##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file no. 1-33350
 SOURCEFIRE, INC.
 (Exact Name of Registrant as Specified in its Charter)
 Delaware(State or Other Jurisdiction of 
Incorporation or Organization)
    
    52-2289365(I.R.S. Employer
Identification No.)9770 Patuxent Woods Drive 
Columbia, Maryland(Address of Principal Executive Offices)
    
    21046(Zip Code)
 Registrants telephone number including area code: 410-290-1616
 þ o
  o o þ
 o þ




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##### 



Sourcefire, Inc.
Index
Form 10-Q
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)
    
    3Consolidated Balance Sheets as of September 30, 2007 and December 31, 2006
    
    3Consolidated Statements of Operations for the three and nine months ended September 30, 2007 and 2006
    
    4Consolidated Statement of Changes in Convertible Preferred Stock and Stockholders Equity (Deficit)
for the nine months      ended September 30, 2007
    
    5Consolidated Statements of Cash Flows for the nine months ended September 30, 2007 and 2006
    
    6Notes to Consolidated Financial Statements
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    15Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    28Item 4.
    
    Controls and Procedures
    
    28PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    29Item 1A.
    
    Risk Factors
    
    29Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    41Item 3.
    
    Defaults Upon Senior Securities
    
    42Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    42Item 5.
    
    Other Information
    
    42Item 6.
    
    Exhibits
    
    43Signatures
    
    44
 2




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##### 



PART I. FINANCIAL INFORMATION
 Item 1. Financial Statements
 SOURCEFIRE, INC.
 CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
 September 30
    
    
    December 312007
    
    
    2006(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    27,217
    
    
    $
    13,029Held-to-maturity investments
    
    
    70,204
    
    
    
    12,385Accounts receivable, net of allowance for doubtful accounts of $147 in 2007 and $166 in 2006
    
    
    13,920
    
    
    
    16,507Inventory
    
    
    3,164
    
    
    
    2,099Prepaid expenses and other current assets
    
    
    2,981
    
    
    
    919Total current assets
    
    
    117,486
    
    
    
    44,939Property and equipment, net
    
    
    3,848
    
    
    
    2,546Intangible assets, net
    
    
    624
    
    
    
    Held-to-maturity investments, less current portion
    
    
    5,916
    
    
    
    908Restricted cash
    
    
    1,000
    
    
    
    Other assets
    
    
    329
    
    
    
    1,559Total assets
    
    $
    129,203
    
    
    $
    49,952Liabilities, convertible preferred stock and stockholders equity (deficit)Current liabilities:Accounts payable
    
    $
    1,936
    
    
    $
    3,081Accrued compensation and related expenses
    
    
    1,979
    
    
    
    1,783Other accrued expenses
    
    
    1,170
    
    
    
    1,312Current portion of deferred revenue
    
    
    13,362
    
    
    
    11,735Current portion of long-term debt
    
    
    
    
    
    
    675Other current liabilities
    
    
    721
    
    
    
    501Total current liabilities
    
    
    19,168
    
    
    
    19,087Deferred revenue, less current portion
    
    
    2,526
    
    
    
    2,380Long-term debt, less current portion
    
    
    
    
    
    
    637Other long-term liabilities
    
    
    83
    
    
    
    Total liabilities
    
    
    21,777
    
    
    
    22,104Commitments and contingenciesSeries A convertible preferred stock, $0.001 par value; 2,495,410 shares authorized at
December 31, 2006, 2,475,410 shares issued and outstanding at December 31, 2006; aggregate
liquidation preference of $14,093 at December 31, 2006; no shares authorized, issued or
outstanding at September 30, 2007
    
    
    
    
    
    
    10,308Warrants to purchase Series A convertible preferred stock
    
    
    
    
    
    
    25Series B convertible preferred stock, $0.001 par value; 7,132,205 shares authorized, issued
and outstanding at December 31, 2006; aggregate liquidation preference of $19,947 at
December 31, 2006; no shares authorized, issued or outstanding at September 30, 2007
    
    
    
    
    
    
    14,265Series C convertible preferred stock, $0.001 par value; 5,404,043 shares authorized, issued
and outstanding at December 31, 2006; aggregate liquidation preference of $26,050 at
December 31, 2006; no shares authorized, issued or outstanding at September 30, 2007
    
    
    
    
    
    
    18,270Series D convertible preferred stock, $0.001 par value; 3,264,449 shares authorized, issued
and outstanding at December 31, 2006; aggregate liquidation preference of $29,847 at
December 31, 2006; no shares authorized, issued or outstanding at September 30, 2007
    
    
    
    
    
    
    23,879Total convertible preferred stock
    
    
    
    
    
    
    66,747Stockholders equity (deficit):Preferred stock, $0.001 par value; 20,000,000 shares authorized; no shares
issued and outstanding at September 30, 2007 and December 31, 2006
    
    
    
    
    
    
    Common stock, $0.001 par value; 240,000,000 shares
authorized; 24,464,116 and
3,491,764 shares issued and outstanding at September 30, 2007 and December 31,
2006, respectively
    
    
    24
    
    
    
    3Additional paid-in capital
    
    
    152,733
    
    
    
    Accumulated deficit
    
    
    (45,331
    )
    
    
    (38,902
    )Total stockholders equity (deficit)
    
    
    107,426
    
    
    
    (38,899
    )Total liabilities, convertible preferred stock and stockholders equity (deficit)
    
    $
    129,203
    
    
    $
    49,952
 3




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##### 



SOURCEFIRE, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30
    
    
    September 302007
    
    
    2006
    
    
    2007
    
    
    2006(Unaudited)
    
    
    (Unaudited)Revenue:Products
    
    $
    9,403
    
    
    $
    6,927
    
    
    $
    21,103
    
    
    $
    18,390Technical support and professional services
    
    
    5,403
    
    
    
