Cover
Cover - shares | 9 Months Ended | |
Oct. 31, 2023 | Jan. 26, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Fiscal Year Focus | 2023 | |
Document Period End Date | Oct. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39125 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Registrant Name | IronNet, Inc. | |
Entity Tax Identification Number | 83-4599446 | |
Entity Address, Address Line One | 6 Waelchli Ave | |
Entity Address, Address Line Two | #7395 | |
Entity Address, City or Town | Halethorpe | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 22102 | |
Entity Central Index Key | 0001777946 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
City Area Code | 443 | |
Local Phone Number | 300-6761 | |
Entity Common Stock, Shares Outstanding | 121,506,784 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 787 | $ 7,568 |
Accounts Receivable | 234 | 3,373 |
Unbilled receivable | 95 | 717 |
Accounts receivable | 329 | 4,090 |
Inventory | 872 | 2,669 |
Deferred costs | 2,657 | 3,138 |
Prepaid warranty | 1,040 | 1,218 |
Prepaid expenses | 199 | 1,743 |
Other current assets | 1,066 | 818 |
Total current assets | 6,950 | 21,244 |
Deferred costs | 926 | 2,975 |
Property and equipment, net | 5,017 | 5,972 |
Prepaid warranty | 400 | 1,141 |
Operating lease right-of-use assets, net | 1,562 | 1,885 |
Deposits and other assets | 224 | 442 |
Total assets | 15,079 | 33,659 |
Current liabilities: | ||
Accounts payable | 1,001 | 7,287 |
Accrued expenses | 4,411 | 9,973 |
Deferred revenue | 12,929 | 17,180 |
Convertible notes payable | 0 | 8,128 |
Conversion features on convertible notes payable | 0 | 734 |
Income tax payable | 425 | 412 |
Other current liabilities | 0 | 735 |
Total current liabilities | 20,265 | 56,294 |
Deferred revenue | 5,567 | 9,961 |
Other long-term liabilities | 0 | 2,128 |
Total liabilities not subject to compromise | 25,832 | 68,383 |
Liabilities subject to compromise (Note 12) | 40,666 | 0 |
Total liabilities | 66,498 | 68,383 |
Stockholders' equity | ||
Preferred stock, $0.0001 par value; 100,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock; $0.0001 par value; 500,000 shares authorized; 121,507 and 111,466 shares issued and outstanding at October 31, 2023 and January 31, 2023, respectively | 12 | 11 |
Additional paid-in capital | 499,809 | 493,902 |
Accumulated other comprehensive income | 51 | 59 |
Accumulated deficit | (551,291) | (528,696) |
Total stockholders' (deficit) equity | (51,419) | (34,724) |
Total liabilities and stockholders' (deficit) equity | 15,079 | 33,659 |
Related Party [Member] | ||
Current assets | ||
Accounts Receivable | 0 | 0 |
Current liabilities: | ||
Related party notes payable | $ 1,499 | $ 11,845 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Oct. 31, 2023 | Jan. 31, 2023 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 121,507,000 | 111,466,000 |
Common stock, shares outstanding | 121,507,000 | 111,466,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Revenue | $ 4,562 | $ 6,988 | $ 17,354 | $ 20,283 |
Total cost of revenue | 3,832 | 4,289 | 8,838 | 9,272 |
Gross Profit | 730 | 2,699 | 8,516 | 11,011 |
Operating expenses | ||||
Research and development | 1,456 | 6,804 | 7,813 | 27,246 |
Sales and marketing | 1,001 | 7,774 | 4,069 | 27,194 |
General and administrative | 2,965 | 19,723 | 15,262 | 48,742 |
Total operating expenses | 5,422 | 34,301 | 27,144 | 103,182 |
Operating loss | (4,692) | (31,602) | (18,628) | (92,171) |
Interest expense | (915) | (320) | (3,453) | (482) |
Other income | 174 | 493 | 785 | 55 |
Other expense | (65) | (581) | (266) | (995) |
Change in fair value of warrant liabilities | 0 | 3 | 0 | 6 |
Loss before reorganization items | (5,498) | (32,007) | (21,562) | (93,587) |
Reorganization items (Note 13) | 838 | 0 | 838 | 0 |
Loss before income taxes | (6,336) | (32,007) | (22,400) | (93,587) |
Benefit (provision) for income taxes | 1 | (2) | (13) | (6) |
Net loss | $ (6,335) | $ (32,009) | $ (22,413) | $ (93,593) |
Basic and diluted net loss per common share | $ (0.05) | $ (0.3) | $ (0.19) | $ (0.92) |
Basic and diluted net loss per common share | $ (0.05) | $ (0.3) | $ (0.19) | $ (0.92) |
Weighted average shares outstanding, basic and diluted | 123,001 | 105,033 | 118,004 | 101,925 |
Weighted average shares outstanding, basic and diluted | 123,001 | 105,033 | 118,004 | 101,925 |
Product Subscription And Support Revenue [Member] | ||||
Revenue | $ 4,562 | $ 6,674 | $ 17,182 | $ 19,331 |
Total cost of revenue | 3,828 | 4,206 | 8,746 | 8,875 |
Professional Services Revenue [Member] | ||||
Revenue | 0 | 314 | 172 | 952 |
Total cost of revenue | $ 4 | $ 83 | $ 92 | $ 397 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (6,335) | $ (32,009) | $ (22,413) | $ (93,593) |
Foreign currency translations adjustment, net of tax | (14) | 206 | (8) | (58) |
Total Comprehensive loss | $ (6,349) | $ (31,803) | $ (22,421) | $ (93,651) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Convertible Debt [Member] | Cumulative Effect Adjustment for New Accounting Standard | Common Stock | Common Stock Convertible Debt [Member] | Additional Paid-in Capital | Additional Paid-in Capital Convertible Debt [Member] | (Accumulated Deficit)/ Retained Earnings | (Accumulated Deficit)/ Retained Earnings Cumulative Effect Adjustment for New Accounting Standard | Accumulated Other Comprehensive Income |
Beginning Balance at Jan. 31, 2022 | $ 38,443 | $ 9 | $ 455,849 | $ (417,686) | $ 271 | |||||
Beginning Balance (in Shares) at Jan. 31, 2022 | 88,876 | |||||||||
Exercise of stock options and settlement of restricted stock units (share) | 14,847 | |||||||||
Exercise of stock options and settlement of restricted stock units | 272 | $ 1 | 271 | |||||||
Statutory tax withholding related to net-share settlement of restricted stock units (in shares) | (15) | |||||||||
Statutory tax withholding related to net-share settlement of restricted stock units | (91) | (91) | ||||||||
Stock-based compensation | 33,075 | 33,075 | ||||||||
Net loss | (93,593) | (93,593) | ||||||||
Foreign currency translation adjustment | (58) | (58) | ||||||||
Ending Balance at Oct. 31, 2022 | (21,952) | $ 10 | 489,104 | (511,279) | 213 | |||||
Ending Balance (in Shares) at Oct. 31, 2022 | 103,708 | |||||||||
Beginning Balance at Jul. 31, 2022 | (4,707) | $ 10 | 474,547 | (479,270) | 6 | |||||
Beginning Balance (in Shares) at Jul. 31, 2022 | 101,649 | |||||||||
Exercise of stock options and settlement of restricted stock units (share) | 2,059 | |||||||||
Exercise of stock options and settlement of restricted stock units | 66 | 66 | ||||||||
Stock-based compensation | 14,492 | 14,492 | ||||||||
Net loss | (32,009) | (32,009) | ||||||||
Foreign currency translation adjustment | 206 | 206 | ||||||||
Ending Balance at Oct. 31, 2022 | (21,952) | $ 10 | 489,104 | (511,279) | 213 | |||||
Ending Balance (in Shares) at Oct. 31, 2022 | 103,708 | |||||||||
Beginning Balance at Jan. 31, 2023 | (34,724) | $ 182 | $ 11 | 493,902 | (528,696) | $ 182 | 59 | |||
Beginning Balance (in Shares) at Jan. 31, 2023 | 111,466 | |||||||||
Vesting of restricted stock units (Shares) | 1,337 | |||||||||
Issuance of common stock | $ 3,652 | $ 1 | $ 3,651 | |||||||
Issuance of common stock (in Shares) | 8,704 | |||||||||
Stock-based compensation | 2,256 | 2,256 | ||||||||
Net loss | (22,413) | (22,413) | ||||||||
Foreign currency translation adjustment | (8) | (8) | ||||||||
Ending Balance at Oct. 31, 2023 | (51,419) | $ 12 | 499,809 | (551,291) | 51 | |||||
Ending Balance (in Shares) at Oct. 31, 2023 | 121,507 | |||||||||
Beginning Balance at Jul. 31, 2023 | (45,073) | $ 12 | 499,806 | (544,956) | 65 | |||||
Beginning Balance (in Shares) at Jul. 31, 2023 | 120,865 | |||||||||
Vesting of restricted stock units (Shares) | 642 | |||||||||
Stock-based compensation | 3 | 3 | ||||||||
Net loss | (6,335) | (6,335) | ||||||||
Foreign currency translation adjustment | (14) | (14) | ||||||||
Ending Balance at Oct. 31, 2023 | $ (51,419) | $ 12 | $ 499,809 | $ (551,291) | $ 51 | |||||
Ending Balance (in Shares) at Oct. 31, 2023 | 121,507 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (22,413) | $ (93,593) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,535 | 1,815 |
(Gain) Loss on sale of fixed assets | 0 | (11) |
Loss of disposal of fixed assets | 4 | 64 |
Employee stock based compensation | 2,256 | 33,075 |
Change in fair value of warrant liabilities | 0 | (6) |
Change in fair value of conversion options | (734) | 0 |
Change in fair value of commitment fee | 195 | 421 |
Conversion option accretion | 443 | 106 |
Non-cash interest expense | 3,021 | 381 |
Inventory adjustment to net realizable value | 1,772 | 1,372 |
Non-cash reorganization items, net | 125 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,579 | 5,572 |
Deferred costs | 2,531 | (1,105) |
Inventories | 24 | (908) |
Prepaid expenses | 1,544 | 736 |
Other current assets | (443) | (271) |
Prepaid warranty | 920 | (140) |
Deposits and other assets | 538 | 753 |
Accounts payable and accrued expenses | 850 | 2,525 |
Income taxes payable | 13 | (178) |
Other liabilities | 0 | (3) |
Deferred revenue | (8,646) | (3,331) |
Operating lease liability | (452) | (831) |
Net cash used in operating activities | (13,338) | (53,557) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | 0 | (2,100) |
Capitalized software development costs | (583) | 0 |
Proceeds from the sale of fixed assets | 0 | 11 |
Net cash used in investing activities | (583) | (2,089) |
Cash Flows from Financing Activities: | ||
Exercise of stock options and vesting of restricted stock units | 0 | 272 |
Statutory tax withholding related to net-share settlement of restricted stock units | 0 | (91) |
Cash received to fund employee tax obligation for vested RSUs | 77 | 19,607 |
Cash remitted to fund employee tax obligation for vested RSUs | (6,678) | (11,398) |
Cash received for overpayment of tax obligation for vested RSUs | 1,405 | 0 |
Payment of equity line commitment fee | 0 | (1,750) |
Proceeds from issuance of convertible notes | 0 | 10,000 |
Proceeds from issuance of related party debt | 12,350 | 0 |
Proceeds from DIP financing facility | 1,499 | 0 |
Repayment of debt | (1,373) | 0 |
Payment of debt issuance costs | 0 | (284) |
Payment of finance lease obligations | (132) | (96) |
Net cash provided by financing activities | 7,148 | 16,260 |
Effect of exchange rate changes on cash and cash equivalents | (8) | (59) |
Net change in cash and cash equivalents | (6,781) | (39,445) |
Cash and Cash Equivalents | ||
Beginning of the period | 7,568 | 47,673 |
End of the period | 787 | 8,228 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 142 | 0 |
Supplemental disclosures of non-cash investing and financing activities | ||
Non-cash settlement of convertible debt for common stock | $ 3,320 | $ 0 |
Organization and Summary of Cha
Organization and Summary of Changes in Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Organization and Summary of Changes in Significant Accounting Policies | 1. Organization and Summary of Changes in Significant Accounting Policies IronNet, Inc., formerly known as LGL Systems Acquisition Corporation (“Legacy LGL”), was incorporated in the state of Delaware on April 30, 2019 for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. On March 15, 2021, Legacy LGL entered into an Agreement and Plan of Reorganization and Merger (“Merger Agreement”), as amended on August 6, 2021, by and among Legacy LGL, LGL Systems Merger Sub Inc. (the “Merger Sub”) and IronNet Cybersecurity, Inc. (“Legacy IronNet”). On August 26, 2021, the Merger Agreement was consummated and the Merger was completed (the “Merger”). In connection with the Merger, Legacy LGL changed its name to IronNet, Inc., and the New York Stock Exchange (“NYSE”) ticker symbols for its Class A common stock and warrants were changed to “IRNT” and “IRNT.WS” respectively. Throughout the notes to the consolidated financial statements, unless otherwise noted, "we," "us," "our," "IronNet," the "Company," and similar terms refer to Legacy IronNet and its subsidiaries prior to the consummation of the transactions associated with the Merger, and IronNet, Inc. and the Company's subsidiaries after the Merger. Chapter 11 Cases On October 12, 2023 ("Petition Date"), the Company and IronNet Cybersecurity, Inc. ("IronNet Cybersecurity"), the Company’s wholly-owned subsidiary (collectively, the “Debtors”), filed voluntary petitions for reorganization under the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court of Delaware ("Bankruptcy Court") (such cases, the “Chapter 11 Cases”). The Debtors and their subsidiaries continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Chapter 11 Cases are currently jointly administered under the caption In re IronNet, Inc. et al., Case No. 23-11710 (Bankr. D. Del. 2023). The filing of the petitions for the Chapter 11 Cases constituted an event of default under all of the Outstanding Indebtedness (as defined below). Furlough and Temporary Cessation of Business Prior to Voluntary Chapter 11 Filings As previously reported, on September 2, 2023, the Company furloughed almost all of the Company’s employees and substantially curtailed business operations as a result of the Company’s liquidity position. Subsequently, on September 29, 2023, given the unavailability of additional sources of liquidity and after considering strategic alternatives, the Company ceased substantially all of its business activities and terminated the remaining employees of the Company and its subsidiaries. The board of directors of the Company further authorized the Company to take such actions necessary to prepare for and, subject to final approval by the board of directors to be given at a subsequent meeting, file a voluntary petition for relief under the applicable provisions of the Bankruptcy Code in the Bankruptcy Court (the “Bankruptcy Filing”) as expeditiously as possible. The foregoing furlough and cessation of business operations constituted events of default under the Company’s outstanding indebtedness for borrowed money (collectively, the “Outstanding Indebtedness”), including the senior unsecured convertible note issued to 3i, LP ("3i" as discussed below) on September 15, 2022 in the principal amount of approximately $ 4,233 and the other transaction documents entered into in connection therewith, including the Securities Purchase Agreement and Registration Rights Agreement dated September 14, 2022, the various secured promissory notes and the C5 Notes (as defined below) in the aggregate principal amount of approximately $ 15,275 outstanding as of the commencement of the Chapter 11 Cases discussed below, the Director Notes (as defined below) issued in December 2022, April 2023, May 2023 and August 29, 2023 to a total of eight lenders, including seven lenders who are either directors of the Company or entities affiliated with directors of the Company in the aggregate principal amount of approximately $ 8,475 outstanding as of the commencement of the Chapter 11 Cases discussed below, and the amended and restated security agreement related thereto, and the secured promissory note dated July 21, 2023 issued to Korr Acquisitions Group, Inc. in the aggregate principal amount of $ 556 outstanding as of the commencement of the Chapter 11 Cases discussed below (the “Korr Note”). DIP Facility On October 10, 2023, the Debtors, and ITC Global Advisers LLC (“ITC GA”), and/or ITC GA’s designated affiliates and/or related funds or accounts, and such other lender parties that have agreed or may agree from time to time to provide commitments to fund the DIP Facility (as defined below) (the “DIP Facility Lender”) entered into a binding term sheet for debtor-in-possession financing (the “Term Sheet”), which sets forth the principal terms of a superpriority, senior secured debtor-in-possession credit facility (the “DIP Facility”, the credit agreement evidencing the DIP Facility, the “DIP Credit Agreement” and, together with the other definitive documents governing the DIP Facility and the DIP order, collectively, the “DIP Documents”), pursuant to which the DIP Facility Lender would provide the Company with a senior (priming) secured and superpriority debtor-in-possession delayed-draw term loan credit facility in an aggregate principal amount not to exceed $ 10,000 (the “Maximum Facility Amount”), consisting of up to $ 8,500 of term loans (the “DIP Term Loans”) and $ 1,499 of the Bridge Amount (as defined below) (collectively, the “DIP Loans”), subject to the terms and conditions set forth in the Term Sheet. Until the entry of a final order approving the DIP Facility by the Bankruptcy Court, a maximum amount of up to $ 4,500 of the DIP Facility (inclusive of the Bridge Amount) would be available on an interim basis. Upon the execution of the Term Sheet, the DIP Facility Lender had advanced the Bridge Amount of $ 1,499 to the Company. The Bridge Amount is secured by all the assets of the Debtors. As of January 29, 2024, the DIP Facility Lender had advanced an aggregate of $ 9,999 to the Company. AWS Reinstatement In connection with the commencement of the Chapter 11 Cases, the Company filed a number of motions with the Bankruptcy Court. Among these was a motion authorizing the Debtors to enter into a reinstatement agreement with Amazon Web Services, Inc. (“AWS”) in order to reinstate and reactivate the cloud computing services provided by AWS (the “Reinstatement Agreement”), which had been previously terminated by AWS following the Company’s cessation of business activities on September 29, 2023. AWS’s termination of the cloud computing services constituted an event of default under certain of the Company’s contracts. On October 13, 2023, the Bankruptcy Court entered an interim order approving the motion authorizing the Debtors to enter into the Reinstatement Agreement, and the Reinstatement Agreement was executed and delivered by IronNet Cybersecurity and AWS. Pursuant to the Reinstatement Agreement, IronNet Cybersecurity agreed to assume pursuant to Section 365 of the Bankruptcy Code, and agreed to be bound by, all of the terms and conditions of the Reinstatement Agreement and the customer agreement between IronNet Cybersecurity and AWS dated March 30, 2021 (the “AWS Agreement”). Upon payment to AWS of invoice arrearages and the September 2023 invoice on October 13, 2023, AWS reinstated IronNet Cybersecurity’s account and the AWS services pursuant to the AWS Agreement. Further, pursuant to the Reinstatement Agreement, IronNet Cybersecurity will be required to make weekly advance payments to AWS of fees and charges in an amount equal to at least one fourth of the previous month’s fees and charges, subject to certain minimum amounts specified in the Reinstatement Agreement. Pursuant to the Reinstatement Agreement, AWS may suspend the AWS services under the Customer Agreement if IronNet Cybersecurity fails to make the advance payments as required or if it does not pay any invoice in full within two business days of invoice issuance. Rehiring of Certain Employees On October 13, 2023, certain employees were re-hired by the Company in connection with the Chapter 11 proceedings. Hiring subsequently occurred in the ordinary course of business and, as of January 29, 2024, the Company had 28 active employees. First Day Motions On October 13, 2023, the Bankruptcy Court approved a variety of “first day” motions seeking customary relief intended to enable the Debtors to continue ordinary course operations during the Chapter 11 Cases, including the motion relating to the Reinstatement Agreement as described in "— AWS Reinstatement" above and a motion to establish certain procedures to protect any potential value of the Debtor’s net operating loss carryforwards and other tax attributes (the “NOL Motion”). On October 13, 2023, the Bankruptcy Court entered an order approving the NOL Motion on an interim basis. Filing of Joint Plan On November 2, 2023, the Debtors filed a Joint Chapter 11 Plan of Reorganization of IronNet, Inc. and its Debtor Affiliates (as amended, the “Joint Plan”) and a related proposed disclosure statement. On January 18, 2024, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order Confirming the Joint Plan, which approved and confirmed the Joint Plan (the “Confirmation Order”). Among other things, the Joint Plan will result in in all of the Company’s equity securities being automatically cancelled, the issuance of new common equity to holders of certain claims under the Joint Plan, the issuance of certain takeback notes, and the settlement of other claims. The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. Reorganization Accounting Beginning on the Petition Date of the Chapter 11 Cases, the Company applied Financial Accounting Standards Board ("FASB") Codification Topic 852, Reorganizations (“ASC 852”) in preparing the condensed consolidated financial statements. ASC 852 requires the financial statements, for the periods subsequent to the Petition Date and up to and including the period of emergence from Chapter 11 (the “Effective Date”), to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain charges incurred during the bankruptcy proceedings, such as the write-off of unamortized debt issuance costs and premium on debt subject to compromise, legal and professional fees incurred directly as a result of the bankruptcy proceeding are recorded as Reorganization items, net in the condensed consolidated statements of operations and comprehensive loss. In addition, the balance sheet must distinguish between debtor pre-petition liabilities subject to compromise from pre-petition or post-petition liabilities that are not subject to compromise. Liabilities subject to compromise are pre-petition obligations that are not fully secured and have at least a possibility of not being repaid at the full claim amount. These amounts are classified on the condensed consolidated balance sheet as of October 31, 2023 as Liabilities subject to compromise. These liabilities are reported at the amounts expected to be allowed by the Bankruptcy Court, which may differ from the ultimate settlement amounts. Accordingly, the condensed consolidated financial statements for the three and nine months ended October 31, 2023 have been prepared in accordance with ASC 852. Additionally, the Company's condensed consolidated financial statements represent the Debtors and the Company's non-filing entities which are comprised primarily of the Company's