Filed by a Party other than the Registrant¨
Bioanalytical Systems,
February 5, 2021
As we look back
Our team now has experience with completing and integrating acquisitions, investing and expanding for internal growth, internally developing new services, rebranding, and enhancing infrastructure and supporting systems. These are all strengths we can further leverage in the future.
Looking forward, we see significant opportunity aheadshareholders (the “Special Meeting”) of us to expand our services, generate a favorable return on our investments and drive value for shareholders. We will always focus on enhancing the client experience, fostering a winning culture, and creating a professional, gratifying work environment. In 2021, we intend to continue to focus on internal growth by adding service offerings and expanding capacity, as well as exploring selective external growth opportunities that might add breadth and value to our platform.
As we execute on our growth strategy, we intend to further develop our brand and increase communication with our stakeholders. To that end, in September 2020, we presented at an investor conference and in February 2021, we plan to initiate quarterly earnings calls.
Attached is this year’s proxy statement. The annual shareholder meetingInotiv, Inc. (“we”, “us”, or “Inotiv”), which will be held March 18, 2021. Among other matters,at Courtyard Marriott Lafayette, 150 Fairington Avenue, Lafayette, IN 47905 on November 4, 2021 at 10:00 a.m. Eastern Time. If you owned common shares of Inotiv at the close of business on October 4, 2021, Annual Meetingthe record date, you are entitled to vote at the Special Meeting.
I am gratefulallow sufficient time for management to solicit additional proxies in the event that there are insufficient votes at the Special Meeting for the talentapproval of the Authorized Share Increase Proposal or the Merger Share Issuance Proposal, you will be asked to consider and hard workapprove a proposal to adjourn the Special Meeting to a later date, if necessary or appropriate, to permit solicitation of our teamadditional votes if there are insufficient votes to approve those proposals (the “Adjournment Proposal”).
This year has taught us that even when facing considerable challenges and uncertainty, we can succeed if we remain true to our core values and focus on our goals. We look forward to executing on our goals in 2021 and beyond.
the successful completion of the Mergers.
to consider and vote upon:
This year we will be using the Internet as our primary means of furnishing proxy materials to shareholders. Accordingly, most shareholders will not receive copies of our proxy materials. We instead are mailing a notice with instructions for accessing the proxy materials and voting via the internet, telephone, or mail (the “Notice of Internet Availability”). We encourage you to review these materials and vote your shares. This delivery method allows us to conserve natural resources and reduce the cost of delivery while also meeting our obligations to you, our shareholders, to provide information relevant to your continued investment in the Company. If you received the Notice of Internet Availability by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability.
Inotiv, by delivering a properly executed proxy bearing a later date or by attending the Special Meeting and voting in person.
BIOANALYTICAL SYSTEMS,
ANNUAL
MARCH 18,
On or about February 5, 2021, we
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All of our shareholders will receive a Notice of Internet Availability of Proxy Materials containingStatement,” summarizes certain information on the availability of our proxy materials on the Internet. Shareholders will not receive a printed copy of our proxy materials unless requestedcontained in the manner described in the Notice of Internet Availability. The Notice of Internet Availability explains how to access and review this proxy statement, and our Annual Reportbut does not contain all of the information that is important to Shareholders, and how you may vote by proxy.
Thisyou. You should carefully read this entire proxy statement, describesincluding the proposals on which you, asattached Annexes, for a shareholdermore complete understanding of the Company, are being asked to vote. It also gives you information on the proposalsmatters to be voted onconsidered at the Annual Meeting,Special Meeting.
Who canbring life-saving and life-enhancing new medicines to patients. For more information about Envigo, please see the sections entitled “
Shareholders who owned common sharesSpecial Meeting. The Merger is not conditioned on January 27,the approval of the EIP Amendment Proposal or the Notes Share Issuance Proposal.
We are asking you to elect two Class III directors to the Board of Directors of the Company, to ratify the appointment of RSM US LLP as the Company's independent registered public accounting firm for fiscal 2021constitutes a quorum, and what vote is required to approve the Corporate legal name change.
What if I change my mind after I give my proxy?
You may revoke your proxy and change your vote at any time before the polls closeeach proposal at the meeting. You may do this by:
A: A quorum is | ||
Your proxy will not be revoked if you attend the meeting, but do not vote.
How many shares must be present to hold the meeting?
To hold the meeting and conduct business, a majority of the Company’s outstanding voting shares as of January 27, 2021 must be present in person or represented by proxiespresence at the meeting. On January 27, 2021, a total of 11,128,546 common shares were outstanding and entitled to vote. Shares representing a majority of these votes, or 5,564,274 shares, must be present at the AnnualSpecial Meeting in person or by proxy of shareholders entitled to holdcast a majority of all the meeting and conduct business. This is called a quorum.votes entitled to be cast as of October 4, 2021, the record date for the Special Meeting. Because there were 15,988,919 Common Shares are counted as presentoutstanding on the record date for the Special Meeting, the quorum for the Special Meeting requires the presence at the meeting if:
Note that viewing the Annual Meeting virtually via the instructions on the webpage we have provided will not count as presence for purposes of establishing a quorum, but abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present.
Will my shares be voted if I do not attend the Annual Meeting in person vote via remote means or sign and return my proxy card?
If your shares are registered in your name, they will not be voted unless you vote by the Internet, by telephone, by submitting your proxy card via mail or hand delivery, or by voting in person at the meeting.
How will my shares be voted if they are held in “street name”?
If your shares are held in “street name,” you should have received voting instructions with these materials from your broker or other nominee. We urge you to instruct your broker or other nominee howproxy of holders of Common Shares entitled to vote your shares by following those instructions.
at least 7,994,460 shares.
How many votes must the nominee receive to be elected as a Class III director?
The Class III directors nominated for election will be elected by a plurality of the votes cast, meaning that the two persons receiving the highest number of “for” votes will be elected. Shares represented by your proxy will be voted “for” the election of the nominee recommended by the Company’s Board of Directors, unless you withhold authority for the nominee. Abstentions and broker non-votes are not counted for purposes of determining whether the nominee is elected.
How many votes are required to approve the proposals to be voted on at the AnnualSpecial Meeting, other thaneach proposal presented to the election of directors?
The proposals to ratify RSM US LLP as our independent registered public accounting firm and to approve the Corporate legal name changeSpecial Meeting will be approved if the number of votes cast for approval of the proposal exceeds the number of votes cast against approval of the proposal at the Special Meeting. Abstentions and broker non-votes are not votes cast in favor of or against approval of a proposal and, therefore, are not counted for purposes of determining whether a proposal has been approved. Additionally, if a holder of Common Shares instructs its bank, broker or other nominee regarding one or more, but not all, of the proposals to be considered at the Special Meeting, except with respect to “routine” matters on which brokers are permitted to vote by the rules of the New York Stock Exchange, the broker non-vote on the proposals for which direction is not given will not be counted for purposes of determining whether such proposals are approved. The Authorized Share Increase Proposal is considered a “routine” matter; the Merger Share Issuance Proposal, the EIP Amendment Proposal, the Notes Share Issuance Proposal and the Adjournment Proposal are considered “non-routine” matters. The failure to instruct your bank, broker or other nominee how you wish to vote your shares with respect to the Authorized Share Increase Proposal will permit such bank, broker or other nominee to exercise its authority to vote in its discretion on that proposal. The failure to instruct your bank, broker or other nominee how you wish to vote your shares with respect to the Merger Share Issuance Proposal, the EIP Amendment Proposal, the Notes Share Issuance Proposal or the Adjournment Proposal will result in the bank, broker or other nominee being unable to vote your shares on those proposals, and your shares will not count as having been voted on those proposals.
| | | Inotiv Year Ended September 30, 2020 | | | Inotiv Nine Months Ended June 30, 2021 | | ||||||
Basic earnings (loss) per common share | | | | $ | (0.43) | | | | | $ | (0.27) | | |
Diluted earnings (loss) per common share | | | | $ | (0.43) | | | | | $ | (0.27) | | |
| | | Unaudited Pro Forma | | |||||||||
| | | Year Ended September 30, 2020 | | | Nine Months Ended June 30, 2021 | | ||||||
Basic earnings (loss) per common share | | | | $ | (4.56) | | | | | $ | (0.38) | | |
Diluted earnings (loss) per common share | | | | $ | (4.56) | | | | | $ | (0.38) | | |
Who Additionally, if a holder of Common Shares fails to instruct its bank, broker or other nominee regarding the Authorized Share Increase Proposal, such broker will be able to exercise its discretion to vote on the proposal and, if so, the vote will be counted for purposes of determining whether the Authorized Share Increase Proposal is approved.
