Company: NOTV
Filing Date: 2025-12-05
Form Type: 10-K
Source: 0001628280-25-055483
Chunk: 47

Company: Inotiv, Inc.
Filing Date: 2025-12-05
Form: 10-K
Item: Item 7
Chunk 47
---
 increase in RMS revenue of $14,458 discussed above and a decrease in RMS depreciation and amortization of intangible assets of $1,373, partially offset by an increase in RMS cost of revenue of $1,478. The decrease in operating expenses was primarily driven by the $28,500 charge incurred during the fiscal year ended September 30, 2024 related to the Resolution Agreement and Plea Agreement, which did not repeat during the fiscal year ended September 30, 2025 and a legal settlement of $7,550 that we received during the fiscal year ended September 30, 2025, among other immaterial changes.

The increase of $1,478 in cost of revenue was primarily due to increased costs of $7,820 associated with higher NHP-related product and service revenue, partially offset by a decrease in small animal and other non-NHP animal costs, a decrease in transportation costs as a result of the in-house integration of our North American transportation operations and a decrease in facility-related costs, among other immaterial changes.

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 RMS, which the Company acquired in November 2021. In connection with such resolution, the Company and its related entities entered into a Resolution Agreement (the “Resolution Agreement”) with the DOJ and the United States Attorney’s Office for the Western District of Virginia (“USAO-WDV”), and Envigo RMS and Envigo Global Services, Inc. (“EGSI” and together with Envigo RMS, “Envigo”) entered into a 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 RMS 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. 

Pursuant to the Resolution Agreement and the Plea Agreement, the Company and Envigo, 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