    3,940
    
    
    
    15,418
    
    
    
    10,544Total revenue
    
    
    14,806
    
    
    
    10,867
    
    
    
    36,521
    
    
    
    28,934Cost of revenue:Products
    
    
    2,665
    
    
    
    1,813
    
    
    
    5,809
    
    
    
    4,931Technical support and professional services
    
    
    800
    
    
    
    725
    
    
    
    2,277
    
    
    
    2,016Total cost of revenue
    
    
    3,465
    
    
    
    2,538
    
    
    
    8,086
    
    
    
    6,947Gross profit
    
    
    11,341
    
    
    
    8,329
    
    
    
    28,435
    
    
    
    21,987Operating expenses:Research and development
    
    
    2,895
    
    
    
    2,082
    
    
    
    8,076
    
    
    
    6,334Sales and marketing
    
    
    6,746
    
    
    
    4,929
    
    
    
    18,563
    
    
    
    14,512General and administrative
    
    
    2,540
    
    
    
    1,103
    
    
    
    7,288
    
    
    
    3,587Depreciation and amortization
    
    
    427
    
    
    
    306
    
    
    
    1,177
    
    
    
    912In-process research and development
    
    
    2,947
    
    
    
    
    
    
    
    2,947
    
    
    
    Total operating expenses
    
    
    15,555
    
    
    
    8,420
    
    
    
    38,051
    
    
    
    25,345Loss from operations
    
    
    (4,214
    )
    
    
    (91
    )
    
    
    (9,616
    )
    
    
    (3,358
    )Other income (expense):Interest and investment income
    
    
    1,417
    
    
    
    294
    
    
    
    3,351
    
    
    
    447Interest expense
    
    
    
    
    
    
    (20
    )
    
    
    (35
    )
    
    
    (61
    )Other income (expense)
    
    
    3
    
    
    
    22
    
    
    
    (9
    )
    
    
    56Total other income (expense)
    
    
    1,420
    
    
    
    296
    
    
    
    3,307
    
    
    
    442Income (loss) before income taxes
    
    
    (2,794
    )
    
    
    205
    
    
    
    (6,309
    )
    
    
    (2,916
    )Income tax expense
    
    
    (50
    )
    
    
    
    
    
    
    (120
    )
    
    
    Net income (loss)
    
    
    (2,844
    )
    
    
    205
    
    
    
    (6,429
    )
    
    
    (2,916
    )Accretion of preferred stock
    
    
    
    
    
    
    (1,131
    )
    
    
    (870
    )
    
    
    (2,687
    )Net loss attributable to common stockholders
    
    $
    (2,844
    )
    
    $
    (926
    )
    
    $
    (7,299
    )
    
    $
    (5,603
    )Net loss attributable to common stockholders per share:Basic and diluted
    
    $
    (0.12
    )
    
    $
    (0.27
    )
    
    $
    (0.38
    )
    
    $
    (1.67
    )Weighted average shares outstanding used in computing
per share amounts:Basic and diluted
    
    
    24,218,634
    
    
    
    3,392,526
    
    
    
    19,027,750
    
    
    
    3,360,099
  4




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##### 



SOURCEFIRE, INC.
 CONSOLIDATED STATEMENT OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT)
(Amounts in thousands, except share data)
(unaudited)
 Warrants toPurchaseSeries ASeries A Convertible
    
    
    Convertible
    
    
    Series B Convertible
    
    
    Series C Convertible
    
    
    Series D Convertible
    
    
    
    
    
    
    
    
    
    
    AdditionalPreferred Stock
    
    
    Preferred
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Stock
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    TotalBalance at
December 31, 2006
    
    
    2,475,410
    
    
    $
    10,308
    
    
    $
    25
    
    
    
    7,132,205
    
    
    $
    14,265
    
    
    
    5,404,043
    
    
    $
    18,270
    
    
    
    3,264,449
    
    
    $
    23,879
    
    
    
    3,491,764
    
    
    $
    3
    
    
    $
    
    
    
    $
    (38,902
    )
    
    $
    (38,899
    )Exercise of common
stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    172,998
    
    
    
    1
    
    
    
    213
    
    
    
    
    
    
    
    214Issuance of
restricted common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    311,798
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based
compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,911
    
    
    
    
    
    
    
    1,911Issuance of common
stock in initial
public offering,
net of issuance
costs of $8,901
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,185,500
    
    
    
    6
    
    
    
    83,876
    
    
    
    
    
    
    
    83,882Accretion of
convertible
preferred stock to
redemption value
    
    
    
    
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    186
    
    
    
    
    
    
    
    237
    
    
    
    
    
    
    
    307
    
    
    
    
    
    
    
    
    
    
    
    (870
    )
    
    
    
    
    
    
    (870
    )Conversion of
preferred stock to
common stock
    
    
    (2,475,410
    )
    
    
    (10,448
    )
    
    
    (25
    )
    
    
    (7,132,205
    )
    
    
    (14,451
    )
    
    
    (5,404,043
    )
    
    
    (18,507
    )
    
    
    (3,264,449
    )
    
    
    (24,186
    )
    
    
    14,302,056
    
    
    
    14
    
    
    
    67,603
    
    
    
    
    
    
    
    67,617Net loss for the
nine months ended
September 30, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,429
    )
    
    
    (6,429
    )Balance at
September 30, 2007
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    24,464,116
    
    
    $
    24
    
    
    $
    152,733
    
    
    $
    (45,331
    )
    
    $
    107,426
  5




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##### 



SOURCEFIRE, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 Nine Months EndedSeptember 302007
    
    
    2006(Unaudited)Operating activitiesNet loss
    
    $
    (6,429
    )
    
    $
    (2,916
    )Adjustments to reconcile net loss to net cash (used in) provided by operating activities:Depreciation and amortization
    