Westatement. The unaudited Special Purposes
| | | Year Ended December 31, 2020 | | | Period June 3, 2019 to December 31, 2019 | | | Period January 1, 2019 to June 2, 2019 | | | Combined 2019 | | | $ Change | | | % Change | | ||||||||||||||||||
Net revenue | | | | $ | 246,369 | | | | | $ | 139,661 | | | | | $ | 66,847 | | | | | $ | 206,508 | | | | | $ | 39,861 | | | | | | 19.3% | | |
Operating costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of sales | | | | | (192,360) | | | | | | (111,594) | | | | | | (47,393) | | | | | | (158,987) | | | | | | (33,373) | | | | | | 21.0% | | |
Selling, general and administrative expenses | | | | | (40,610) | | | | | | (22,225) | | | | | | (7,597) | | | | | | (29,822) | | | | | | (10,788) | | | | | | 36.2% | | |
Amortization of intangible assets | | | | | (2,549) | | | | | | (1,422) | | | | | | (743) | | | | | | (2,165) | | | | | | (384) | | | | | | 17.7% | | |
Loss on impairment of property, plant and equipment, goodwill and intangible assets | | | | | (49,806) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Gain on sale of animal colony | | | | | 12,386 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Other operating expense | | | | | (5,440) | | | | | | (11,263) | | | | | | — | | | | | | (11,263) | | | | | | | | | | | | | | |
Operating (loss) income | | | | | (32,010) | | | | | | (6,843) | | | | | | 11,114 | | | | | | 4,271 | | | | | | | | | | | | | | |
Interest expense, net | | | | | (9,331) | | | | | | (6,195) | | | | | | — | | | | | | (6,195) | | | | | | | | | | | | | | |
Interest expense, net – related parties | | | | | (47) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Gain on bargain purchase of business | | | | | — | | | | | | 2,137 | | | | | | — | | | | | | 2,137 | | | | | | | | | | | | | | |
Gain on extinguishment of debt | | | | | 633 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | |
Foreign exchange (losses) gains | | | | | (1,574) | | | | | | 441 | | | | | | — | | | | | | 441 | | | | | | | | | | | | | | |
Other income | | | | | 83 | | | | | | 626 | | | | | | — | | | | | | 626 | | | | | | | | | | | | | | |
(Loss) income from continuing operations, before income taxes | | | | | (42,246) | | | | | | (9,834) | | | | | | 11,114 | | | | | | 1,280 | | | | | | | | | | | | | | |
Income tax (expense) benefit | | | | | (11,262) | | | | | | 2,371 | | | | | | — | | | | | | 2,371 | | | | | | | | | | | | | | |
(Loss) income from continuing operations | | | | | (53,508) | | | | | | (7,463) | | | | | | 11,114 | | | | | | 3,651 | | | | | | | | | | | | | | |
Income (loss) from discontinued operations, net of tax | | | | | 268 | | | | | | (408) | | | | | | — | | | | | | (408) | | | | | | | | | | | | | | |
Consolidated net (loss) income | | | | $ | (53,240) | | | | | $ | (7,871) | | | | | $ | 11,114 | | | | | $ | 3,243 | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2020 | | | June 3 2019 to December 31, 2019 | | | January 1, 2019 to June 2, 2019 | | | Combined Year Ended December 31, 2019 | | | Change | | |||||||||||||||||||||
| | | $ | | | % | | ||||||||||||||||||||||||||||||
Products | | | | $ | 223,959 | | | | | $ | 128,865 | | | | | $ | 62,731 | | | | | $ | 191,596 | | | | | $ | 32,363 | | | | | | 16.9% | | |
Services | | | | | 22,410 | | | | | | 10,796 | | | | | | 4,116 | | | | | $ | 14,912 | | | | | $ | 7,498 | | | | | | 50.3% | | |
| | | | $ | 246,369 | | | | | $ | 139,661 | | | | | $ | 66,847 | | | | | $ | 206,508 | | | | | $ | 39,861 | | | | | | 19.3% | | |
| | | Period June 3, 2019 to December 31, 2019 | | | Period January 1, 2019 to June 2, 2019 | | | Combined 2019 | | | Year Ended December 31, 2018 | | | $ Change | | | % Change | | ||||||||||||||||||
Net revenue | | | | $ | 139,661 | | | | | $ | 66,847 | | | | | $ | 206,508 | | | | | $ | 157,782 | | | | | $ | 48,726 | | | | | | 30.9% | | |
Operating costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of sales | | | | | (111,594) | | | | | | (47,393) | | | | | | (158,987) | | | | | | (115,198) | | | | | | (43,789) | | | | | | 38.0% | | |
Selling, general and administrative expenses | | | | | (22,225) | | | | | | (7,597) | | | | | | (29,822) | | | | | | (16,176) | | | | | | (13,646) | | | | | | 84.4% | | |
Amortization of intangible assets | | | | | (1,422) | | | | | | (743) | | | | | | (2,165) | | | | | | (1,826) | | | | | | (339) | | | | | | 18.6% | | |
Other operating expense | | | | | (11,263) | | | | | | — | | | | | | (11,263) | | | | | | — | | | | | | | | | | | | | | |
Operating (loss) income | | | | | (6,843) | | | | | | 11,114 | | | | | | 4,271 | | | | | | 24,582 | | | | | | | | | | | | | | |
Interest expense, net | | | | | (6,195) | | | | | | — | | | | | | (6,195) | | | | | | — | | | | | | | | | | | | | | |
Gain on bargain purchase of business | | | | | 2,137 | | | | | | — | | | | | | 2,137 | | | | | | — | | | | | | | | | | | | | | |
Foreign exchange gains | | | | | 441 | | | | | | — | | | | | | 441 | | | | | | — | | | | | | | | | | | | | | |
Other income | | | | | 626 | | | | | | — | | | | | | 626 | | | | | | — | | | | | | | | | | | | | | |
(Loss) income from continuing operations, before income taxes | | | | | (9,834) | | | | | | 11,114 | | | | | | 1,280 | | | | | | 24,582 | | | | | | | | | | | | | | |
Income tax benefit | | | | | 2,371 | | | | | | — | | | | | | 2,371 | | | | | | — | | | | | | | | | | | | | | |
(Loss) income from continuing operations | | | | | (7,463) | | | | | | 11,114 | | | | | | 3,651 | | | | | | 24,582 | | | | | | | | | | | | | | |
Loss from discontinued operations, net of tax | | | | | (408) | | | | | | — | | | | | | (408) | | | | | | — | | | | | | | | | | | | | | |
Consolidated net (loss) income | | | | $ | (7,871) | | | | | $ | 11,114 | | | | | $ | 3,243 | | | | | $ | 24,582 | | | | | | | | | | | | | | |
| | | June 3 2019 to December 31, 2019 | | | January 1, 2019 to June 2, 2019 | | | Combined 2019 | | | Year Ended December 31, 2018 | | | Change | | |||||||||||||||||||||
| | | $ | | | % | | ||||||||||||||||||||||||||||||
Products | | | | $ | 128,865 | | | | | $ | 62,731 | | | | | $ | 191,596 | | | | | $ | 146,973 | | | | | $ | 44,623 | | | | | | 30.4% | | |
Services | | | | | 10,796 | | | | | | 4,116 | | | | | | 14,912 | | | | | | 10,809 | | | | | | 4,103 | | | | | | 38.0% | | |
| | | | $ | 139,661 | | | | | $ | 66,847 | | | | | $ | 206,508 | | | | | $ | 157,782 | | | | | $ | 48,726 | | | | | | 30.9% | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
| | | 2021 | | | 2020 | | | 2021 | | | 2020 | | ||||||||||||
Net revenue | | | | $ | 71,416 | | | | | $ | 54,449 | | | | | $ | 141,095 | | | | | $ | 115,309 | | |
Operating costs | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of sales | | | | | (53,764) | | | | | | (47,017) | | | | | | (105,751) | | | | | | (94,403) | | |