international entities. The non-filing entities are not significant to the results of the Company and are not separately presented. These non-debtor subsidiaries are IronNet Australia Pty Ltd, IronNet Cybersecurity Japan, GK, IronNet Cybersecurity Singapore Pte Ltd, , IronNet Cybersecurity, UK, Ltd and IronNet Cybersecurity FZ-LLC. As of October 31, 2023, these entities held liabilities of $ 732 , which are reflected in liabilities not subject to compromise on the condensed consolidated balance sheets. Debtors-In-Possession The Debtors are currently operating as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code. The Debtors have brought and will seek Bankruptcy Court approval of motions designed primarily to mitigate the impact of the Chapter 11 Cases on the Company’s operations, customers and employees. In general, as debtors-in-possession under the Bankruptcy Code, the Debtors are authorized to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Debtors have filed motions with the Bankruptcy Court to authorize the Debtors to conduct their business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing the Debtors to, among other things: (i) pay employees’ wages and related obligations; (ii) pay prepetition claims of certain lien claimants and critical vendors; (iii) continue to operate their cash management system in a form substantially similar to pre-petition practice (iv) continue to maintain and administer certain existing customer programs; (v) pay taxes in the ordinary course; (vi) maintain their insurance program and surety bond program in the ordinary course; (vii) pay utility providers in the ordinary course; and (viii) to use cash collateral. Automatic Stay Subject to certain specific exceptions under the Bankruptcy Code, the petitions for the Chapter 11 Cases automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. Absent an order from the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities are subject to settlement under the Bankruptcy Code. Executory Contracts Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, amend or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with the Debtors in this document, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease of the Debtors, is qualified by any overriding rejection rights the Company has under the Bankruptcy Code. Potential Claims During October 2023, the Debtors (as defined below) filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. These schedules and statements were subject to further amendment or modification after filing. Certain holders of pre-petition claims that are not governmental units were required to file proofs of claim by the deadline for general claims (the “Bar Date”) of December 22, 2023. Certain holders of pre-petition claims that are governmental units are required to file proofs of claim by the bar date of April 9, 2024. As of January 18, 2024, the date of the Confirmation Order, the Debtors received approximately 108 proofs of claim, primarily representing general unsecured claims, for an amount of approximately $ 99,427 . These claims will be reconciled to amounts recorded in the Company’s accounting records. Differences in amounts recorded and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Company may ask the Bankruptcy Court to disallow claims that the Company believes are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In addition, as a result of this process, the Company may identify additional liabilities that will need to be recorded or reclassified to Liabilities subject to compromise. In light of the number of claims filed, the claims resolution process may take time to complete and likely will continue after the Debtors emerge from bankruptcy. Reorganization Items, Net The Debtors have incurred and will continue to incur costs associated with the Chapter 11 Cases and the reorganization under the Joint Plan, primarily related to legal and professional fees. The amount of these costs, which since the Petition Date are being expensed as incurred, are expected to significantly affect the Company’s results of operations. The Company also wrote off $ 125 in pre-petition deferred financing costs and debt discount as of the Petition Date. In accordance with applicable guidance, costs associated with the bankruptcy proceedings have been recorded as Reorganization items, net within the Company's accompanying condensed consolidated statements of operations for the three and nine months ended October 31, 2023. See Note 13, Reorganization items, net. Financial Statement Classification of Liabilities Subject to Compromise The accompanying Consolidated Balance Sheet as of October 31, 2023 includes amounts classified as Liabilities subject to compromise, which represent liabilities the Company anticipates will be allowed as claims in the Chapter 11 Cases. These amounts represent the Debtors’ current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases, and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated, and resolved in connection with the claims resolution process. See Note 12, Liabilities subject to compromise. Lease Termination On November 30, 2023, the Company terminated its lease for its McLean, Virginia headquarters with immediate effect. The Company is seeking to establish a new office lease for a smaller facility more appropriate for the resized company in the Northern Virginia or Maryland area and is in active discussions with potential landlords regarding terms and lease language. This is expected to result in monthly savings for the Company. ROU assets and liabilities associated with this terminated lease in total amount to $ 1,525 and $ 2,150 , respectively. On December 18, 2023, the Company terminated an equipment lease for equipment primarily used to support Q&A and customer support of an older iteration of the IronDefense solution that is no longer in production. This lease was canceled through the Chapter 11 reorganization process, helping to reduce the Company's expenses. ROU assets and liabilities associated with this terminated lease in total amount to $ 77 and $ 82 , respectively. New York Stock Exchange Delisting As previously disclosed, on July 17, 2023, the board of directors of the Company authorized the Company to voluntarily delist each class of its securities (including its warrants) from the New York Stock Exchange. On July 17, 2023, the Company delivered written notice to the New York Stock Exchange of its intention to voluntarily delist each class of its common stock and its redeemable warrants from the New York Stock Exchange. The Company filed a Form 25 with the Securities and Exchange Commission relating to the delisting on July 27, 2023, and the delisting of its securities became effective on August 6, 2023. As a result of the delisting, the Company’s securities are traded on over-the-counter markets. Upon the Effective Date of the Joint Plan, all of the Company’s securities outstanding prior to the Effective Date will be automatically cancelled without further action upon the Effective Date. The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. Letter Agreement with C5 On July 11, 2023, the Letter Agreement (the “Letter Agreement”) executed on June 16, 2023 between the Company and C5 CC Ferrous, LLC, a Delaware limited Liability company, as amended on July 11, 2023 was deemed executed and delivered by the Parties in accordance with its terms. The transactions contemplated by the Letter Agreement have been superseded by the Chapter 11 Cases. Additional Indebtedness On May 19, 2023, the Company issued a secured convertible promissory note in the principal amount of $ 475 to GEN Keith B. Alexander (Ret.). Such note has the same terms with respect to interest rate, maturity and conversion as the secured promissory notes previously issued to GEN Alexander and certain other members of the Board or entities affiliated with members of the Board of Directors and C5. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under this note. Between December 2022 and May 2023, the Company entered into Convertible Secured Promissory Notes, in the aggregate principal amount of $ 20,770 , with certain of its directors and officers and entities affiliated with C5. On June 30, 2023, the Company and the noteholders executed amendments to these notes to extend the maturity dates thereof from June 30, 2023 to December 31, 2023 . As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under these notes. On July 21, 2023, the Company entered into the Korr Note with Korr Acquisitions Group, Inc. In the original principal amount of $ 556 . The Korr Note was issued and funded with original issue discount of $ 55 , which is 9.9 % of the aggregate principal amount of the Korr Note. The unpaid principal amount of the Korr Note bears interest at a rate of 8 % from July 21, 2023, calculated on an actual/360 basis. The Korr Note is secured by receivables owing from time to time to the Company under certain support, solutions or services contract(s), as designated in the Korr Note. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under the Korr Note. On August 23, 2023, the Company received written notice delivered on behalf of 3i pursuant to the 3i Note and the other transaction documents entered into in connection therewith, stating that, among other things, the Company was in purported payment default and purported covenant default under the 3i Note and other transaction documents. Pursuant to such written notice, 3i made a demand for payment within five business days of the written notice of amounts purportedly owed to 3i by the Company as a result of such purported defaults. 3i indicated that it intended to pursue some or all of its rights and remedies against the Company if the Company did not repay the purported outstanding obligations under the 3i Note and the other transaction documents. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under the 3i Note. On August 29, 2023, the Company issued secured promissory notes in an aggregate principal amount of $ 800 (the “August 2023 Notes”) to VADM Jan E. Tighe (Ret.) and Donald R. Dixon, members of the Company’s board of directors. The August 2023 Notes provided that the principal amount thereof was only to be used as follows: first, to satisfy accrued and unpaid employee payroll-related obligations of the Company; second, to pay an amount not to exceed $ 100 on account of employee, contractor or vendor expenses needed in the event the Company determined to prepare and file a bankruptcy proceeding; and third, to pay the premium for the Company’s director and officer tail insurance policy. The August 2023 Notes have a scheduled maturity date one year after issuance and bear interest at the rate of 13.8 % per annum, payable at maturity. The Company’s obligations under the August 2023 Notes are secured by substantially all of the assets of the Company, excluding the Company’s intellectual property. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under these notes. As of January 29, 2024, the Company had $ 4,788 in convertible debt outstanding and $ 23,750 in non-convertible debt outstanding. Securities Litigation On April 22, 2022, a federal securities class action lawsuit was filed by a purported stockholder in the United States District Court for the Eastern District of Virginia (the “Court”). On July 15, 2022, the Court appointed a lead plaintiff for the action, and ordered that the action bear the caption In re IronNet, Inc. Securities Litigation, No. 1:22-cv-004499-RDA-JFA. On August 29, 2022, the lead plaintiff filed an amended complaint on behalf of a proposed class consisting of those who acquired our securities between September 14, 2021 and December 15, 2021. The amended complaint names us, our current Chief Executive Officer, our former co-Chief Executive Officer, and our former Chief Financial Officer as defendants and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“1934 Act”), as amended, for alleged misrepresentations and/or omissions in September 2021 regarding our financial guidance for fiscal year 2022 and a claim under Section 20A of the 1934 Act, as amended, for alleged trading on material nonpublic information by our current Chief Executive Officer. The amended complaint seeks an unspecified amount of damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. On October 26, 2022, the defendants filed a motion to dismiss the amended complaint. On November 30, 2022, the lead plaintiff filed an opposition. On December 21, 2022, the defendants filed a reply in support of the motion to dismiss. The defendants’ motion to dismiss was denied on August 9, 2023. We believe the claims are without merit, intend to defend the case vigorously, and have not recorded a liability related to this lawsuit because, at this time, we are unable to estimate reasonably possible losses or determine whether an unfavorable outcome is probable. Appointment of Certain Director On October 10, 2023, Ivona Smith was elected as a director of the Board of the Company, effective upon the filing of the Chapter 11 Cases. Ms. Smith will serve as an independent director of the Company with respect to the Cases and pursuant to an Independent Director Agreement entered into between Ms. Smith and the Company on October 10, 2023 (the “Independent Director Agreement”). Pursuant to the Independent Director Agreement, Ms. Smith may only be removed as a director of the Company with the prior approval of the Bankruptcy Court. She may otherwise resign as a director at any time, and the Independent Director Agreement will otherwise terminate on the earlier of the effective date of a plan of liquidation of the Company pursuant to Chapter 11 of the Bankruptcy Code or the conversion of the Cases to cases under Chapter 7 of the Bankruptcy Code. Under the Independent Director Agreement, Ms. Smith’s compensation for service on the Board and on committees of the Board will consist of a monthly fee of $ 30 payable in advance each month, with the first monthly fee prorated for only that portion of the month remaining after October 10, 2023. Other than the Independent Director Agreement, there is no agreement or understanding between Ms. Smith and any other person pursuant to which she was selected as a director. Liquidity and Going Concern Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about the Company’s ability to meet our future obligations as they become due within one year of the financial statements being issued in this Quarterly Report on Form 10-Q. As of October 31, 2023, the Company had cash and cash equivalents of $ 787 which is not legally restricted to use, collectable receivables of $ 329 , and accounts payable and accrued expenses not subject to compromise of $ 5,412 , including $ 1,313 due to taxing authorities. In February 2022, the Company entered into an equity line with Tumim Stone Capital, LLC (“Tumim”) under which the Company may, in its discretion, sell shares of its common stock to Tumim subject to various conditions and limitations set forth in the purchase agreement with Tumim. On June 16, 2023, Tumim notified the Company of Tumim’s election to terminate the Purchase Agreement, effective as of June 20, 2023. On September 14, 2022, the Company entered into a Securities Purchase Agreement ("SPA") with 3i, which is an affiliate of Tumim, pursuant to which the Company agreed to sell and issue senior unsecured convertible promissory notes (the "Convertible Notes") to 3i in the aggregate principal amount of up to $ 25,750 . On September 15, 2022, the Company issued a Convertible Note to 3i in the principal amount of $ 10,300 , net of discount for cash proceeds of $ 10,000 . The Company initially borrowed approximately $ 10,300 and issued related Convertible Notes to 3i, including a 3 % Original Issue Discount ("OID"), with an 18-month term. The Company prepaid approximately $ 6,067 of the Convertible Notes to 3i and, as a result, approximately $ 4,233 principal amount of the Convertible Note remained outstanding thereafter. As of the date of this report, the conditions to the additional borrowing have not been met. See Note 9 for additional information. Between December 14, 2022 and September 17, 2023, the Company issued senior secured promissory notes in an aggregate principal amount of $ 8,475 to a total of nine lenders including directors of the Company. Between January 11, 2023 a nd August 31, 2023, the Company issued senior secured convertible promissory notes in the aggregate principal amount of $ 15,275 to entities affiliated with C5 Capital Limited (“C5”), a beneficial owner of more than 5 % of the Company’s outstanding common stock. On July 21, 2023, the Company entered into the Korr Note with Korr Acquisition Group, Inc., in the original principal amount of $ 556 (the "Korr Note"), which was issued and funded with an original issue discount of $ 55 , or 9.9 % of the principal balance. The Company’s future capital requirements will depend on many factors, including, but not limited to the rate of its growth, its ability to attract and retain customers and their willingness and ability to pay for the Company's products and services, and the timing and extent of spending to support its multiple and ongoing efforts to market and continue to develop its products. Further, the Company may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies. The Company needs additional equity or debt financing in order to continue its operations, which it may not be able to raise on terms acceptable to it or at all. If additional funds a |
Revenue
Revenue | 9 Months Ended |
Oct. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. Revenue Product, Subscription and Support Revenue The Company sells a collective defense software solution that is comprised of three product offerings, IronDefense, IronDome, and IronRadar. Through December 2022, the software platform was delivered through both on-premises licenses bundled with on-premises hardware and through subscription software. The Company stopped offering on-premises deployment options in December 2022. The security appliance deliverables include proprietary operating system software and hardware together with regular threat intelligence updates and support, maintenance, and warranty. The Company combines intelligence dependent hardware and software licenses with the related threat intelligence and support and maintenance as a single performance obligation, as it delivers the essential functionality of the cybersecurity solution. The Company recognizes revenue for this single performance obligation ratably over the expected term. Judgment is required for the assessment of material rights relating to renewal options associated with the Company's contracts. Revenue from subscriptions, which allow customers to use the Company's security software over a contracted period without taking possession of the software, and managed services, where the Company provides managed detection and response services for customers, is recognized over the contractual term. The cloud-based subscription revenue, where the Company also provides hosting, recognized for the three months ended October 31, 2023 and 2022 was $ 3,924 and $ 5,651 , respectively, and for the nine months ended October 31, 2023 and 2022 were $ 14,774 and $ 16,069 respectively. Overall product, subscription, and support revenue recognized for the three months ended October 31, 2023 and 2022, were $ 4,562 and $ 6,674 , respectively, and for the nine months ended October 31, 2023 and 2022, was $ 17,182 and $ 19,331 , respectively. Professional Services Revenue The Company sells professional services, including cyber operations monitoring, security, training and tailored maturity assessments. Revenue derived from these services is recognized as the services are delivered. Revenue recognized from professional services for the three months ended October 31, 2023 and 2022, was $ 0 and $ 314 , respectively. Revenue recognized from professional services for the nine months ended October 31, 2023 and 2022, were $ 172 and $ 952 , respectively. Customer Concentration For the nine months ended October 31, 2023, 4 customers accounted for 51 %, or $ 8,932 , of the Company's revenue, and for the nine months ended October 31, 2022, 2 customers accounted for 23 %, or $ 4,534 , of the Company’s revenue. Two customers represented 98 % and 56 % of the total accounts receivable balance as of October 31, 2023 and January 31, 2023, respectively. Customer C elected not to renew the contract with the Company that ended in September 2023. The Company continues to pursue a subsequent contract with Customer C. Significant customers are those which represent at least 10 % of the Company’s total revenue for a period. The following table presents customers that represented 10% or more of the Company’s total revenue in the respective periods: For the Three Months Ended October 31, For the Nine Months Ended October 31, 2023 2022 2023 2022 Customer A 11 % 13 % 11 % 12 % Customer B 13 % 10 % 12 % 11 % Customer C 11 % * 13 % * Customer D 17 % * 15 % * 52 % 23 % 51 % 23 % * - less than 10% Deferred Costs The Company defers contract fulfillment costs that include appliance hardware. The balances in deferred costs are as follows: Balance at February 1, 2023 $ 4,362 Amounts recognized in cost of revenue ( 1,820 ) Costs deferred 120 Balance at October 31, 2023 $ 2,662 Balance at February 1, 2022 $ 4,604 Amounts recognized in cost of revenue ( 9,294 ) Costs deferred 9,640 Balance at October 31, 2022 $ 4,950 Capitalized costs are included in deferred costs on the consolidated balance sheet, of which $ 1,960 is current and $ 702 is long-term as of October 31, 2023. The balance of deferred commissions at October 31, 2023 and January 31, 2023 were $ 921 and $ 1,751 , respectively. Deferred commissions are included in the deferred costs on the condensed consolidated balance sheets, of which $ 697 is current and $ 224 is long-term as of October 31, 2023. Deferred Revenue Deferred revenue represents amounts received from and/or billed to customers in excess of revenue recognized. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue depending on whether the revenue recognition criteria have been met. The balance in deferred revenue is as follows: Balance at February 1, 2023 $ 27,141 Revenue recognized ( 17,354 ) Amounts deferred 8,709 Balance at October 31, 2023 $ 18,496 Balance at February 1, 2022 $ 33,566 Revenue recognized ( 20,283 ) Amounts deferred 16,952 Balance at October 31, 2022 $ 30,235 Of the revenue recognized in the nine months ended October 31, 2023 and 2022, $ 14,641 and $ 13,078 was included in deferred revenue as of January 31, 2023 and 2022, respectively. Remaining Performance Obligations As of October 31, 2023, the remaining performance obligations totaled $ 22,253 .The Company’s recognition of revenue in the future thereon will be in: Years Ending January 31, 2024 (3 months) $ 4,977 2025 13,144 2026 3,593 2027 539 $ 22,253 |
