BASI Bioanalytical Systems Inc

On June 13, 2022, Inotiv, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Original Form 8-K”) disclosing that the Company had decided to close two of its facilities, a purpose-bred canine facility in Cumberland, Virginia and a rodent breeding facility in Dublin, Virginia (the “sites”), both of which were acquired by the Company in connection with its acquisition of Envigo RMS Holding Corp. (“Envigo”) in November 2021.

The decision to close the Cumberland facility was due to the fact that the required investments and lead time to improve the facility have recently increased. Further, as disclosed by the Company on July 18, 2022, Envigo has entered into a settlement with the U.S. Department of Justice (“DOJ”) and the U.S. Department of Agriculture (“USDA”) that resolves an extensive civil and administrative investigation into the Cumberland facility and incorporates a transfer plan related to the transfer of the canines out of the facility. The Company intends to implement an orderly closure plan for the Cumberland facility, and the Company expects the Cumberland facility exit to be complete by October 2022.  Any potential decision to sell the facility and related property may extend past that date.

The closure of the Dublin facility is part of the Company’s ongoing restructuring and site optimization plan. The Company intends to relocate the current production at the Dublin facility to other facilities that have recently been expanded or refurbished. The Company expects the Dublin facility transition to be complete by December 2022. 

At this time, the Company expects to incur charges related to the closures of the Cumberland and Dublin sites and related restructuring initiatives ranging between $7.4 million and $9.9 million, which include approximately $2.0 million to $2.3 million in charges related to employee severance and other costs related to workforce reductions, approximately $2.1 million to $2.4 million in charges related to canine write-offs and transfer plan expenses and approximately $3.3 million to $5.2 million in certain costs to maintain the facilities until each facility has been exited, among other expenses. The total cash expenditures are expected to be in the range of $5.9 million to $7.8 million. While the Company has estimated the above charges based on information currently available, the estimates are subject to change based on various factors, including whether the Company is able to exit the related facilities within the timeframes noted above. In addition, the Company may incur additional costs and charges in connection with the site closures and related facility and property disposals, if any, as such events progress.