Company: NOTV
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-039017
Chunk: 209

Company: Inotiv, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part II, Item 8
Chunk 209
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 expected to impact the Company's cash flows in the future. Future NHP imports are expected to be subject to 15%-20% tariffs. The current and future applicable tariff percentages are based on the country of origin of the imported NHPs. Further, there continues to be a risk of additional and/or increased tariffs in connection with ongoing geopolitical factors. Our attempts to mitigate the financial impacts of the additional tariff costs may not be successful in the desired timeframe or at all. Should additional and/or increased tariffs be put into place and exist for some time, our business, financial condition, cash flows and results of operations could be materially adversely affected by the additional costs to us and/or by our clients' prioritization of studies and our suppliers' prioritization and allocation of their supply going forward.

Some of our clients and contracts depend on government funding of research and development and a reduction in that funding may adversely affect our business.

A significant portion of our sales are derived from clients at academic institutions and research laboratories whose funding is partially dependent on funding from government sources, including the National Institutes of Health and U.K./E.U. equivalents. Such funding can be difficult to forecast as government research and development funding is subject to political and budgetary uncertainties, which can delay client purchases or reduce demand for our products and services. Our sales may be adversely affected if our clients delay purchases as a result of uncertainties surrounding the approval of government budget proposals. There can be no certainty that government research funding that is approved will be directed towards projects and studies that involve use of our products and services. Direct cuts to agency budgets or shifts in funding priorities away from areas using our offerings could negatively affect our business, revenue and financial results.

The following new risk factor is added to those disclosed under the heading "Risk Factors" appearing in Item 1A of Part I of the Annual Report on Form 10-K for the fiscal year ended September 30, 2024:

Regulatory changes in the pharmaceutical and biotechnology industries could reduce demand for our services and products.

Our business depends on helping clients navigate complex drug development regulations. While new or stricter regulations can increase demand for our services, changes such as relaxed regulatory requirements, expedited drug approvals, or rules that make our services less competitive could reduce the demand for our products and services. For example, the FDA Modernization Act 2.0, passed in December 2022, encourages the industry to explore alternatives to animal testing. A shift away from animal research could negatively impact our business, operations, or financial condition if we are