Selling, general and administrative expenses | | | | | (11,151) | | | | | | (10,217) | | | | | | (22,837) | | | | | | (20,703) | | |
Amortization of intangible assets | | | | | (650) | | | | | | (672) | | | | | | (1,300) | | | | | | (1,262) | | |
Loss on impairment of goodwill and intangible assets | | | | | — | | | | | | — | | | | | | — | | | | | | (49,506) | | |
Other operating expense | | | | | (1,389) | | | | | | (1,115) | | | | | | (2,069) | | | | | | (2,916) | | |
Operating income (loss) | | | | | 4,462 | | | | | | (4,572) | | | | | | 9,138 | | | | | | (53,481) | | |
Interest expense, net | | | | | (1,728) | | | | | | (2,391) | | | | | | (3,633) | | | | | | (4,838) | | |
Interest expense, net – related parties | | | | | (277) | | | | | | — | | | | | | (440) | | | | | | — | | |
Gain on forgiveness of debt | | | | | — | | | | | | — | | | | | | 346 | | | | | | — | | |
Foreign exchange (losses) gains | | | | | (282) | | | | | | (100) | | | | | | 519 | | | | | | (1,936) | | |
Other income | | | | | 88 | | | | | | 115 | | | | | | 20 | | | | | | 217 | | |
Income (loss) from continuing operations, before income taxes | | | | | 2,263 | | | | | | (6,948) | | | | | | 5,950 | | | | | | (60,038) | | |
Income tax (expense) benefit | | | | | (582) | | | | | | 271 | | | | | | (1,501) | | | | | | 5,326 | | |
Income (loss) from continuing operations | | | | | 1,681 | | | | | | (6,677) | | | | | | 4,449 | | | | | | (54,712) | | |
(Loss) income from discontinued operations, net of tax | | | | | (82) | | | | | | (44) | | | | | | (25) | | | | | | 49 | | |
Consolidated net income (loss) | | | | $ | 1,599 | | | | | $ | (6,721) | | | | | $ | 4,424 | | | | | $ | (54,663) | | |
| | | Three Months Ended June 30, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Products | | | | $ | 63,257 | | | | | $ | 49,437 | | |
Services | | | | | 8,159 | | | | | | 5,012 | | |
| | | | $ | 71,416 | | | | | $ | 54,449 | | |
| | | Six Months Ended June 30, | | |||||||||
| | | 2021 | | | 2020 | | ||||||
Products | | | | $ | 123,851 | | | | | $ | 102,985 | | |
Services | | | | | 17,244 | | | | | | 12,324 | | |
| | | | $ | 141,095 | | | | | $ | 115,309 | | |
Corporate Governance Policiesdirectors for the applicable meeting, solicit proxies to approve the election of those persons to the Board and Guidelines
recommend to our shareholders that those persons be elected
The Boardvacancies occurring due to the death, resignation, retirement, disqualification or removal from office as a member of Directors has determined that Gregory C. Davis, Ph.D., R. Matthew Neff, and Richard A. Johnson, Ph.D. have no relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilitiesboard of a director anddesignated by a Nominating Holder are to be filled by a person designated by that such individuals meetNominating Holder.
proceeding with the engagement of Jefferies to provide financial advisory and financing services to Inotiv.
members regarding the status of the transaction and due diligence.
Financial Metric | | | Mean | | | Median | | ||||||
CY 2022E Adjusted EBITDA | | | | | 23x | | | | | | 23x | | |
CY 2023E Adjusted EBITDA | | | | | 18x | | | | | | 18x | | |
Financial Metric | | | Mean | | | Median | | ||||||
CY 2022E Adjusted EBITDA | | | | | 20x | | | | | | 20x | | |
CY 2023E Adjusted EBITDA | | | | | 18x | | | | | | 18x | | |
Financial Metric | | | Mean | | | Median | | ||||||
CY 2022E Adjusted EBITDA | | | | | 21x | | | | | | 21x | | |
CY 2023E Adjusted EBITDA | | | | | 18x | | | | | | 18x | | |
Financial Metric | | | Multiple Range | | | Implied Enterprise Value Reference Range ($ millions) | | ||||||
CY 2022E Adjusted EBITDA | | | | | 19x – 21x | | | | | $ | 973 – $1,075 | | |
CY 2023E Adjusted EBITDA | | | | | 16x – 18x | | | | | $ | 984 – $1,106 | | |
| Announcement Date | | | Acquiror | | | Target | |
| July 2, 2021 | | | EQT IX Fund / Goldman Sachs Asset Management | | | Parexel International Corporation* | |
| April 15, 2021 | | | Thermo Fisher Scientific Inc. | | | PPD, Inc. | |
| February 24, 2021 | | | ICON plc | | | PRA Health Sciences, Inc. | |
| November 20, 2020 | | | Blackstone | | | Precision Medicine Group* | |
| October 28, 2020 | | | Syneos Health, Inc. | | | Synteract* | |
| September 1, 2020 | | | ArchiMed | | | NAMSA* | |
| April 17, 2019 | | | LabCorp (Covance) | | | Envigo CRS* | |
| February 13, 2019 | | | Charles River Laboratories International, Inc. | | | Citoxlab | |
| February 13, 2018 | | | Charles River Laboratories International, Inc. | | | MPI Research | |
| July 31, 2017 | | | LabCorp (Covance) | | | Chiltern* | |
| June 20, 2017 | | | Pamplona Capital Management, LLP | | | Parexel International Corporation | |
| January 7, 2016 | | | Charles River Laboratories International, Inc. | | | WIL Research | |
| July 9, 2015 | | | Charles River Laboratories International, Inc. | | | Celsis International Ltd. | |
Financial Metric | | | Mean | | | Median | | ||||||
EV / LTM Adjusted EBITDA | | | | | 17x | | | | | | 14x | | |
EV / NTM Adjusted EBITDA* | | | | | 16x | | | | | | 16x | | |
Financial Metric | | | Multiple Range | | | Implied Enterprise Value Reference Range ($ millions) | | ||||||
LTM Adjusted EBITDA | | | | | 13x – 16x | | | | | $ | 520 – $640 | | |
NTM Adjusted EBITDA | | | | | 12x – 14x | | | | | $ | 583 – $680 | | |
Financial Metric | | | Mean | | | Median | | ||||||
CY 2022E Adjusted EBITDA | | | | | 21x | | | | | | 21x | | |
CY 2023E Adjusted EBITDA | | | | | 19x | | | | | | 19x | | |
Financial Metric | | | Multiple Range | | | Implied Per Share Equity Value Reference Range | | ||||||
CY 2022E Adjusted EBITDA | | | | | 20x – 24x | | | | | $ | 22.33 – $27.17 | | |
CY 2023E Adjusted EBITDA | | | | | 18x – 22x | | | | | $ | 29.58 – $36.57 | | |
It is management’s responsibility to manage our enterprise risks on a day-to-day basis. The Board of Directors is responsible for risk oversight by focusing on our overall risk management strategy and the steps managementflexibility to grant equity incentive awards is taking to manage our risks. While the Board of Directors as a whole maintains ultimate oversight responsibility, the Board of Directors has delegated certain risk management oversight responsibilities to its various committees. The Audit Committee oversees management of market and operational risks that could have a financial impact, such as those relating to internal controls or liquidity. The Compensation Committee is responsible for overseeing risks related to our compensation programs, including structuring and reviewing our executive compensation programs, considering whether such programs are in line with our strategic objectives and incentivizing appropriate risk-taking. The Nominating/Corporate Governance Committee manages risks associated with governance issues, such as the independence of the Board of Directors and key executive succession.