    
    1,202
    
    
    
    934Provision for doubtful accounts
    
    
    (1
    )
    
    
    Amortization of unearned compensation
    
    
    
    
    
    
    15Stock-based compensation
    
    
    1,911
    
    
    
    267Amortization of (premium) discount on held-to-maturity investments
    
    
    (933
    )
    
    
    5Write-off of acquired in-process research and development costs
    
    
    2,947
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    2,588
    
    
    
    2,430Inventory
    
    
    (1,065
    )
    
    
    (659
    )Prepaid expenses and other assets
    
    
    (1,871
    )
    
    
    (360
    )Accounts payable
    
    
    (1,145
    )
    
    
    (104
    )Accrued expenses
    
    
    54
    
    
    
    1,657Deferred revenue
    
    
    1,773
    
    
    
    664Other current liabilities
    
    
    303
    
    
    
    (21
    )Net cash (used in) provided by operating activities
    
    
    (666
    )
    
    
    1,912Investing activitiesPurchase of property and equipment
    
    
    (2,494
    )
    
    
    (815
    )Purchase of held-to-maturity investments
    
    
    (95,895
    )
    
    
    (1,401
    )Proceeds from maturities of held-to-maturity investments
    
    
    34,000
    
    
    
    2,000Cash paid for acquisition of ClamAV, including direct acquisition costs of $81
    
    
    (3,581
    )
    
    
    Cash held in escrow related to acquisition of ClamAV
    
    
    (1,000
    )
    
    
    Net cash used in investing activities
    
    
    (68,970
    )
    
    
    (216
    )Financing activitiesBorrowings of long-term debt
    
    
    113
    
    
    
    383Repayments of long-term debt
    
    
    (1,424
    )
    
    
    (403
    )Proceeds from issuance of Series D Redeemable Convertible Preferred Stock, net of offering costs
    
    
    
    
    
    
    22,921Proceeds from issuance of common stock, net of underwriters discount of $6,495
    
    
    86,288
    
    
    
    Proceeds from exercise of stock options
    
    
    214
    
    
    
    142Payment of equity offering costs
    
    
    (1,367
    )
    
    
    (708
    )Net cash provided by financing activities
    
    
    83,824
    
    
    
    22,335Net increase in cash and cash equivalents
    
    
    14,188
    
    
    
    24,031Cash and cash equivalents at beginning of period
    
    
    13,029
    
    
    
    1,106Cash and cash equivalents at end of period
    
    $
    27,217
    
    
    $
    25,137
  6




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##### 



SOURCEFIRE, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007
(Unaudited)
 1.  Initial Public Offering
  2. Description of Business
  ®
   3. Summary of Significant Accounting Policies
 Basis of Presentation
  Use of Estimates
  7




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##### 



Accounts Receivable and Allowance for Doubtful Accounts
   Inventories
  Revenue Recognition
   Modification of SOP 97-2, Software Revenue Recognition with Respect to Certain
Transactions.
   8




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##### 



Warranty
  Income Taxes
 Accounting
for Income Taxes.
 Acquired Intangible Assets
   Stock-Based Compensation
 Accounting for Stock
Based Compensation Accounting for Stock Issued to
Employees
 9




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##### 



Three Months Ended
    
    Nine Months EndedSeptember 30
    
    September 302007
    
    2007
    
    2006Average risk-free interest rate
    
    
    4.3
    %
    
    
    4.6
    %
    
    
    4.7
    %Expected dividend yield
    
    
    
    
    
    
    
    
    
    
    Expected useful life (years)
    
    
    6.25
    
    
    
    6.25
    
    
    
    6.25Expected volatility
    
    
    71.1
    %
    
    
    74.9
    %
    
    
    80.1
    %
 
 
 
  Three Months Ended
    
    
    Nine Months EndedSeptember 30
    
    
    September 302007
    
    
    2006
    
    
    2007
    
    
    2006Cost of sales product
    
    
    11
    
    
    
    
    
    
    
    16
    
    
    
    Cost of sales services
    
    
    38
    
    
    
    
    
    
    
    50
    
    
    
    Stock based compensation expense included in cost of sales
    
    
    49
    
    
    
    
    
    
    
    66
    
    
    
    Research and development
    
    
    88
    
    
    
    20
    
    
    
    257
    
    
    
    43Sales and marketing
    
    
    300
    
    
    
    55
    
    
    
    755
    
    
    
    119General and administrative
    
    
    282
    
    
    
    67
    
    
    
    833
    
    
    
    120Stock-based compensation included in operating expenses
    
    
    670
    
    
    
    142
    
    
    
    1,845
    
    
    
    282Total stock-based compensation
    
    
    719
    
    
    
    142
    
    
    
    1,911
    
    
    
    282Effect on net loss per share:Basic and diluted
    
    $
    0.03
    
    
    $
    0.04
    
    
    $
    0.10
    
    
    $
    0.08
 10




---



##### 



Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction
with Selling, Goods or Services
 Net Loss Attributable to Common Stockholders Per Share
   September 302007
    
    2006Options to purchase common stock
    
    
    3,313,532
    
    
    
    2,744,991Shares of common stock into which outstanding warrants are convertible
    
    
    36,944
    
    
    
    36,944Shares of common stock into which outstanding preferred stock is convertible
    
    
    
    
    
    
    14,302,056Unvested shares of restricted common stock
    
    
    12,315
    
    
    
    81,588Total
    
    
    3,362,791
    
    
    
    17,165,579
  Fair Value of Financial Instruments
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes,
an interpretation of SFAS No. 109, Accounting for Income Taxes
 Fair Value
Measurements
 4.  Acquisition
  11




---



##### 



5.  Property and Equipment
  September 30
    
    
    December 312007
    
    
    2006(unaudited)Furniture, fixtures and equipment
    
    $
    6,789
    
    
    $
    5,025Leasehold improvements
    
    
    1,699
    
    
    
