Inotiv amends credit agreement with $40.0 million bridge facility

The Ninth Amendment and the bridge loan

Inotiv, Inc. entered into a Ninth Amendment to its Credit Agreement, dated November 5, 2021, effective May 14, 2026, according to an 8-K. The amendment provides a bridge facility of delayed draw term loan commitments totaling $40.0 million. Acquiom Agency Services LLC is successor administrative agent and collateral agent under the existing credit agreement. The 8-K says the proceeds also fund fees, the strategic alternatives review and working capital.

On the effective date the company borrowed $27.5 million under the bridge facility. It used the money to repay in full all outstanding revolving loans, together with accrued interest and deferred fees of approximately $14.3 million. All revolving commitments were then terminated. Amounts repaid under the bridge facility cannot be reborrowed. The bridge is guaranteed by the subsidiary guarantors and secured by substantially all assets of the company and those guarantors. The filing names no placement agent or advisor for the bridge.

The lenders also received a closing fee of 1.00% of the bridge commitments, and each consenting term lender received a consent fee of 2.50% of its term loans. The consenting lenders held 100% of the existing term loans. Both fees were added to principal. Each loan party released claims against the agents and lenders.

Covenant relief and strategic milestones

The amendment excludes testing of the first lien net leverage ratio for the quarter ended March 31, 2026. It also excludes testing of the minimum fixed charge covenant for that quarter, and sets that covenant at 1.00 to 1.00 for the period ending June 30, 2026 and each quarter after. The loan parties are not subject to the minimum liquidity covenant through June 29, 2026.

The amendment requires the company to pursue strategic alternatives on set milestones: a budget on the effective date, and a transaction support agreement with the administrative agent and lenders by June 3, 2026, unless the required lenders waive or extend that date. It also requires a special committee of the board.

The board increased its size from seven members to nine and appointed Eugene Davis and John T. Young, Jr. to fill the new seats. Both serve as independent directors on the special committee, which also includes Mr. Harrington and is chaired by Mr. Davis. The committee has exclusive authority to review, negotiate and implement recapitalization, reorganization, refinancing or restructuring transactions, or other strategic alternatives. Each of the three members, Mr. Davis, Mr. Harrington and Mr. Young, will receive a fee of $40,000 per month.

The convertible notes and the missed payment

On April 15, 2026, Inotiv was required to make an interest payment of approximately $2.139 million on its 3.25% Convertible Senior Notes due 2027. It did not, and its grace period ran through May 15, 2026. Holders of a majority of the notes consented to a First Supplemental Indenture, signed May 15, 2026 with U.S. Bank Trust Company, National Association as trustee, that extends the grace period from thirty days to forty-four days, through May 29, 2026. The credit amendment also temporarily waives any cross-default that the missed payment would trigger, through June 3, 2026.

Retention pay, bylaws and a data-breach settlement

The compensation committee approved an Executive Retention Plan and a Key Employee Retention Plan, with payments expected to aggregate up to $3,934,000. Lump sums for named executives include $1.2 million for Mr. Leasure. The payments are subject to clawback, and one of the periods is tied to a possible Chapter 11 filing resulting from the strategic alternatives review. Amended bylaws require a unanimous board vote to remove a special committee member or change its charter.

The 8-K also reports a proposed settlement of a class action over the August 2025 cybersecurity incident, Doyal, et al. v. Inotiv, Inc., filed in Marion Superior Court in Indiana after three federal suits were dismissed without prejudice. Class members could claim compensation for lost time and expenses, or a cash payment, and two years of credit monitoring. Plaintiffs' lawyers will seek fees and costs of up to $275,000. The company, which denies wrongdoing, expects insurance to fund all payments. The settlement needs court approval.

Report an error