In addition to its formal compliance programs, the Board of Directors encourages management to promote a corporate culture that understands risk management and incorporates it into the overall corporate strategy and day-to-day business operations of the Company. The Company’s risk management structure also includes an ongoing effort to assess and analyze the most likely areas of future risknecessary for the Company to remain competitive with regard to retaining and to address themattracting highly qualified individuals upon whom, in its long-term planning process.
Committeeslarge measure, the future growth and Meetingssuccess of the Company depends.
shares remaining available under the Plan for future awards and the number of outstanding stock options, (iii) the potential significant increase in the number of employees who may be eligible for awards under the Plan if the Envigo acquisition is consummated; (iv) potential dilution resulting from the proposed increase in authorized shares, and (v) the potential shareholder value transfer resulting from the proposed increase in shares issuable under the Plan.
No memberCommon Shares of the BoardCompany issuable under the Plan by 1,500,000 shares and correspondingly adjusts the number of Directors attended fewer than 75%shares issuable as incentive options and as restricted stock or pursuant to restricted stock units following the effective date of the aggregateamendment of the meetingsPlan in 2020 to 3,400,000 and 3,400,000, respectively. Upon approval by the shareholders, the Plan would have a total of 1,896,167 shares available for equity awards (including the 396,167 shares remaining available for equity awards currently under the Plan).
The Compensation Committee is responsible for, among other matters, making recommendations to the Board of Directorsno employee may be granted restricted stock and/or restricted stock units awards with respect to:
The Audit Committee is responsibleto more than 50,000 shares in any fiscal year, subject to adjustment. In addition, no non-employee director may be granted stock options and/or stock appreciation rights with respect to more than 25,000 shares in any fiscal year, and no non-employee director may be granted restricted stock and/or restricted stock units with respect to more than 12,500 shares in any fiscal year, subject to adjustment. Certain shares, including those subject to awards that are forfeited, amended, terminated, or settled in cash, and other shares, will be eligible for among other matters:
The Nominating/Corporate Governance Committee is responsible for, among other matters:
The Board of Directors has adopted a written charter for each ofreissuance under the Compensation Committee, the Audit CommitteeAmended Plan.
The Nominating/Corporate Governance Committee will consider for nomination as directors persons recommended by shareholders entitled to vote on the election of directors. Such recommendations must be made to the Board of Directors in writing and delivered to Bioanalytical Systems, Inc. (Inotiv), Attention: Corporate Secretary, 2701 Kent Avenue, West Lafayette, Indiana 47906. There is no fixed process for identifying and evaluating potential candidates to be nominees for directors, and there is no fixed set of qualifications that must be satisfied before a candidate will be considered. Rather, the Nominating/Corporate Governance Committee has the flexibilityauthority and responsibility to consider such factors as it deems appropriate. These factors may include education, diversity, experience with business and other organizations comparable withadminister the Company,Amended Plan, except for awards to non-employee directors, which are administered by the interplayBoard. The Committee consists solely of the candidate’s experience with that of other members of the Board of Directors, and the extent to which the candidate would be a desirable addition to the Board of Directors and to any of the committees of the Board of Directors. The Nominating/Corporate Governance Committee does not have a formal policy regarding the consideration of diversity in identifying director nominees, but the Nominating/Corporate Governance Committee does consider, among other things, a director nominee’s potential contribution to the diversity of background and experience of our Board of Directors, including with respect to age, gender, international background, race and specialized experience. The Nominating/Corporate Governance Committee will evaluate nominees for director submitted by shareholders in the same manner in which it evaluates other director nominees.
The Company’s Second Amended and Restated Bylaws, as amended, provide that nominations of persons for election to the Board of Directors may be made (i) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (ii) by any shareholder of the Company (1) who is a shareholder of record on the date of the giving of the relevant notice and on the record date for the determination of shareholders entitled to notice of and to vote at such meeting and (2) who complies with the notice procedures set forth in the Second Amended and Restated Bylaws, as amended. For nominations to be made by a shareholder, the shareholder must deliver notice to Bioanalytical Systems, Inc. not less than 90 days nor more than 120 days prior to the anniversary date of the prior year’s annual shareholders meeting. Nominations must be received between November 18, 2021 and December 18, 2021 for consideration at the 2022 Annual Shareholders’ Meeting. Nominations must set forth, with respect to the person nominated, their name, age, business address and residence address, principal occupation or employment, class and number of shares of the Company which are owned beneficially or of record by the person, and any other information relating to the person that would be requiredtwo members intended to be disclosed in a proxy statement or other filings required to be made in connection with solicitations“non-employee directors” within the meaning of proxies for election of directors pursuant to Section 14Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and the rules and“outside directors” under regulations promulgated thereunder.under Section 162(m), and “independent directors” under NASDAQ rules. The shareholder making this proposal must state his, her or its name and record address,Committee may exercise broad discretionary authority in the class and number of sharesadministration of the Company which he, she or it owns beneficially or of record, a description of all arrangements or understandings between such shareholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder, a representation that such shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice, and any other information relating to such shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. The Chair of the Nominating/Corporate Governance Committee or his or her designee shall haveAmended Plan, including the authority to determine the treatment of awards upon an employee’s retirement, disability, death, or during a leave of absence. In addition, the Committee is authorized to delegate some or all of its ministerial duties to one or more of its members or to one or more employees or agents of the Company.
There are no family relationships among the directors and executive officersassets of the Company.
Certain Relationships and Transactions
The Board reviews transactions with related parties, if any, including those required to be disclosed under Item 404 of Regulation S-K. On January 12, 2019,Company, the Board of Directors elected Robert Leasure, Jr.may, after considering any accounting impact to the Company, take such action as the Company’s President and Chief Executive Officer and as a director of the Company. Mr. Leasure serves as the managing partner and president of LS Associates LLC (“LS”), a management and consulting firm formedit in 2002. The Company has a consulting agreement with LS by which we paid consulting fees of $64,000 and $156,000 in fiscal 2020 and fiscal 2019, respectively. The Company received consulting services from LSits discretion deems appropriate to (i) cash out outstanding vested stock options and/or other awards at or immediately prior to Mr. Leasure being elected as CEO and continues to use servicesthe date of such event that will not otherwise be assumed or substituted, (ii) provide for the consulting firm on an as needed basis.
The Company leases space from SWL Properties, LLC. SWL Properties is ownedassumption or substitution of outstanding stock options or other awards by Dr. John E. Sagartz, our Chief Strategy Officer, a membersurviving, successor or transferee entities, (iii) provide that in lieu of our Board of Directors and a greater than five percent beneficial owner of our common shares, Kimberly Sagartz, an employeeCommon Shares of the Company, andthe award recipient shall be entitled to receive the consideration he or she would have received in such transaction in exchange for such Common Shares (or the Fair Market Value thereof in cash), and/or (iv) provide that stock options shall be exercisable for a greater than five percent beneficial ownerperiod of our common shares and Joseph E. Flynn, our Chief Commercial Officer. The lease commenced in Julyat least ten business days from the date of 2018, with an initial term of seven years, and the possibility of extensions for two successive terms of seven years each. Annual rent under the lease arrangements for the initial term ranges from $390,000 for the first year to $440,987 for the seventh year, provided that the lease arrangements provide the Company with the option to purchase the premises prior to the end of the fifth lease year. Lease expense incurred was $390,000 in each of fiscal 2020 and 2019.
Communications with the Board of Directors
Any shareholder who desires to contact members of the Board of Directors, including the non-management members as a group, may do so by writing to:
Bioanalytical Systems, Inc. (Inotiv) Corporate Secretary
2701 Kent Avenue
West Lafayette, IN 47906
secretary@inotivco.com
The Corporate Secretary will collect all such appropriate communications and organize them by subject matter. Thereafter, each appropriate communication will be promptly forwarded to the relevant board committee chairperson according to the subject matter of the communication. Appropriate communications addressed to the non-management members as a group will be forwarded to each non-management member of the Board.