Equity
Equity | 9 Months Ended |
Oct. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Equity | 3. Equity Common Stock As of October 31, 2023, the Company had 500,000 shares of common stock authorized and 121,507 shares of common stock issued and outstanding with a par value of $ 0.0001 per share. Each share of Common Stock has 1 vote. Tumim Common Stock Purchase Agreement On February 11, 2022, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Tumim, pursuant to which Tumim has committed to purchase up to $ 175,000 of common stock (the “Total Commitment”), at the Company's direction from time to time, subject to the satisfaction of the conditions in the Purchase Agreement. Also on February 11, 2022, the Company entered into a registration rights agreement with Tumim (the “Registration Rights Agreement”), pursuant to which the Company filed with the SEC a registration statement to register for resale under the Securities Act (the “ELOC Registration Statement”), the shares of common stock that may be issued to Tumim under the Purchase Agreement. The SEC declared the ELOC Registration Statement effective on March 17, 2022. The sales of common stock to Tumim under the Purchase Agreement, if any, are subject to certain limitations and may occur, from time to time at the Company's sole discretion, over the approximately 36-month period commencing upon the initial satisfaction of all conditions to Tumim’s purchase obligations set forth in the Purchase Agreement (the “Commencement Date”). From and after the Commencement Date, the Company has the right, but not the obligation from time to time to direct Tumim to purchase amounts of common stock, subject to certain limitations in the Purchase Agreement, specified in purchase notices that will be delivered to Tumim under the Purchase Agreement (each such purchase, a “Purchase”). Shares of common stock will be issued from the Company to Tumim at either a (i) 3% discount to the average daily volume weighted average price (the “VWAP”) of the common stock during the three consecutive trading days from the date that a purchase notice with respect to a particular purchase (a “VWAP Purchase Notice”) is delivered from the Company to Tumim (a “Forward VWAP Purchase”), or (ii) 5% discount to the lowest daily VWAP during the three consecutive trading days from the date that a VWAP Purchase Notice with respect to a particular purchase is delivered from the Company to Tumim (an “Alternative VWAP Purchase”). There is no upper limit on the price per share that Tumim could be obligated to pay for the common stock under the Purchase Agreement. The purchase price per share of common stock to be sold in a Purchase will be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction. Pursuant to the terms of the Purchase Agreement, at the time the Purchase Agreement and the Registration Rights Agreement were signed, the Company paid a cash fee of $ 1,750 , or 1 % of the Total Commitment, to Tumim as consideration for its commitment to purchase shares of the Company's common stock under the Purchase Agreement. The cash paid related to the Commitment Fee was recorded in the consolidated statement of cash flows as a financing activity. The Commitment Fee qualifies as a derivative asset under ASC 815-40 Derivatives and Hedging — Contracts in Entity's Own Equity and was established as an asset on the condensed consolidated balance sheet, which will be adjusted over the period of the agreement to reflect fair value, with changes in fair value being recognized as a component of other expense. The Commitment Fee is measured at fair value categorized within Level 3 of the fair value hierarchy and the value derived was not determined to be material. Change in fair value of the Commitment Fee for the nine months ended October 31, 2023 of $ 195 was recognized in other expense in the condensed consolidated statement of operations. As of October 31, 2023, the Commitment Fee has no value. There were no purchases of common stock under the Purchase Agreement during the nine months ended October 31, 2023 and October 31, 2022. On June 16, 2023, Tumim notified the Company of Tumim’s election to terminate the Purchase Agreement, effective as of June 20, 2023. See Note 1, including under the heading “— Liquidity and Going Concern” for additional information. Preferred Stock The Company is authorized to issue 100,000 shares of preferred stock with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At October 31, 2023, there were no shares of preferred stock issued or outstanding. Public Warrants On November 12, 2019, Legacy LGL sold 17,250 units at a price of $ 10.00 per unit (the “Units”) in its Initial Public Offering, which included the full exercise by the underwriters of the over-allotment option to purchase an additional 2,250 units. Each Unit consisted of one share of Legacy LGL Class A common stock, par value $ 0.0001 per share, and one-half of one warrant to purchase one share of Legacy LGL Class A common stock (the “Public Warrants”). Public Warrants may only be exercised for a whole number of shares at a price of $ 11.50 per share. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants became exercisable in September 2021 and will expire five years after the completion of the Merger or earlier upon redemption or liquidation. Once the Public Warrants became exercisable upon the effective date of the Company's S-1 registration statement filed in September 2021, the Company obtained the ability to redeem the Public Warrants: • in whole and not in part; • at a price of $ 0.01 per warrant; • upon not less than 30 days’ prior written notice of redemption; and • if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to adjustment as described below) for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to the warrant holders. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the Warrant Agreement. As of October 31, 2023, the Company had 8,596 Public Warrants outstanding and not exercised. |
Stock Incentive Plan
Stock Incentive Plan | 9 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Incentive Plan | 4. Stock Incentive Plan Legacy IronNet’s Board of Directors adopted, and its stockholders approved Legacy IronNet’s 2014 Stock Incentive Plan (the “2014 Plan”) on September 29, 2014, and on October 17, 2014, respectively. The 2014 Plan was periodically amended, most recently on June 7, 2019. The 2014 Plan permitted the grant of incentive stock options (“ISOs"), non-qualified stock options (“NSOs"), stock appreciation rights, restricted stock, restricted stock units (“RSUs"), and other stock-based awards. ISOs were only able to be granted to Legacy IronNet’s employees and to Legacy IronNet’s subsidiary corporations’ employees. All other awards could be granted to employees, directors and consultants of Legacy IronNet and to any of Legacy IronNet’s parent or subsidiary corporation’s employees or consultants. As of August 26, 2021, the closing date of the Merger, no additional awards will be granted under the 2014 Plan. The terms of the 2014 Plan will continue to govern the terms of outstanding equity awards that were granted prior to the closing date. On August 26, 2021, per the Merger Agreement, the outstanding Legacy IronNet ISO and RSU grants issued under the 2014 Plan were converted to their post-transaction equivalents based on the conversion ratio, totaling 18,972 shares in the Company when exercised or converted. The 2021 Equity Incentive Plan (the “2021 Plan”) was approved by Legacy LGL’s board of directors and by its stockholders on August 26, 2021. Under the 2021 Plan, upon its effectiveness, the Company was able to grant ISOs, RSUs and other equity securities to acquire, to convert into, or to receive up to 13,500 shares of common stock. The terms of the 2021 Plan include an evergreen provision that provides for an automatic share increase on February 1 of each year, in an amount equal to 5.0 % of the sum of (a) the total number of shares of the Company’s common stock outstanding on January 31 of the immediately preceding fiscal year, plus (b) the number of shares of common stock reserved for issuance under the 2021 Plan as of January 31 of the immediately preceding fiscal year, but which have not yet been issued. In accordance with the evergreen provision, on February 1, 2022, the number of shares that can be issued under the 2021 Plan increased by 4,934 shares, and on February 1, 2023, the number of shares that can be issued under the 2021 plan increased by 5,818 shares, with a new limit following the increases of 24,252 shares. As of October 31, 2023, 16,362 share equivalents remained available to issue under the 2021 Plan. Awards under the 2014 Plan and the 2021 Plan (together, the “Stock Incentive Plans”) normally vest over a forty-eight month period, some of which have a first year cliff vest for the first 25 % of their vesting, during which time no vesting occurs. In limited cases, vesting as short as twelve months with no cliff, vesting based on performance criteria and acceleration under certain events have also been permitted; however, such exceptions apply to less than 20 % of the shares underlying awards currently outstanding under the Stock Incentive Plans. Stock Options The exercise price of each stock option granted under the Stock Incentive Plans may not be less than the fair market value per share of the underlying Class A common stock on the date of grant. The Board of Directors establishes the term and the vesting of all options issued under the Stock Incentive Plans; however, in no event will the term exceed ten years . Presented below is a summary of the status of the stock options under the 2014 Stock Incentive Plan , as no stock options have been granted under the 2021 Plan: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Intrinsic Value of Outstanding Options Outstanding at February 1, 2023 530 $ 0.56 3.8 $ 773 Granted - - - - Exercised - - - - Forfeited or expired ( 65 ) 0.36 2.4 - Outstanding at October 31, 2023 465 $ 0.59 3.1 $ — Exercisable at October 31, 2023 465 $ 0.59 3.1 $ — For the three months ended October 31, 2023 and 2022, the Company recorded no compensation cost . For the nine months ended October 31, 2023 and 2022, the Company recorded no compensation cost and an insignificant amount of compensation cost related to stock option s, respectively. The fair value of the shares under stock options granted that vested during the nine month periods ended October 31, 2023 and 2022 totaled $ 0 and $ 2 , respectively. Stock compensation expense for stock options is recognized on a straight line basis and with a provision for forfeitures matched to historical experience for matured grant cohorts. At October 31, 2023, there was no unrecognized compensation cost related to unvested stock options. The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted. The Black-Scholes model takes into account the fair value of an ordinary share and the contractual and expected term of the stock option, expected volatility, dividend yield, and risk-free interest rate. Prior to becoming a public company, the fair value of the Company’s common stock was determined utilizing an external third-party pricing specialist. The contractual term of the option ranges from the one to ten years. Expected volatility is the average volatility over the expected terms of comparable public entities from the same or similar industry as a substitute for the historical volatility of the Company’s common shares, which is not determinable without an active external or internal market. The risk-free interest rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has not historically distributed dividends and does not expect to distribute any dividends. Restricted Stock Units In addition to the applicable time or performance-based vesting criteria, the RSUs granted under the 2014 Plan contained an additional vesting requirement that required the occurrence of a liquidity event. On August 26, 2021, the date of the Merger, the Board of Directors resolved that the Merger constituted a liquidity event, which triggered the liquidity event criteria for vesting under then outstanding RSU awards. As the closing of the Merger represented the satisfaction of the liquidity event vesting requirement for outstanding RSUs, and vesting was not probable until that time, all RSUs issued prior to the completion of the Merger were re-valued at the date of the Merger using the closing share price on that date. All RSUs were assigned a fair value of $ 12.85 per share. Subsequent to the closing of the Merger, the fair value of RSUs is based on the fair value of the Company’s common stock on the date of the grant or any further modification. Presented below is a summary of the status of outstanding RSUs: Number of Shares Weighted Average Grant Date Fair Value Non-vested at February 1, 2023 4,361 $ 6.76 Granted 28 0.21 Vested ( 1,223 ) 2.31 Forfeited or expired ( 3,134 ) 5.26 Non-vested at October 31, 2023 32 $ 8.18 For the three months ended October 31, 2023, the Company recorded $ 3 of stock-based compensation expense, net of ac tual forfeitures, related to RSUs, of which ($ 376 ) is associated with RSUs on a graded vesting schedule and $ 380 is associated with RSUs on a straight -line vesting schedule. For the nine months ended October 31, 2023, the Company recorded $ 2,252 of stock-based compensation expense, net of ac tual forfeitures, related to RSUs, of which ($ 713 ) is associated with RSUs on a graded vesting schedule and $ 2,965 is associated with RSUs on a straight -line vesting sch edule. For the three months ended October 31, 2022, the Company recorded $ 14,495 of stock-based compensation expense, net of actual forfeitures, related to RSUs, of which $ 2,684 is associated with RSUs on a graded vesting schedule and $ 11,811 is associated with RSUs on a straight-line vesting schedule. For the nine months ended October 31, 2022, the Company recorded $ 33,075 of stock-based compensation expense, net of actual forfeitures, related to RSUs, of which $ 15,630 is associated with RSUs on a graded vesting schedule and $ 17,445 is associated with RSUs on a straight-line vesting schedule. Stock compensation expense for RSUs granted under the 2014 Plan, which contain both service and performance conditions, is recognized on a graded-scale basis, recognizing expense over the respective vesting period for each tranche of shares under each award granted. Stock compensation expense for RSUs granted under the 2021 Plan, which have only service vesting conditions, is recognized on a straight-line basis over the vesting period. In the event that an RSU holder is terminated before the award is fully vested for RSUs granted under either Plan, the full amount of the unvested portion of the award will be recognized as a forfeiture in the period of termination. The Company's default tax withholding method for RSUs is the sell-to-cover method, under which shares with a market value equivalent to the tax withholding obligation are sold on behalf of the holder of the RSUs upon vesting and settlement to cover the tax withholding liability and the cash proceeds from such sales are then remitted by the Company to taxing authorities. As of September 30, 2023, all employees of the Company were terminated, which resulted in the cancellation of unvested RSUs. However, the RSUs issued to board members remained outstanding. As of October 31, 2023, the unrecognized compensation cost related to unvested RSUs without performance obligations is $ 214 . The weighted average remaining vesting period was 2.13 years. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 31, 2023 | |
Fair Value Measurements | 5. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset in an orderly transaction or paid to settle a liability in an orderly transaction between market participants at the measurement date. Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Observable inputs other than quoted prices that are either directly or indirectly observable for the asset or liability. Level 3 – Unobservable inputs that are supported by little or no market activity. These levels are not necessarily an indication of the risk of liquidity associated with the financial assets or liabilities disclosed. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement, as required under ASC 820-10 “Fair Value Measurement.” On September 15, 2022, the Company issued the Convertible Note. Pursuant to the terms of the Convertible Note, under certain circumstances the Company may be required to redeem all or a portion of the Convertible Note in cash. The convertible feature is measured at fair value categorized within Level 3 of the fair value hierarchy, with the fair value determined to be $ 774 on the date of issuance, which was determined to not be material. The fair value of the convertible feature was determined based on management assumptions and quotes received from financial institutions for obtaining additional debt financing. As of January 31, 2023, the convertible feature had a value of $ 671 and as of October 31, 2023, the convertible feature has no value. The Company recognized non-cash income of $ 167 and $ 671 related to the change in fair value of the convertible feature during the three and nine months ended October 31, 2023, respectively. During the fiscal year ended January 31, 2023, the Company issued two senior secured convertible promissory notes to C5 in the amount of $ 5,000 . During the nine months ended October 31, 2023, the Company issued additional senior secured promissory notes to C5 in the amount of $ 10,275 . These senior secured convertible promissory notes all may require the Company to convert all or a portion of the principal and accrued and unpaid interest into shares of redeemable stock at the option of the holder up to five calendar days prior to maturity. The convertible feature is measured at fair value categorized within Level 3 of the fair value hierarchy, with the fair value of the convertible feature related to the two senior secured convertible promissory notes issued during the year ended January 31, 2023 determined to be $ 63 . The convertible feature related to the senior secured convertible promissory notes during the nine months ended October 31, 2023 was determined to have a nominal value at issuance. The Company made this determination using a Black-Scholes option-pricing model. The Company recognized non-cash income of $ 0 and $ 63 related to the change in fair value of the convertible features during the three and nine months ended October 31, 2023, respectively. During the fiscal year ended January 31, 2023, the Company established a derivative asset related to the Commitment Fee incurred when entering into the Securities Purchase Agreement with 3i, which is measured at fair value categorized within Level 3 of the fair value hierarchy, with the value determined to not be material. As of October 31, 2023, the Commitment Fee has no value. The Company’s Private Warrants have similar terms and are subject to substantially the same redemption features as the Public Warrants, as the transfer of a Private Warrant to anyone who is not a permitted transferee would result in the Private Warrant being converted to a Public Warrant. The Company determined that the fair value of each Private Warrant is equivalent to that of a Public Warrant. There have been observable transactions in the Company's Public Warrants and the Public Warrants had adequate trading volume between independent investors on the public market to provide a reliable indication of value. As of October 31, 2023 and 2022, the fair value of the Private Warrants was equal to that of the Public Warrants as they had substantially the same terms. However, as they are not actively traded, they are listed as a Level 2 in the fair value hierarchy table below. Investments with an original maturity of three months or less at the date of purchase are considered cash equivalents, while all other investments are classified as short-term or long-term based on their maturities and their availability for use in current operations. The following table presents our assets measured at fair value on a recurring basis: October 31, 2023 January 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 6 $ — $ — $ 6 $ 6 $ — $ — $ 6 Commitment Fee $ — $ — $ — $ — $ — $ — $ 195 $ 195 Total financial assets $ 6 $ — $ — $ 6 $ 6 $ — $ — $ 201 Liabilities $ — Warrants $ — $ — $ — $ — $ — $ — $ — $ — Conversion options $ — $ — $ — $ — $ — $ — $ 734 $ 734 Total financial liabilities $ — $ — $ — $ — $ — $ — $ 734 $ 734 The following table presents a summary of the changes in the fair value of the Company's Level 3 financial instruments during the nine months ended October 31, 2023 and 2022: Convertible Notes Derivative Liability C5 Notes Derivative Liability Commitment Fee Derivative Asset Fair Value as of January 31, 2023 $ 671 $ 63 $ 195 Change in fair value ( 671 ) ( 63 ) ( 195 ) Fair value as of October 31, 2023 $ - $ - $ - Fair Value as of January 31, 2022 $ - $ - $ - Change in fair value 774 - 1,330 Fair value as of October 31, 2022 $ 774 $ - $ 1,330 |
Supplemental Information
Supplemental Information | 9 Months Ended |
Oct. 31, 2023 | |
Disclosure Text Block [Abstract] | |