    969Total property and equipment
    
    
    8,488
    
    
    
    5,994Less accumulated depreciation and amortization
    
    
    4,640
    
    
    
    3,448Net property and equipment
    
    $
    3,848
    
    
    $
    2,546
 6.  Stock Incentive Plans
     12




---



##### 



WeightedAverage
    
    
    AggregateNumber of
    
    
    Range of
    
    
    Exercise
    
    
    IntrinsicShares
    
    
    Exercise Prices
    
    
    Price
    
    
    ValueOutstanding at December 31, 2006
    
    
    3,199,903
    
    
    $
    0.24 to $11.34
    
    
    $
    2.96Granted
    
    
    414,514
    
    
    $
    9.72 to $15.49
    
    
    $
    12.40Exercised
    
    
    (172,998
    )
    
    $
    0.24 to $5.26
    
    
    $
    1.24Forfeited
    
    
    (127,887
    )
    
    $
    0.24 to $13.10
    
    
    $
    7.00Outstanding at September30, 2007
    
    
    3,313,532
    
    
    $
    0.24 to $15.49
    
    
    $
    4.06
    
    
    $
    18,237Exercisable at September30, 2007
    
    
    2,001,981
    
    
    $
    0.24 to $10.41
    
    
    $
    1.55
    
    
    $
    15,111Vested and expected to vest at September 30, 2007
    
    
    3,007,002
    
    
    
    
    
    
    $
    3.72
    
    
    $
    17,352
 
 
 Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted Average
    
    
    
    
    
    
    WeightedAverage
    
    
    Remaining
    
    
    
    
    
    
    AverageNumber of
    
    
    Exercise
    
    
    Contractual Life
    
    
    Number of
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    
    Prices
    
    
    (Years)
    
    
    Shares
    
    
    Prices$0.24  $0.32
    
    
    938,143
    
    
    $
    0.29
    
    
    
    5.6
    
    
    
    935,447
    
    
    $
    0.29$1.14  $2.03
    
    
    1,150,417
    
    
    $
    1.63
    
    
    
    7.2
    
    
    
    820,590
    
    
    $
    1.54$3.69  $10.05
    
    
    829,153
    
    
    $
    7.64
    
    
    
    8.9
    
    
    
    242,610
    
    
    $
    6.32$10.41  $15.49
    
    
    395,819
    
    
    $
    12.61
    
    
    
    9.0
    
    
    
    3,334
    
    
    $
    10.413,313,532
    
    
    $
    4.06
    
    
    
    7.4
    
    
    
    2,001,981
    
    
    $
    1.55
 
 Weighted-AverageNumber of
    
    
    Grant DateShares
    
    
    Fair ValueUnvested at December 31, 2006
    
    
    27,709
    
    
    $
    7.63Granted
    
    
    296,404
    
    
    
    10.66Restrictions Lapsed
    
    
    (27,709
    )
    
    
    7.63Forfeited
    
    
    
    
    
    
    Unvested at September30, 2007
    
    
    296,404
    
    
    
    10.66
 7. Business and Geographic Segment Information
   Three Months Ended
    
    
    Nine Months EndedSeptember 30
    
    
    September 302007
    
    
    2006
    
    
    2007
    
    
    2006United States
    
    
    11,415
    
    
    
    9,287
    
    
    
    27,981
    
    
    
    23,184All foreign countries
    
    
    3,391
    
    
    
    1,580
    
    
    
    8,540
    
    
    
    5,750Consolidated total
    
    $
    14,806
    
    
    $
    10,867
    
    
    $
    36,521
    
    
    $
    28,934
 13




---



##### 



8. Legal Proceedings
     9. Commitments and Contingencies
  
  10. Subsequent Event
  14




---



##### 



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Certain statements contained in this Quarterly Report on From 10-Q may constitute
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases
would be, will allow, intends to, will likely result, are expected to, will continue,
is anticipated, estimate, project, or similar expressions, or the negative of such words or
phrases, are intended to identify forward-looking statements. We have based these forward-looking
statements on our current expectations and projections about future events. Because such statements
include risks and uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Factors that could cause or contribute to these
differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q,
particularly in Risk Factors, and our other filings with the Securities and Exchange Commission.
Statements made herein are as of the date of the filing of this Form 10-Q with the Securities and
Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise
required by applicable law, we do not undertake, and we specifically disclaim, any obligation to
update any forward-looking statements to reflect occurrences, developments, unanticipated events or
circumstances after the date of such statement.
 The following discussion and analysis of our financial condition and results of operations
should be read in conjunction with our consolidated financial statements and related notes that
appear elsewhere in this Quarterly Report on Form 10-Q and in our other Securities and Exchange
Commission filings, including our final prospectus dated March 8, 2007, which we filed in
connection with our IPO. Our actual results could differ materially from those discussed in or
implied by the forward-looking statements.
 Overview
    Sourcefire Defense Center 
 Sourcefire 3D Sensors
 Sourcefire IPS (Intrusion Prevention System) 
 15




---



##### 



Sourcefire RNA (Real-time Network Awareness) 
 Sourcefire RUA (Real-time User Awareness) 
 Sourcefire NetFlow Analysis 
 Sourcefire Intrusion Agent for Snort
  Sourcefire Customer Support 
 Sourcefire Product Services
 Sourcefire Education & Certification 
 Sourcefire Vulnerability Research Team (VRT) Subscriptions 
 Initial Public Offering
  16




---



##### 



Acquisition
   Key Financial Metrics and Trends
 Pricing and Discounts
  Revenue
   
 17




---



##### 



Cost of Revenue
  
 Gross Profit
 
 18




---



##### 



Operating Expenses
 Research and Development.
  Sales and Marketing.
  