Communications with the Audit Committee
Any person who would like to contact the Company for the purpose of submitting a complaint regarding accounting, internal accounting controls, or auditing matters may do so via email, by writing to:
Chairman of the Audit Committee,
R. Matthew Neff
auditcommittee@inotivco.com
Upon receipt of a complaint,notice from the ChairmanCompany of such proposed event, following the Audit Committee will follow a review processexpiration of which period any unexercised stock options shall terminate. Furthermore, for any change in corporate structure affecting the Common Shares subject to an outstanding award, the number and actions dictated inkind of Common Shares or other securities which are subject to the Company’s Code of Business Conduct and Ethics to review and address the complaint. The Company’s Code of Business Conduct and Ethics applies to all of the Company’s directors, employees and officers. The Company’s Code of Business Conduct and Ethics is available on the Company’s website at www.inotivco.com. We intend to disclose any changes in,Amended Plan or waivers from, our code of ethics applicablesubject to any relevant officer on our website or by filing a Form 8-K with the SEC.
Non-Employee Director Compensation and Benefits
The Company's compensation package for non-employee directors is generally comprised of annual cash retainers and historically has included stock option awards and/or restricted stock awards. The annual pay package is designed to attract and retain highly-qualified, independent professionals to represent the Company's shareholders and reflect the Company's position in the industry. Actual annual pay varies among directors based on Board committee memberships and committee chair responsibilities. The Company has not adopted guidelines with respect to non-employee director ownership of common shares. Directors who are employees receive no additional compensation for their service on the Board.
Compensation for non-employee directors during fiscal 2020 consisted of the following:
Stock Awards
The award disclosed under the heading "Stock Awards" consists of the aggregate grant date fair value of the restricted stock awardstheretofore granted, in fiscal 2020 computed in accordance with FASB ASC Topic 718. The grant date fair value of the stock awards may vary from the actual amount ultimately realized based on a number of factors. These factors include the Company's actual operating performance, common share price fluctuations, the limited liquidity in the trading of the Company’s shares and the timing of applicable vesting.
Business Expenses
The directors are reimbursed for their business expenses related to their attendance at the Company meetings, including room, meals,exercise prices, may be appropriately and transportation to and from Board and committee meetings. Directors are also encouraged to attend educational programs related to Board issues and corporate governance, which are reimbursed by the Company.
Non-Employee Directors' Compensation Table
The following table shows information regarding the compensation of the Company's non-employee directors for fiscal 2020.
DIRECTOR COMPENSATION FOR FISCAL 2020 | ||||||||||||||||||||
Name | Fees paid in cash ($) | Stock Awards (1) ($) | Option Awards (2) ($) | All Other Compensation (3) ($) | Total ($) | |||||||||||||||
Gregory C. Davis, Ph.D. | 57,250 | 33,100 | - | 596 | 90,946 | |||||||||||||||
R. Matthew Neff | 48,250 | 33,100 | - | 616 | 81,966 | |||||||||||||||
Richard A. Johnson, Ph.D. | 44,750 | 33,100 | - | 423 | 78,273 | |||||||||||||||
Wendy Perrow (4) | 17,500 | - | - | - | 17,500 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Required Vote and Board of Directors’ Recommendation
Under the Company's Second Amended and Restated Bylaws, as amended, the number of directors of the Company is to be fixed by resolution of the Board of Directors. The Board of Directors has set the number of directors at five. In accordance with the Company’s Second Amended and Restated Bylaws, as amended, the Company’s Board of Directors is divided into three classes: Class I, Class II and Class III, each class having a staggered term of three years. Each year the term of office of one class expires. The terms of office of the Class III directors expire at the 2021 Annual Meeting.
The Board of Directors has nominated Gregory C. Davis, Ph.D. and John E. Sagartz, DVM, PhD, DACVP (the "Nominated Directors") to be reelected by the holders of the Company’s common shares, to serve as a Class III Director of the Company for a term expiring at the 2024 Annual Meeting and until his successor is elected and qualified.
The nomination of the Nominated Directors was approved by the Company’s Nominating/Corporate Governance Committee and ratified by the Company’s Board of Directors. If elected, the Nominated Directors have consented to serve as a director of the Company.
The Board of Directors recommends that shareholders vote FOR the election of the Nominated Directors. Unless authority to vote for the Nominated Directors is withheld, the accompanying proxy will be voted FOR the election of the Nominated Directors; however, the persons designated as proxies reserve the right to cast votes for another person designatedequitably adjusted by the Board of Directors so as to maintain the proportionate number of shares or other securities without changing the aggregate exercise price, if any.
Please find certain information about the Nominated Directors directly below. The address for the Nominated Directors is in care of Bioanalytical Systems, Inc. (Inotiv), 2701 Kent Avenue, West Lafayette, IN 47906.
Name | Age | Position | Served as Director Since |
Gregory C. Davis, Ph.D. | 67 | Director | 2017 |
John E. Sagartz, DVM, PhD, DACVP | 56 | Director | 2018 |
Business Experience of the Nominated Directors
Gregory C. Davis, Ph.D. was elected to the board on June 14, 2017. Dr. Davis currently runs his own consulting firm, which he founded in 2012, assisting Biopharmaceutical companies with regulatory strategy and product development issues. In 2014, Dr. Davis joined Calibrium, LLC as Vice President of CMC, Regulatory, and Quality. Calibrium was developing novel biotherapeutics for the treatment of diabetes. The company was sold to Novo Nordisk in late 2015. From 1992 to 2012, Dr. Davis held various leadership positions at Eli Lilly in Biotechnology Product Development, Global Regulatory Affairs, Global Brand Teams, and Quality. Dr. Davis’ tenure at Eli Lilly included service as Chief Operating Officer of the Xigris Product Team. Xigris was the first biotechnology product ever approved for the treatment of severe sepsis. When Dr. Davis retired from Eli Lilly in December of 2012, he was Executive Director and Senior Principle Fellow in Global Regulatory Affairs. Dr. Davis has held numerous leadership positions within the Pharmaceutical Research and Manufacturers Association (PhRMA), the United States Pharmacopeia (USP), and the Biotechnology Industry Organization (BIO). He also served for five years as the PhRMA liaison to the International Conference on Harmonization (ICH) for Q5/Q6 Biotechnology topics. He coauthored several of the ICH’s pieces of guidance on registration standards for biotechnology products, which are still in use today. Dr. Davis received his bachelor’s degree from Southeast Missouri State University and his Ph.D. in Analytical Chemistry from Purdue University, studying under Dr. Peter Kissinger, the founder of the Company. As Chairman of the Board, Dr. Davis provides the Board of Directors with significant industry and leadership experience.
John E. Sagartz, DVM, PhD, DACVP, joined the Company as part of the Company’s acquisition of Seventh Wave Laboratories on July 2, 2018. Following the acquisition, Dr. Sagartz has served as the Company’s Chief Strategy Officer and joined the Company’s Board of Directors to help guide operations in order to provide broader solutions and greater scientific expertise to the Company’s clients. Dr. Sagartz began his career as a toxicologic pathologist at Searle/Monsanto in 1996, and held positions of increasing responsibility as section head, director, preclinical development site head, and fellow, following Monsanto’s merger with Pharmacia. After Pfizer’s acquisition of Pharmacia in 2003, Dr. Sagartz founded Seventh Wave Laboratories where he served as President and Chief Executive Officer, and Chief Strategy Officer. Dr. Sagartz is an adjunct associate professor of Comparative Medicine at St. Louis University’s College of Medicine and serves on the Board of Directors of the Missouri Biotechnology Association. He received his Bachelor of Science and Doctor of Veterinary Medicine degrees from Kansas State University and, after completing residency training in anatomic pathology, earned his Doctor of Philosophy from The Ohio State University. As a legacy executive of Seventh Wave Laboratories, Dr. Sagartz provides the Board with valuable insight regarding its operations, as well as scientific and management expertise generally.
The following table sets forth certain information regarding the Company’s other directors who will remain in office following the 2021 Annual Meeting. The address for each is in care of Inotiv, 2701 Kent Avenue, West Lafayette, Indiana 47906.
