Inotiv, Inc. (NASDAQ:NOTV), a commercial physical and biological research services company, has announced an agreement to potentially sell up to $50 million of its common shares in an at-the-market equity offering. The company entered into an Open Market Sale AgreementSM with Jefferies LLC on Thursday, allowing for the sale of shares through Jefferies as sales agent.
The shares will be sold pursuant to Inotiv's shelf registration statement, which was filed on August 18, 2022, and declared effective by the SEC on August 31, 2022. The prospectus supplement for this offering was dated Thursday.
Jefferies will endeavor to sell the shares according to Inotiv's instructions, which include any price, time, or size limits the company may set. The sales agent's commission is set at 3.0% of the gross proceeds from the sale of shares under the agreement. Additionally, Inotiv has agreed to reimburse Jefferies for certain expenses related to the offering.
In other recent news, Inotiv has reported a significant decrease in its Q3 FY24 revenue, primarily due to a decline in non-human primate (NHP) sales and lower revenue from safety and discovery services. The total revenue for the quarter dropped by 33% to $105.8 million. Despite an operating loss of $20.8 million, CEO Bob Leasure remains optimistic about the company's long-term contracts and expects to see improvements in the coming quarters. Inotiv is also focusing on enhancing liquidity, improving its balance sheet, and reducing costs.
However, due to current market uncertainties, Inotiv has withdrawn its financial guidance for fiscal 2024. Analysts from various firms have noted these developments, with some attributing the decline to the downturn in NHP sales and margins, and others pointing out the consistent demand for Inotiv's safety assessment studies. These developments represent some of the recent changes within Inotiv.
InvestingPro Insights
In light of Inotiv, Inc.'s recent agreement for a potential equity offering, analyzing the company's financial health and market performance is crucial for investors considering participation. InvestingPro data reveals a market capitalization of $44.41 million, underscoring the company's relatively small size in the marketplace. Notably, the firm's revenue has seen a decline of 7.47% over the last twelve months as of Q2 2024, aligning with analysts' expectations of a sales decline in the current year, as indicated by an InvestingPro Tip.
The stock has experienced significant volatility, with a 73.79% decrease in the one-year total price return, which might be of concern to potential investors. The company's shares are trading at a price significantly below the 52-week high, at only 14.63% of that peak value. Despite this downturn, the valuation implies a strong free cash flow yield, suggesting that the company could represent an opportunity for investors looking for undervalued stocks.
For those interested in a deeper dive into Inotiv's financials and market prospects, there are additional InvestingPro Tips available, providing comprehensive analysis and guidance. Visit InvestingPro for more insights.
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