 General and Administrative.
  
 Acquired in-process research and development costs
   Stock-Based Compensation.
 19




---



##### 



Critical Accounting Policies and Estimates
   Revenue Recognition.
 
    
    persuasive evidence of an arrangement exists (e.g., a signed contract);
    
    delivery of the product has occurred and there are no remaining obligations or
substantive customer acceptance provisions;
    
    the fee is fixed or determinable; and
    
    collection of the fee is probable.
  Accounting for Stock-Based Compensation. Share-Based Payment
 20




---



##### 



Accounting for Stock Based Compensation Accounting for Stock Issued to Employees
      
  Accounting for Income Taxes. Accounting for Income Taxes.
 21




---



##### 



Warranty.
 Bad Debt Reserve.
 Inventory Valuation.
 Results of Operations
  Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedSeptember 30
    
    
    Variance
    
    
    September 30
    
    
    Variance2007
    
    
    2006
    
    
    $
    
    
    %
    
    
    2007
    
    
    2006
    
    
    $
    
    
    %Revenue:Products
    
    $
    9,403
    
    
    $
    6,927
    
    
    $
    2,476
    
    
    
    36
    %
    
    $
    21,103
    
    
    $
    18,390
    
    
    $
    2,713
    
    
    
    15
    %Technical Support and
Professional Services
    
    
    5,403
    
    
    
    3,940
    
    
    
    1,463
    
    
    
    37
    %
    
    
    15,418
    
    
    
    10,544
    
    
    
    4,874
    
    
    
    46
    %Total revenue
    
    
    14,806
    
    
    
    10,867
    
    
    
    3,939
    
    
    
    36
    %
    
    
    36,521
    
    
    
    28,934
    
    
    
    7,587
    
    
    
    26
    %Cost of revenue:Products
    
    
    2,665
    
    
    
    1,813
    
    
    
    852
    
    
    
    47
    %
    
    
    5,809
    
    
    
    4,931
    
    
    
    878
    
    
    
    18
    %Technical Support and
Professional Services
    
    
    800
    
    
    
    725
    
    
    
    75
    
    
    
    10
    %
    
    
    2,277
    
    
    
    2,016
    
    
    
    261
    
    
    
    13
    %Total cost of revenue
    
    
    3,465
    
    
    
    2,538
    
    
    
    927
    
    
    
    37
    %
    
    
    8,086
    
    
    
    6,947
    
    
    
    1,139
    
    
    
    16
    %Gross profit
    
    
    11,341
    
    
    
    8,329
    
    
    
    3,012
    
    
    
    36
    %
    
    
    28,435
    
    
    
    21,987
    
    
    
    6,448
    
    
    
    29
    %Operating expenses:Research and development
    
    
    2,895
    
    
    
    2,082
    
    
    
    813
    
    
    
    39
    %
    
    
    8,076
    
    
    
    6,334
    
    
    
    1,742
    
    
    
    28
    %Sales and marketing
    
    
    6,746
    
    
    
    4,929
    
    
    
    1,817
    
    
    
    37
    %
    
    
    18,563
    
    
    
    14,512
    
    
    
    4,051
    
    
    
    28
    %General and administrative
    
    
    2,540
    
    
    
    1,103
    
    
    
    1,437
    
    
    
    130
    %
    
    
    7,288
    
    
    
    3,587
    
    
    
    3,701
    
    
    
    103
    %Depreciation and amortization
    
    
    427
    
    
    
    306
    
    
    
    121
    
    
    
    40
    %
    
    
    1,177
    
    
    
    912
    
    
    
    265
    
    
    
    29
    %Write-off of acquired
in-process research and
development costs
    
    
    2,947
    
    
    
    
    
    
    
    2,947
    
    
    
    100
    %
    
    
    2,947
    
    
    
    
    
    
    
    2,947
    
    
    
    100
    %Total operating expenses
    
    
    15,555
    
    
    
    8,420
    
    
    
    7,135
    
    
    
    85
    %
    
    
    38,051
    
    
    
    25,345
    
    
    
    12,706
    
    
    
    50
    %Operating loss
    
    
    (4,214
    )
    
    
    (91
    )
    
    
    (4,123
    )
    
    
    4531
    %
    
    
    (9,616
    )
    
    
    (3,358
    )
    
    
    (6,258
    )
    
    
    (186
    %)Other income (expense), net
    
    
    1,420
    
    
    
    296
    
    
    
    1,124
    
    
    
    380
    %
    
    
    3,307
    
    
    
    442
    
    
    
    2,865
    
    
    
    648
    %Income (loss) before income taxes
    
    
    (2,794
    )
    
    
    205
    
    
    
    (2,999
    )
    
    
    (1463
    %)
    
    
    (6,309
    )
    
    
    (2,916
    )
    
    
    (3,393
    )
    
    
    (116
    %)Income tax expense
    
    
    (50
    )
    
    
    
    
    
    
    (50
    )
    
    
    100
    %
    
    
    (120
    )
    
    
    
    
    
    
    (120
    )
    
    
    100
    %Net
Income (loss)
    
    $
    (2,844
    )
    
    $
    205
    
    
    $
    (3,049
    )
    
    
    (1487
    %)
    
    $
    (6,429
    )
    
    $
    (2,916
    )
    
    $
    (3,513
    )
    
    
    (120
    %)
 22




---



##### 



Three Months
    
    Nine MonthsEnded
    
    EndedSeptember 30
    
    September 302007
    
    2006
    
    2007
    
    2006Revenue:Products
    
    
    64
    %
    
    
    64
    %
    
    
    58
    %
    
    
    64
    %Technical Support and Professional Services
    
    
    36
    %
    
    
    36
    %
    
    
    42
    %
    
    
    36
    %Total revenue
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Cost of revenue:Products
    