Name | Age | Position | Director Since |
Class I Directors serving until the 2022 Annual Meeting of Shareholders: | |||
R. Matthew Neff | 65 | Director | 2017 |
Robert W. Leasure, Jr. | 61 | Director | 2019 |
Class II Director serving until the 2023 Annual Meeting of Shareholders: | |||
Richard A. Johnson, Ph.D. | 75 | Director | 2012 |
R. Matthew Neff was elected to the board on August 1, 2017. Mr. Neff is currently Senior Director of Capital Markets at Thompson Thrift and is Senior Advisor to Evolution Capital Partners, a private equity firm. From July 2017 to May 2020, Mr. Neff was Of Counsel with Bingham Greenebaum Doll LLP. From August 2013 through June 2016, Mr. Neff served as Chairman, President and Chief Executive Officer of AIT Laboratories, a national toxicology lab headquartered in Indianapolis, Indiana. Mr. Neff joined AIT Laboratories after his tenure as President and Chief Executive Officer of CHV Capital, Inc., the venture capital subsidiary of Indiana University Health, a role he had held since 2007. Mr. Neff started his career as a practicing lawyer and Partner at Baker & Daniels. He then served as the Deputy to the Chairman of the Federal Housing Finance Board (now known as the Federal Housing Finance Agency) in the first Bush Administration. Thereafter, he became the co-founder and Chief Executive Officer of two Indianapolis companies: Circle Investors, an insurance holding company then chaired by former Vice President of the United States, Dan Quayle, and Senex Financial Corp., a healthcare receivables finance company. Mr. Neff currently serves on the Board of Directors of Fairbanks Addiction Treatment Center and was a member of Riley Children’s Foundation’s Board of Directors from January 2000 to November 2012. Mr. Neff earned his bachelor’s degree and graduated a Phi Beta Kappa from DePauw University. He received his Juris Doctor degree from Indiana University. Mr. Neff’s legal expertise, financial acumen, knowledge of our industry and leadership background, including at AIT Laboratories, ideally situate him for service as a director.
Robert Leasure, Jr. was elected as President and Chief Executive Officer and as a director of the Company effective January 12, 2019. Mr. Leasure also serves as the managing partner and president of LS Associates LLC (“LS”), a management and consulting firm formed in 2002. From September of 2016 until Mr. Leasure’s election, the Company engaged LS as a financial consultant. Mr. Leasure's experience working with management teams in areas including strategic planning and implementation, problem solving, operations, mergers and acquisitions and financial transactions, and in particular Mr. Leasure’s experience leading the Company’s turnaround, well situate him for his role as President and Chief Executive Officer and as a director.
Richard A. Johnson, Ph.D. was elected as a director of the Company on May 9, 2012. Dr. Johnson is currently an executive scientific consultant. From 1990 to 2008, he served as Founder and President of AvTech Laboratories. Prior to founding AvTech Laboratories, he served in various positions with The Upjohn Company, including Senior Research Scientist, Manager of Product Control, Manager of Quality Assurance Product Support and Director of Strategic Planning. Dr. Johnson received his Bachelor of Science in Chemistry from the Illinois Institute of Technology and his Ph.D. in Chemical Physics from Michigan State University. Dr. Johnson brings to the Board of Directors knowledge and insight on scientific matters, stemming from his extensive experience in the pharmaceutical industry.
The Audit Committee of the Board has appointed RSM US LLP (“RSM”) as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2021. THE NOTES SHARE ISSUANCE PROPOSAL
The proposal will be approved if a quorum is present and more shares represented in person or by proxy and entitled to vote on this item at the Annual Meeting are voted for approvalissuance of the proposal than are voted against approvalmaximum number of our Common Shares issuable in connection with the potential future conversion of the proposal. Abstentions and broker non-votes will not count for purposesConvertible Notes as disclosed in this proxy statement.
The Board recommends that shareholders vote “FOR” ratification of the appointment of RSM US LLP as the Company’s independent registered public accounting firm for fiscal 2021.
In the event shareholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee and the Board. Even if the selection is ratified, the Audit Committee3.25% Convertible Senior Notes due 2027 in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.
Selection of Independent Registered Public Accounting firm
The Company’s Audit Committee has engaged RSM as the Company’s independent registered public accounting firm for the audit of the consolidated financial statements since the fiscal year ended September 30, 2013.
Representatives of RSM are expectedprivate offering to be present at the Annual Meeting. They will have the opportunityqualified institutional buyers pursuant to make a statement if they desire to do so and will be available to answer appropriate questions concerning the audit of the Company’s financial statements.
Fees of Independent Registered Public Accounting firm
The approximate aggregate fees billed for the last two fiscal years for each of the following categories of services are set forth below:
2020 | 2019 | |||||||
Audit Fees – | ||||||||
Aggregate fees for annual audit, quarterly reviews | $ | 415,000 | $ | 370,000 | ||||
Audit Related Fees - | ||||||||
Aggregate fees for assurance and related services | $ | 131,000 | $ | 105,000 | ||||
Tax Fees - | ||||||||
Income tax services related to compliance with tax laws | $ | — | $ | — | ||||
All Other Fees - | $ | — | $ | — |
There were no fees for services other than the above paid to the Company’s independent registered public accounting firm.
The Company’s policies require that the scope and cost of all work to be performed for the Company by its independent registered public accounting firm must be approved by the Audit Committee. Prior to the commencement of any work by the independent registered public accountants on behalf of the Company, the independent registered public accountants provide an engagement letter describing the scope of the work to be performed and an estimate of the fees. The Audit Committee, the Chief Executive Officer and the Chief Financial Officer must review and approve the engagement letter and the estimate before authorizing the engagement. All fees were reviewed and approved by the Audit Committee, the Chief Executive Officer and the Chief Financial Officer during fiscal 2020 and 2019. Where fees charged by the independent registered public accounting firm exceed the estimate, the Audit Committee must review and approve the excess fees prior to their payment.
The following Report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission nor shall this information be incorporated by reference into any existing or future filingRule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Convertible Notes are fully and unconditionally guaranteed, on a senior, unsecured basis, by BAS Evansville, Inc., one of our wholly owned subsidiaries (the “Guarantor”). We received net proceeds from the offering of the Convertible Notes of approximately $120.5 million after discounts and commissions and related offering expenses. We intend to use the net proceeds from the offering of the Convertible Notes, together with borrowings under a new senior secured term loan facility, to fund the cash purchase price of the Envigo Acquisition, if it is consummated, and to pay related fees and expenses.
Make-Whole Fundamental Change Effective Date | | | Share Price | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 34.11 | | | $ 40.00 | | | $ 46.05 | | | $ 53.00 | | | $ 59.86 | | | $ 70.00 | | | $ 90.00 | | | $ 120.00 | | | $ 160.00 | | | $ 210.00 | | ||||||||||||||||||||||||||||||||
September 27, 2021 | | | | | 7.6007 | | | | | | 6.6738 | | | | | | 5.2271 | | | | | | 4.0800 | | | | | | 3.2775 | | | | | | 2.4609 | | | | | | 1.5271 | | | | | | 0.8613 | | | | | | 0.4532 | | | | | | 0.2186 | | |
October 15, 2022 | | | | | 7.6007 | | | | | | 6.5613 | | | | | | 5.0642 | | | | | | 3.8895 | | | | | | 3.0820 | | | | | | 2.2752 | | | | | | 1.3771 | | | | | | 0.7596 | | | | | | 0.3932 | | | | | | 0.1857 | | |
October 15, 2023 | | | | | 7.6007 | | | | | | 6.3813 | | | | | | 4.8232 | | | | | | 3.6234 | | | | | | 2.8148 | | | | | | 2.0281 | | | | | | 1.1860 | | | | | | 0.6363 | | | | | | 0.3232 | | | | | | 0.1495 | | |
October 15, 2024 | | | | | 7.6007 | | | | | | 6.0988 | | | | | | 4.4692 | | | | | | 3.2461 | | | | | | 2.4472 | | | | | | 1.6967 | | | | | | 0.9427 | | | | | | 0.4905 | | | | | | 0.2457 | | | | | | 0.1114 | | |
October 15, 2025 | | | | | 7.6007 | | | | | | 5.6313 | | | | | | 3.9133 | | | | | | 2.6781 | | | | | | 1.9127 | | | | | | 1.2424 | | | | | | 0.6371 | | | | | | 0.3230 | | | | | | 0.1638 | | | | | | 0.0738 | | |
October 15, 2026 | | | | | 7.6007 | | | | | | 4.7988 | | | | | | 2.9621 | | | | | | 1.7593 | | | | | | 1.1025 | | | | | | 0.6181 | | | | | | 0.2838 | | | | | | 0.1546 | | | | | | 0.0838 | | | | | | 0.0367 | | |
October 15, 2027 | | | | | 7.6007 | | | | | | 3.2837 | | | | | | 0.0000 | | | | | | 0.0000 | | | | | | 0.0000 | | | | | | 0.0000 | | | | | | 0.0000 | | | | | | 0.0000 | | | | | | 0.0000 | | | | | | 0.0000 | | |
The Audit Committeewould receive from issuing the Securities;
The Company’s management is primarily responsible for the preparation, presentation and integrity of the Company’s financial statements. The Company’s independent registered public accounting firm, RSM US LLP (“independent auditors”), is responsible for performing an independent audit of the Company’s financial statements and expressing an opinion as to the conformity of the financial statements with generally accepted accounting principles.
