UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-39125

IronNet, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (443) 300-6761

(Former Name or Former Address, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 88,718,630 shares of Common Stock, par value $0.0001 per share, outstanding as of December 15, 2021.

EXPLANATORY NOTE

IronNet, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q (this “Amendment No. 1”) to amend its Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on December 15, 2021 (the “Original Form 10-Q”). The purpose of this Amendment No. 1 is to restate the previously issued unaudited condensed consolidated financial statements and related disclosures as of October 31, 2021 and for the three and nine months then ended contained in the Original Form 10-Q (the “Restatement”). See Note 2, “Restatement of Condensed Consolidated Financial Statements” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q/A for additional information. On April 25, 2022, the Company filed a Current Report on Form 8-K disclosing that the financial statements included in the Original Form 10-Q should not be relied upon.



Restatement Background



On April 22, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) of the Company determined, based on the analysis and recommendation of management, that the Company’s unaudited consolidated financial statements and related disclosures included in the Form 10-Q should no longer be relied upon due to an error. The error was the result of the Company not appropriately applying modification accounting to stock-based compensation awards that were issued and outstanding as of August 26, 2021, the closing date of the merger between the Company and IronNet Cybersecurity, Inc. (“Legacy IronNet”). This overstatement relates to stock-based compensation expense for certain of the Company’s outstanding restricted stock units (“RSUs”) granted pursuant to Legacy IronNet’s 2014 Stock Incentive Plan.



When calculating the additional stock-based compensation cost to recognize for modified unvested awards for the three months ended October 31, 2021, the Company considered requisite service rendered by the employee to start from the original vesting commencement date of the award. Upon further evaluation, the Company determined that the correct expense recognition applicable under Accounting Standards Codification Topic 718, Stock Compensation for a Type III (improbable-to-probable) modification requires the use of a method that utilizes the date of modification (August 26, 2021) as the beginning of the requisite service period for unvested portions of the awards outstanding, rather than the original vesting commencement date of the award. The impact of correcting the requisite service period start date is to shift the recognition of stock-based compensation expense to later periods.



In connection with the restatement, the Company has also corrected previously identified immaterial errors. Refer to Note 2, “Restatement of Condensed Consolidated Financial Statements” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q/A for additional information.



A summary of the accounting impacts of these errors to the Company’s unaudited condensed consolidated financial statements and related disclosures as of October 31, 2021 and for the three and nine months then ended is provided in Note 2, “Restatement of Condensed Consolidated Financial Statements,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q/A.



In connection with the restatement, the Company’s management determined that an additional material weakness existed in the Company’s internal control over financial reporting. See additional discussion included in Part I, Item 4 of this Amended Report.

Items Amended in this Amendment No. 1



The Company is filing this Amendment No. 1 to amend and restate the Original Form 10-Q with modification as necessary to reflect the Restatement. The following items have been amended to reflect the Restatement:



•Part I, Item 1, Financial Statements;

•Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations; and

•Part I, Item 4, Controls and Procedures.



Additionally, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including with this Amendment No. 1 currently dated certifications from its Principal Executive Officer and Principal Financial Officer.



Except as described above, this Amendment No. 1 does not amend, update or change any other disclosures in the Original Form 10-Q. In addition, the information contained in this Amendment No. 1 does not reflect events occurring subsequent to the Original Form 10-Q and does not modify or update the disclosures therein, except to reflect the effects of the Restatement.

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IronNet, Inc.

Table of Contents

FORM 10‑Q/A

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

IronNet, Inc.

Condensed Consolidated Balance Sheets

($ in thousands, except share and per share data)

(unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

IronNet, Inc.

Condensed Consolidated Statements of Operations

($ in thousands, except per share data)

(unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

IronNet, Inc.

Condensed Consolidated Statements of Comprehensive Loss

($ in thousands) (unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

IronNet, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Nine Months Ended October 31, 2021 and 2020

($ in thousands, number of preferred stock and common stock in thousands)

(unaudited)