Company: NOTV
Filing Date: 2025-12-05
Form Type: 10-K
Source: 0001628280-25-055483
Chunk: 216

Company: Inotiv, Inc.
Filing Date: 2025-12-05
Form: 10-K
Item: Item 1
Chunk 216
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 design, is well positioned to serve the emerging biopharmaceutical segment during the discovery and development phases. Historically, our RMS segment has maintained stable, long-term relationships with a majority of our clients due to their overarching preference for consistency in the 

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products they use to conduct their studies. However, we are continuing our efforts to cross-sell and expand our client base. We discuss client concentration of revenue in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements contained in Part II, Item 8. 

Contractual Arrangements

Our DSA contracts typically establish an estimated fee to be paid for a proposed set of services designed in consultation with the client. In most cases, some percentage of the contract fee is paid in advance. While we are performing a contract, clients sometimes adjust the scope of services to be provided based on interim project results, in which cash fees are adjusted accordingly. Generally, our fee-for-service contracts are terminable by the client upon written notice of 30 days or less for a variety of reasons, including the client’s decision to forego a particular study, the failure of product prototypes to satisfy safety requirements, and unexpected or undesired results of product testing. Cancellation or delay of ongoing contracts may result in fluctuations in our quarterly and annual results. We are generally able to recover, at a minimum, our invested costs when contracts are terminated.

Our RMS product contracts are typically short-term in nature and based upon purchase orders submitted by clients to satisfy specific requirements for their research. Pricing is based upon list prices, which are market-adjusted. In addition, prior to Inotiv’s acquisition of Envigo, Envigo entered into a five-year supplier agreement with a key strategic partner that included minimum purchase commitments through the end of the third year of the agreement and preferred pricing (equal to best price extended to similar clients). The contract’s initial term ended during the third fiscal quarter 2024 and was automatically renewed and continues until either party provides notice to terminate. Any termination notice must be provided two years in advance of the desired termination date. At this time, no termination notice has been provided. Contract breeding and colony management service contracts are generally billed as per diems over the contract period. 

Sales and Marketing

We promote our services through centralized business development and marketing efforts and scientist-to-scientist communications. We recognize that our growth depends upon our ability to continually improve client satisfaction in order to deepen existing and establish new client relationships.

In November of 2019, the