CONTINGENCIES	6 Months Ended
CONTINGENCIES	Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	CONTINGENCIES AND COMMITMENTS Litigation From time to time, the Company is involved in actual or threatened legal actions, including class actions, and the Company also receives inquiries from regulators and other government authorities relating to various aspects of its business. At any given time, the Company has matters at various stages of resolution. The outcomes of these matters are not within the Company’s control and may not be known for prolonged periods of time. In some actions, claimants seek damages, as well as other relief including injunctive relief, that could require significant expenditures or result in lost revenues. In accordance with applicable accounting standards, the Company records a liability in its condensed consolidated financial statements for material loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation, governmental proceedings and other contingencies are inherently difficult to predict, particularly when the matters are in early procedural stages, with incomplete facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties, fines, disgorgement, or punitive damages; or could result in a change in business practice. Further, in accordance with applicable accounting standards, the Company records an asset in its condensed consolidated financial statements relating to a recovery only when realization of the claim for recovery is deemed probable. An asset should be recognized to the extent that a loss has previously been recognized. Any expected proceeds in excess of a previously recognized loss or a recovery of a loss not yet recognized in the financial statements should be treated as a gain contingency. Securities Class Action and Derivative Lawsuits On June 23, 2022, a putative securities class action lawsuit (the “Securities Class Action”) was filed in the United States District Court for the Northern District of Indiana, naming the Company and Robert W. Leasure and Beth A. Taylor as defendants, captioned Grobler v. Inotiv, Inc., et al., Case No. 4:22-cv-00045 (N.D. Ind.). The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, and Rule 10b-5 promulgated thereunder, based on alleged false and misleading statements and material omissions regarding the Company’s acquisition of Envigo and its regulatory compliance. On September 12, 2022, Oklahoma Police Pension and Retirement System was appointed by the Court as lead plaintiff. Thereafter, on November 14, 2022, the lead plaintiff filed an amended complaint against the same defendants, in addition to John E. Sagartz and Carmen Wilbourn, that asserted the same claims along with a claim under Section 14(a) of the Exchange Act. On November 23, 2022, the lead plaintiff filed a further amended complaint against the aforementioned defendants, asserting the same claims as the amended complaint and further alleging that false and misleading statements and material omissions were made concerning the Company’s non-human primate business. The purported class in the operative complaint included all persons who purchased or otherwise acquired the Company’s common shares between September 21, 2021 and November 16, 2022, and the complaint sought an unspecified amount of monetary damages, interest, fees and expenses of attorneys and experts, and other relief. On January 27, 2023, the defendants filed a motion to dismiss the amended complaint. That motion was fully briefed by April 28, 2023. On March 29, 2024, the Court issued a decision denying, in part, Defendants’ motion to dismiss. On September 25, 2025, the parties entered into a Stipulation and Agreement of Settlement to settle the Securities Class Action (the “Securities Settlement”), which the Court preliminarily approved on October 3, 2025. Following the notice period to members of the putative settlement class, the Court held a final fairness hearing on January 27, 2026. At this hearing, the Court granted final approval of the Securities Settlement, finding the terms to be fair, reasonable, and adequate. The Company entered into the Securities Settlement to eliminate the uncertainty, burden, and expense of protracted litigation. The 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 Securities Settlement fully resolved the Securities Class Action claims against the Company and the individual defendants Robert W. Leasure, Beth A. Taylor, John E. Sagartz, and Carmen Wilbourn. As consideration for the Securities Settlement, the Company caused to be paid a cash settlement payment of $8,750 (“Cash Payment”) to the members of the class. The Cash Payment was fully funded by available insurance. Class members who may be entitled to receive distributions from the cash settlement include all persons and entities who purchased or otherwise acquired the Company’s common shares between September 21, 2021 and May 20, 2022 or who held the Company’s common shares 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). The Court also awarded plaintiff attorneys’ fees and costs, which were funded entirely from the Cash Payment. On September 9, 2022, a purported shareholder derivative lawsuit was filed in the United States District Court for the Northern District of Indiana, naming Robert W. Leasure, Beth A. Taylor, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Grobler v. Robert W. Leasure, et al., Case No. 4:22-cv-00064 (N.D. Ind.) (the “Grobler Derivative Action”). On January 4, 2023, an additional shareholder derivative lawsuit was filed in the United States District Court for the Northern District of Indiana, naming Robert W. Leasure, Beth A. Taylor, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Burkhart v. Robert W. Leasure, et al., Case No 4:23-cv-00003 (N.D. Ind.) (the “Burkhart Derivative Action,” and together with the Grobler Derivative Action, the “Federal Derivative Action”). The Federal Derivative Actions collectively asserted claims for breach of fiduciary duty, abuse of control, gross mismanagement, and waste of corporate assets, as well as violations of Sections 10(b), 14(a), and 21D of the Exchange Act arising out of the Company’s acquisition of Envigo and its regulatory compliance. The Court consolidated the Federal Derivative Actions on April 24, 2024, and Plaintiffs filed a consolidated complaint on June 24, 2024. On April 20, 2023, a purported shareholder derivative lawsuit was filed in the State of Indiana Tippecanoe County Circuit Court, naming Robert W. Leasure, Beth A. Taylor, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Whitfield v. Gregory C. Davis, et al., Case No. 79C01-2304-PL-000048 (Tippecanoe Circuit Court) (the “Whitfield Derivative Action”). On June 2, 2023, an additional shareholder derivative lawsuit was filed in the Indiana Commercial Court of Marion County, naming Robert W. Leasure, Beth A. Taylor, Carmen Wilbourn, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Castro v. Robert W. Leasure, et al., Case No. 49D01-2306-PL-022213 (Marion Superior Court 1) (the “Castro Derivative Action,” together with the Whitfield Derivative Action, the “State Derivative Actions,” and together with the consolidated Federal Derivative Actions, the “Derivative Actions”). The State Derivative Actions collectively asserted claims for breach of fiduciary duty, unjust enrichment, aiding and abetting breach of fiduciary duty, and waste of corporate assets arising out of the Company’s acquisition of Envigo and its regulatory compliance, and the Company’s non-human primate business. On August 24, 2023, the Castro Derivative Action was transferred to the Tippecanoe County Circuit Court and consolidated with the Whitfield Derivative Action. On December 18, 2025, the parties to the Derivative Actions executed a stipulation of settlement (the “Derivative Settlement”). The court overseeing the Federal Derivative Actions preliminarily approved the Derivative Settlement on January 7, 2026, and granted final approval on March 19, 2026, finding the terms to be fair, reasonable, and adequate. Pursuant to the terms of the Derivative Settlement, the court overseeing the State Derivative Actions dismissed the State Derivative Actions with prejudice on April 8, 2026. The Company agreed to the Derivative Settlement to eliminate the uncertainty, burden, and expense of protracted litigation. The 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 Derivative Settlement fully resolved the Derivative Actions, 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 Derivative Settlement credited the plaintiffs in the Derivative Actions for the fact that the Company was the beneficiary of $2,490 from certain of its insurers, which amount was utilized by the Company as part of the Cash Payment for the Securities Settlement. The Derivative Settlement also involved the institution of, and commitment to maintain, certain corporate governance measures by the Company, including having, for a period of at least five years: a separate Chief Executive Officer and Board Chairperson, maintaining a fully independent Board Chairperson, guidelines for due diligence conducted in any future mergers and acquisitions, and a disclosure committee. The Derivative Settlement also awarded plaintiffs in the Derivative Actions attorneys’ fees of $2,250 (the “Derivative Attorneys’ Fee”), the amount of which was fully funded by available insurance. The $8,750 Cash Payment was distributed to the plaintiff in the Securities Class Action for appropriate distribution after the final fairness hearing for the Securities Settlement. The $2,250 Derivative Attorneys’ Fee was distributed to the plaintiffs in the Derivative Actions for appropriate allocation after the court approved the Derivative Settlement. Privacy Class Actions The Company has been a party to three putative class actions filed in the United States District Court for the Northern District of Indiana (the “Federal Actions”) relating to a cybersecurity incident experienced in August 2025 (the “2025 Cybersecurity Incident”), in which a threat actor gained unauthorized access to the Company’s systems and may have acquired certain data. On March 14, 2026, (a) the Federal Actions were dismissed without prejudice, and (b) the same plaintiffs who filed the Federal Actions filed a putative class action in the Marion Superior Court, Marion County, Indiana under the caption Doyal, et al. v. Inotiv, Inc., Case No. 49D01-2604-CE-020713 (the “Indiana State Court Action”) on behalf of the same class of persons identified in the Federal Actions. The Indiana State Court Action generally alleges the same claims as the Federal Actions, namely that the plaintiffs and the proposed class members were harmed when their personally identifying information and protected health information was impacted by the 2025 Cybersecurity Incident. Envigo Class Action Envigo is a defendant in a purported class and representative action under California’s Private Attorney General Act of 2004 (“PAGA”) brought by Jacob Greenwell (“Plaintiff”), a former non-exempt employee of Envigo, on June 25, 2021 in the Superior Court of California, Alameda County (the “Lawsuit”). The Lawsuit alleges that Envigo violated certain wage and hour requirements under the California Labor Code. PAGA authorizes employees to bring claims on behalf of the State of California and aggrieved employees for violations of California’s wage and hour laws. The Lawsuit seeks (1) certification of a class of similarly situated employees and the award of actual, consequential and incidental losses