Inotiv, Inc. Announces Second Quarter Fiscal 2021 Financial Results

Inotiv, Inc. Announces Second Quarter Fiscal

2021 Financial Results

IN, May 5, 2021 - Inotiv, Inc. (NASDAQ:NOTV) (the "Company", "We", "Our" or "Inotiv"),

a leading contract research organization specializing in nonclinical and analytical drug discovery and development services,

today announced financial results for the three months ("Q2 FY 2021") and six months ("H1 FY 2021") ended March

Q2 FY 2021 Highlights

H1 FY 2021 Highlights

Significant Events during Q2 FY 2021

Robert Leasure, Jr., the Company's President and

Chief Executive Officer, commented, "To augment acquisitions and anticipated future revenue growth, this quarter we increased our

strategic investment in G&A, including in our people, capacity, infrastructure, systems and services. These growth initiatives, along

with higher unallocated corporate expenses for due diligence, legal support and integration planning related to our purchases of HistoTox

Labs and Bolder BioPATH in April, negatively impacted operating margin in the quarter. Our investments in additional service offerings,

combined with our increased backlog and expected contributions from the two recent acquisitions, position Inotiv for continued growth."

Mr. Leasure concluded, "The last few months

have once again been transformative for our Company. Capping off an 18-month rebranding initiative, we formally changed our corporate

name to Inotiv, Inc. in March, unifying our organization under a client-service oriented culture. We continued to attract and hire best-in-class

talent to our team. And we successfully completed an equity capital raise and debt financing that enabled us to complete two complementary

acquisitions as well as the means to pursue internal expansion initiatives, all of which we believe will drive significant long-term value

for our customers and shareholders. In HistoTox and Bolder BioPATH, we bring two growing organizations with predominantly emerging biopharma

clients into our fold, providing excellent cross selling opportunities. We look forward to enhancing the experience of our combined client

base through a more comprehensive suite of services across the entire drug discovery and preclinical development continuum."

Q2 FY 2021 revenue increased 17.1%

to $18.8 million, from $16.0 million in Q2 FY 2020. The increase in revenue was due to internal growth.

Service segment revenue for Q2 FY 2021 increased

17.8% to $17.9 million, from $15.2 million in Q2 FY 2020. The increase in service revenue was due to internal growth.

Cost of Service revenue as a percentage of Service

revenue decreased to 66.8% in Q2 FY 2021, from 67.2% in Q2 FY 2020. Service gross margin increased to 33.2% in Q2 FY 2021, from 32.8%

Product segment revenue increased 3.4% to $849,000

in Q2 FY 2021, from $821,000 in Q2 FY 2020.

Cost of Product revenue as a percentage

of Product revenue in Q2 FY 2021 decreased to 61.5% from 74.5% in Q2 FY 2020, due to expense reductions implemented in the last half of

FY 2020 and improved margins on existing sales. Product gross margin increased to 38.5% in Q2 FY 2021, from 25.5% in Q2 FY 2020.

Operating expenses increased by 26.2%

or $1.4 million as the Company continued to build the infrastructure for growth, which included additional headcount, recruiting and relocation

expense and investments in research and development, technology, and systems. During the quarter, we announced services that we are bringing

in house such as clinical pathology, cardiovascular safety pharmacology and investments

in software solutions and human resources to support existing internal expertise in the area of SEND (Standard for Exchange of Nonclinical

Data) data management and delivery. In addition, we announced investments being made in laboratory infrastructure and data and

study management technologies through a partnership with Centric Consulting, LLC.

Net loss in Q2 FY 2021 totaled $(723,000),

or $(0.06) per diluted share, compared to a net loss of $(588,000), or $(0.05) per diluted share in Q2 FY 2020.

Adjusted EBITDA of $1.1 million was

consistent with Q2 FY 2021.

