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Commitment and Contingencies
9 Months Ended
Oct. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies COMMITMENTS AND CONTINGENCIES
Legal Contingencies
From time to time, we may be a party to various legal proceedings and subject to claims in the ordinary course of business.
Securities Litigation
On June 6, 2023, a securities class action was filed against the Company, its Chief Executive Officer and its Chief Financial Officer, in the Northern District of California, captioned Johansson v. SentinelOne, Inc., Case No. 4:23-cv-02786. The suit is brought on behalf of an alleged class of stockholders who purchased or acquired shares of the Company’s Class A common stock between June 1, 2022 and June 1, 2023. The complaint alleges that defendants made false or misleading statements about the Company's business, operations and prospects, including its annual recurring revenues and internal controls, and purports to assert claims under Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, as amended. A substantially similar suit was filed on June 16, 2023 in the same court against the same defendants asserting the same claims, captioned Nyren v. SentinelOne, Inc., Case No. 4:23-cv-02982. On October 4, 2023, the court issued an order consolidating both cases under the caption In re SentinelOne, Inc. Securities Litigation Case No. 4:23-cv-02786 and appointing a lead plaintiff. Lead plaintiff has until December 4, 2023 to file a consolidated or amended complaint. The deadline for defendants’ response to the consolidated amended complaint is February 2, 2024. We believe the case is without merit and intends to defend the suit vigorously. Once the consolidated or amended complaint is filed, we will file a motion to dismiss the action.
Fortis Litigation
In September 2023, Fortis Advisors LLC (Fortis), in its capacity as the representative for the stockholders of Attivo, filed an action against the Company in Delaware Chancery Court asserting claims arising out of the Attivo Acquisition. The case is captioned Fortis Advisors LLC v. SentinelOne, Inc., Case No. 2023-0946-VLM.
In June 2023, the Company sent a letter to Fortis seeking indemnification for certain claims, including for breaches by Attivo of its representations and warranties in the merger agreement. Fortis is now seeking a declaratory judgment that the Company is not entitled to indemnification for the claims it has asserted, and that Fortis should recover the funds held in escrow. Fortis also alleges that the Company breached its representations and warranties in the merger agreement because its SEC filings allegedly contained materially false or misleading statements about the Company’s annual recurring revenues. The Company believes Fortis’ claims are without merit and intends to defend the suit vigorously. On November 3, 2023, the Company filed its answer to Fortis’ complaint. On the same day, the Company filed counterclaims against Fortis, in its capacity as the representative of the stockholders of Attivo, based on Attivo’s breach of several of its representations, warranties and covenants in the merger agreement. The Company’s counterclaims seek an order directing Fortis to comply with its contractual obligations to release funds set aside to indemnify the Company for its losses and any additional damages in excess of the indemnity fund.
BlackBerry Litigation
Starting in October 2019, BlackBerry Corp. and its subsidiary Cylance, Inc. (BlackBerry) filed a total of nine proceedings (seven lawsuits and two arbitrations) against us and certain former BlackBerry employees who joined the Company. In these proceedings, BlackBerry alleged that it had viable legal claims as a result of its former employees joining us. Over the four years, all but three of these actions (a company-to company case and two cases in Vermont) were dismissed by BlackBerry. In September 2023, the Company and BlackBerry entered into a confidential settlement agreement pursuant to which BlackBerry agreed, among other things, to dismiss with prejudice and terminate the remaining actions, and which contained a comprehensive release to resolve any other potential disputes regarding the hiring of certain former employees of BlackBerry and any alleged misappropriation of BlackBerry’s alleged trade secrets.
We believe that there are no other pending or threatened legal proceedings that are likely to have a material adverse effect on our condensed consolidated financial statements.
Warranties and Indemnification
Our services are generally warranted to deliver and operate in a manner consistent with general industry standards that are reasonably applicable and materially conform with our documentation under normal use and circumstances. Our contracts generally include certain provisions for indemnifying customers against liabilities if our products or services infringe a third party’s intellectual property rights.
We also offer a limited warranty to certain customers, subject to certain conditions, to cover certain costs incurred by the customer in case of a cybersecurity breach. We have a cybersecurity liability policy that may cover our customers’ actual damages. We have not incurred any material costs related to such obligations and have not accrued any liabilities related to such obligations in the condensed consolidated financial statements as of October 31, 2023 and January 31, 2023.
In addition, we also indemnify certain of our directors and executive officers against certain liabilities that may arise while they are serving in good faith in their company capacities. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid.