4,368			—			—		41,639	(g)		46,007
Other intangible assets			4,261			—			—		21,000	(g)		25,261
Other assets			81			70			25					151
Total assets		$	61,593		$	11,439		$	6,463	$	88,221		$	161,253
Liabilities
Current liabilities
Accounts payable		$	3,196		$	147		$	262	$	—		$	3,343
Restructuring liability			168			—			—		—			168
Accrued expenses			2,688			199			380		(136)	(g)		2,751
Customer advances			11,392			778			458					12,170
Revolving line of credit			—			—			—					—
Capex line of credit			2,613			—			—					2,613
Current portion of long-term operating leases			866			329			214					1,195
Current portion of long-term financing leases			4,728			—			—					4,728
Current portion of long-term debt			5,991			1,636			498		711	(g)		8,338
Total current liabilities			31,642			3,089			1,812		575			35,306
Long-term operating leases, net			3,344			2,307			1,487					5,651
Long-term financing leases, net			44			—			—					44
Long-term debt, less current portion, net of debt issuance costs			18,826			174			401		12,855	(g)		31,855
Deferred tax liability			141			—			—					141
Total liabilities			53,997			5,570			3,700		13,430			72,997
Shareholders’ Equity
Preferred Stock			25			—			—		—			25
Common Stock			2,706			1			—		1,157	(j),(g)		3,864
Additional paid in capital			26,775			—			—		82,265	(j),(g)		109,040
Retained Earnings / (Accumulated deficit)			(21,910)			5,868			2,763		(8,631)	(j)		(24,673)
Total shareholders’ equity			7,596			5,869			2,763		74,791			88,256
Total liabilities and shareholders’ equity		$	61,593		$	11,439		$	6,463	$	88,221		$	161,253

(g)	Reflects the preliminary purchase price allocation among assets acquired and liabilities assumed as set forth below (in thousands):

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		Bolder BioPATH				HistoTox Labs
Estimated purchase price(8):
Cash(1)		$	18,500		$	22,321
Stockholder Note(2)			1,500			—
Inotiv shares(3)			34,452			—
Total			54,452			22,321
Preliminary purchase price allocation(8):
Net assets as of the Acquisition/Merger date			5,869			2,763
Adjustments to remove liabilities not acquired(4)			1,946			899
Adjusted net assets as of the Acqusitition/Merger date			7,815			3,662
Preliminary fair value adjustments to net assets acquired
Increase Property and equipment to fair value(5)			1,710			947
Record acquired intangible assets at fair value(6)			12,500			8,500
Preliminary fair value of net assets acquired			14,210			9,447
Allocation to goodwill(7)		$	32,427		$	9,212

(1)	The cash consideration is based on the Purchase Agreement and adjusted for the amount of working capital at the related acquisition/merger date and other contractual adjustments (including existing indebtedness and certain tax positions). The total cash consideration will be adjusted, as needed, based on the final net asset position per the terms included within the Purchase Agreement and Merger Agreement.
(2)	Inotiv issued $1,500 thousand in unsecured, subordinated promissory notes to the holders of common shares of Bolder BioPATH as consideration transferred in connection with the Merger.
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(3)	Inotiv issued 1,588 thousand shares to the holders of all of the outstanding common shares of Bolder BioPATH at $25.52 per share as of May 3, 2021 as consideration transferred in connection with the Merger. Per the terms of the Merger Agreement, there is a mandatory lock-up period for 1-year. As such, a discount has been applied for the lack of marketability of the securities.
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(4)	Certain liabilities reflected on the Bolder BioPATH and HistoTox Labs business’s historical combined statement of financial position were not acquired by Inotiv pursuant to the terms of the Purchase Agreement and Merger Agreement, respectively.
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(5)	Represents the adjustment to record Property and equipment at fair value. The preliminary fair value estimate was calculated using a combination of cost and market-based methodologies.
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(6)	Represents the recognition of intangible assets (e.g. customer relationships, non-compete agreements) at preliminary fair value. The preliminary fair value estimate was calculated by using the multi-period excess earning method within the income approach.
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(7)	The pro forma adjustment to goodwill represents goodwill of $41,639 thousand.
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(8)	The valuation of assets acquired and liabilities assumed has not yet been finalized as of June 30, 2021. The purchase price allocation is preliminary and subject to change, including the valuation of property and equipment, intangible assets, income taxes and goodwill, among other items. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquisition date fair value.
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(h)	Reflects the impact on cash and cash equivalents of the Acquisition as follows (in thousands):

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	****	Amount		****
Net proceeds from borrowings (Note I)		$	14,775
Net proceeds from equity raise(9)			48,971
Cash consideration for the Acquisition (Note G)			(40,821)
Pro forma adjustment			22,925

(9)

Represents an underwritten public offering of 3,044,117 of its common shares. All of the shares were sold at a price to the public of $17.00 per share. Net proceeds to the Company from the offering were approximately $48,971 thousand, after deducting the underwriting discount and estimated offering expenses, a portion of which net proceeds were used to fund parts of the cash consideration under the Acquistion and the Merger.

(i)	Reflects the impact on the net change in borrowings resulting from the Acquisition and the Merger and the associated impact of additional interest expense (in thousands):

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				****	Interest Expense	****
		Amount			Year EndedSeptember 30, 2020
Term Loan 9 and 10(10)		$	15,000		538
Promissory Notes(11)			1,500		66
TL9 and 10 debt issuance costs(10)			(225)		—
Total		$	16,275		604

(10)	Represents the total borrowings of the debt instruments Term Loan 9 and 10 Inotiv entered into to fund the Acquisition and the Merger. This includes an interest rate at 3.85% for both Term Loan 9 and 10. The debt issuance costs are amortized over an estimated life of 5 years.
(11)	Represents the total borrowings of the unsecured subordinated promissory notes payable to the former shareholders of Bolder BioPATH entered into as consideration transferred in connection with the Merger. This includes an interest rate at 4.5% per annum for the promissory notes.
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(j)	Represents the elimination of the historical equity of Bolder BioPATH and HistoTox Labs, the impact of the Acquisition and the Merger and the related equity raise as follows (in thousands):
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	****	Common Stock		****	Additional Paid InCapital		****	Retained Earnings /Accumulated Deficit		****	Total		****
Eliminate BioPATH's equity		$	(1)		$	—		$	(5,868)		$	(5,869)
Eliminate HistoTox Lab's equity			—			—			(2,763)			(2,763)
Share consideration (Note G)			397			34,055			—			34,452
Equity raise (Note H)			761			48,210			—			48,971
Total		$	1,157		$	82,265		$	(8,631)		$	74,791