IronNet, Inc. (IRNT) Misrepresented its Business and Financial Prospects
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired IronNet, Inc. (NYSE: IRNT) f/k/a LGL Systems Acquisition Corp. securities between September 15, 2021 and December 15, 2021, for violations of the Securities Exchange Act of 1934. IronNet designs and develops solutions to prevent cyber attacks.
According to the complaint, on August 27, 2021, IronNet became a publicly traded company via merger with LGL Systems Acquisition Corp. IronNet’s financial projections, which shareholders relied upon in voting for the merger, forecasted fiscal year 2022 revenues of $43 million to $45 million and annual recurring revenue (“ARR”) of $75 million.
On September 14, 2021, IronNet announced disappointing second quarter 2022 financial results of $6.1 million for Q2 2022 compared to $7.9 million for Q2 2021 and a net loss of $17.2 million. Notwithstanding, IronNet affirmed its projections and assured investors it was “on target with our first half guidance.” The result was a 38% increase in the stock price and a closing stock price of $32.13 per share.
However, by December 15, 2021, the Company slashed its expected fiscal year 2022 revenue to just $26 million with ARR of approximately $30 million. The Company also announced it had terminated its Chief Revenue Officer. On this news, IronNet’s stock fell 31% to close at $4.66 per share on December 15, 2021.
During the class period, IronNet materially overstated its business and financial prospects. Specifically, the Company was unable to predict the timing of significant customer opportunities, which constituted a substantial portion of its publicly-issued FY 2022 financial guidance.
Next Steps: If you acquired shares of IronNet, Inc. (IRNT) between September 15, 2021 and December 15, 2021, you have until June 21, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.