Item 1.01. Entry Into or Amendment of a Material Definitive Agreement.
On September 27, 2021, Inotiv, Inc. (the "Company") issued $140,000,000
principal amount of its 3.25% Convertible Senior Notes due 2027 (the "Notes").
The Notes were issued pursuant to, and are governed by, an indenture (the
"Indenture"), dated as of September 27, 2021, among the Company, the guarantor
named therein and U.S. Bank National Association, as trustee (the "Trustee").
Pursuant to the purchase agreement between the Company and the initial purchaser
of the Notes, the Company granted the initial purchaser an option to purchase,
for settlement within a period of 13 days from, and including, the date the
Notes are first issued, up to an additional $15,000,000 principal amount of
Notes. The Notes issued on September 27, 2021 include $15,000,000 principal
amount of Notes issued pursuant to the full exercise by the initial purchaser of
such option.
The Company intends to use the net proceeds from the offering of Notes, together
with borrowings under a new senior secured term loan facility, to fund the cash
purchase price of the Company's previously announced acquisition of Envigo RMS
Holding Corp., if it is consummated, and to pay related fees and expenses.
The Notes will be the Company's senior, unsecured obligations and will be (i)
equal in right of payment with the Company's existing and future senior,
unsecured indebtedness; (ii) senior in right of payment to the Company's
existing and future indebtedness that is expressly subordinated to the Notes;
(iii) effectively subordinated to the Company's existing and future secured
indebtedness, to the extent of the value of the collateral securing that
indebtedness; and (iv) structurally subordinated to all existing and future
indebtedness and other liabilities, including trade payables, and (to the extent
the Company is not a holder thereof) preferred equity, if any, of the Company's
non-guarantor subsidiaries. The Notes will be fully and unconditionally
guaranteed, on a senior, unsecured basis, by BAS Evansville, Inc., a wholly
owned subsidiary of the Company (the "Guarantor").
The Notes will accrue interest at a rate of 3.25% per annum, payable
semi-annually in arrears on April 15 and October 15 of each year, beginning on
April 15, 2022. The Notes will mature on October 15, 2027, unless earlier
repurchased, redeemed or converted. Before April 15, 2027, noteholders will have
the right to convert their Notes only upon the occurrence of certain events.
From and after April 15, 2027, noteholders may convert their Notes at any time
at their election until the close of business on the scheduled trading day
immediately before the maturity date. The Company will settle conversions by
paying or delivering, as applicable, cash, its common shares or a combination of
cash and its common shares, at the Company's election. However, until the
Company obtains the shareholder approval required by the listing standards of
The NASDAQ Capital Market, if at all, and the Company has increased the number
of its authorized common shares and reserved a sufficient number of its common
shares solely for issuance upon conversion of the Notes, the Company will settle
all conversions of Notes entirely in cash. The initial conversion rate is
21.7162 common shares per $1,000 principal amount of Notes, which represents an
initial conversion price of approximately $46.05 per common share. The
conversion rate and conversion price will be subject to customary adjustments
upon the occurrence of certain events. In addition, if certain corporate events
that constitute a "Make-Whole Fundamental Change" (as defined in the Indenture)
occur, then the conversion rate will, in certain circumstances, be increased for
a specified period of time.
The Notes will be redeemable, in whole and not in part, at the Company's option
at any time on or after October 15, 2024 and on or before the 40th scheduled
trading day immediately before the maturity date, but only if the last reported
sale price per common share of the Company exceeds 130% of the conversion price
on (i) each of at least 20 trading days, whether or not consecutive, during the
30 consecutive trading days ending on, and including, the trading day
immediately before the date the Company sends the related redemption notice; and
(ii) the trading day immediately before the date the Company sends such notice.
The redemption price will be a cash amount equal to the principal amount of the
Notes to be redeemed, plus accrued and unpaid interest, if any, to, but
excluding, the redemption date. In addition, calling the Notes for redemption
pursuant to the provisions described in this paragraph will constitute a
Make-Whole Fundamental Change, which will result in an increase to the
conversion rate in certain circumstances for a specified period of time.
In addition, if the pending Envigo acquisition has not closed as of the close of
business on June 30, 2022, or if, before such time, the related Envigo merger
agreement is terminated in accordance with its terms or the Company's board of
directors determines, in its good faith judgment, that the Envigo acquisition
will not occur, then the Notes will be redeemable, in whole and not in part, at
the Company's option, on a redemption date occurring on or before October 3,
2022, at a cash
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redemption price equal to 101% the principal amount of the notes to be redeemed,
plus accrued and unpaid interest, plus the "Applicable Premium" (as defined in
the Indenture).
If certain corporate events that constitute a "Fundamental Change" (as defined
in the Indenture) occur, then noteholders may require the Company to repurchase
their Notes at a cash repurchase price equal to the principal amount of the
Notes to be repurchased, plus accrued and unpaid interest, if any, to, but
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Off-Balance Sheet
Arrangement.
The disclosure set forth in Item 1.01 above is incorporated by reference into
this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth in Item 1.01 above is incorporated by reference into
this Item 3.02. The Notes were issued to the initial purchaser in reliance upon
Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities
Act"), in transactions not involving any public offering. The Notes were resold
by the initial purchaser to persons whom the initial purchaser reasonably
believes are "qualified institutional buyers," as defined in, and in accordance
with, Rule 144A under the Securities Act. Any common shares of the Company that
may be issued upon conversion of the Notes will be issued in reliance upon
Section 3(a)(9) of the Securities Act as involving an exchange by the Company
exclusively with its
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security holders. Initially, a maximum of 4,104,366 common shares of the Company
may be issued upon conversion of the Notes, based on the initial maximum
conversion rate of 29.3169 common shares per $1,000 principal amount of Notes,
which is subject to customary anti-dilution adjustment provisions.
Item 7.01 Regulation FD Disclosure.
On September 22, 2021, the Company issued a press release with respect to the
pricing of its Convertible Senior Notes offering, a copy of which is attached to
this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by
reference. On September 27, 2021, the Company issued a press release with
respect to the closing of its Convertible Senior Notes offering, a copy of which
is attached to this Current Report on Form 8-K as Exhibit 99.2 and is
incorporated herein by reference. This information shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or incorporated by reference in any filing under the
Securities Act or the Exchange Act, except as shall be expressly set forth by
specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
Exhibits
Exhibit Number Description
4.1 Indenture, dated as of September 27, 2021, among Inotiv, Inc.,
the guarantor named therein and U.S. Bank National Association, as
trustee.
4.2 Form of certificate representing the 3.25% Convertible Senior
Notes due 2027 (included as Exhibit A to Exhibit 4.1).
99.1 Press release issued by the Company dated September 22, 2021
99.2 Press release issued by the Company dated September 27, 2021
104 Cover page interactive data file (embedded within the inline XBRL
document).
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