H1 FY 2021 revenue increased 26.6%

to $36.6 million, from $28.9 million in H1 FY 2020. The majority of the increase in revenue was due to internal growth, augmented by $1.5

million of incremental revenue from operations at the Company's Fort Collins, CO location, which the Company acquired in December

Service segment revenue for H1 FY 2021 increased

27.8% to $34.9 million, from $27.3 million in H1 FY 2020. The increase in service revenue was due to incremental revenue of $1.5 million

in Q1 FY 2021 attributable to a full six months of Fort Collins, CO, related operations, combined with additional revenue as a result

Cost of Service revenue as a percentage of Service

revenue decreased to 67.3% in H1 FY 2021, from 69.9% in H1 FY 2020. Service gross margin increased to 32.7% in H1 FY 2021, from 30.1%

in H1 FY 2020, reflecting operating leverage and the greater utilization of recently expanded capacity.

Product segment revenue increased 6.6% to $1.7

million in H1 FY 2021, from $1.6 million in H1 FY 2020, reflecting higher sales of Culex in-vivo sampling systems and analytical instruments,

partially offset by a decrease in other instruments.

Cost of Product revenue as a percentage

of Product revenue in H1 FY 2021 decreased to 54.8% from 71.5% in H1 FY 2020, due to expense reductions implemented in the last half of

FY 2020 and improved margins on existing sales. Product gross margin increased to 45.2% in H1 FY 2021, from 28.5% in H1 FY 2020.

Operating expenses increased by 28.6%

or $2.8 million as the Company continued to build the infrastructure for anticipated growth, which included additional headcount, recruiting

and relocation expense, and investments in research and development, technology, and systems

Net loss in H1 FY 2021 totaled $(1.1)

million, or $(0.10) per diluted share, an improvement of $925,000 compared to a net loss of $(2.0) million, or $(0.19) per diluted share

Adjusted EBITDA increased 51.3% to

$2.4 million in H1 FY 2021, from $1.6 million in H1 FY 2020.

Cash Provided by Operating Activities and Financial

As of March 31, 2021, the Company had $2.2 million

in cash and cash equivalents and there was a $0 balance on its $5.0 million available general line of credit.

In April 2021, the Company completed a public

offering of 3,044,117 common shares, including 397,058 common shares sold pursuant to the full exercise of the underwriter of its option

to purchase additional shares to cover over-allotments. The net proceeds after deducting the underwriting discount and offering expenses

payable by the Company were approximately $49.0 million. A portion of the proceeds was used in April 2021 to close the acquisition of

HistoTox Labs and the merger with Bolder BioPATH.

Cash provided by operating activities was $4.5

million in H1 FY 2021, compared to $0.2 million in H1 FY 2020. In H1 FY 2021, cash from operations, cash on hand and $387,000 from a capex

line of credit together funded capital expenditures of $2.4 million for the investment in laboratory equipment to increase capacity at

all locations and facility improvements at the Fort Collins location.

Management will host a conference call on Wednesday,

May 5, 2021, at 4:30 pm ET to discuss Q2 FY 2021 financial results.

Interested parties may participate in the call

The live conference call webcast also will be

accessible in the Investors section of the Company's website, and directly via the following link:

For those who cannot listen to the live broadcast,

an online webcast replay will be available in the Investors section of Inotiv's web site at: https://www.inotivco.com/investors/investor-information/.

Non-GAAP to GAAP Reconciliation

This press release contains financial measures

that are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). The non-GAAP financial

measures are Adjusted EBITDA for the three and six months ended March 31, 2021 and 2020. Adjusted EBITDA as reported herein refers to

a financial performance measure that excludes from net income (loss) income statement line items interest expense and income taxes (benefit)

expense, as well as non-cash charges for depreciation and amortization, stock option (benefit) expense, United Kingdom lease liability

reversal benefit, non-recurring acquisition and integration costs and other non-recurring third-party costs, such as recruiting costs,

consulting fees related to the adoption of two accounting standards, and expenses for rebranding and new website launch.

The non-GAAP financial information should be considered

supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Management, however,

believes that Adjusted EBITDA, when used in conjunction with the results presented in accordance with GAAP, may provide a more complete

understanding of the Company's results and may facilitate a fuller analysis of the Company's results, particularly in evaluating performance

from one period to another.

Management has chosen to provide this supplemental