The function of the Audit Committee is to assist the Board of Directors in its oversight responsibilities relating to the integrity of the Company’s accounting policies, internal controls and financial reporting. The Audit Committee reviews the Company’s quarterly and annual financial statements prior to public earnings releases and submissions to the SEC; reviews and evaluates the performance of our independent auditors; consults with the independent auditors regarding internal controls and the integrity of the Company’s financial statements; assesses the independence of the independent auditors; and is responsible for the selection of the independent auditors. In this context, the Audit Committee has met and held discussions with members of management and the independent auditors. Management has represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditors. Management has also represented to the Audit Committee that the Company’s internal controls over financial reporting were effective as of the end of the Company’s most recently-completed fiscal year.
The Audit Committee also discussed with the independent auditors matters required to be discussed by the applicable requirements of the PCAOB and the Commission. The Audit Committee has also discussed with the Company’s independent auditors the overall scope and plans for the annual audit and reviewed the results of the audit with management and the independent auditors.
In addition, the Audit Committee has discussed the independent auditors’ independence from the Company and its management, including the matters in the received written disclosures and letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence. The Audit Committee has also considered whether the provision of any non-audit services (as discussed under “Fees of Independent Registered Public Accountants”) would impact the independence of the auditors.
The members of the Audit Committee are not engaged in the practice of auditing or accounting. In performing its functions, the Audit Committee necessarily relies on the work and assurances of the Company’s management and independent auditors.
In reliance on the reviews and discussions referred to in this report and in light of its role and responsibilities, the Audit Committee recommended to the Board of Directors that the audited financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2020, be filed with the SEC.
AUDIT COMMITTEE
R. Matthew Neff (Chairman)
Gregory C. Davis, Ph.D.
Richard A. Johnson, Ph.D.
PROPOSAL 3 –THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT INOTIV’S SHAREHOLDERS VOTE “FOR” APPROVAL OF THE CORPORATE LEGAL NAME CHANGE
On January 14, 2021, the Board of Directors unanimously approved an amendment to our Second Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) to change our corporate name from “Bioanalytical Systems, Inc.” to “Inotiv, Inc.” The Board believes it is in the Company’s and our shareholders best interests to effect the name change and recommends to our shareholders the approval and adoption of the name change amendment.
Reason for the Amendment
In November of 2019, the Company rebranded its contract research services business as “Inotiv.” Adoption of the tradename Inotiv symbolized the expansion and supplementation of the Company’s legacy contract research services operations through significant business acquisitions, as well as internal growth. Since the rebranding, the Company has marketed and otherwise managed its contract research services operations under the name Inotiv. The proposed change to the Company’s corporate name would formalize current business practice within the Company’s Services segment and unify the Company’s Products segment under the same corporate name.
Management believes that the corporate name Inotiv, Inc. better reflects the diversified suite of contract research services the Company offers and its complementary Products business. Management intends the name change to signify the Company’s focused transformation to an organization with both considerable scale and nimble client responsiveness.
Inherent risks involved in any corporate name change include, among others, the prospect of confusion in the marketplace and the potential incurrence of expense in effectuating the change. However, because the Company has operated the majority of its business as Inotiv for over a year, management believes that it has mitigated many of the risks which would otherwise accompany a corporate name change.
Effects of the Amendment
The Board of Directors has adopted resolutions, which set forth an amendment to the Company’s Articles of Incorporation and instructed the Company to submit the amendment to the shareholders of the Company entitled to vote thereon for consideration at the Annual Meeting in accordance with the Indiana Business Corporation Law. The proposed amendment to Article 1 of the Company’s Articles of Incorporation reads as follows:
“The name of the Corporation is Inotiv, Inc.”
If approved by our shareholders, the proposed amendment to the Articles of Incorporation will become effective upon the filing of Articles of Amendment with the Indiana Secretary of State by the Company. Coincident with the filing of the Articles of Amendment, the Company will also amend the Company’s Second Amended and Restated Bylaws and other corporate documentation to reflect the name change.
The Company’s common shares currently trade on the NASDAQ Capital Market under the trading symbol “BASI”. If the shareholders approve the amendment and the name change becomes effective, the Company will continue to list its shares on the NASDAQ Capital Market. At or around the time that the Company files its Articles of Amendment we anticipate that we will adopt the trading symbol “NOTV” for our stock exchange listing in order to more closely align our trading symbol with our new name. If the name change becomes effective, the rights of shareholders holding certificated shares under currently outstanding stock certificates and the number of shares represented by those certificates will remain unchanged. The new corporate name will not affect the validity or transferability of any currently outstanding stock certificates nor will it be necessary for shareholders with certificated shares to surrender any stock certificates they currently hold as a result of the name change. After the name change, all new stock certificates issued by the Company and all uncertificated shares held in book entry, including uncertificated shares currently held in book entry, will bear the name “Inotiv, Inc.”
If the shareholders do not approve the name change, the Company will not file the proposed amendment to our Articles of Incorporation and the name of the Company will remain unchanged. In recommending the name change to the Company’s shareholders, the Board of Directors retains the ability to, without further vote by the shareholders, delay or abandon the proposed name change at any time if the Board of Directors concludes that such action would be in the best interest of the Company and its shareholders.
Vote Required
The proposal will be approved if a quorum is present and more shares represented in person or by proxy and entitled to vote on this item at the Annual Meeting are voted for approval of the proposal than are voted against approval of the proposal. Abstentions and broker non-votes will not count for purposes of determining whether this proposal has been approved.
The Board recommends that shareholders vote “FOR” approval of an amendment to the Articles of Incorporation to change the name of the Company to Inotiv, Inc.
On January 27, 2020 Mr. Leasure entered into a new employment agreement with the Company (the “2020 Leasure Employment Agreement”). The 2020 Leasure Employment Agreement replaced the 2019 Leasure Employment Agreement, which expired on December 31, 2019, and extended the term of Mr. Leasure’s service as our President and Chief Executive Officer through December 31, 2020, subject to extension for successive one-year periods thereafter upon the mutual agreement of the parties. Under the 2020 Leasure Employment Agreement, Mr. Leasure was entitled to (a) receive an annual base salary of $370,000, (b) have an annual incentive opportunity of up to 50% of his base salary for the year and (c) vacation in
Report.
