IronNet (IRNT) Shareholder C5 Offers to Acquire All Outstanding Common Stock

IronNet (NYSE: IRNT) shareholder C5 Investors General Partner disclosed:

Item 4 of the Original Schedule 13D is hereby amended and supplemented by the addition of the following:

On December 22, 2022, C5 Capital Ltd., on behalf of the Reporting Persons (“C5”), delivered a non-binding expression of interest (the “Initial Proposal”) to the Board of Directors of the Company (the “Board”) in respect of a potential offer to acquire all of the outstanding Common Stock of the Company not presently owned by the Reporting Persons (the “Proposed Transaction”). No specific structure for the Proposed Transaction was proposed.

The Initial Proposal stated that any transaction, once structured and agreed upon, would be conditioned upon, among other things, the (x) approval of the transaction by a properly constituted special committee of independent directors of the Company, authorized and empowered to retain its own independent legal and financial advisors and (y) approval of the holders of a majority of the Common Shares not held by members of the buyer group or their affiliates. The Company responded to the Initial Proposal by letter dated December 24, 2022 (the “Response Letter”), in which the Company indicated that in light of the exigent circumstances involving the Company’s liquidity and cash position, and taking into account the composition of the Board and the Company’s stockholder base, the Company and a quorum of its Board did not believe these conditions are necessary to protect the Company and all of its residual claimants. As a result, the Company and its Board were therefore not prepared to accept these conditions.

Later on December 24, 2022, C5 delivered a follow up proposal to the Company’s Board (the “Proposal”) in which C5, based on the circumstances and reasons articulated in the Response Letter, indicated its willingness to proceed and commence negotiation of the Proposed Transaction at a price equal to $0.30 per share. Further, in light of the Company’s liquidity needs and in order to enable the Company to complete the Proposed Transaction, C5 indicated that it was prepared to extend the Company financing on terms no less favorable than those set forth in the secured promissory notes issued by the Company on or around December 14, 2022 in the aggregate principal amount of approximately $6.9 million, including (i) an initial payment of $2 million by December 28, 2022, (ii) a second payment of $3.5 million on January 9, 2023 and (iii) a mutually agreed amount to be placed in escrow upon entering into definitive agreements with respect to the Proposed Transaction. C5 has conditioned further discussion regarding the Proposal on the Company agreeing to a mutual exclusivity period through January 31, 2022 (subject to an automatic extension of an additional seven days) to seek to negotiate definitive agreements with respect to the Proposed Transaction.

The Proposal is non-binding in nature and does not obligate in any way the Reporting Persons or the Company to negotiate or enter into definitive documentation with respect to a transaction or otherwise complete the Proposed Transaction. The Proposal states that the buyer group is only interested in acquiring the outstanding Common Stock that they do not already own, and are not interested in selling their Common Stock to another party.

The foregoing description of the Initial Proposal, the Response Letter and the Proposal does not purport to be complete and is qualified in its entirety by reference to the full text of Initial Proposal, the Response Letter and the Proposal, which are filed herewith as Exhibit 2, Exhibit 3 and Exhibit 4 and incorporated herein by reference.

Neither the Proposal nor this Schedule 13D is meant to be, nor should be construed as, an offer to buy or the solicitation of an offer to sell any of Company’s securities.

The Reporting Persons intend to review their investment in the Company on a continuing basis and may from time to time and at any time in the future depending on various factors, including, without limitation, the outcome of any discussions referenced in this Schedule 13D, as may be amended from time to time, the Company’s financial position and strategic direction, actions taken by the Board, price levels of the Company’s securities, other investment opportunities available to the Reporting Person, conditions in the securities market and general economic and industry conditions, take such actions with respect to the investment in the Company as they deem appropriate.

These actions may include (i) acquiring additional Common Stock and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon or relate to the value of securities of the Company(collectively, “Securities”) in the open market or otherwise; (ii) disposing of any or all of their Securities in the open market or otherwise; (iii) engaging in any hedging or similar transactions with respect to the Securities; or (iv) proposing or considering one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D.

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