Supplemental Balance Sheet Information | 6. Supplemental Balance Sheet Information Accrued Expenses Accrued expenses consisted of the following: October 31, January 31, 2023 2023 Accrued expenses $ 4,150 $ 976 Taxes payable on behalf of employees related to vested RSUs 265 6,987 Estimated additional taxes payable related to vested RSUs 1,048 - Unvouched payables 1,215 2,010 Accrued expenses 6,678 9,973 Accrued expenses subject to compromise (Note 12) ( 2,267 ) - Accrued expenses not subject to compromise 4,411 9,973 The balance of accrued expenses as of October 31, 2023 and January 31, 2023 includes cash proceeds from the sale of shares on behalf of the holders of vested RSUs to cover the associated tax withholding liability under the sell-to-cover method. The Company made payments of $ 6,335 to the Internal Revenue Service ("IRS") during May 2023 to cover the portion owed to taxing authorities. In September 2023, a refund of $ 1,405 was received for overpayment of taxes due. The $ 2,267 of accrued expenses subject to compromise consists of $ 69 in accrued expenses and $ 2,198 in accrued interest on debt subject to compromise. See Note 12 for additional information. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies In the ordinary course of business, the Company and its subsidiaries may become defendants in certain shareholder claims and other litigation. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. To date, no such liability has been recorded. |
Leases
Leases | 9 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Leases | 8. Leases The Company leases office space under the terms of noncancelable operating leases that expire at various dates through November 2026. Certain operating lease agreements provide for an annual 2.75 % escalation of the base rent. The Company is also responsible for operating expenses, which are classified as variable lease costs. Lease terms may include options to extend or terminate the lease, typically at the Company’s own discretion. Renewal options are regularly evaluated and the renewal period will be included in the lease term when exercise of the renewal option is considered reasonably certain. There are no active leases that have a renewal option that is reasonably certain of being exercised. The Company holds leases that include both lease (e.g., payments including rent, taxes, and insurance costs) and non-lease components (e.g., common-area or other maintenance costs). As the Company has elected the practical expedient to group lease and non-lease components for all leases, these are accounted for as a single lease component. The Company's leases do not include any residual value guarantees or material restrictive covenants. Lease expense for both operating and finance leases is recognized on a straight-line basis over the lease term and is recorded in operating expenses on the consolidated statements of operations. Interest expense incurred on finance lease liabilities is calculated using the effective interest method and is recorded in interest expense on the consolidated statements of operations. The lease balances are located in the following positions on the consolidated balance sheet. Balance Sheet Location October 31, 2023 January 31, 2023 Assets Operating Operating lease right-of-use assets, net $ 1,562 $ 1,885 Financing Property and equipment, net 108 205 Liabilities Current Operating Other current liabilities $ 653 $ 607 Financing Other current liabilities 37 130 Non-current Operating Other long-term liabilities 1,549 2,047 Financing Other long-term liabilities 51 81 The ROU liabilities are subject to compromise at October 31, 2023. See Note 12 for further information. Total lease costs for the three and nine months ended October 31, 2023 and 2022 were: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended October 31, 2023 October 31, 2022 October 31, 2023 October 31, 2022 Operating lease cost $ 146 $ 222 $ 437 $ 815 Short-term lease cost 359 447 985 1,630 Variable lease cost 51 13 29 60 Finance lease cost: Amortization of right-of-use assets 32 23 65 68 Interest on lease liabilities 4 1 7 4 Total finance lease cost $ 36 $ 24 $ 72 $ 72 The following table summarizes future scheduled lease payments as of October 31, 2023: Operating Leases Finance Leases Remaining three months of fiscal year 2024 189 12 2025 775 48 2026 797 45 2027 658 - Total $ 2,419 $ 105 Less: Imputed Interest 217 17 Present value of net lease payments $ 2,202 $ 88 Lease liability, current portion 653 37 Lease liability, net of current portion 1,549 51 Total lease liability $ 2,202 $ 88 Supplemental information and non-cash activities related to operating and finance leases as of October 31, 2023 and 2022 are as follows: Cash paid for amounts included in the measurement of lease liabilities as of October 31, 2023 Operating cash flows from operating leases $ 566 Operating cash flows from finance leases 11 Financing cash flows from finance leases 36 $ 612 Weighted average remaining lease term (in years) Operating leases 3.08 Finance leases 2.25 Weighted average discount rate Operating leases 6.36 % Finance leases 13.80 % Cash paid for amounts included in the measurement of lease liabilities as of October 31, 2022 Operating cash flows from operating leases $ 950 Operating cash flows from finance leases 4 Financing cash flows from finance leases 96 $ 1,050 Weighted average remaining lease term (in years) Operating leases 4.08 Finance leases 1.25 Weighted average discount rate Operating leases 6.36 % Finance leases 5.67 % On November 30, 2023, the Company terminated the lease for and vacated its McLean, Virginia headquarters. See Note 15, Subsequent Events, for additional information. |
Debt
Debt | 9 Months Ended |
Oct. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt 5% Convertible Promissory Notes due 2024 On September 14, 2022, the Company entered into the SPA with 3i, under which the Company agreed to sell and issue Convertible Notes to 3i in an aggregate principal amount of up to $ 25,750 , which are convertible into shares of the Company's common stock, subject to certain conditions. On September 15, 2022, the Company issued a Convertible Note under the SPA in the principal amount of $ 10,300 , including a 3 % Original Issue Discount ("OID"), with an 18-month term. The Company prepaid approximately $ 6,067 of the Convertible Notes to 3i and, as a result, approximately $ 4,233 principal amount of the Convertible Note remained outstanding thereafter. As of the date of this report, the conditions to the additional borrowing have not been met. See Note 15, Subsequent Events, for additional information, including with respect to events of default under the Convertible Notes. The Convertible Notes bear interest at an annual rate of 5.00 % per annum, payable monthly on the first of each month (the "Installment Date"), beginning the first month that is 90 days following the issuance date, payable in cash and/or shares of the Company's common stock, at the Company's option. The interest rate will increase to an annual rate of 10.00 % per annum upon the occurrence and during the continuance of an event of default as defined in the Convertible Notes. Each Convertible Note issued pursuant to the SPA will have a maturity date of 18 months from the date of issuance, which may be extended at the option of 3i in certain instances. The Convertible Notes provide a conversion right pursuant to which 3i may convert any portion of the principal, together with any unpaid interest and other unpaid amounts, into shares of common stock at a conversion price of $ 7.50 per share, subject to adjustments in accordance with the terms of the Convertible Notes. The Convertible Note also contains provisions that provide 3i with the right, subject to certain exceptions, to require the Company to redeem all or a portion of the Convertible Note in cash. This convertible feature has been bifurcated from the host contract and accounted for separately as a derivative. The bifurcation of the embedded derivative created a debt discount of $ 774 which reduced the book value of the $ 10,300 Convertible Note and increases prospectively the amount of interest expense to be recognized over the life of the Convertible Note. Due to the provisions that may provide 3i with the right to require the Company to redeem all or a portion of the Convertible Note in cash, the balance of the Convertible Note is included in current liabilities on the consolidated balance sheet. As of October 31, 2023, the fair value of the Convertible Notes was approximately $ 2,934 based on Level 3 inputs. On each monthly Installment Date, the Company shall repay the lesser of $ 687 and the principal amount then outstanding, plus accrued and unpaid interest, in cash and/or shares of common stock, at the Company’s option (the "Installment Amount"). In certain instances, but no more than once per calendar month, 3i will also have the right to accelerate the repayment of one monthly repayment obligation based on the conversion price on the acceleration date. For any Installment Amount paid in the form of shares of common stock, the applicable conversion price will be equal to the lesser of (a) $ 7.50 , and (b) the greater of (x) 95 % of the lowest VWAP in the five trading days immediately prior to such conversion, and (y) a “floor price” of approximately $ 0.44 , subject to adjustment in accordance with the terms of the Convertible Notes. For any Installment Amount paid in cash, the price paid will be equal to 105 % of the Installment Amount. The proceeds received from the Convertible Notes were used to fund general corporate and working capital needs. During the nine months ended October 31, 2023, the Company paid two of the Installment Amounts due in cash and elected to pay $ 3,320 of the principal balance, along with $ 332 in accrued interest, through the issuance of common stock, which resulted in the issuance of 8,704 shares of common stock. As of October 31, 2023, the effective interest rate on the Convertible Notes was 16.79 %. The Company failed to pay Installment Amounts in December 2022 and April 2023, then from July 2023 through October 2023, which qualifies as an event of default per the Convertible Notes, and has resulted in the Company incurring interest at a rate of 10.0 % per annum since the original event of default. Interest expense for the three months ended October 31, 2023 related to the Convertible Notes was $ 200 , which was a result of effective interest of $ 67 incurred under the $ 10,300 Convertible Note, as well as $ 57 in interest expense related to the amortization of related debt issuance costs and OID and $ 76 of interest expense related to the accretion of the debt discount created by the embedded conversion feature. Interest expense for the nine months ended October 31, 2023 related to the Convertible Notes was $ 1,239 , which was a result of effective interest of $ 559 incurred under the $ 10,300 Convertible Note, as well as $ 292 in interest expense related to the amortization of related debt issuance costs and OID and $ 388 of interest expense related to the accretion of the debt discount created by the embedded conversion feature. Interest expense is included in interest expense in the condensed consolidated statement of operations. As a result of the Court issued Automatic Stay and in accordance with ASC 852, Reorganizations, we have accrued interest expense on the Convertible Note only up to the Petition Date. As a result of the Chapter 11 Cases, the Company wrote off the balance of debt issuance costs and OID, including the debt discount created by the embedded conversion feature, for a total amount of $ 118 . The outstanding principle amount of $ 4,233 , as well as accrued and unpaid interest of $ 22 , was reclassified as liabilities subject to compromise as of October 12, 2023. See Note 12 for additional information. Promissory Notes with Directors In December 2022, the Company issued and sold secured promissory notes in an aggregate principal amount of $ 6,900 (the “Initial Director Notes”) to a total of eight lenders, including seven lenders who are either directors of the Company or entities affiliates with directors of the Company. At the time of issuance of the Initial Directors Notes, each of the holders of the Director Notes executed a Security Agreement, under which the Company’s obligations under the Initial Director Notes were secured by substantially all of the assets of the Company, excluding the Company’s intellectual property. The Director Notes, together with the C5 Notes described below, rank senior in right of payment to any of the Company’s existing and future indebtedness for borrowed money. On January 11, 2023, the Company and the holders agreed to amend and restate the Initial Director Notes to be substantially in the form of the secured promissory notes issued to C5 and discussed below (the “Director Notes”). As amended and restated, the Director Notes bear interest at a rate of 13.8 % per annum from the respective dates of the Initial Director Notes. On April 20, 2023, the Company issued and sold an additional Director Note in the amount of $ 300 to one of the initial lenders from the December 2022 issuances who is not affiliated with the board of directors. Upon issuance of the Director Notes, each of the holders executed an Amended and Restated Security Agreement which secure the Company’s obligations under the Director Notes by substantially all of the assets of the Company, excluding the Company’s intellectual property. The proceeds received from the Director Notes will be used to fund general corporate and working capital needs, including for purposes of remitting amounts due to taxing authorities for tax withholdings received for RSUs settled under the sell-to-cover method. On May 19, 2023, the Company issued a secured convertible promissory note in the principal amount of $ 475 to GEN Keith B. Alexander (Ret.). Such note has the same terms with respect to interest rate, maturity and conversion as the secured promissory notes previously issued to GEN Alexander and certain other members of the Board or entities affiliated with members of the Board of Directors and C5. On June 30, 2023, the Company and the noteholders executed amendments to these notes to extend the maturity dates thereof from June 30, 2023 to December 31, 2023. On August 29, 2023, the Company issued secured promissory notes in an aggregate principal amount of $ 800 (the “August 2023 Notes”) to VADM Jan E. Tighe (Ret.) and Donald R. Dixon, members of the Company’s board of directors. The August 2023 Notes provided that the principal amount thereof was only to be used as follows: first, to satisfy accrued and unpaid employee payroll-related obligations of the Company; second, to pay an amount not to exceed $ 100 on account of employee, contractor or vendor expenses needed in the event the Company determined to prepare and file a bankruptcy proceeding; and third, to pay the premium for the Company’s director and officer tail insurance policy. The August 2023 Notes have a scheduled maturity date one year after issuance and bear interest at the rate of 13.8 % per annum, payable at maturity. The Company’s obligations under the August 2023 Notes are secured by substantially all of the assets of the Company, excluding the Company’s intellectual property. As of October 31 2023, there is $ 8,475 in Director Notes outstanding. The outstanding principle amount, along with accrued and unpaid interest of $ 859 was reclassified as liabilities subject to compromise as of October 12, 2023. See Note 12 for additional information. As of October 31, 2023, the fair value of the Director Notes was approximately $ 5,875 based on Level 3 inputs. Interest expense for the three and nine months ended October 31, 2023 was $ 228 and $ 732 and is included in interest expense in the condensed consolidated statement of operations. As a result of the Court issued Automatic Stay and i n accordance with ASC 852, the Company has accrued interest expense on the BOD Notes only up to the Petition Date. Convertible Promissory Notes with C5 On December 30, 2022, the Company issued a secured convertible promissory note in the principal amount of $ 2,000 (the “Initial C5 Note”) to an affiliate of C5, which was amended and restated on January 11, 2023 (as amended and restated, the “Restated C5 Note”). The Company issued additional senior secured convertible promissory notes to affiliates of C5 (together with the Restated C5 Note, the “C5 Notes”) in total principal amounts of $ 3,000 in fiscal 2023, $ 6,845 during the three months ended April 30, 2023, $ 3,030 during the three months ended July 31, 2023, and $ 400 during the three months ended October 31, 2023. Each of the C5 Notes bear interest at an annual rate of 13.8 % per annum from the date of issuance (or in the case of the Restated C5 Note, from the date of the Initial C5 Note), and were originally payable at scheduled maturity on June 30, 2023 , subject to acceleration in certain circumstances. On June 30, 2023, the Company and the noteholders executed amendments to these notes to extend the maturity dates thereof from June 30, 2023 to December 31, 2023. The C5 Notes, together with the Director Notes, rank senior in right of payment to any of the Company’s existing and future indebtedness for borrowed money. The Company’s obligations under the C5 Notes are secured by substantially all of the assets of the Company, excluding the Company’s intellectual property, as governed by an Amended and Restated Security Agreement executed by C5 on January 4, 2023.The C5 Notes provide C5 with the right, at any time on or after the date that is five calendar days prior to maturity, to convert all or any portion of the aggregate principal amount of the C5 Notes, together with any accrued and unpaid interest and any other unpaid amounts, into shares of the Company’s common stock, par value $ 0.0001 per share, at a conversion price of $ 2.00 per share. In the event that any shares of common stock are issued upon conversion of the C5 Notes, the Company has agreed to grant specified registration rights to C5. The convertible feature included within the C5 Notes issued through January 31, 2023 was bifurcated from the host contract and accounted for separately as a derivative. The bifurcation of the embedded derivative created a debt discount of $ 63 , which reduced the book value of the $ 5,000 C5 Notes outstanding at January 31, 2023 and increases prospectively the amount of interest expense to be recognized over the life of the C5 Notes. The convertible features for the C5 Notes issued during the nine months ended October 31, 2023 were determined to have no value and were not bifurcated from the host contract as separate derivatives. Refer to Note 5 for more information. The proceeds received from the C5 Notes have been used to fund general corporate and working capital needs. As of October 31, 2023, the fair value of the C5 Notes is approximately $ 10,520 based on Level 3 inputs. Interest expense related to the C5 Notes for the three and nine months ended October 31, 2023 was $ 423 and $ 1,316 . The Company also recognized interest expense of $ 0 and $ 55 related to the accretion of the debt discount created by the embedded conversion feature included within the C5 Notes issued during the three and nine months ended October 31, 2023, respectively, which is included in interest expense in the condensed consolidated statement of operations. As a result of the Court issued Automatic Stay and i n accordance with ASC 852, the Company has accrued interest expense on the C5 Notes only up to the Petition Date. As of October 31, 2023, the Company had issued secured convertible promissory notes to C5 in the amount of $ 15,275 . The outstanding principle amount, along with accrued and unpaid interest of $ 1,307 was reclassified as liabilities subject to compromise as of October 12, 2023. See Note 12 for additional information. Korr Note On July 21, 2023, the Company entered into the Korr Note with Korr Acquisitions Group, Inc. in the original principal amount of $ 556 . The Korr Note was issued and funded with original issue discount of $ 55 , which is 9.9 % of the aggregate principal amount. The Korr Note bears interest at a rate of 8 % from July 21, 2023, calculated on an actual/360 basis. The Korr Note is payable upon the earlier of October 21, 2023 and the time at which the Company receives all amounts payable under certain covered agreements and is secured by receivables owing from time to time to the Company under those certain support, solutions or services contract(s), as designated in the Korr Note. The proceeds received from the Korr Note were used to fund general corporate and working capital needs. As of October 31, 2023, the fair value of the Korr Note is approximately $ 347 based on Level 3 inputs. As of October 31, 2023, the effective interest rate on the Korr Note was 50.71 %. I nterest expense related to the Korr Note for the nine months ended October 31, 2023 was $ 59 , which was a result of effective interest of $ 10 incurred under the Korr Note, as well as $ 49 in interest expense related to the amortization of related OID, which is included in interest expense in the condensed consolidated statement of operations. I nterest expense related to the Korr Note for the three months ended October 31, 2023 was $ 53 , which was a result of effective interest of $ 8 incurred under the Korr Note, as well as $ 44 in interest expense related to the amortization of related OID, which is included in interest expense in the condensed consolidated statement of operations. As a result of the Court issued Automatic Stay and in accordance with ASC 852, the Company has accrued interest expense on the Korr Note only up to the Petition Date. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under the Korr Note. As a result of the Chapter 11 Cases, the Company wrote off the balance of OID of $ 6 . The outstanding principle amount, along with accrued an unpaid interest of $ 10 , was reclassified as liabilities subject to compromise as of October 12, 2023. See Note 12 for additional information. DIP Facility On October 10, 2023, the Debtors, and the DIP Facility Lender entered into a Term Sheet, which sets forth the principal terms of the DIP Documents, pursuant to which the DIP Facility Lender would provide the Company with a Maximum Facility Amount not to exceed $ 10,000 , consisting of up to $ 8,500 of DIP Term Loans and $ 1,499 of the Bridge Amount, subject to the terms and conditions set forth in the Term Sheet. Until the entry of a final order approving the DIP Facility by the Bankruptcy Court, a maximum amount of up to $ 4,500 of the DIP Facility (inclusive of the Bridge Amount) would be available on an interim basis. As of October 31, 2023, the DIP Facility Lender advanced the Bridge Amount of $ 1,499 to the Company. The Bridge Amount is secured by all the assets of the Debtors. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate as adjusted for discrete items arising in that quarter. The effective income tax rate was ( 0.1 %) and 0.00 % fo r the nine months ended October 31, 2023 and 2022, respectively. The effective tax rate differs from the U.S. statutory rate primarily due to the full valuation allowances on the Company’s net domestic deferred tax assets and impact of foreign tax rate differential. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions Product, subscription and support revenue from Related Parties Certain investors and companies who the Company is affiliated with purchased software, subscription and support revenue during the periods presented and the contracts with related parties ended in October 2022. There was no revenue from contracts with related parties recognized for the three and nine months ended October 31, 2023. The Company recognized $ 210 and $ 948 of revenue from contracts with related parties for the three and nine months ended October 31, 2022, respectively. There is no receivable balance as of October 31, 2023. The corresponding receivable was $ 0 as of January 31, 2023 after the Company recorded an allowance for bad debt of $ 1,283 . Indebtedness and Other Transactions See Note 1 and Note 9 for additional information relating to indebtedness held by certain affiliates of the Company, including the BOD Notes, C5 Notes, and the Korr Note. |