SUMMARY COMPENSATION TABLE | ||||||||||||||||||||||||||||||
Name | Principal Position | Year | Salary ($) | Nonequity Incentive Plan Compensation ($) | Stock Awards ($) (1) | Options ($) (1) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
Robert W. Leasure, Jr | President and Chief Executive | 2020 | 344,225 | 185,000 | (2) | 69,420 | (3) | 171,000 | (5) | - | 769,645 | |||||||||||||||||||
Officer | 2019 | 191,250 | 97,491 | (2) | 57,107 | (4) | 51,700 | (6) | - | 397,548 | ||||||||||||||||||||
John E. Sagartz, DVM | Chief Strategy | 2020 | 289,821 | - | 34,729 | (7) | - | - | 324,550 | |||||||||||||||||||||
Ph.D., DACVP | Officer | 2019 | 250,000 | 15,000 | (8) | - | - | - | 265,000 | |||||||||||||||||||||
Joseph E. Flynn | Chief Commercial | 2020 | 250,000 | 60,000 | (9) | 9,923 | (10) | - | - | 319,923 | ||||||||||||||||||||
Officer |
SUMMARY COMPENSATION TABLE | | ||||||||||||||||||||||||
Name | | | Principal Position | | | Year | | | Salary ($) | | | Nonequity Incentive Plan Compensation ($) | | | Stock Awards ($)(1) | | | Options ($)(1) | | | All Other Compensation ($) | | | Total ($) | |
Robert W. Leasure, Jr | | | President and Chief | | | 2020 | | | 344,225 | | | 185,000(2) | | | 69,420(3) | | | 171,000(5) | | | — | | | 769,645 | |
| | | Executive Officer | | | 2019 | | | 191,250 | | | 97,491(2) | | | 57,107(4) | | | 51,700(6) | | | — | | | 397,548 | |
John E. Sagartz, DVM | | | Chief Strategy | | | 2020 | | | 289,821 | | | — | | | 34,729(7) | | | — | | | — | | | 324,550 | |
Ph.D., DACVP | | | Officer | | | 2019 | | | 250,000 | | | 15,000(8) | | | — | | | — | | | — | | | 265,000 | |
Joseph E. Flynn | | | Chief Commercial | | | 2020 | | | 250,000 | | | 60,000(9) | | | 9,923(10) | | | — | | | — | | | 319,923 | |
| | | Officer | | | | | | | | | | | | | | | | | | | | | | |
OUTSTANDING EQUITY AWARDS AT FISCAL 2020 YEAR-END | ||||||||||||||
OPTION AWARDS | ||||||||||||||
Number of Securities Underlying Unexercised Options | ||||||||||||||
Name | (#) Exercisable | (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | ||||||||||
Robert W. Leasure, Jr. | 18,000 | 27,000 | (1) | 5.03 | January 26, 2030 | |||||||||
36,667 | 18,333 | (2) | 1.30 | January 13, 2029 | ||||||||||
54,667 | 45,333 | |||||||||||||
Joseph E. Flynn | 4,000 | 6,000 | (3) | 1.42 | February 7, 2029 |
RESTRICTED STOCK AWARDS | ||||||||
Name | Number of Shares that Have Not Vested | Market Value of Shares That Have Not Vested (1) | ||||||
Robert W. Leasure, Jr. | 23,000 | (2) | $ | 109,940 | ||||
John E. Sagartz, DVM, Ph. D., DACVP | 8,974 | (3) | $ | 42,896 | ||||
Joseph E. Flynn | 2,564 | (3) | $ | 12,256 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2020 YEAR-END | | |||||||||||||||||||||
OPTION AWARDS | | |||||||||||||||||||||
| | | Number of Securities Underlying Unexercised Options | | | | | | | | | | | |||||||||
Name | | | (#) Exercisable | | | (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | |||||||||
Robert W. Leasure, Jr. | | | | | 18,000 | | | | | | 27,000(1) | | | | | | 5.03 | | | | January 26, 2030 | |
| | | | | 36,667 | | | | | | 18,333(2) | | | | | | 1.30 | | | | January 13, 2029 | |
| | | | | 54,667 | | | | | | 45,333 | | | | | | | | | | | |
Joseph E. Flynn | | | | | 4,000 | | | | | | 6,000(3) | | | | | | 1.42 | | | | February 7, 2029 | |
RESTRICTED STOCK AWARDS | | | | | | | | ||||||||||||
Name | | | Number of Shares that Have Not Vested | | | Market Value of Shares That Have Not Vested(1) | | | | ||||||||||
Robert W. Leasure, Jr. | | | | | 23,000(2) | | | | | $ | 109,940 | | | | | ||||
John E. Sagartz, DVM, Ph. D., DACVP | | | | | 8,974(3) | | | | | $ | 42,896 | | | | | ||||
Joseph E. Flynn | | | | | 2,564(3) | | | | | $ | 12,256 | | | | |
Plan Category | | | Number of Securities to be Issued upon Exercise of Outstanding Options | | | Weighted Average Exercise Price of Outstanding Options | | | Number of Securities Remaining Available for Future Issuance under the Equity Compensation Plan* | | |||||||||
Equity compensation plans approved by security holders | | | | | 711,760 | | | | | $ | 2.21 | | | | | | 813,548 | | |
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options | Weighted Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance under the Equity Compensation Plan * | |||||||||
Equity compensation plans approved by security holders | 711,760 | $ | 2.21 | 813,548 |
*
Name | Shares Owned | % | ||||||
Peter T. Kissinger (1) | 1,285,767 | 11.6 | ||||||
Candice B. Kissinger(2) | 1,285,767 | 11.6 | ||||||
John E. Sagartz (4) | 643,885 | 5.8 | ||||||
Estate of Seth W. Hamot (3) | 636,621 | 5.7 | ||||||
Kimberly L. Sagartz (4) | 634,759 | 5.7 | ||||||
Robert Leasure, Jr. (4) | 281,216 | (5) | 2.5 | |||||
Joseph E. Flynn (4) | 131,514 | 1.2 | ||||||
R. Matthew Neff (4) | 72,430 | (6) | * | |||||
Richard A. Johnson, Ph.D. (4) | 69,000 | (7) | * | |||||
Gregory C. Davis, Ph.D. (4) | 44,000 | (8) | * | |||||
9 Executive Officers and Directors as a group | 1,393,546 | 12.5 |
Name | | | Shares Owned | | | % | | ||||||
Peter T. Kissinger(1) | | | | | 1,285,767 | | | | | | 8.1 | | |
Candice B. Kissinger(2) | | | | | 1,285,767 | | | | | | 8.1 | | |
Phillip Bendele(3) | | | | | 837,639 | | | | | | 5.3 | | |
John E. Sagartz(3) | | | | | 648,524 | | | | | | 4.1 | | |
Robert W. Leasure, Jr.(3) | | | | | 289,883(4) | | | | | | 1.8 | | |
R. Matthew Neff(3) | | | | | 78,113(5) | | | | | | * | | |
Richard A. Johnson, Ph.D.(3) | | | | | 74,683(6) | | | | | | * | | |
Gregory C. Davis, Ph.D.(3) | | | | | 49,683(7) | | | | | | * | | |
9 Executive Officers and Directors as a group | | | | | 1,340,741 | | | | | | 8.4 | | |
Shareholders who intend to nominate individuals for election to the Board of Directors must comply with the advance notice provisions specified under the "Director Nominations" section above.
| ANNEX B | | | ![]() | |
By Order
| | | Period January 1, 2019 to June 2, 2019 | | | Year Ended December 31, 2018 | | ||||||
Direct revenue | | | | $ | 66,847 | | | | | $ | 157,782 | | |
Direct expenses: | | | | | | | | | | | | | |
Cost of sales | | | | | (47,393) | | | | | | (115,198) | | |
Selling, general and administrative expenses | | | | | (7,597) | | | | | | (16,176) | | |
Amortization of intangible assets | | | | | (743) | | | | | | (1,826) | | |
Total direct expenses | | | | | (55,733) | | | | | | (133,200) | | |
Direct revenue less direct expenses | | | | $ | 11,114 | | | | | $ | 24,582 | | |
for Special Meeting — November 4, 2021 at 10:00 a.m. The undersigned shareholder(s) appoint(s) Robert Leasure, Jr. and Beth A. Taylor,
Chief Financial Officer, Vice President and each other, with full power of Finance, Secretary
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