and damages for the alleged violations, (2) civil penalties pursuant to PAGA, and (3) attorney’s fees. On June 2, 2023, Envigo and the plaintiff signed a Memorandum of Understanding (“MOU”) that sets forth the parties’ intent to settle these matters for $795 which includes Plaintiff’s attorneys’ fees. On August 2, 2024, the parties entered into a Joint Stipulation of Class Action and PAGA Settlement and Release of Claims (the “PAGA Settlement Agreement”) that incorporated the material terms of the MOU and was subject to the Court's approval. The PAGA Settlement Agreement contains no admission of liability or wrongdoing by Envigo. The PAGA Settlement Agreement provides that, if the settlement is approved by the Court, the settlement amount would be paid in four quarterly installments, with the first one to be funded after settlement becomes effective according to its terms, and the following ones in the three subsequent quarters. The Court granted preliminary approval of the settlement on June 18, 2025 and granted final approval, in part, on March 25, 2026. The parties await the Court’s entry of an amended final approval order and judgment, which is still pending. The first payment under the settlement will be due seventy-five (75) days following entry of the final approval order and judgment. The Company took a reserve equal to the proposed settlement amount, which is included in accrued expenses and other current liabilities. The Company is party to certain other legal actions arising out of the normal course of its business. In management's opinion, none of these actions will have a material effect on the Company's operations, financial condition or liquidity. Government Investigations and Actions The Company is subject to and/or involved in various government investigations, inquiries and actions, including as described below. Given its inherent uncertainty, except as otherwise noted, the Company cannot predict the duration or outcome of the pending matter described below. An adverse outcome of the following matter could have a material adverse impact on the Company’s operations, financial condition, operating results and cash flows. Resolution Agreement and Plea Agreement On June 3, 2024, the Company announced that it had reached agreement with the DOJ to resolve a previously-announced criminal investigation into its shuttered canine breeding facility located in Cumberland, Virginia, which was operated originally by Envigo in November 2021. In connection with such resolution, the Company and its related entities entered into the Resolution Agreement (the “Resolution Agreement”) with the DOJ and the U.S. Attorney’s Office for the Western District of Virginia (“USAO-WDV”), and Envigo and Envigo Global Services, Inc. (“EGSI”) entered into the Plea Agreement (the “Plea Agreement”) with the DOJ and the USAO-WDV. On June 3, 2024, before the United States District Court for the Western District of Virginia, Envigo pleaded guilty to one misdemeanor count of conspiracy to violate the Animal Welfare Act and EGSI pleaded guilty to one felony count of conspiracy to violate the Clean Water Act. On October 24, 2024, the Court sentenced Envigo and EGSI according to the terms agreed to between the DOJ and the Company in the Resolution Agreement and Plea Agreement. Pursuant to the Resolution Agreement and the Plea Agreement, the Company, Envigo and EGSI, among other matters, have agreed to: (i) make payments totaling $22,000 in fines, with $5,000 payable on each of June 3, 2025, 2026 and 2027, and $7,000 (plus accrued interest beginning on the sentencing date) payable on June 3, 2028; (ii) on June 3, 2024, pay $3,000, split between the Virginia Animal Fighting Taskforce and the Humane Society of the United States in recognition of assistance provided to the U.S. Government’s investigation; (iii) on June 3, 2024, pay $3,500 to the National Fish and Wildlife Foundation to fund environmental projects, studies, and initiatives in Cumberland County, Virginia; (iv) expend at least $7,000 ($2,500 by June 3, 2025, $2,500 by June 3, 2026, and $2,000 by June 3, 2027) for improvements to its facilities and personnel related to the welfare of animals; (v) provide a lien to the United States against sufficient Company assets to secure the deferred payments in connection with the $22,000 fine, which lien will be junior to only the lien provided by the Company to lenders under its credit facility as of April 1, 2024 and additional liens to secure up to $100,000 of additional debt; (vi) meet specified standards with respect to the health, safety and well-being of animals under the Company’s care; (vii) develop, adopt, implement, fund and comply with a comprehensive nationwide compliance plan related to applicable laws; and (viii) on January 20, 2025, appoint the Compliance Monitor to review the Company’s care of animals and compliance with certain laws, and to pay all associated costs, which Compliance Monitor shall serve for a term that expires on January 20, 2030, five years from appointment of the Compliance Monitor, unless the Company is released from probation prior to completion of the five-year term, in which case the monitorship term shall expire on January 20, 2028, three years from appointment of the Compliance Monitor, or two months after the completion of probation, whichever is later. In addition, the pleas result in Envigo and EGSI being subject to probation for up to five years, with the potential to end the term early at a minimum of three years if the Company complies with the elements of the resolution. Refer to Note 5 Supplemental Balance Sheet Information - Other long term liabilities for further discussion of payments associated with the Resolution Agreement and the Plea Agreement.

Inotiv, Inc. 10-Q