Item 1.01 Entry into a Material Definitive Agreement.
Between December 14, 2022 and December 16, 2022, IronNet, Inc. (the “Company”) issued and sold secured promissory notes in an aggregate principal amount of $6.9 million (the “Notes”) to a total of eight lenders. The lenders included GEN Keith B. Alexander (Ret.), the founder, Chief Executive Officer and Chairman of the Board of Directors of the Company. The Notes were also issued to lenders that include VADM John M. McConnell (Ret.), Hon. Michael J. Rogers, Theodore E. Schlein and VADM Jan E. Tighe (Ret.), each of whom is a director of the Company, as well as funds affiliated with Forgepoint Capital (the “Forgepoint Funds”). Donald R. Dixon, a member of the Company’s board of directors, is an affiliate of ForgePoint Capital, and the ForgePoint Funds are also beneficial owners of greater than 5% of the Company’s common stock.
Each Note has a scheduled maturity date of one year from the date of issuance, except that the Note issued to one lender that is not, and is not affiliated with, a director of the Company has a scheduled maturity date of six months from the date of issuance. The Notes bear interest at a rate of 13.8% per annum, payable at maturity. The Company may prepay the Notes at any time without premium or penalty, and the Notes do not restrict the incurrence of future indebtedness by the Company.
In the event that the Company fails to timely pay amounts due under the Notes or the Company materially defaults in its performance of any other covenant under the Notes or the Security Agreement (as defined below), which default is not cured within 30 days after written notice thereof, then at the option of the lenders, upon the written consent of lenders representing a majority of the outstanding and unpaid principal under the Notes, all unpaid principal, accrued interest and other amounts owing under the Notes shall be immediately due and payable.
In the event that the Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of or relating to debtors, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance thereof, or if an involuntary petition is filed against the Company (unless such petition is dismissed or discharged within 60 days) under any bankruptcy statute, or a custodian, receiver, trustee, assignee for the benefit of creditors is appointed to take possession, custody or control of any property of the Company, then all unpaid principal, accrued interest and other amounts owing under the Notes will accelerate and automatically become immediately due and payable.
The Notes are secured by substantially all of the assets of the Company, excluding the Company’s intellectual property. The Company entered into a Security Agreement (the “Security Agreements”) with each of the lenders.
The forgoing descriptions of the Notes and the Security Agreements do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the form of Note and form of Security Agreement filed hereto as Exhibits 4.1 and 10.1, respectively, and incorporated herein by reference.