Company: NOTV
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-039017
Chunk: 43

Company: Inotiv, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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 ended June 30, 2025, the Company’s effective tax rate was primarily driven by a change in the valuation allowance. For the nine months ended June 30, 2024, the Company’s effective tax rate was primarily driven by unfavorable permanent items related to the Resolution Agreement and Plea Agreement and valuation allowance adjustments.The “One Big Beautiful Bill Act” (“OBBBA”) was signed into law on July 4, 2025, which is considered the enactment date under U.S. GAAP. Under ASC 740, the impact of tax law changes on current and deferred taxes is reflected in the estimated annual effective tax rate and/or recognized discretely in the period including the enactment date, which is the fourth quarter of the Company’s current fiscal year.  The Company is currently assessing the tax implications stemming from certain provisions in the OBBBA and how they may affect the current fiscal year’s financial statements.

12.    CONTINGENCIES AND COMMITMENTS

LitigationFrom time to time, the Company is involved in actual or threatened legal actions, including class actions, and the Company also receives inquiries from regulators and other government authorities relating to various aspects of its business. At any given time, the Company has matters at various stages of resolution. The outcomes of these matters are not within the 

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Company’s control and may not be known for prolonged periods of time. In some actions, claimants seek damages, as well as other relief including injunctive relief, that could require significant expenditures or result in lost revenues.In accordance with applicable accounting standards, the Company records a liability in its condensed consolidated financial statements for material loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation, governmental proceedings and other contingencies are inherently difficult to predict, particularly when the matters are in early procedural stages, with incomplete facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties, fines, disgorgement, or punitive damages; or could result in a change in business practice.Further, in accordance with applicable accounting standards, the Company records an asset in its condensed consolidated financial statements relating to a recovery only when realization