    
    18
    %
    
    
    17
    %
    
    
    16
    %
    
    
    17
    %Technical Support and Professional Services
    
    
    5
    %
    
    
    6
    %
    
    
    6
    %
    
    
    7
    %Total cost of revenue
    
    
    23
    %
    
    
    23
    %
    
    
    22
    %
    
    
    24
    %Gross profit
    
    
    77
    %
    
    
    77
    %
    
    
    78
    %
    
    
    76
    %Operating expenses:Research and development
    
    
    20
    %
    
    
    19
    %
    
    
    22
    %
    
    
    22
    %Sales and marketing
    
    
    46
    %
    
    
    46
    %
    
    
    51
    %
    
    
    50
    %General and administrative
    
    
    16
    %
    
    
    10
    %
    
    
    20
    %
    
    
    13
    %Depreciation and amortization
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %Write-off of acquired in-process research and development costs
    
    
    20
    %
    
    
    0
    %
    
    
    8
    %
    
    
    0
    %Total operating expenses
    
    
    105
    %
    
    
    78
    %
    
    
    104
    %
    
    
    88
    %Operating loss
    
    
    (28
    )%
    
    
    (1
    )%
    
    
    (26
    )%
    
    
    (12
    )%Other income (expense), net
    
    
    10
    %
    
    
    3
    %
    
    
    9
    %
    
    
    2
    %Income (loss) before income taxes
    
    
    (18
    )%
    
    
    2
    %
    
    
    (17
    )%
    
    
    (10
    )%Income tax expense
    
    
    (1
    )%
    
    
    0
    %
    
    
    (1
    )%
    
    
    0
    %Net income (loss)
    
    
    (19
    )%
    
    
    2
    %
    
    
    (18
    )%
    
    
    (10
    )%
 Comparison of Three Months Ended September 30, 2007 and 2006
 Revenue.
 Cost of Revenue.
 23




---



##### 



Gross Profit.
 Research and Development.
 Sales and Marketing.
 General and Administrative.
 Depreciation and Amortization.
 Acquired in-process research and development costs.
 Other income (expense).
 Provision for income taxes.
 24




---



##### 



Comparison of Nine Months Ended September 30, 2007 and 2006
 Revenue.
 Cost of Revenue.
 Gross Profit.
 Research and Development.
 Sales and Marketing.
 General and Administrative.
 Depreciation and Amortization.
 25




---



##### 



Acquired in-process research and development costs.
 Other income (expense).
 Provision for income taxes.
 Seasonality
  Quarterly Timing of Revenue
  Liquidity and Capital Resources
     26




---



##### 



Operating Activities
  Investing Activities
  Financing Activities
  Working Capital and Capital Expenditure Needs
   Contractual Obligations
  Payments Due by PeriodLess thanTotal
    
    One Year
    
    1-3 Years
    
    3-5 YearsOperating Leases
    
    $
    4,802
    
    
    $
    1,516
    
    
    $
    2,509
    
    
    $
    777Purchase Commitments(1)
    
    
    6,140
    
    
    
    6,140
    
    
    
    
    
    
    
    
 
 (1)
    
    We entered into a purchase commitment with a hardware
manufacturing vendor with whom we have a current
arrangement. Under the terms of this commitment, we have
agreed to purchase a fixed quantity of inventory over an
18-month period. The value of the purchase commitment is
approximately $800,000 of which $160,000 has been
purchased to date. Additionally, we purchase components
from a variety of suppliers and use several contract
manufacturers to provide manufacturing services for our
products. During the normal course of business, in order
to manage manufacturing lead times and help ensure
adequate component supply, we enter into agreements with
contract manufacturers and suppliers that allow them to
procure inventory based upon information provided by us.
In certain instances, these agreements allow us the option
to cancel, reschedule, and adjust our requirements based
on our business needs prior to firm orders being placed.
Consequently, a portion of our reported purchase
commitments arising from these agreements are firm,
non-cancelable, and unconditional commitments. As of
September 30, 2007, we had total purchase commitments for
inventory of approximately $5.2 million, exclusive of the
commitments described above. 27




---



##### 



Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes, an interpretation of FAS 109, Accounting for Income
Taxes
 Fair Value
Measurements
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Foreign Currency Risk
  Interest Rate Sensitivity
  ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Sourcefires Disclosure Controls and Internal Controls.
 Limitations.
 Changes in Internal Controls Over Financial Reporting.
 28




---



##### 



PART II. OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS
 Securities Class Action Lawsuits
    ITEM 1A. RISK FACTORS
  We have had operating losses since our inception and we expect operating expenses to increase in
the foreseeable future and we may never reach or maintain profitability.
  29




---



##### 



We face intense competition in our market, especially from larger, better-known companies, and we
may lack sufficient financial or other resources to maintain or improve our competitive position.
     New competitors could emerge or our customers or distributors could internally develop
alternatives to our products and either development could impair our sales.
  30




---



##### 



Our quarterly operating results are likely to vary significantly and be unpredictable, in part
because of the purchasing and budget practices of our customers, which could cause the trading
price of our stock to decline.
  
    
    the budgeting cycles, internal approval requirements and funding available to our
existing and prospective customers for the purchase of network security products;
    
    the timing, size and contract terms of orders received, which have historically been
highest in the fourth quarter (representing more than one-third of our total revenue in
recent years), but may fluctuate seasonally in different ways;
    
    the level of perceived threats to network security, which may fluctuate from period to
period;
    
    the level of demand for products sold by original equipment manufacturers, or OEMs,
resellers and distributors that incorporate and resell our technologies;
    
    the market acceptance of open-source software solutions;
    
    the announcement or introduction of new product offerings by us or our competitors, and
the levels of anticipation and market acceptance of those products;
    
    price competition;
    
    general economic conditions, both domestically and in our foreign markets;
    
    the product mix of our sales; and
    
    the timing of revenue recognition for our sales.
   The market for network security products is rapidly evolving and the complex technology
incorporated in our products makes them difficult to develop. If we do not accurately predict,
prepare for and respond promptly to technological and market developments and changing customer
needs, our competitive position and prospects will be harmed.
  31




