Company: NOTV
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0001628280-25-004178
Chunk: 38

Company: Inotiv, Inc.
Filing Date: 2025-02-06
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 common shares issuable upon the exercise of the Warrants. For the three months ended December 31, 2023, anti-dilutive common share equivalents are comprised of stock options, restricted stock units, restricted stock awards and 3,040,268 shares of common stock issuable upon conversion of the Notes. These common share equivalents were outstanding for the periods presented, but were not included in the computation of diluted loss per share for those periods because their inclusion would have had an anti-dilutive effect.

11.    INCOME TAXESThe Company uses the asset and liability method of accounting for income taxes. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date. The Company records valuation allowances based on a determination of the expected realization of tax assets. The Company’s effective tax rates for the three months ended December 31, 2024 and 2023 were 7.3% and 18.1%, respectively. For the three months ended December 31, 2024, the Company’s effective tax rate was primarily driven by a change in the valuation allowance. For the three months ended December 31, 2023, the Company’s effective tax rate was primarily driven by nondeductible expenses.The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The Company measures the amount of the accrual for which an exposure exists as the largest amount of benefit determined on a cumulative probability basis that it believes is more likely than not to be realized upon settlement of the position. As of December 31, 2024, the Company had no material liability for uncertain tax positions. The Company records interest and penalties accrued in relation to the uncertain income tax position as a component of income tax expense (benefit). Any changes in the liability for the uncertain tax position would impact the effective tax rate. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. The Company is no longer subject to U.S. federal tax