# EDGAR Filing Document

**Accession Number:** 0001823575
**File Stem:** 0000950170-23-007697
**Filing Date:** 2023-3
**Character Count:** 40653
**Document Hash:** f4e2e598263c01cb7651faeaba3ca068
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-007697.hdr.sgml**: 20230314

**ACCESSION NUMBER**: 0000950170-23-007697

**CONFORMED SUBMISSION TYPE**: 424B3

**PUBLIC DOCUMENT COUNT**: 4

**FILED AS OF DATE**: 20230314

**DATE AS OF CHANGE**: 20230314

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ZeroFox Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001823575
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 424B3
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-267200
- **FILM NUMBER:** 23729142

**BUSINESS ADDRESS:**
- **STREET 1:** 1834 S. CHARLES ST.
- **CITY:** BALTIMORE
- **STATE:** MD
- **ZIP:** 21230
- **BUSINESS PHONE:** 1-855-936-9369

**MAIL ADDRESS:**
- **STREET 1:** 1834 S. CHARLES ST.
- **CITY:** BALTIMORE
- **STATE:** MD
- **ZIP:** 21230

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ZeroFox Holdings Inc.
- **DATE OF NAME CHANGE:** 20220804

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** L&F Acquisition Corp.
- **DATE OF NAME CHANGE:** 20200903

**Filed Pursuant to Rule 424(b)(3)** 

**Registration No. 333-267200**

**PROSPECTUS SUPPLEMENT NO. 4** 

**(To Prospectus dated October 7, 2022)**![img247038567_0.jpg](img247038567_0.jpg)

**Up To 16,213,419 Shares Of Common Stock**

**Issuable Upon Exercise Of Warrants**

**Up To 120,443,882 Shares of Common Stock**

**Up To 7,588,430 Warrants**

This prospectus supplement is being filed to update and supplement the information contained in the prospectus, dated October 7, 2022 (the "**Prospectus**"), with certain information contained in Exhibit 99.1 related to Item 2.02 in our Current Report on Form 8-K, furnished to the Securities and Exchange Commission on March 14, 2023, which is set forth below. Accordingly, we have attached the Current Report on Form 8-K to this prospectus supplement. The information from Exhibit 99.1 included in the Prospectus is limited to: the headings "Fourth Quarter Fiscal Year 2023 Financial Highlights" and "Recent Highlights" and the bullets directly thereunder; the final paragraph included under the heading "Financial Outlook"; the heading "Use of Non-GAAP Financial Measures and Key Business Measures" and the paragraphs directly thereunder, including the explanations of our Non-GAAP financial measures and Key Business Measures; and the financial tables presenting the preliminary, unaudited consolidated statement of operations, consolidated balance sheet, consolidated statement of cash flows, and Non-GAAP financial measures and reconciliation to GAAP results. No other information included in Exhibit 99.1 or in the Current Report on Form 8-K furnished to the Securities and Exchange Commission on March 14, 2023, is included in the Prospectus.

The Prospectus and this prospectus supplement relate to the issuance by us of up to an aggregate of 16,213,419 shares of our common stock, par value $0.0001 per share (the "**Common Stock**") consisting of (i) up to 5,450,000 shares of Common Stock that are issuable upon the exercise of 5,450,000 warrants (the "**Sponsor Warrants**") originally issued to JAR Sponsor, LLC (the "**Sponsor**") in private placements at a price of $1.00 per warrant in connection with the initial public offering (the "**L&F IPO**") of L&F Acquisition Corp., a Cayman Islands exempted company, (ii) up to 2,138,430 shares of Common Stock that are issuable upon the exercise of 2,138,430 warrants (together with the Sponsor Warrants, the "**Private Placement Warrants**") originally issued to Jefferies LLC, the underwriter of the L&F IPO, in private placements at a price of approximately $1.21 per warrant in connection with the L&F IPO, and (iii) up to 8,624,989 shares of Common Stock that are issuable upon the exercise of 8,624,989 warrants (the "**Public Warrants**" and, together with the Private Placement Warrants, the "**Warrants**") originally issued in the L&F IPO. Each Warrant entitles the holder thereof to purchase one share of our Common Stock at a price of $11.50 per share.

The Prospectus and this prospectus supplement also relate to the offer and sale from time to time by the selling securityholders named in the Prospectus or their permitted transferees (the "**Selling Securityholders**") of (a) up to 120,443,882 shares of Common Stock consisting of (i) 89,348,952 shares of Common Stock issued as merger consideration to certain former stockholders of ZeroFox, Inc. and ID Experts Holdings, Inc., a Delaware corporation in connection with the consummation of the Business Combination (as defined in the Prospectus) based upon an implied equity consideration value of $10.00 per share, (ii) 193,039 shares of Common Stock issued upon the exercise by two of our executives of options assumed by us in connection with the consummation of the Business Combination at exercise prices of $0.49 per share and $0.60 per share, (iii) up to 137,253 shares of Common Stock issuable upon the exercise of options assumed by us in connection with the consummation of the Business