Liabilities Subject to Compromi
Liabilities Subject to Compromise | 9 Months Ended |
Oct. 31, 2023 | |
Liabilities Subject to Compromise [Abstract] | |
Liabilities Subject to Compromise | 12. Liabilities Subject to Compromise As discussed in Note 1. Organization and Summary of Changes in Significant Accounting Policies, since the Petition Date, the Company has been operating as debtor in possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. On the accompanying condensed consolidated balance sheet, the caption “Liabilities subject to compromise” reflects the expected allowed amount of the pre-petition claims of the debtor entities that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. On January 18, 2024, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order Confirming the Joint Plan, which approved and confirmed the Joint Plan (the “Confirmation Order”). The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. Liabilities subject to compromise at October 31, 2023, consisted of the following: October 31, 2023 Accounts payable $ 7,570 Accrued expenses 69 Other current liabilities 690 Debt subject to compromise 28,539 Accrued interest on debt subject to compromise 2,198 Other long-term liabilities 1,600 Total liabilities subject to compromise $ 40,666 |
Reorganization Items, Net
Reorganization Items, Net | 9 Months Ended |
Oct. 31, 2023 | |
Reorganizations [Abstract] | |
Reorganization Items, net | 13. Reorganization Items, net Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying statements of operations for the nine months ended October 31, 2023 and were as follows: Reorganization Nine Months Ended October 31, Write-off of pre-petition deferred financing costs and debt discount $ 125 Professional fees 713 Reorganization items, net $ 838 Professional fees included in Reorganization items, net represent fees for post-petition expenses related to the Chapter 11 Cases. Deferred long-term debt fees and original issue discount are included in Reorganization items, net. No cash was paid for Reorganization items, net as of October 31, 2023. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 9 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | 14. Net Loss Per Share Attributable to Common Stockholders Net Loss per common share The Company computes basic earnings (loss) per share (“EPS") by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Diluted EPS is computed similarly to basic net earnings per shares, except that it reflects the effect of potential shares that would be issued if stock option awards, restricted stock units, convertible notes, warrants and preferred shares, to the extent issued, were converted into or exercised for common stock, to the extent dilutive. The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Numerator: Net loss $ ( 6,335 ) $ ( 32,009 ) $ ( 22,413 ) $ ( 93,593 ) Denominator: Basic and Diluted Weighted-average shares in computing net loss per share attributable to common stockholders 123,001 105,033 118,004 101,925 Net loss attributable to common stockholders—basic and diluted $ ( 0.05 ) $ ( 0.30 ) $ ( 0.19 ) $ ( 0.92 ) Since the Company was in a net loss position for all periods presented, diluted net loss per share attributable to common stockholders will be the same as the basic net loss per share, as, in a net loss position, the inclusion of all potential common shares outstanding would be antidilutive. The potential shares of common stock excluded from the computation of diluted net loss per share for the periods presented due to their antidilutive impacts are as follows: As of October 31, 2023 As of October 31, 2022 Shares of common stock issuable from stock options 465 810 Unvested RSUs — 7,030 Convertible notes — 1,373 Warrants 8,606 8,606 Potential common shares excluded from diluted net loss per share 9,071 17,819 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events On November 2, 2023, the Debtors filed the Joint Plan and a related proposed disclosure statement with the Bankruptcy Court. On January 18, 2024, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order Confirming the Joint Plan. The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. On January 17, 2024, IronNet Cybersecurity, Ferrous Investors LP, ITC Global Advisers, LLC and certain other parties entered into a Post-Bankruptcy Financing Term Sheet providing for the issuances of $ 15,000 of secured convertible notes following the Effective Date of the Joint Plan. Such post-Effective Date financing consists of secured convertible notes issuable by IronNet Cybersecurity that bear interest at 6.00 % per annum and that will mature 48 months after issuance, unless converted into shares of Series A preferred stock of the Company. As of January 29, 2024, $ 500 has been issued to the Company under the Post-Bankruptcy Financing Term Sheet. Lease Termination On November 30, 2023, the Company terminated its lease for its McLean, Virginia headquarters with immediate effect. The Company is seeking to establish a new office lease for a smaller facility more appropriate for the resized company in the Northern Virginia or Maryland area and is in active discussions with potential landlords regarding terms and lease language. This is expected to result in a significant monthly savings for the Company. ROU assets and liabilities associated with this terminated lease in total amount to $ 1,525 and 2,150 , respectively. On December 18, 2023, the Company terminated an equipment lease for equipment primarily used to support Q&A and customer support of an older iteration of the IronDefense solution that is no longer in production. This lease was canceled through the Chapter 11 reorganization process, helping to reduce the Company's expenses. ROU assets and liabilities associated with this terminated lease in total amount to $ 77 and $ 82 , respectively. |
Organization and Summary of C_2
Organization and Summary of Changes in Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2023 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |
Chapter 11 Cases | Chapter 11 Cases On October 12, 2023 ("Petition Date"), the Company and IronNet Cybersecurity, Inc. ("IronNet Cybersecurity"), the Company’s wholly-owned subsidiary (collectively, the “Debtors”), filed voluntary petitions for reorganization under the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court of Delaware ("Bankruptcy Court") (such cases, the “Chapter 11 Cases”). The Debtors and their subsidiaries continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Chapter 11 Cases are currently jointly administered under the caption In re IronNet, Inc. et al., Case No. 23-11710 (Bankr. D. Del. 2023). The filing of the petitions for the Chapter 11 Cases constituted an event of default under all of the Outstanding Indebtedness (as defined below). Furlough and Temporary Cessation of Business Prior to Voluntary Chapter 11 Filings As previously reported, on September 2, 2023, the Company furloughed almost all of the Company’s employees and substantially curtailed business operations as a result of the Company’s liquidity position. Subsequently, on September 29, 2023, given the unavailability of additional sources of liquidity and after considering strategic alternatives, the Company ceased substantially all of its business activities and terminated the remaining employees of the Company and its subsidiaries. The board of directors of the Company further authorized the Company to take such actions necessary to prepare for and, subject to final approval by the board of directors to be given at a subsequent meeting, file a voluntary petition for relief under the applicable provisions of the Bankruptcy Code in the Bankruptcy Court (the “Bankruptcy Filing”) as expeditiously as possible. The foregoing furlough and cessation of business operations constituted events of default under the Company’s outstanding indebtedness for borrowed money (collectively, the “Outstanding Indebtedness”), including the senior unsecured convertible note issued to 3i, LP ("3i" as discussed below) on September 15, 2022 in the principal amount of approximately $ 4,233 and the other transaction documents entered into in connection therewith, including the Securities Purchase Agreement and Registration Rights Agreement dated September 14, 2022, the various secured promissory notes and the C5 Notes (as defined below) in the aggregate principal amount of approximately $ 15,275 outstanding as of the commencement of the Chapter 11 Cases discussed below, the Director Notes (as defined below) issued in December 2022, April 2023, May 2023 and August 29, 2023 to a total of eight lenders, including seven lenders who are either directors of the Company or entities affiliated with directors of the Company in the aggregate principal amount of approximately $ 8,475 outstanding as of the commencement of the Chapter 11 Cases discussed below, and the amended and restated security agreement related thereto, and the secured promissory note dated July 21, 2023 issued to Korr Acquisitions Group, Inc. in the aggregate principal amount of $ 556 outstanding as of the commencement of the Chapter 11 Cases discussed below (the “Korr Note”). DIP Facility On October 10, 2023, the Debtors, and ITC Global Advisers LLC (“ITC GA”), and/or ITC GA’s designated affiliates and/or related funds or accounts, and such other lender parties that have agreed or may agree from time to time to provide commitments to fund the DIP Facility (as defined below) (the “DIP Facility Lender”) entered into a binding term sheet for debtor-in-possession financing (the “Term Sheet”), which sets forth the principal terms of a superpriority, senior secured debtor-in-possession credit facility (the “DIP Facility”, the credit agreement evidencing the DIP Facility, the “DIP Credit Agreement” and, together with the other definitive documents governing the DIP Facility and the DIP order, collectively, the “DIP Documents”), pursuant to which the DIP Facility Lender would provide the Company with a senior (priming) secured and superpriority debtor-in-possession delayed-draw term loan credit facility in an aggregate principal amount not to exceed $ 10,000 (the “Maximum Facility Amount”), consisting of up to $ 8,500 of term loans (the “DIP Term Loans”) and $ 1,499 of the Bridge Amount (as defined below) (collectively, the “DIP Loans”), subject to the terms and conditions set forth in the Term Sheet. Until the entry of a final order approving the DIP Facility by the Bankruptcy Court, a maximum amount of up to $ 4,500 of the DIP Facility (inclusive of the Bridge Amount) would be available on an interim basis. Upon the execution of the Term Sheet, the DIP Facility Lender had advanced the Bridge Amount of $ 1,499 to the Company. The Bridge Amount is secured by all the assets of the Debtors. As of January 29, 2024, the DIP Facility Lender had advanced an aggregate of $ 9,999 to the Company. AWS Reinstatement In connection with the commencement of the Chapter 11 Cases, the Company filed a number of motions with the Bankruptcy Court. Among these was a motion authorizing the Debtors to enter into a reinstatement agreement with Amazon Web Services, Inc. (“AWS”) in order to reinstate and reactivate the cloud computing services provided by AWS (the “Reinstatement Agreement”), which had been previously terminated by AWS following the Company’s cessation of business activities on September 29, 2023. AWS’s termination of the cloud computing services constituted an event of default under certain of the Company’s contracts. On October 13, 2023, the Bankruptcy Court entered an interim order approving the motion authorizing the Debtors to enter into the Reinstatement Agreement, and the Reinstatement Agreement was executed and delivered by IronNet Cybersecurity and AWS. Pursuant to the Reinstatement Agreement, IronNet Cybersecurity agreed to assume pursuant to Section 365 of the Bankruptcy Code, and agreed to be bound by, all of the terms and conditions of the Reinstatement Agreement and the customer agreement between IronNet Cybersecurity and AWS dated March 30, 2021 (the “AWS Agreement”). Upon payment to AWS of invoice arrearages and the September 2023 invoice on October 13, 2023, AWS reinstated IronNet Cybersecurity’s account and the AWS services pursuant to the AWS Agreement. Further, pursuant to the Reinstatement Agreement, IronNet Cybersecurity will be required to make weekly advance payments to AWS of fees and charges in an amount equal to at least one fourth of the previous month’s fees and charges, subject to certain minimum amounts specified in the Reinstatement Agreement. Pursuant to the Reinstatement Agreement, AWS may suspend the AWS services under the Customer Agreement if IronNet Cybersecurity fails to make the advance payments as required or if it does not pay any invoice in full within two business days of invoice issuance. Rehiring of Certain Employees On October 13, 2023, certain employees were re-hired by the Company in connection with the Chapter 11 proceedings. Hiring subsequently occurred in the ordinary course of business and, as of January 29, 2024, the Company had 28 active employees. First Day Motions On October 13, 2023, the Bankruptcy Court approved a variety of “first day” motions seeking customary relief intended to enable the Debtors to continue ordinary course operations during the Chapter 11 Cases, including the motion relating to the Reinstatement Agreement as described in "— AWS Reinstatement" above and a motion to establish certain procedures to protect any potential value of the Debtor’s net operating loss carryforwards and other tax attributes (the “NOL Motion”). On October 13, 2023, the Bankruptcy Court entered an order approving the NOL Motion on an interim basis. Filing of Joint Plan On November 2, 2023, the Debtors filed a Joint Chapter 11 Plan of Reorganization of IronNet, Inc. and its Debtor Affiliates (as amended, the “Joint Plan”) and a related proposed disclosure statement. On January 18, 2024, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order Confirming the Joint Plan, which approved and confirmed the Joint Plan (the “Confirmation Order”). Among other things, the Joint Plan will result in in all of the Company’s equity securities being automatically cancelled, the issuance of new common equity to holders of certain claims under the Joint Plan, the issuance of certain takeback notes, and the settlement of other claims. The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. Reorganization Accounting Beginning on the Petition Date of the Chapter 11 Cases, the Company applied Financial Accounting Standards Board ("FASB") Codification Topic 852, Reorganizations (“ASC 852”) in preparing the condensed consolidated financial statements. ASC 852 requires the financial statements, for the periods subsequent to the Petition Date and up to and including the period of emergence from Chapter 11 (the “Effective Date”), to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain charges incurred during the bankruptcy proceedings, such as the write-off of unamortized debt issuance costs and premium on debt subject to compromise, legal and professional fees incurred directly as a result of the bankruptcy proceeding are recorded as Reorganization items, net in the condensed consolidated statements of operations and comprehensive loss. In addition, the balance sheet must distinguish between debtor pre-petition liabilities subject to compromise from pre-petition or post-petition liabilities that are not subject to compromise. Liabilities subject to compromise are pre-petition obligations that are not fully secured and have at least a possibility of not being repaid at the full claim amount. These amounts are classified on the condensed consolidated balance sheet as of October 31, 2023 as Liabilities subject to compromise. These liabilities are reported at the amounts expected to be allowed by the Bankruptcy Court, which may differ from the ultimate settlement amounts. Accordingly, the condensed consolidated financial statements for the three and nine months ended October 31, 2023 have been prepared in accordance with ASC 852. Additionally, the Company's condensed consolidated financial statements represent the Debtors and the Company's non-filing entities which are comprised primarily of the Company's international entities. The non-filing entities are not significant to the results of the Company and are not separately presented. These non-debtor subsidiaries are IronNet Australia Pty Ltd, IronNet Cybersecurity Japan, GK, IronNet Cybersecurity Singapore Pte Ltd, , IronNet Cybersecurity, UK, Ltd and IronNet Cybersecurity FZ-LLC. As of October 31, 2023, these entities held liabilities of $ 732 , which are reflected in liabilities not subject to compromise on the condensed consolidated balance sheets. Debtors-In-Possession The Debtors are currently operating as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code. The Debtors have brought and will seek Bankruptcy Court approval of motions designed primarily to mitigate the impact of the Chapter 11 Cases on the Company’s operations, customers and employees. In general, as debtors-in-possession under the Bankruptcy Code, the Debtors are authorized to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Debtors have filed motions with the Bankruptcy Court to authorize the Debtors to conduct their business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing the Debtors to, among other things: (i) pay employees’ wages and related obligations; (ii) pay prepetition claims of certain lien claimants and critical vendors; (iii) continue to operate their cash management system in a form substantially similar to pre-petition practice (iv) continue to maintain and administer certain existing customer programs; (v) pay taxes in the ordinary course; (vi) maintain their insurance program and surety bond program in the ordinary course; (vii) pay utility providers in the ordinary course; and (viii) to use cash collateral. Automatic Stay Subject to certain specific exceptions under the Bankruptcy Code, the petitions for the Chapter 11 Cases automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. Absent an order from the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities are subject to settlement under the Bankruptcy Code. Executory Contracts Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, amend or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with the Debtors in this document, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease of the Debtors, is qualified by any overriding rejection rights the Company has under the Bankruptcy Code. Potential Claims During October 2023, the Debtors (as defined below) filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. These schedules and statements were subject to further amendment or modification after filing. Certain holders of pre-petition claims that are not governmental units were required to file proofs of claim by the deadline for general claims (the “Bar Date”) of December 22, 2023. Certain holders of pre-petition claims that are governmental units are required to file proofs of claim by the bar date of April 9, 2024. As of January 18, 2024, the date of the Confirmation Order, the Debtors received approximately 108 proofs of claim, primarily representing general unsecured claims, for an amount of approximately $ 99,427 . These claims will be reconciled to amounts recorded in the Company’s accounting records. Differences in amounts recorded and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Company may ask the Bankruptcy Court to disallow claims that the Company believes are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In addition, as a result of this process, the Company may identify additional liabilities that will need to be recorded or reclassified to Liabilities subject to compromise. In light of the number of claims filed, the claims resolution process may take time to complete and likely will continue after the Debtors emerge from bankruptcy. Reorganization Items, Net The Debtors have incurred and will continue to incur costs associated with the Chapter 11 Cases and the reorganization under the Joint Plan, primarily related to legal and professional fees. The amount of these costs, which since the Petition Date are being expensed as incurred, are expected to significantly affect the Company’s results of operations. The Company also wrote off $ 125 in pre-petition deferred financing costs and debt discount as of the Petition Date. In accordance with applicable guidance, costs associated with the bankruptcy proceedings have been recorded as Reorganization items, net within the Company's accompanying condensed consolidated statements of operations for the three and nine months ended October 31, 2023. See Note 13, Reorganization items, net. Financial Statement Classification of Liabilities Subject to Compromise The accompanying Consolidated Balance Sheet as of October 31, 2023 includes amounts classified as Liabilities subject to compromise, which represent liabilities the Company anticipates will be allowed as claims in the Chapter 11 Cases. These amounts represent the Debtors’ current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases, and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated, and resolved in connection with the claims resolution process. See Note 12, Liabilities subject to compromise. Lease Termination On November 30, 2023, the Company terminated its lease for its McLean, Virginia headquarters with immediate effect. The Company is seeking to establish a new office lease for a smaller facility more appropriate for the resized company in the Northern Virginia or Maryland area and is in active discussions with potential landlords regarding terms and lease language. This is expected to result in monthly savings for the Company. ROU assets and liabilities associated with this terminated lease in total amount to $ 1,525 and $ 2,150 , respectively. On December 18, 2023, the Company terminated an equipment lease for equipment primarily used to support Q&A and customer support of an older iteration of the IronDefense solution that is no longer in production. This lease was canceled through the Chapter 11 reorganization process, helping to reduce the Company's expenses. ROU assets and liabilities associated with this terminated lease in total amount to $ 77 and $ 82 , respectively. New York Stock Exchange Delisting As previously disclosed, on July 17, 2023, the board of directors of the Company authorized the Company to voluntarily delist each class of its securities (including its warrants) from the New York Stock Exchange. On July 17, 2023, the Company delivered written notice to the New York Stock Exchange of its intention to voluntarily delist each class of its common stock and its redeemable warrants from the New York Stock Exchange. The Company filed a Form 25 with the Securities and Exchange Commission relating to the delisting on July 27, 2023, and the delisting of its securities became effective on August 6, 2023. As a result of the delisting, the Company’s securities are traded on over-the-counter markets. Upon the Effective Date of the Joint Plan, all of the Company’s securities outstanding prior to the Effective Date will be automatically cancelled without further action upon the Effective Date. The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. Letter Agreement with C5 On July 11, 2023, the Letter Agreement (the “Letter Agreement”) executed on June 16, 2023 between the Company and C5 CC Ferrous, LLC, a Delaware limited Liability company, as amended on July 11, 2023 was deemed executed and delivered by the Parties in accordance with its terms. The transactions contemplated by the Letter Agreement have been superseded by the Chapter 11 Cases. Additional Indebtedness On May 19, 2023, the Company issued a secured convertible promissory note in the principal amount of $ 475 to GEN Keith B. Alexander (Ret.). Such note has the same terms with respect to interest rate, maturity and conversion as the secured promissory notes previously issued to GEN Alexander and certain other members of the Board or entities affiliated with members of the Board of Directors and C5. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under this note. Between December 2022 and May 2023, the Company entered into Convertible Secured Promissory Notes, in the aggregate principal amount of $ 20,770 , with certain of its directors and officers and entities affiliated with C5. On June 30, 2023, the Company and the noteholders executed amendments to these notes to extend the maturity dates thereof from June 30, 2023 to December 31, 2023 . As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under these notes. On July 21, 2023, the Company entered into the Korr Note with Korr Acquisitions Group, Inc. In the original principal amount of $ 556 . The Korr Note was issued and funded with original issue discount of $ 55 , which is 9.9 % of the aggregate principal amount of the Korr Note. The unpaid principal amount of the Korr Note bears interest at a rate of 8 % from July 21, 2023, calculated on an actual/360 basis. The Korr Note is secured by receivables owing from time to time to the Company under certain support, solutions or services contract(s), as designated in the Korr Note. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under the Korr Note. On August 23, 2023, the Company received written notice delivered on behalf of 3i pursuant to the 3i Note and the other transaction documents entered into in connection therewith, stating that, among other things, the Company was in purported payment default and purported covenant default under the 3i Note and other transaction documents. Pursuant to such written notice, 3i made a demand for payment within five business days of the written notice of amounts purportedly owed to 3i by the Company as a result of such purported defaults. 3i indicated that it intended to pursue some or all of its rights and remedies against the Company if the Company did not repay the purported outstanding obligations under the 3i Note and the other transaction documents. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under the 3i Note. On August 29, 2023, the Company issued secured promissory notes in an aggregate principal amount of $ 800 (the “August 2023 Notes”) to VADM Jan E. Tighe (Ret.) and Donald R. Dixon, members of the Company’s board of directors. The August 2023 Notes provided that the principal amount thereof was only to be used as follows: first, to satisfy accrued and unpaid employee payroll-related obligations of the Company; second, to pay an amount not to exceed $ 100 on account of employee, contractor or vendor expenses needed in the event the Company determined to prepare and file a bankruptcy proceeding; and third, to pay the premium for the Company’s director and officer tail insurance policy. The August 2023 Notes have a scheduled maturity date one year after issuance and bear interest at the rate of 13.8 % per annum, payable at maturity. The Company’s obligations under the August 2023 Notes are secured by substantially all of the assets of the Company, excluding the Company’s intellectual property. As noted above, the furlough of the Company’s employees, cessation of business operations and the filing of the Chapter 11 Cases constitute events of default under these notes. As of January 29, 2024, the Company had $ 4,788 in convertible debt outstanding and $ 23,750 in non-convertible debt outstanding. Securities Litigation On April 22, 2022, a federal securities class action lawsuit was filed by a purported stockholder in the United States District Court for the Eastern District of Virginia (the “Court”). On July 15, 2022, the Court appointed a lead plaintiff for the action, and ordered that the action bear the caption In re IronNet, Inc. Securities Litigation, No. 1:22-cv-004499-RDA-JFA. On August 29, 2022, the lead plaintiff filed an amended complaint on behalf of a proposed class consisting of those who acquired our securities between September 14, 2021 and December 15, 2021. The amended complaint names us, our current Chief Executive Officer, our former co-Chief Executive Officer, and our former Chief Financial Officer as defendants and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“1934 Act”), as amended, for alleged misrepresentations and/or omissions in September 2021 regarding our financial guidance for fiscal year 2022 and a claim under Section 20A of the 1934 Act, as amended, for alleged trading on material nonpublic information by our current Chief Executive Officer. The amended complaint seeks an unspecified amount of damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. On October 26, 2022, the defendants filed a motion to dismiss the amended complaint. On November 30, 2022, the lead plaintiff filed an opposition. On December 21, 2022, the defendants filed a reply in support of the motion to dismiss. The defendants’ motion to dismiss was denied on August 9, 2023. We believe the claims are without merit, intend to defend the case vigorously, and have not recorded a liability related to this lawsuit because, at this time, we are unable to estimate reasonably possible losses or determine whether an unfavorable outcome is probable. Appointment of Certain Director On October 10, 2023, Ivona Smith was elected as a director of the Board of the Company, effective upon the filing of the Chapter 11 Cases. Ms. Smith will serve as an independent director of the Company with respect to the Cases and pursuant to an Independent Director Agreement entered into between Ms. Smith and the Company on October 10, 2023 (the “Independent Director Agreement”). Pursuant to the Independent Director Agreement, Ms. Smith may only be removed as a director of the Company with the prior approval of the Bankruptcy Court. She may otherwise resign as a director at any time, and the Independent Director Agreement will otherwise terminate on the earlier of the effective date of a plan of liquidation of the Company pursuant to Chapter 11 of the Bankruptcy Code or the conversion of the Cases to cases under Chapter 7 of the Bankruptcy Code. Under the Independent Director Agreement, Ms. Smith’s compensation for service on the Board and on committees of the Board will consist of a monthly fee of $ 30 payable in advance each month, with the first monthly fee prorated for only that portion of the month remaining after October 10, 2023. Other than the Independent Director Agreement, there is no agreement or understanding between Ms. Smith and any other person pursuant to which she was selected as a director. |
Liquidity and Going Concern | Liquidity and Going Concern Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about the Company’s ability to meet our future obligations as they become due within one year of the financial statements being issued in this Quarterly Report on Form 10-Q. As of October 31, 2023, the Company had cash and cash equivalents of $ 787 which is not legally restricted to use, collectable receivables of $ 329 , and accounts payable and accrued expenses not subject to compromise of $ 5,412 , including $ 1,313 due to taxing authorities. In February 2022, the Company entered into an equity line with Tumim Stone Capital, LLC (“Tumim”) under which the Company may, in its discretion, sell shares of its common stock to Tumim subject to various conditions and limitations set forth in the purchase agreement with Tumim. On June 16, 2023, Tumim notified the Company of Tumim’s election to terminate the Purchase Agreement, effective as of June 20, 2023. On September 14, 2022, the Company entered into a Securities Purchase Agreement ("SPA") with 3i, which is an affiliate of Tumim, pursuant to which the Company agreed to sell and issue senior unsecured convertible promissory notes (the "Convertible Notes") to 3i in the aggregate principal amount of up to $ 25,750 . On September 15, 2022, the Company issued a Convertible Note to 3i in the principal amount of $ 10,300 , net of discount for cash proceeds of $ 10,000 . The Company initially borrowed approximately $ 10,300 and issued related Convertible Notes to 3i, including a 3 % Original Issue Discount ("OID"), with an 18-month term. The Company prepaid approximately $ 6,067 of the Convertible Notes to 3i and, as a result, approximately $ 4,233 principal amount of the Convertible Note remained outstanding thereafter. As of the date of this report, the conditions to the additional borrowing have not been met. See Note 9 for additional information. Between December 14, 2022 and September 17, 2023, the Company issued senior secured promissory notes in an aggregate principal amount of $ 8,475 to a total of nine lenders including directors of the Company. Between January 11, 2023 a nd August 31, 2023, the Company issued senior secured convertible promissory notes in the aggregate principal amount of $ 15,275 to entities affiliated with C5 Capital Limited (“C5”), a beneficial owner of more than 5 % of the Company’s outstanding common stock. On July 21, 2023, the Company entered into the Korr Note with Korr Acquisition Group, Inc., in the original principal amount of $ 556 (the "Korr Note"), which was issued and funded with an original issue discount of $ 55 , or 9.9 % of the principal balance. The Company’s future capital requirements will depend on many factors, including, but not limited to the rate of its growth, its ability to attract and retain customers and their willingness and ability to pay for the Company's products and services, and the timing and extent of spending to support its multiple and ongoing efforts to market and continue to develop its products. Further, the Company may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies. The Company needs additional equity or debt financing in order to continue its operations, which it may not be able to raise on terms acceptable to it or at all. If additional funds are not available to the Company on acceptable terms, or at all, the Company’s business, financial condition, and results of operations would be adversely affected. Despite the Company’s current operating plans to implement the Joint Plan and emerge from bankruptcy, focus its business, reduce its expenses, improve its margins and mitigate uncertainties related to the foregoing, management believes that the Company does not have sufficient cash and cash equivalents on hand to support current operations for at least one year from the date of issuance of these consolidated financial statements without additional financing. Management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern. Based on its current planned operations, in the absence of additional sources of liquidity, management anticipates that the Company’s existing cash and cash equivalents and anticipated cash flows from operations will not be sufficient to meet the Company’s operating and liquidity needs for any meaningful period of time following the date of this report. Given that additional sources of liquidity have not been available to it, the Company filed the Chapter 11 Cases. The Chapter 11 Cases have not been determined to alleviate the previously identified substantial doubt about the Company’s ability to continue as a going concern, including following the Effective Date of the Joint Plan. The Joint Plan was confirmed by the Bankruptcy Court on January 18, 2024. The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. On September 2, 2023, the Company furloughed almost all of the Company’s employees and substantially curtailed business operations as a result of the Company’s liquidity position. Subsequently, on September 29, 2023, given the unavailability of additional sources of liquidity and after considering strategic alternatives, the Company ceased substantially all of its business activities and terminated the remaining employees of the Company and its subsidiaries. The furlough of employees and cessation of business operations constituted events of default on all of the Company’s outstanding indebtedness. On October 10, 2023, the Debtors, and the DIP Facility Lender entered into a Term Sheet, which sets forth the principal terms of the DIP Documents, pursuant to which the DIP Facility Lender would provide the Company with a Maximum Facility Amount not to exceed $ 10,000 , consisting of up to $ 8,500 of DIP Term Loans and $ 1,499 of the Bridge Amount, subject to the terms and conditions set forth in the Term Sheet. Until the entry of a final order approving the DIP Facility by the Bankruptcy Court, a maximum amount of up to $ 4,500 of the DIP Facility (inclusive of the Bridge Amount) would be available on an interim basis. Upon the execution of the Term Sheet, the DIP Facility Lender had advanced the Bridge Amount of $ 1,499 to the Company. The Bridge Amount is secured by all the assets of the Debtors. As of January 29, 2024, the DIP Facility Lender had advanced an aggregate of $ 9,999 to the Company. On October 12, 2023, the Debtors, filed the Chapter 11 Cases. In connection with the filing of the Chapter 11 Cases, the Debtors resumed business operations and rehired a portion of the previously furloughed and terminated employees. The Debtors and their subsidiaries continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The filing of the Charter 11 Cases constituted an event of default on all of the Company’s outstanding indebtedness. The Company’s ability to continue as a going concern is contingent upon its ability to generate sufficient liquidity to meet its contractual obligations and operating needs. Beginning on the Petition Date, it is also contingent upon its ability to, subject to the Bankruptcy Court’s approval, implement a Chapter 11 plan of reorganization and emerge from the Chapter 11 Cases. As noted above, the Bankruptcy Court entered the Confirmation Order for the Joint Plan on January 18, 2024, and the Joint Plan will become effective upon satisfaction of the conditions precedent to the Joint Plan, including the adoption of the Company’s new organization documents, the recapitalization of the Company in accordance with the Joint Plan, the filing of any final plan supplements, the Debtors shall have entered into the exit financing facility contemplated by the Joint Plan, and other customary conditions. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. The Debtors expect that the Effective Date of the Joint Plan will occur as soon as all conditions precedent to the Joint Plan have been satisfied. Although the Debtors anticipate that all conditions will be satisfied, the Debtors can make no assurances as to when, or ultimately if, the Joint Plan will become effective. See Note 13, Subsequent Events, for additional information. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The interim condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. These unaudited interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements of IronNet, Inc. and accompanying notes thereto included in the Company's Annual Report on Form 10-K for the year ended January 31, 2023. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The Company’s fiscal year ends on January 31. References to fiscal 2024, for example, refer to the fiscal year ending January 31, 2024. The results of operations for the three and nine months ended October 31, 2023 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending January 31, 2024 or any future period. The accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments (except as otherwise noted), necessary for a fair statement of the Company’s financial position as of October 31, 2023, its results of operations for the three and nine months ended October 31, 2023 and 2022, changes in stockholders’ equity for the three and nine months ended October 31, 2023 and 2022, and cash flows for the nine months ended October 31, 2023 and 2022. Certain prior-period amounts have been reclassified in the accompanying condensed consolidated financial statements and notes thereto in order to conform to the current period presentation. |
Use of estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions include, but are not limited to, the period of benefit for deferred commissions, the useful life of property and equipment, stock-based compensation expense, fair value of warrants, fair value of conversion options of debt, obsolescence reserves for inventory, and income taxes. If the underlying estimates and assumptions upon which the financial statements are based change in future periods, actual amounts may differ from those included in the accompanying condensed consolidated financial statements. |
New Accounting Pronouncement Adopted in Fiscal 2023 | New Accounting Pronouncement Adopted in Fiscal 2024 In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). This standard requires a new method for recognizing credit losses that is referred to as the current expected credit loss (“CECL”) method. The CECL method requires the recognition of all losses expected over the life of a financial instrument upon origination or purchase of the instrument, unless the Company elects to recognize such instruments at fair value with changes in profit and loss (the fair value option). This standard is effective for the Company for the earlier of the fiscal years beginning after December 15, 2022 or the time at which the Company no longer qualifies as an emerging growth company ("EGC") under SEC rules. The Company adopted the standard as of February 1, 2023 on a modified retrospective basis resulting in an increase to the beginning balance of accumulated deficit of approximately $ 182 as of February 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company's condensed consolidated financial statements and related disclosures for the nine-month period ended October 31, 2023. Results for reporting periods prior to FY2024 continue to be presented in accordance with previously applicable GAAP while results for subsequent reporting periods are presented under ASC 326. Newly Issued Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. |
Segment and Geographic Information | Segment and Geographic Information Segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and assess performance. The CODM reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance. Accordingly, management has determined that the Company operates as one operating segment. The following table presents revenue by geographic location: Three Months Ended October 31, 2023 2022 United States $ 3,493 $ 5,634 International 1,069 1,354 Total $ 4,562 $ 6,988 Nine Months Ended October 31, 2023 2022 United States $ 13,766 $ 17,478 International 3,588 2,805 Total $ 17,354 $ 20,283 Substantially all of the Company’s long-lived assets are located in the United States. |
Organization and Summary of C_3
Organization and Summary of Changes in Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of revenue by geographical location | The following table presents revenue by geographic location: Three Months Ended October 31, 2023 2022 United States $ 3,493 $ 5,634 International 1,069 1,354 Total $ 4,562 $ 6,988 Nine Months Ended October 31, 2023 2022 United States $ 13,766 $ 17,478 International 3,588 2,805 Total $ 17,354 $ 20,283 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Customers That Represented 10% or More of the Company's Total Revenue | The following table presents customers that represented 10% or more of the Company’s total revenue in the respective periods: For the Three Months Ended October 31, For the Nine Months Ended October 31, 2023 2022 2023 2022 Customer A 11 % 13 % 11 % 12 % Customer B 13 % 10 % 12 % 11 % Customer C 11 % * 13 % * Customer D 17 % * 15 % * 52 % 23 % 51 % 23 % * - less than 10% |