---



##### 



If our new products and product enhancements do not achieve sufficient market acceptance, our
results of operations and competitive position will suffer.
   
    
    delays in introducing new, enhanced or modified products;
    
    defects, errors or failures in any of our products;
    
    inability to operate effectively with the networks of our prospective customers;
    
    inability to protect against new types of attacks or techniques used by hackers;
    
    negative publicity about the performance or effectiveness of our intrusion prevention or
other network security products;
    
    reluctance of customers to purchase products based on open source software; and
    
    disruptions or delays in the availability and delivery of our products, which problems
are more likely due to our just-in-time manufacturing and inventory practices.
  If existing customers do not make subsequent purchases from us or if our relationships with our
largest customers are impaired, our revenue could decline.
   32




---



##### 



If we cannot attract sufficient government agency customers, our revenue and competitive position
will suffer.
  
    
    Procurement.  Contracting with public sector customers is highly competitive and can be
expensive and time-consuming, often requiring that we incur significant upfront time and
expense without any assurance that we will win a contract;
    
    Budgetary Constraints and Cycles.  Demand and payment for our products and services are
impacted by public sector budgetary cycles and funding availability, with funding reductions
or delays adversely impacting public sector demand for our products, including delays caused
by continuing resolutions or other temporary funding arrangements resulting from the current
congressional transition;
    
    Modification or Cancellation of Contracts.  Public sector customers often have
contractual or other legal rights to terminate current contracts for convenience or due to a
default. If a contract is cancelled for convenience, which can occur if the customers
product needs change, we may only be able to collect for products and services delivered
prior to termination. If a contract is cancelled because of default, we may only be able to
collect for products and alternative products and services delivered to the customer;
    
    Governmental Audits.  National governments and other state and local agencies routinely
investigate and audit government contractors administrative processes. They may audit our
performance and pricing and review our compliance with applicable rules and regulations. If
they find that we improperly allocated costs, they may require us to refund those costs or
may refuse to pay us for outstanding balances related to the improper allocation. An
unfavorable audit could result in a reduction of revenue, and may result in civil or
criminal liability if the audit uncovers improper or illegal activities.
    
    Replacing Existing Products.  After we announced in October 2005 that we had agreed to be
acquired by a foreign company, many government agencies were unwilling to buy products from
us and instead purchased and installed products sold by our competitors. The proposed
acquisition was terminated in April 2006 following objections from the Committee on Foreign
Investment in the United States. Since that time, we have been attempting to retain
government agency customers. Many government agencies, however, already have installed
network security products of our competitors. It can be very difficult to convince
government agencies or other prospective customers to replace their existing network
security solutions with our products, even if we can demonstrate the superiority of our
products.
 We are subject to risks of operating internationally that could impair our ability to grow our
revenue abroad.
  
    
    economic or political instability in foreign markets;
    
    greater difficulty in accounts receivable collection and longer collection periods;
    
    unexpected changes in regulatory requirements;
    
    difficulties and costs of staffing and managing foreign operations;
    
    import and export controls;
    
    the uncertainty of protection for intellectual property rights in some countries;
    
    costs of compliance with foreign laws and laws applicable to companies doing business in
foreign jurisdictions;
 33




---



##### 




    
    management communication and integration problems resulting from cultural differences and
geographic dispersion;
    
    multiple and possibly overlapping tax structures; and
    
    foreign currency exchange rate fluctuations.
  In the future, we may not be able to secure financing necessary to operate and grow our business
as planned.
  Our inability to acquire and integrate other businesses, products or technologies could seriously
harm our competitive position.
  If other parties claim commercial ownership rights to Snort, our reputation, customer relations
and results of operations could be harmed.
  Our products contain third party open source software, and failure to comply with the terms of the
underlying open source software licenses could restrict our ability to sell our products.
  34




---



##### 




    
    the terms of open source license agreements may be unclear and subject to varying
interpretations, which could result in unforeseen obligations regarding our proprietary
products;
    
    it may be difficult to determine the developers of open source software and whether such
licensed software infringes another partys intellectual property rights;
    
    competitors will have greater access to information by obtaining these open source
products, which may help them develop competitive products; and
    
    open source software potentially increases customer support costs because licensees can
modify the software and potentially introduce errors.
  Efforts to assert intellectual property ownership rights in our products could impact our standing
in the open source community which could limit our product innovation capabilities.
  Our proprietary rights may be difficult to enforce, which could enable others to copy or use
aspects of our products without compensating us.
  35




---



##### 



Claims that our products infringe the proprietary rights of others could harm our business and
cause us to incur significant costs.
   
    
    be very expensive and time consuming to defend;
    
    require us to indemnify our customers for losses resulting from such claims;
    
    cause us to cease making, licensing or using software or products that incorporate the
challenged intellectual property;
    
    cause product shipment and installation delays;
    
    require us to redesign our products, which may not be feasible;
    
    divert managements attention and resources; or
    
    require us to enter into royalty or licensing agreements in order to obtain the right to
use a necessary product or component.
  We rely on software licensed from other parties, the loss of which could increase our costs and
delay software shipments.
  36




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Defects, errors or vulnerabilities in our software products would harm our reputation and divert
resources.
  
