Equity Investment in Unconsolidated Subsidiary

9 Months Ended

Sep. 30, 2022

Equity Method Investments And Joint Ventures [Abstract]

Equity Investment in Unconsolidated Subsidiary

C. Equity Investment in Unconsolidated Subsidiary

In November 2019, the Company made its initial investment of $3,350,000 in the Sponsor of the SPAC and subscribed to an additional investment of $2,725,000 in March 2021, which was funded in May 2021. The incremental investment was part of the Sponsor syndication to participate in a private placement in connection with the IronNet Business Combination. As previously discussed, the SPAC completed a merger with its target company on August 26, 2021 and the combined company began trading its common stock on the NYSE under the symbol “IRNT.”

On September 14, 2021, as a result of its Sponsor investment, the Company received 1,572,529 shares of IRNT common stock and 2,065,000 IRNT warrants exchangeable into shares of IRNT common stock. On October 1, 2021, the Company exercised its 2,065,000 warrants on a cashless basis and received 1,271,406 shares of IRNT common stock. To date, the Company has disposed of 1,555,315 of its 2,843,935 shares of IRNT common stock and derivatives purchased as part of its plan to minimize the economic risk of IRNT share price volatility and received related proceeds of approximately $20,200,000, with 1,288,620 shares of IRNT common stock remaining in our portfolio at September 30, 2022 valued at $887,859. Subsequent to the September 14, 2021 Sponsor distribution, the Company’s IRNT common stock and warrants were classified as marketable securities under ASC 321, Investments – Equity Securities (“ASC 321”), with any change in fair value reported as an unrealized gain or loss. See Note D - Marketable Securities. Subsequent to the September 14, 2021 Sponsor distribution, LGL’s interest in the Sponsor is immaterial.