Schedule of Deferred Costs | The balances in deferred costs are as follows: Balance at February 1, 2023 $ 4,362 Amounts recognized in cost of revenue ( 1,820 ) Costs deferred 120 Balance at October 31, 2023 $ 2,662 Balance at February 1, 2022 $ 4,604 Amounts recognized in cost of revenue ( 9,294 ) Costs deferred 9,640 Balance at October 31, 2022 $ 4,950 |
Schedule of Deferred Revenue | The balance in deferred revenue is as follows: Balance at February 1, 2023 $ 27,141 Revenue recognized ( 17,354 ) Amounts deferred 8,709 Balance at October 31, 2023 $ 18,496 Balance at February 1, 2022 $ 33,566 Revenue recognized ( 20,283 ) Amounts deferred 16,952 Balance at October 31, 2022 $ 30,235 |
Schedule of Company's Recognition of Revenue | .The Company’s recognition of revenue in the future thereon will be in: Years Ending January 31, 2024 (3 months) $ 4,977 2025 13,144 2026 3,593 2027 539 $ 22,253 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Options Under Stock Incentive Plan | Presented below is a summary of the status of the stock options under the 2014 Stock Incentive Plan , as no stock options have been granted under the 2021 Plan: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Intrinsic Value of Outstanding Options Outstanding at February 1, 2023 530 $ 0.56 3.8 $ 773 Granted - - - - Exercised - - - - Forfeited or expired ( 65 ) 0.36 2.4 - Outstanding at October 31, 2023 465 $ 0.59 3.1 $ — Exercisable at October 31, 2023 465 $ 0.59 3.1 $ — |
Summary of Status of Outstanding RSU's | Presented below is a summary of the status of outstanding RSUs: Number of Shares Weighted Average Grant Date Fair Value Non-vested at February 1, 2023 4,361 $ 6.76 Granted 28 0.21 Vested ( 1,223 ) 2.31 Forfeited or expired ( 3,134 ) 5.26 Non-vested at October 31, 2023 32 $ 8.18 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Schedule of assets measured at fair value on a recurring basis | The following table presents our assets measured at fair value on a recurring basis: October 31, 2023 January 31, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 6 $ — $ — $ 6 $ 6 $ — $ — $ 6 Commitment Fee $ — $ — $ — $ — $ — $ — $ 195 $ 195 Total financial assets $ 6 $ — $ — $ 6 $ 6 $ — $ — $ 201 Liabilities $ — Warrants $ — $ — $ — $ — $ — $ — $ — $ — Conversion options $ — $ — $ — $ — $ — $ — $ 734 $ 734 Total financial liabilities $ — $ — $ — $ — $ — $ — $ 734 $ 734 |
Level 3 [Member] | |
Schedule of assets measured at fair value on a recurring basis | Convertible Notes Derivative Liability C5 Notes Derivative Liability Commitment Fee Derivative Asset Fair Value as of January 31, 2023 $ 671 $ 63 $ 195 Change in fair value ( 671 ) ( 63 ) ( 195 ) Fair value as of October 31, 2023 $ - $ - $ - Fair Value as of January 31, 2022 $ - $ - $ - Change in fair value 774 - 1,330 Fair value as of October 31, 2022 $ 774 $ - $ 1,330 |
Supplemental Information (Table
Supplemental Information (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: October 31, January 31, 2023 2023 Accrued expenses $ 4,150 $ 976 Taxes payable on behalf of employees related to vested RSUs 265 6,987 Estimated additional taxes payable related to vested RSUs 1,048 - Unvouched payables 1,215 2,010 Accrued expenses 6,678 9,973 Accrued expenses subject to compromise (Note 12) ( 2,267 ) - Accrued expenses not subject to compromise 4,411 9,973 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Schedule of Financial Statement Classification of Lease Balances With Condensed Consolidated Balance Sheet | The lease balances are located in the following positions on the consolidated balance sheet. Balance Sheet Location October 31, 2023 January 31, 2023 Assets Operating Operating lease right-of-use assets, net $ 1,562 $ 1,885 Financing Property and equipment, net 108 205 Liabilities Current Operating Other current liabilities $ 653 $ 607 Financing Other current liabilities 37 130 Non-current Operating Other long-term liabilities 1,549 2,047 Financing Other long-term liabilities 51 81 The ROU liabilities are subject to compromise at October 31, 2023. See Note 12 for further information. |
Schedule of total lease cost | Total lease costs for the three and nine months ended October 31, 2023 and 2022 were: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended October 31, 2023 October 31, 2022 October 31, 2023 October 31, 2022 Operating lease cost $ 146 $ 222 $ 437 $ 815 Short-term lease cost 359 447 985 1,630 Variable lease cost 51 13 29 60 Finance lease cost: Amortization of right-of-use assets 32 23 65 68 Interest on lease liabilities 4 1 7 4 Total finance lease cost $ 36 $ 24 $ 72 $ 72 |
Schedule of lease payments | The following table summarizes future scheduled lease payments as of October 31, 2023: Operating Leases Finance Leases Remaining three months of fiscal year 2024 189 12 2025 775 48 2026 797 45 2027 658 - Total $ 2,419 $ 105 Less: Imputed Interest 217 17 Present value of net lease payments $ 2,202 $ 88 Lease liability, current portion 653 37 Lease liability, net of current portion 1,549 51 Total lease liability $ 2,202 $ 88 |
Schedule of supplemental information and non cash activities related to operating and finance leases | Supplemental information and non-cash activities related to operating and finance leases as of October 31, 2023 and 2022 are as follows: Cash paid for amounts included in the measurement of lease liabilities as of October 31, 2023 Operating cash flows from operating leases $ 566 Operating cash flows from finance leases 11 Financing cash flows from finance leases 36 $ 612 Weighted average remaining lease term (in years) Operating leases 3.08 Finance leases 2.25 Weighted average discount rate Operating leases 6.36 % Finance leases 13.80 % Cash paid for amounts included in the measurement of lease liabilities as of October 31, 2022 Operating cash flows from operating leases $ 950 Operating cash flows from finance leases 4 Financing cash flows from finance leases 96 $ 1,050 Weighted average remaining lease term (in years) Operating leases 4.08 Finance leases 1.25 Weighted average discount rate Operating leases 6.36 % Finance leases 5.67 % |
Liabilities Subject to Compro_2
Liabilities Subject to Compromise (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Liabilities Subject to Compromise [Abstract] | |
Schedule of Liabilities Subject to Compromise | Liabilities subject to compromise at October 31, 2023, consisted of the following: October 31, 2023 Accounts payable $ 7,570 Accrued expenses 69 Other current liabilities 690 Debt subject to compromise 28,539 Accrued interest on debt subject to compromise 2,198 Other long-term liabilities 1,600 Total liabilities subject to compromise $ 40,666 |
Reorganization Items, Net (Tabl
Reorganization Items, Net (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Reorganizations [Abstract] | |
Schedule of Reorganization items | Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying statements of operations for the nine months ended October 31, 2023 and were as follows: Reorganization Nine Months Ended October 31, Write-off of pre-petition deferred financing costs and debt discount $ 125 Professional fees 713 Reorganization items, net $ 838 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Numerator: Net loss $ ( 6,335 ) $ ( 32,009 ) $ ( 22,413 ) $ ( 93,593 ) Denominator: Basic and Diluted Weighted-average shares in computing net loss per share attributable to common stockholders 123,001 105,033 118,004 101,925 Net loss attributable to common stockholders—basic and diluted $ ( 0.05 ) $ ( 0.30 ) $ ( 0.19 ) $ ( 0.92 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The potential shares of common stock excluded from the computation of diluted net loss per share for the periods presented due to their antidilutive impacts are as follows: As of October 31, 2023 As of October 31, 2022 Shares of common stock issuable from stock options 465 810 Unvested RSUs — 7,030 Convertible notes — 1,373 Warrants 8,606 8,606 Potential common shares excluded from diluted net loss per share 9,071 17,819 |
Organization and Summary of C_4
Organization and Summary of Changes in Significant Accounting Policies - Additional Information1 (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 14, 2022 | Oct. 31, 2023 | Jan. 29, 2024 | Oct. 10, 2023 | Sep. 15, 2022 | |
Subsequent Event | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Convertible Debt | $ 4,788 | ||||
DIP borrowings outstandng amount | 9,999 | ||||
Term Loan [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
DIP borrowings outstandng amount | $ 8,500 | ||||
Bridge Loan [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
DIP borrowings outstandng amount | 1,499 | ||||
DIP by bankruptcy court maximum amount | 4,500 | ||||
Bridge Loan [Member] | Subsequent Event | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
DIP borrowings outstandng amount | $ 1,499 | ||||
Maximum [Member] | Delayed Draw Term Loan Credit Facility [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
DIP aggregate principal amount | $ 10,000 | ||||
Promissory Notes With Directors [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Director notes outstanding | $ 8,475 | $ 8,475 | |||
Secured Promissory Notes [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Convertible Debt | 556 | ||||
Securities Purchase Agreement [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Convertible Debt | 25,750 | $ 4,233 | $ 10,300 | ||
Securities Purchase Agreement [Member] | Senior Unsecured Convertible Note [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Convertible Debt | $ 4,233 | ||||
Securities Purchase Agreement [Member] | Secured Promissory Notes [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Convertible Debt | $ 15,275 |
Organization and Summary of C_5
Organization and Summary of Changes in Significant Accounting Policies - Additional Information2 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Aug. 29, 2023 | May 19, 2023 | Dec. 30, 2022 | Dec. 14, 2022 | Oct. 31, 2023 | Jul. 31, 2023 | Apr. 30, 2023 | May 31, 2023 | Oct. 31, 2023 | Sep. 17, 2023 | Jan. 31, 2023 | Jan. 29, 2024 | Oct. 12, 2023 | Oct. 10, 2023 | Jul. 21, 2023 | Jan. 11, 2023 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Convertible promissory note in principal amount | $ 475 | |||||||||||||||
Secured promissory notes aggregate principal amount | $ 8,475 | |||||||||||||||
Debt instrument face amount | $ 556 | |||||||||||||||
Debt discount | $ 55 | |||||||||||||||
Issue discount rate | 9.90% | |||||||||||||||
Interest rate | 8% | |||||||||||||||
Effective interest rate | 50.71% | 50.71% | ||||||||||||||
Monthly fees advance payable | $ 30 | |||||||||||||||
Subsequent Event | ||||||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Convertible Debt | $ 4,788 | |||||||||||||||
Non-convertible debt | $ 23,750 | |||||||||||||||
Promissory Notes With Directors [Member] | ||||||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Secured promissory notes aggregate principal amount | $ 6,900 | |||||||||||||||
Interest rate | 13.80% | |||||||||||||||
Convertible Promissory Notes With C5 [Member] | ||||||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Secured promissory notes aggregate principal amount | $ 2,000 | $ 400 | $ 3,030 | $ 6,845 | $ 20,770 | $ 3,000 | ||||||||||
Maturity date, start | Jun. 30, 2023 | |||||||||||||||
Maturity Date, End | Dec. 31, 2023 | |||||||||||||||
Debt discount | $ 63 | $ 63 | ||||||||||||||
Interest rate | 13.80% | |||||||||||||||
Korr Note [Member] | ||||||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Debt instrument face amount | $ 556 | |||||||||||||||
Debt discount | $ 6 | $ 55 | ||||||||||||||
Issue discount rate | 9.90% | |||||||||||||||
Interest rate | 8% | |||||||||||||||
August 2023 Notes | ||||||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Secured promissory notes aggregate principal amount | $ 800 | |||||||||||||||
Effective interest rate | 13.80% | |||||||||||||||
August 2023 Notes | Maximum [Member] | ||||||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Secured promissory notes aggregate principal amount | $ 100 | |||||||||||||||
GEN Keith B. Alexander [Member] | Promissory Notes With Directors [Member] | ||||||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||||||
Convertible promissory note in principal amount | $ 475 |
Organization and Summary of C_6
Organization and Summary of Changes in Significant Accounting Policies - Additional Information3 (Details) $ in Thousands | 9 Months Ended | |||||
Jan. 18, 2024 USD ($) Integer | Oct. 31, 2023 USD ($) | Jan. 29, 2024 Employees | Dec. 18, 2023 USD ($) | Nov. 30, 2023 USD ($) | Jan. 31, 2023 USD ($) | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Entities held liabilities | $ 66,498 | $ 68,383 | ||||
Number of proofs of claim | Integer | 108 | |||||
Write-off of pre-petition deferred financing costs and debt discount | 125 | |||||
Operating lease, right-of-use asset | 1,562 | $ 1,885 | ||||
Operating lease liability | 2,202 | |||||
IronNet Cybersecurity Inc [Member] | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Entities held liabilities | $ 732 | |||||
Subsequent Event | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Entity Number of Employees | Employees | 28 | |||||
Unsecured claims amount | $ 99,427 | |||||
Subsequent Event | Lease Termination Agreement | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Operating lease, right-of-use asset | $ 77 | $ 1,525 | ||||
Operating lease liability | $ 82 | $ 2,150 |
Organization and Summary of C_7
Organization and Summary of Changes in Significant Accounting Policies - Liquidity and Going Concern (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||||||||
Sep. 15, 2022 | Sep. 17, 2023 | Jan. 29, 2024 | Oct. 31, 2023 | Oct. 12, 2023 | Oct. 10, 2023 | Aug. 31, 2023 | Jul. 21, 2023 | Jan. 31, 2023 | Oct. 31, 2022 | Sep. 14, 2022 | Jan. 31, 2022 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Cash and cash equivalents | $ 787 | $ 7,568 | $ 8,228 | $ 47,673 | ||||||||
Collectible receivables | 329 | |||||||||||
Accounts Payable and Accrued Liabilities, Current | 5,412 | |||||||||||
Accounts Payable and Accrued Liabilities Current Due to Taxing Authorities | 1,313 | |||||||||||
Interest rate | 8% | |||||||||||
Secured promissory notes aggregate principal amount | $ 8,475 | |||||||||||
Debt instrument face amount | $ 556 | |||||||||||
Debt discount | $ 55 | |||||||||||
Issue discount rate | 9.90% | |||||||||||
Subsequent Event | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Convertible Debt | $ 4,788 | |||||||||||
DIP borrowings outstandng amount | 9,999 | |||||||||||
Term Loan [Member] | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
DIP borrowings outstandng amount | $ 8,500 | |||||||||||
Bridge Loan [Member] | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
DIP borrowings outstandng amount | 1,499 | |||||||||||
DIP by bankruptcy court maximum amount | 4,500 | |||||||||||
Bridge Loan [Member] | Subsequent Event | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
DIP borrowings outstandng amount | $ 1,499 | |||||||||||
Maximum [Member] | Delayed Draw Term Loan Credit Facility [Member] | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
DIP aggregate principal amount | $ 10,000 | |||||||||||
Korr Note [Member] | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Interest rate | 8% | |||||||||||
Debt instrument face amount | $ 556 | |||||||||||
Debt discount | $ 6 | $ 55 | ||||||||||
Issue discount rate | 9.90% | |||||||||||
C5 Capital Limited [Member] | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Secured convertible promissory note principal amount | $ 15,275 | |||||||||||
Ownership Percentage by beneficial owners | 5% | |||||||||||
Debt instrument face amount | 10,275 | $ 5,000 | ||||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Convertible Debt | $ 10,300 | 4,233 | $ 25,750 | |||||||||
Net of discount for cash proceeds | $ 10,000 | |||||||||||
Interest rate | 3% | |||||||||||
Debt Instrument, Term | 18 months | |||||||||||
Prepaid Convertible Debt | $ 6,067 |
Organization and Summary of C_8
Organization and Summary of Changes in Significant Accounting Policies - Additional Information 4 (Details) $ in Thousands | 6 Months Ended | ||||||
Jul. 31, 2022 USD ($) Segment | Oct. 31, 2023 USD ($) | Jul. 31, 2023 USD ($) | Feb. 01, 2023 USD ($) | Jan. 31, 2023 USD ($) | Oct. 31, 2022 USD ($) | Jan. 31, 2022 USD ($) | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Beginning balance of accumulated deficit | $ (4,707) | $ (51,419) | $ (45,073) | $ (34,724) | $ (21,952) | $ 38,443 | |
Number of Operating Segments | Segment | 1 | ||||||
Retained Earnings [Member] | |||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Beginning balance of accumulated deficit | $ (479,270) | $ (551,291) | $ (544,956) | $ (528,696) | $ (511,279) | $ (417,686) | |
Retained Earnings [Member] | Accounting Standards Update 2016-13 [Member] | |||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Beginning balance of accumulated deficit | $ 182 |
Organization and Summary of C_9
Organization and Summary of Changes in Significant Accounting Policies - Summary of Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue | $ 4,562 | $ 6,988 | $ 17,354 | $ 20,283 |
United States [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue | 3,493 | 5,634 | 13,766 | 17,478 |
International [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue | $ 1,069 | $ 1,354 | $ 3,588 | $ 2,805 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||||
Capitalized costs, current | $ 1,960 | $ 1,960 | |||
Capitalized costs, non current | 702 | 702 | |||
Deferred commission expenses | 921 | 921 | $ 1,751 | ||
Deferred revenue | 14,641 | $ 13,078 | 14,641 | $ 13,078 | |
Revenue remaining performance obligation amount | 22,253 | 22,253 | |||
Other Current Assets [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred commission expenses | 224 | 224 | |||
Other Noncurrent Assets [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred commission expenses | 697 | 697 | |||
Two Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers excluding assessed tax | 4,534 | ||||
Four Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers excluding assessed tax | $ 8,932 | ||||
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 23% | ||||
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 51% | ||||
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | Minimum [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 10% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 98% | 56% | |||
Subscription Revenue [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers excluding assessed tax | 3,924 | 5,651 | $ 14,774 | $ 16,069 | |
Product Subscription And Support Revenue [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers excluding assessed tax | 4,562 | 6,674 | 17,182 | 19,331 | |
Professional Services Revenue [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers excluding assessed tax | $ 0 | $ 314 | $ 172 | $ 952 |
Revenue - Schedule of Customers
Revenue - Schedule of Customers That Represented 10% or More of the Company's Total Revenue (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 11% | 13% | 11% | 12% |
Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 13% | 10% | 12% | 11% |
Customer C [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 11% | 13% | ||
Customer D [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 17% | 15% | ||
Total Customer [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 52% | 23% | 51% | 23% |
Revenue - Schedule of Deferred
Revenue - Schedule of Deferred Costs (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Beginning Balance | $ 4,362 | $ 4,604 |
Amounts recognized in cost of revenue | (1,820) | (9,294) |
Costs deferred | 120 | 9,640 |
Ending Balance | $ 2,662 | $ 4,950 |
Revenue - Schedule of Deferre_2
Revenue - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Beginning Balance | $ 27,141 | $ 33,566 |
Revenue recognized | (17,354) | (20,283) |
Amounts deferred | 8,709 | 16,952 |
Ending Balance | $ 18,496 | $ 30,235 |
Revenues - Schedule of Company'
Revenues - Schedule of Company's Recognition of Revenue (Details) $ in Thousands | Oct. 31, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue remaining performance obligation amount | $ 22,253 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-02-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 months |
Revenue remaining performance obligation amount | $ 4,977 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-02-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue remaining performance obligation amount | $ 13,144 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-02-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue remaining performance obligation amount | $ 3,593 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-02-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue remaining performance obligation amount | $ 539 |
Equity - Additional Information
Equity - Additional Information (Details) | 9 Months Ended | ||||
Feb. 11, 2022 USD ($) | Nov. 12, 2019 $ / shares shares | Oct. 31, 2023 USD ($) Vote $ / shares shares | Oct. 31, 2022 USD ($) | Jan. 31, 2023 $ / shares shares | |
Stockholders' Equity (Details) [Line Items] | |||||
Preferred stock authorized to issue | 100,000,000 | 100,000,000 | |||
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Preferred Stock, Shares Issued | 0 | 0 | |||
Preferred Stock, Shares Outstanding | 0 | 0 | |||
Common stock, share authorized | 500,000,000 | 500,000,000 | |||
Common shares, votes per share | Vote | 1 | ||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Common stock, shares issued | 121,507,000 | 111,466,000 | |||
Common stock, shares outstanding | 121,507,000 | 111,466,000 | |||
Commitment fee | $ | $ 0 | ||||
Change in fair value of commitment fee | $ | 195,000 | $ 421,000 | |||
