IronNet Furloughs Most Workers, May Seek Bankruptcy Protection
The cybersecurity vendor will ‘substantially curtail’ its business operations, according to an SEC filing.
IronNet disclosed Tuesday that it will furlough most employees and halt the bulk of its operations.
The cybersecurity vendor’s board is also “continuing to evaluate strategic alternatives, including potentially seeking bankruptcy protection,” IronNet said in a filing with the U.S. Securities and Exchange Commission.
IronNet’s board authorized the moves on Sept. 2 “as a result of the liquidity position” of the company, according to the SEC filing.
The moves come after IronNet’s founder, Keith Alexander, resigned as CEO in July as part of a take-private deal with investment firm C5 Capital. Alexander has remained as chairman of the board at IronNet.
A retired four-star general and former director of the National Security Agency, Alexander launched IronNet in 2014, and the company went public in 2021.
“Several” employees have been retained by IronNet “to ensure there were no service interruptions,” the filing said. As of the end of January, IronNet had employed 104 full-time workers, according to the company’s latest annual report.
The plan entails a furlough of “almost all of the company’s employees” and will “substantially curtail” its business operations, IronNet said in the filing. The curtailment will continue “until such time that the company has sufficient operating liquidity to rehire a portion of the furloughed employees and resume business operations,” the firm said.
IronNet had previously gone through two rounds of layoffs since mid-2022. Most recently, IronNet disclosed last September that it would lay off 90 employees, or 35 percent of its staff at the time, while warning that it might not have enough cash to support operations for the next year.
In the SEC filing Tuesday, IronNet said that “in the absence of additional sources of liquidity, the company’s existing cash and cash equivalents and anticipated cash flows from operations are not sufficient to meet the company’s operating and liquidity needs.”
“In the event that additional sources of liquidity do not become available to the company, the company may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a plan of reorganization, court-supervised sale and/or liquidation,” the company said.
If IronNet is unable to pursue Chapter 11 bankruptcy protection, “it may be necessary to pursue bankruptcy protection under Chapter 7 of the United States Bankruptcy Code, in which case a Chapter 7 trustee would be appointed or elected to liquidate the Company’s assets for distribution in accordance with the priorities established by the United States Bankruptcy Code,” IronNet said.