Company: NOTV
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023370
Chunk: 11

Company: Inotiv, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 4
Chunk 11
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 an already constrained NHP supply for U.S. research.

The number of NHP suppliers located outside the U.S. is limited. If we are unable to obtain NHPs in sufficient quantities of the required species or in a timely manner to meet the needs of our clients, if the price of NHPs that are available increases significantly, or if we are unable to ship the NHPs in our possession to our clients because of governmental restrictions or limitations, our business, particularly in our RMS segment, will be materially adversely affected. 

In recent years, overall supply constraints with respect to NHPs led to an extremely dynamic pricing environment for NHPs, which made it difficult to predict results, led to reduced volumes, and required us to adjust operations. 

In addition, increases in the costs of NHPs without ratable increased revenue as a result of macroeconomic and other factors, including increased tariffs, export or import laws/restrictions or embargoes, inflation, international trade regulations and foreign government instability, among other circumstances could materially adversely affect our business, financial condition, cash flows and results of operations. 

As of the date of this report, our imported NHPs are subject to 10% tariffs during the third quarter of fiscal 2025. Further, there continues to be a risk of additional and/or increased tariffs in connection with the ongoing geopolitical factors. 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 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 R&D 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 

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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