Tumim Stone Capital, LLC [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Purchase agreement description | the Company has the right, but not the obligation from time to time to direct Tumim to purchase amounts of common stock, subject to certain limitations in the Purchase Agreement, specified in purchase notices that will be delivered to Tumim under the Purchase Agreement (each such purchase, a “Purchase”). Shares of common stock will be issued from the Company to Tumim at either a (i) 3% discount to the average daily volume weighted average price (the “VWAP”) of the common stock during the three consecutive trading days from the date that a purchase notice with respect to a particular purchase (a “VWAP Purchase Notice”) is delivered from the Company to Tumim (a “Forward VWAP Purchase”), or (ii) 5% discount to the lowest daily VWAP during the three consecutive trading days from the date that a VWAP Purchase Notice with respect to a particular purchase is delivered from the Company to Tumim (an “Alternative VWAP Purchase”). There is no upper limit on the price per share that Tumim could be obligated to pay for the common stock under the Purchase Agreement. The purchase price per share of common stock to be sold in a Purchase will be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction. | ||||
Commitment fee | $ | 0 | ||||
Tumim Stone Capital, LLC [Member] | Common Stock Purchase Agreement [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Purchase commitment of common stock shares | $ | $ 175,000 | ||||
Consideration paid on purchase commitment of common stock shares | $ | $ 1,750,000 | ||||
Percentage of consideration paid on purchase commitment of common stock shares | 1% | ||||
Public Warrants [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Not exercised warrants | 8,596,000 | ||||
Sale price of common stock | $ / shares | $ 18 | ||||
Public warrants exercised price | $ / shares | $ 11.5 | ||||
Sale of warrants (in Shares) | 17,250,000 | ||||
Public warrants expiration period | 5 years | ||||
Price per warrant | $ / shares | $ 0.01 | ||||
Shares Issued, Price Per Share | $ / shares | $ 10 | ||||
Public Warrants [Member] | Over-Allotment Option [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Sale of warrants (in Shares) | 2,250,000 | ||||
Common Class A [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 |
Stock Incentive Plan - Addition
Stock Incentive Plan - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Feb. 01, 2023 | Feb. 01, 2022 | Aug. 26, 2021 | Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2023 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Share based compensation by share based arrangement percentage of shares authorized for grant for which no condition is there | 20% | ||||||||
Share based compensation by share based arrangement term | 10 years | ||||||||
Fair value of shares under stock options granted | $ 0 | $ 2,000 | |||||||
Stock Option [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Share based payment arrangement non vested award cost not yet recognized amount | $ 0 | 0 | |||||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Allocated share based compensation | 3,000 | $ 14,495,000 | 2,252,000 | 33,075,000 | |||||
Share based payment arrangementnon vested award excluding options cost not yet recognized amount | 214,000 | $ 214,000 | |||||||
Shares Issued, Price Per Share | $ 12.85 | ||||||||
Weighted average remaining vesting period | 2 years 1 month 17 days | ||||||||
Employee Stock Option [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Allocated share based compensation | 0 | 0 | $ 0 | 0 | |||||
Graded Vesting Schedule [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Allocated share based compensation | 376,000 | (2,684,000) | (713,000) | 15,630,000 | |||||
Straight-line vesting schedule [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Allocated share based compensation | $ 380,000 | $ 11,811,000 | $ 2,965,000 | $ 17,445,000 | |||||
Stock Incentive Plan [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Share based compensation by share based arrangement vesting period | 48 months | ||||||||
Share based compensation by share based arrangement vesting arrangement term | 25% | ||||||||
Stock Incentive Plan [Member] | Common Class A [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Share based compensation by share based arrangement number of shares available for grant | 16,362,000 | 16,362,000 | |||||||
Stock Incentive Plan [Member] | Common Class A [Member] | Maximum [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Share based compensation by share based arrangement number of shares authorized | 13,500 | ||||||||
2014 Equity Incentive Plan [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Conversion of stock, shares converted | 18,972 | ||||||||
2021 Equity Incentive Plan [Member] | |||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||
Share based compensation by share based arrangement number of shares authorized | 24,252,000 | ||||||||
Percentage of annual increase in common stock available for issuance | 5% | ||||||||
Increase in issuance of number of shares and share equivalents | 5,818,000 | 4,934,000 |
Stock Incentive Plan - Summary
Stock Incentive Plan - Summary of Stock Options Under Stock Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Jan. 31, 2023 | Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Shares, Beginning Balance | 530,000 | |
Number of Shares, Forfeited or expired | (65,000) | |
Number of Shares, Ending Balance | 530,000 | 465,000 |
Number of Shares, Exercisable | 465,000 | |
Weighted Average Exercise Price, Beginning Balance | $ 0.56 | |
Weighted Average Exercise Price, Exercised | 0.36 | |
Weighted Average Exercise Price, Ending Balance | $ 0.56 | 0.59 |
Weighted Average Exercise Price, Exercisable | $ 0.59 | |
Weighted Average Remaining Contractual Term, Outstanding | 3 years 9 months 18 days | 3 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Forfeitures or expired | 2 years 4 months 24 days | |
Weighted Average Remaining Contractual Term, Exercisable | 3 years 1 month 6 days | |
Intrinsic Value of Outstanding Options, Beginning Balance | $ 773 | |
Intrinsic Value of Outstanding Options, Ending Balance | $ 773 |
Stock Incentive Plan - Summar_2
Stock Incentive Plan - Summary of Status of Outstanding RSU's (Details) shares in Thousands | 9 Months Ended |
Oct. 31, 2023 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of Shares, Beginning Balance | shares | 4,361 |
Number of Shares, Granted | shares | 28 |
Number of Shares, Vested | shares | (1,223) |
Number of Shares, Forfeited or expired | shares | (3,134) |
Number of Shares, Ending Balance | shares | 32 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 6.76 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 0.21 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 2.31 |
Weighted Average Grant Date Fair Value, Forfeited or expired | $ / shares | 5.26 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 8.18 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2023 USD ($) | Oct. 31, 2023 USD ($) | Jul. 21, 2023 USD ($) | Jan. 31, 2023 USD ($) Integer | Sep. 15, 2022 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument face amount | $ 556 | ||||
Commitment fee | $ 0 | $ 0 | |||
C5 Capital Limited [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Change in fair value of convertible notes | 0 | 63 | |||
Number of debt instrument | Integer | 2 | ||||
Debt instrument face amount | 10,275 | 10,275 | $ 5,000 | ||
Level 2 [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Convertible debt, fair value | 63 | ||||
Level 3 [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Convertible debt, fair value | 0 | 0 | $ 671 | $ 774 | |
Change in fair value of convertible notes | $ 167 | $ 671 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 6 | $ 6 |
Commitment Fee | 195 | |
Total financial assets | 6 | 201 |
Conversion options | 734 | |
Total financial liabilities | 734 | |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6 | 6 |
Total financial assets | $ 6 | 6 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commitment Fee | 195 | |
Conversion options | 734 | |
Total financial liabilities | $ 734 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis - Changes in the Fair Value of the Company's Financial Instruments (Details) - Level 3 [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Convertible Notes Derivative Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 671 | $ 0 |
Change in fair value | (671) | 774 |
Ending Balance | 0 | 774 |
C5 Notes Derivative Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 63 | 0 |
Change in fair value | (63) | 0 |
Ending Balance | 0 | 0 |
Commitment Fee Derivative Asset [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 195 | 0 |
Change in fair value | (195) | 1,330 |
Ending Balance | $ 0 | $ 1,330 |
Supplemental Information - Sche
Supplemental Information - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Accrued Liabilities [Abstract] | ||
Accrued expenses | $ 4,150 | $ 976 |
Taxes payable on behalf of employees related to vested RSUs | 265 | 6,987 |
Estimated additional taxes payable related to vested RSUs1 | 1,048 | 0 |
Unvouched payables | 1,215 | 2,010 |
Accrued expenses | 6,678 | 9,973 |
Accrued expenses subject to compromise (Note 12) | 2,267 | 0 |
Accrued expenses not subject to compromise | $ 4,411 | $ 9,973 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information (Additional Information) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Jan. 31, 2023 | |
Accrued expenses | $ 69 | |
Accrued interest | 2,198 | |
Accrued expenses subject to compromise (Note 12) | 2,267 | $ 0 |
Internal Revenue Service (IRS) [Member] | ||
Proceeds from Income Tax Refunds | 1,405 | |
Company made payments | $ 6,335 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Jan. 31, 2023 | |
Leases [Abstract] | ||
Percentage of annual escalation of base rent | 2.75% | |
Finance lease, right of use asset | $ 108 | $ 205 |
Finance lease liability | 88 | |
Finance lease payments | $ 105 |
Leases - Schedule of Financial
Leases - Schedule of Financial Statement Classification of Lease Balances With Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Leases [Abstract] | ||
Operating lease right-of-use assets, net | $ 1,562 | $ 1,885 |
Finance | 108 | 205 |
Operating | 653 | 607 |
Finance | 37 | 130 |
Operating Lease, Liability, Noncurrent | 1,549 | 2,047 |
Finance Lease, Liability, Noncurrent | $ 51 | $ 81 |
Leases - Schedule of Total Leas
Leases - Schedule of Total Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Leases [Abstract] | ||||
Operating lease cost | $ 146 | $ 222 | $ 437 | $ 815 |
Short-term lease cost | 359 | 447 | 985 | 1,630 |
Variable lease cost | 51 | 13 | 29 | 60 |
Amortization of right-of-use assets | 32 | 23 | 65 | 68 |
Interest on lease liabilities | 4 | 1 | 7 | 4 |
Total finance lease cost | $ 36 | $ 24 | $ 72 | $ 72 |
Leases - Schedule of Lease Paym
Leases - Schedule of Lease Payments (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Operating Leases | ||
Remaining six months of fiscal 2023 | $ 189 | |
2025 | 775 | |
2026 | 797 | |
2027 | 658 | |
Total | 2,419 | |
Less: Imputed Interest | 217 | |
Present value of net lease payments | 2,202 | |
Lease liability, current portion | 653 | $ 607 |
Lease liability, net of current portion | 1,549 | 2,047 |
Total lease liability | 2,202 | |
Finance Leases | ||
Remaining nine months of fiscal 2023 | 12 | |
2025 | 48 | |
2026 | 45 | |
2027 | 0 | |
Total | 105 | |
Less: Imputed Interest | 17 | |
Present value of net lease payments | 88 | |
Lease liability, current portion | 37 | 130 |
Lease liability, net of current portion | 51 | $ 81 |
Total lease liability | $ 88 |
Leases - Supplemental Informati
Leases - Supplemental Information And Non-Cash Activities Related To Operating And Finance Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Opeating cash flows from operating leases | $ 566 | $ 950 |
Operating cash flows from finance leases | 11 | 4 |
Financing cash flows from finance leases | 36 | 96 |
Cash paid for amounts included in the measurement of lease liabilities | $ 612 | $ 1,050 |
Weighted average remaining lease term (in years) | ||
Operating leases | 3 years 29 days | 4 years 29 days |
Finance leases | 2 years 3 months | 1 year 3 months |
Weighted average discount rate | ||
Operating leases | 6.36% | 6.36% |
Finance leases | 13.80% | 5.67% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Obligations Under Non cancellable Operating Leases (Details) $ in Thousands | Oct. 31, 2023 USD ($) |
Leases [Abstract] | |
2023 | $ 775 |
2024 | 797 |
2025 | 658 |
Total | $ 2,419 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Aug. 29, 2023 | May 19, 2023 | Apr. 20, 2023 | Dec. 30, 2022 | Dec. 14, 2022 | Sep. 15, 2022 | Sep. 14, 2022 | Oct. 31, 2023 | Jul. 31, 2023 | Apr. 30, 2023 | Oct. 31, 2022 | May 31, 2023 | Oct. 31, 2023 | Sep. 17, 2023 | Oct. 31, 2022 | Jan. 31, 2023 | Oct. 12, 2023 | Oct. 10, 2023 | Jul. 21, 2023 | Jan. 11, 2023 | |
Short-Term Debt [Line Items] | ||||||||||||||||||||
Debt instrument, interest Rate | 8% | |||||||||||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Debt discount | $ 55 | |||||||||||||||||||
Debt Instrument, Face Amount | 556 | |||||||||||||||||||
Interest expense | $ 200 | $ 1,239 | ||||||||||||||||||
Accretion of debt discount | $ 76 | |||||||||||||||||||
Effective interest rate | 50.71% | 50.71% | ||||||||||||||||||
Interest expense on amortization of debt issuance costs | $ 57 | $ 292 | ||||||||||||||||||
Secured promissory notes aggregate principal amount | $ 8,475 | |||||||||||||||||||
Convertible promissory note in principal amount | $ 475 | |||||||||||||||||||
Debt instrument face amount | $ 556 | |||||||||||||||||||
Issue discount rate | 9.90% | |||||||||||||||||||
Interest rate terms | The Korr Note bears interest at a rate of 8% from July 21, 2023, calculated on an actual/360 basis. | |||||||||||||||||||
Interest Expense | 53 | $ 59 | ||||||||||||||||||
Effective interest amount | 8 | 10 | ||||||||||||||||||
Amortization of Debt Discount (Premium) | 44 | 49 | ||||||||||||||||||
Interest expense | (915) | $ (320) | (3,453) | $ (482) | ||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Convertible Debt | $ 10,300 | $ 25,750 | 4,233 | 4,233 | ||||||||||||||||
Debt instrument, interest Rate | 3% | |||||||||||||||||||
Debt Instrument, Term | 18 months | |||||||||||||||||||
Prepaid convertible debt | 6,067 | 6,067 | ||||||||||||||||||
5% Convertible Promissory Notes Due 2024 [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Convertible note | 10,300 | 10,300 | ||||||||||||||||||
Convertible Debt | 25,750 | $ 4,233 | $ 4,233 | $ 4,233 | ||||||||||||||||
Debt instrument, interest Rate | 3% | 5% | 5% | |||||||||||||||||
Debt Instrument, Term | 18 months | 18 months | ||||||||||||||||||
Issuance of convertible debt percentage | 10% | |||||||||||||||||||
Conversion price per share | $ 7.5 | $ 7.5 | ||||||||||||||||||
Debt discount | $ 774 | $ 774 | 118 | |||||||||||||||||
Convertible debt, fair value | $ 2,934 | 2,934 | ||||||||||||||||||
Debt instrument periodic payment | $ 687 | |||||||||||||||||||
Common stock at a conversion price (in dollars per share) | $ 7.5 | |||||||||||||||||||
Lowest daily volume weighted average price | 95% | 95% | ||||||||||||||||||
Debt Instrument, Convertible, Floor Price | $ 0.44 | $ 0.44 | ||||||||||||||||||
Percentage of installment amount | 105% | 105% | ||||||||||||||||||
Accrued interest | $ 332 | $ 332 | 22 | |||||||||||||||||
Issuance of shares of common stock | 8,704 | |||||||||||||||||||
Debt instrument, principal balance | $ 3,320 | |||||||||||||||||||
Accretion of debt discount | $ 388 | |||||||||||||||||||
Interest expense on convertible note | $ 67 | |||||||||||||||||||
Effective interest rate | 16.79% | 16.79% | ||||||||||||||||||
Prepaid convertible debt | $ 6,067 | $ 6,067 | ||||||||||||||||||
Other Noncash Income (Expense) | 559 | |||||||||||||||||||
Promissory Notes With Directors [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Debt instrument, interest Rate | 13.80% | |||||||||||||||||||
Director note issed | 5,875 | |||||||||||||||||||
Director note sold | $ 300 | |||||||||||||||||||
Accrued interest | 859 | 859 | ||||||||||||||||||
Director notes outstanding | $ 8,475 | 8,475 | ||||||||||||||||||
Secured promissory notes aggregate principal amount | $ 6,900 | |||||||||||||||||||
Promissory Notes With Directors [Member] | Interest Expense [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Interest expense | $ 228 | $ 732 | ||||||||||||||||||
Convertible Promissory Notes With C5 [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Debt instrument, interest Rate | 13.80% | |||||||||||||||||||
Debt Instrument Maturity date | Jun. 30, 2023 | |||||||||||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||||||||||||
Conversion price per share | $ 2 | $ 2 | ||||||||||||||||||
Debt discount | $ 63 | $ 63 | ||||||||||||||||||
Convertible debt, fair value | 10,520 | 10,520 | ||||||||||||||||||
Debt Instrument, Unamortized Discount | 5,000 | 5,000 | ||||||||||||||||||
Accrued interest | 1,307 | 1,307 | ||||||||||||||||||
Accretion of debt discount | 0 | 55 | ||||||||||||||||||
Secured promissory notes aggregate principal amount | $ 2,000 | 400 | $ 3,030 | $ 6,845 | $ 20,770 | $ 3,000 | ||||||||||||||
Senior secured convertible promissory note principal amount | 15,275 | 15,275 | ||||||||||||||||||
Interest expense | (423) | (1,316) | ||||||||||||||||||
August 2023 Notes | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Effective interest rate | 13.80% | |||||||||||||||||||
Secured promissory notes aggregate principal amount | $ 800 | |||||||||||||||||||
Korr Note [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Debt instrument, interest Rate | 8% | |||||||||||||||||||
Debt discount | $ 6 | $ 55 | ||||||||||||||||||
Debt Instrument, Face Amount | 556 | |||||||||||||||||||
Accrued interest | 10 | 10 | ||||||||||||||||||
Debt instrument face amount | $ 556 | |||||||||||||||||||
Issue discount rate | 9.90% | |||||||||||||||||||
Level 3 [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Convertible debt, fair value | $ 774 | 0 | 0 | $ 671 | ||||||||||||||||
Fair value of debt | $ 347 | $ 347 | ||||||||||||||||||
Maximum [Member] | August 2023 Notes | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
Secured promissory notes aggregate principal amount | $ 100 | |||||||||||||||||||
Delayed Draw Term Loan Credit Facility [Member] | Maximum [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
DIP aggregate principal amount | $ 10,000 | |||||||||||||||||||
Term Loan [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
DIP borrowings outstandng amount | 8,500 | |||||||||||||||||||
Bridge Loan [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
DIP borrowings outstandng amount | 1,499 | |||||||||||||||||||
DIP by bankruptcy court maximum amount | 4,500 | |||||||||||||||||||
Bridge Loan [Member] | DIP Facility [Member] | ||||||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||||||
DIP borrowings outstandng amount | $ 1,499 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (0.10%) | 0% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2023 | |
Related Party Transactions (Details) [Line Items] | |||||
Revenue | $ 4,562 | $ 6,988 | $ 17,354 | $ 20,283 | |
Accounts Receivable | 234 | 234 | $ 3,373 | ||
Bad Debt Reserve, Tax Purpose of Qualified Lender | 1,283 | ||||
Related Party [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Revenue | 0 | $ 210 | 0 | $ 948 | |
Accounts Receivable | $ 0 | $ 0 | $ 0 |
Liabilities Subject to Compro_3
Liabilities Subject to Compromise - Schedule of Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Liabilities Subject to Compromise [Abstract] | ||
Accounts payable | $ 7,570 | |
Accrued expenses | 69 | |
Other current liabilities | 690 | |
Debt subject to compromise | 28,539 | |
Accrued interest on debt subject to compromise | 2,198 | |
Other long-term liabilities | 1,600 | |
Total liabilities subject to compromise | $ 40,666 | $ 0 |
Reorganization Items, Net - Sch
Reorganization Items, Net - Schedule of Reorganization Items, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Reorganizations [Abstract] | ||||
Write-off of pre-petition deferred financing costs and debt discount | $ 125 | |||
Professional fees | 713 | |||
Reorganization items, net | $ 838 | $ 0 | $ 838 | $ 0 |
Reorganization Items, Net - Add
Reorganization Items, Net - Additional Information (Details) $ in Thousands | Oct. 31, 2023 USD ($) |
Reorganizations [Abstract] | |
Cash paid for reorganization items | $ 0 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (6,335) | $ (32,009) | $ (22,413) | $ (93,593) |
Basic Weighted-average shares in computing net loss per share attributable to common stockholders | 123,001 | 105,033 | 118,004 | 101,925 |
Diluted Weighted-average shares in computing net loss per share attributable to common stockholders | 123,001 | 105,033 | 118,004 | 101,925 |
Net loss attributable to common stockholders - basic | $ (0.05) | $ (0.3) | $ (0.19) | $ (0.92) |
Net loss attributable to common stockholders - diluted | $ (0.05) | $ (0.3) | $ (0.19) | $ (0.92) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 9,071 | 17,819 |
Shares of Common Stock Issuable from Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 465 | 810 |
Unvested RSUs [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 7,030 |
Convertible notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 1,373 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,606 | 8,606 |
Deferred Payroll Taxes - (Addit
Deferred Payroll Taxes - (Additional Information) (Details) $ in Thousands | Jul. 21, 2023 USD ($) |
Unusual Risk or Uncertainty [Line Items] | |
Debt Instrument, Face Amount | $ 556 |
Debt Instrument, Interest Rate, Stated Percentage | 8% |
Subsequent Events (Additional I
Subsequent Events (Additional Information) (Details) - USD ($) $ in Thousands | Jan. 29, 2024 | Jan. 17, 2024 | Dec. 18, 2023 | Nov. 30, 2023 | Oct. 31, 2023 | Jul. 21, 2023 | Jan. 31, 2023 |
Subsequent Event [Line Items] | |||||||
Debt instrument, interest Rate | 8% | ||||||
Operating lease, right-of-use asset | $ 1,562 | $ 1,885 | |||||
Operating lease liability | $ 2,202 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Convertible Debt | $ 4,788 | ||||||
Subsequent Event [Member] | Lease Termination Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Operating lease, right-of-use asset | $ 77 | $ 1,525 | |||||
Operating lease liability | $ 82 | $ 2,150 | |||||
Subsequent Event [Member] | Post Bankruptcy Financing Term Sheet | |||||||
Subsequent Event [Line Items] | |||||||
Convertible Debt | $ 500 | $ 15,000 | |||||
Debt instrument, interest Rate | 6% |