8-K: Inotiv Enters $65.5M DIP Financing Amid Chapter 11

Inotiv, Inc. has secured a $65.5 million debtor-in-possession credit facility to support operations during its Chapter 11 bankruptcy proceedings.

Summary

• Inotiv, Inc. entered into a $65.5 million Superpriority Secured Debtor-In-Possession (DIP) Credit Agreement on June 5, 2026.
• The DIP facility includes $25 million in new money term loans ($16 million immediately available, $9 million as delayed draw) and a $40.5 million roll-up of prepetition bridge facility loans.
• The facility bears interest at Adjusted Term SOFR (2.5% floor) plus 11.5%, payable in kind.
• The company expects to enter into a $150 million Exit Term Loan Facility upon emergence from Chapter 11, which will convert the DIP facility obligations.
• Nasdaq has notified the company of its intent to delist the common shares due to the Chapter 11 filing, with trading suspension effective June 11, 2026.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as highly negative for existing equity holders due to the bankruptcy filing, expected cancellation of equity, and impending delisting.

Positives

• Secured $65.5 million in DIP financing to maintain liquidity and fund working capital during the restructuring process.
• Established a clear path to an Exit Term Loan Facility of up to $150 million upon emergence from Chapter 11.
• The DIP facility provides necessary funding for professional fees and general corporate purposes to continue operations in the ordinary course.

Negatives

• The company has filed for Chapter 11 bankruptcy protection.
• Existing equity interests are expected to be cancelled without distribution, likely resulting in a total loss for current shareholders.
• Nasdaq has initiated delisting procedures for the company's common shares.
• The DIP facility includes significant upfront premiums (4.5% for new money, 3.5% for roll-up) and an exit premium of 4.5%, all payable in kind.

Risks

• High speculation and substantial risk of total loss for holders of existing equity interests.
• Potential for failure to obtain final Bankruptcy Court approval for the DIP facility within 45 days.
• Strict financial covenants, including a minimum liquidity requirement of $5 million and variance testing on operating receipts and disbursements.
• Operational risks associated with the bankruptcy process, including potential impacts on relationships with vendors, customers, and employees.
• The DIP facility terminates on August 4, 2026, unless extended or replaced by a Chapter 11 plan or asset sale.

Future Outlook

The company intends to emerge from Chapter 11 as a private company, supported by the restructuring plan and the transition to a $150 million Exit Term Loan Facility.

Management Comments

• Management cautions that trading in its securities during the Chapter 11 process is highly speculative.
• Management expects that holders of existing equity interests could experience a total loss on their investment.

Industry Context

StockSavvy.ai notes that this filing reflects a distressed restructuring scenario common in the life sciences and research services sector, where high leverage and liquidity constraints necessitate court-supervised reorganization to preserve core business operations.

Comparison to Industry Standards

• The use of a prepackaged Chapter 11 plan is a standard mechanism for companies seeking to expedite restructuring while maintaining operational continuity.
• The inclusion of roll-up loans and strict variance testing is consistent with current market practices for debtor-in-possession financing in the U.S. bankruptcy system.

Corporate Governance

Legal Proceedings

• Voluntary petitions for Chapter 11 bankruptcy filed in the U.S. Bankruptcy Court for the Southern District of Texas.

Stakeholder Impact

• Shareholders: Expected total loss of investment as equity is likely to be cancelled.
• Creditors: DIP lenders receive superpriority administrative expense claims.
• Employees/Customers/Vendors: Potential uncertainty during the Chapter 11 process, though the company intends to continue operations in the ordinary course.

Next Steps

• Obtain final Bankruptcy Court approval for the DIP facility.
• Proceed with the Chapter 11 plan of reorganization.
• Suspend trading of common shares on Nasdaq on June 11, 2026.
• Hold weekly lender calls to discuss financial results and budget variances.

Key Dates

Recommendation

The filing confirms a Chapter 11 bankruptcy process where existing equity is expected to be cancelled, rendering the shares likely worthless for current investors.

Keywords

Inotiv, Chapter 11, DIP Financing, Bankruptcy, Restructuring, Delisting, NOTV