    
    expenditure of significant financial and product development resources in efforts to
analyze, correct, eliminate or work-around errors or defects or to address and eliminate
vulnerabilities;
    
    loss of existing or potential customers;
    
    delayed or lost revenue;
    
    delay or failure to attain market acceptance;
    
    increased service, warranty, product replacement and product liability insurance
costs; and
    
    negative publicity, which will harm our reputation.
  Our networks, products and services are vulnerable to, and may be targeted by, hackers.
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We utilize a just-in-time contract manufacturing and inventory process, which increases our
vulnerability to supply disruption.
  We depend on a single source to manufacture our enterprise class intrusion sensor product; if that
sole source were to fail to satisfy our requirements, our sales revenue would decline and our
reputation would be harmed.
  Our inability to hire and retain key personnel would slow our growth.
   We depend on resellers and distributors for our sales; if they fail to perform as expected, our
revenue will suffer.
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If we do not continue to establish and effectively manage our OEM relationships, our revenue could
decline.
  Our inability to effectively manage our expected headcount growth and expansion and our additional
obligations as a public company could seriously harm our ability to effectively run our business.
  The price of our common stock may be subject to wide fluctuations.
  
    
    quarterly variations in our operating results compared to market expectations;
    
    changes in expectations as to our future financial performance, including financial
estimates or reports by securities analysts;
    
    changes in market valuations of similar companies;
    
    liquidity and activity in the market for our common stock;
    
    actual or expected sales of our common stock by our stockholders;
    
    strategic moves by us or our competitors, such as acquisitions or restructurings;
    
    general market conditions; and
    
    domestic and international economic, legal and regulatory factors unrelated to our
performance.
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We and certain of our officers and directors have been named as co-defendants in, and are the
subject of, certain legal proceedings which may result in substantial costs and divert
managements attention and resources.
   Sales of substantial amounts of our common stock in the public markets, or the perception that
they might occur, could reduce the price that our common stock might otherwise attain and may
dilute your voting power and your ownership interest in us.
   As a result of becoming a public company, we are obligated to develop and maintain proper and
effective internal controls over financial reporting and are subject to other requirements that
will be burdensome and costly. We may not complete our analysis of our internal controls over
financial reporting in a timely manner, or these internal controls may not be determined to be
effective, which may adversely affect investor confidence in our company and, as a result, the
value of our common stock.
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Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition
of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our
stockholders to replace or remove our current management.
  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    41




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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    To elect the following nominees for election as directors:
 
 Nominee
    
    Votes For
    
    Votes WithheldMr. E. Wayne Jackson, III
    
    
    20,647,785
    
    
    
    157,401Mr. Asheem Chandna
    
    
    20,772,097
    
    
    
    32,089
 In addition to Messrs. Jackson and Chandna, each of Martin A. Roesch, Tim A Guleri, Joseph R.
Chinnici, Arnold L. Punaro and Steven R. Polk continued as directors of our company after the
meeting.2.
    
    Approval of the 2007 Employee Stock Purchase Plan.Vote results, Proposal 2:
 For
    
    Against
    
    Abstain
    
    Broker Non-Votes19,814,504
    
    
    166,988
    
    
    
    90
    
    
    
    823,604
 This proposal was approved by the majority of shares voted.3.
    
    Ratification of the appointment of Ernst & Young LLP as our independent registered public
accounting firm for the fiscal year ending December 31, 2007.Vote results, Proposal 3:
 For
    
    Against
    
    Abstain20,652,087
    

    145,864

    

    7,235
 ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
 Incorporation by ReferenceFiledExhibit
    
    
    
    
    
    File
    
    
    
    
    
    
    
    with thisNumber
    

Exhibit Description
    
    Form
    
    Number
    
    Exhibit
    
    File Date
    
    10-Q3.1
    
    
    Sixth Amended and Restated Certificate
of Incorporation
    
    10-Q
    
    1-33350
    
    
    3.1
    
    
    5/4/20073.2
    
    
    Fourth Amended and Restated Bylaws
    
    10-Q
    
    1-33350
    
    
    3.2
    
    
    5/4/20074.1
    
    
    Form of stock certificate of common stock
    
    S-1/A
    
    333-138199
    
    
    4.1
    
    
    3/6/20074.2
    
    
    2002 Stock Incentive Plan
    
    S-1
    
    333-138199
    
    
    4.2
    
    
    10/25/20064.3
    
    
    2007 Stock Incentive Plan
    
    S-1/A
    
    333-138199
    
    
    4.3
    
    
    3/1/20074.4
    
    
    Form of Nonstatutory Stock Option Grant
Agreement under the 2002 Stock Incentive
Plan
    
    S-1/A
    
    333-138199
    
    
    4.4
    
    
    10/25/20064.5
    
    
    Form of Notice of Stock Option Award
under the 2007 Stock Incentive Plan
    
    S-1/A
    
    333-138199
    
    
    4.5
    
    
    3/1/20074.6
    
    
    Form of Notice of Restricted Stock
Purchase Award under the 2007 Stock
Incentive Plan
    
    S-1/A
    
    333-138199
    
    
    4.6
    
    
    3/1/20074.7
    
    
    Form of Notice of Restricted Stock
Purchase Award for Non-Employee
Directors under the 2007 Stock Incentive
Plan
    
    S-1/A
    
    333-138199
    
    
    4.7
    
    
    3/1/200710.1
    
    
    Employment Agreement of Douglas W. McNitt
    
    
    
    
    
    
    
    
    
    
    
    X10.2
    
    
    Separation Agreement of Joseph Boyle
    
    
    
    
    
    
    
    
    
    
    
    X31.1
    
    
    Certification of Chief Executive Officer
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    
    
    
    
    
    
    
    
    
    
    X31.2
    
    
    Certification of Chief Financial Officer
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    
    
    
    
    
    
    
    
    
    
    X32.1
    
    
    Certification of Chief Executive Officer
and Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002
    
    
    
    
    
    
    
    
    
    
    
    X
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SIGNATURES
  Sourcefire, Inc.By:
    
    /s/ Todd P. HeadleyName: Todd P. HeadleyTitle: Chief Financial Officer and Treasurer
  44