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Combination with a weighted average exercise price of $0.29 per share, (iv) 2,000,000 shares of Common Stock issued by us to certain investors in connection with the consummation of the Business Combination in a private placement at a price of $10.00 per share, (v) up to 16,863,708 shares of Common Stock that are issuable upon the conversion of $150 million aggregate principal amount of our 7.00%/8.75% Convertible Senior Cash/PIK Toggle Notes due 2025 (the "**Notes**") issued by us to certain investors in connection with the consummation of the Business Combination in a private placement for an aggregate purchase price of $150 million, (vi) 4,312,500 shares of Common Stock originally purchased by the Sponsor for $25,000, or approximately $0.006 per share, in a private placement in connection with the L&F IPO, and (vii) up to 7,588,430 shares of Common Stock issuable upon the exercise of the Private Placement Warrants, and (b) up to 7,588,430 Private Placement Warrants. The Notes have an initial conversion price of $11.50 per share, subject to adjustment as provided in the indenture governing the Notes. The number of shares issuable upon conversion of the Notes is calculated assuming that we exercise our option to pay interest in kind with respect to the Notes and further assumes conversion of the Notes after all interest payments prior to maturity are paid in kind and the Notes are converted and settled on the second business day prior to maturity. We will not receive any proceeds from the sale of shares of Common Stock or Warrants by the Selling Securityholders pursuant to the Prospectus.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement is qualified by reference to the Prospectus, including any amendments or supplements thereto, except to the extent that the information in this prospectus supplement updates and supersedes the information contained therein.

Our Common Stock is listed on The Nasdaq Global Market and our Public Warrants are listed on The Nasdaq Capital Market under the symbols "ZFOX" and "ZFOXW," respectively. On March 13, 2023, the last reported sales price of our Common Stock was $2.26 per share and the last reported sales price of our Public Warrants was $0.10 per Warrant.

We are an "emerging growth company" as defined in Section 2(a) of the Securities Act of 1933, as amended, and are subject to reduced public company reporting requirements. The Prospectus and this prospectus supplement comply with the requirements that apply to an issuer that is an emerging growth company.

**See the section titled "**[**<u>Risk Factors</u>**](https://www.sec.gov/Archives/edgar/data/1823575/000119312522259662/d352117d424b3.htm#rom352117_8)**" beginning on page 8 of the Prospectus to read about factors you should consider before buying our securities.**

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the Prospectus or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.**

**The date of this prospectus supplement is March 14, 2023.** 

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549** 

**FORM 8-K** 

**CURRENT REPORT** 

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported): March 14, 2023** 

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**ZeroFox Holdings, Inc.** 

**(Exact name of Registrant as Specified in Its Charter)** 

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| | | |
|:---|:---|:---|
| **Delaware** | **001-39722** | **98-1557361** |
| **(State or Other Jurisdiction**<br>**of Incorporation)** | **(Commission File Number)** | **(IRS Employer**<br>**Identification No.)** |
| **1834 S. Charles Street**<br>**Baltimore, Maryland** |  | **21230** |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

---

**Registrant's Telephone Number, Including Area Code: (855) 936-9369** 

**Not Applicable** 

**(Former Name or Former Address, if Changed Since Last Report)** 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br>**Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.0001 par value per share<br>Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | ZFOX<br>ZFOXW | The Nasdaq Stock Market LLC<br>The Nasdaq Stock Market LLC |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02 Results of Operations and Financial Condition.**

On March 14, 2023, ZeroFox Holdings, Inc. (the "Company") issued a press release announcing its financial results for the fourth quarter ending January 31, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.

The information contained in this Item 2.02 and Item 9.01 in this Current Report on Form 8-K, including the accompanying Exhibit 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing

**Item 9.01 Financial Statements and Exhibits.**

(d)<u>Exhibits:</u>

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 99.1 | [<u>Press release dated March 14, 2023</u>](zfox-ex99_1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  |  | **ZEROFOX HOLDINGS, INC.** |
| Date: March 14, 2023 | By: | /s/ Timothy S. Bender |
|  | Name: | **Timothy S. Bender** |
|  | Title: | **Chief Financial Officer**  |

---

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## Ex-99

![img26276912_0.jpg](img26276912_0.jpg)

**ZeroFox Announces Fourth Quarter Fiscal Year 2023 Financial Results**

Achieves record revenue of $45 million and annual recurring revenue of $157 million

Washington, D.C., – March 14, 2023 – ZeroFox Holdings, Inc. (Nasdaq: ZFOX), a leading external cybersecurity provider, today announced financial results for the fourth quarter ended January 31, 2023.

"We closed out fiscal year 2023 with positive Q4 results, which exceeded the high end of our revenue guidance. Last year was transformational for ZeroFox. We were the only cybersecurity company to go public where we raised significant growth capital and completed our strategic acquisition of IDX." said James C. Foster, Chairman and CEO of ZeroFox." We believe the continued expansion of the external attack surface and increasing threat sophistication will accelerate the external cybersecurity platform mandate even during uncertain macroeconomic environments. As we look to this fiscal year, we remain focused on capturing the significant growth opportunities we see in external cybersecurity while progressing on our path to profitability."

**Fourth Quarter Fiscal Year 2023 Financial Highlights** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●**Revenue**: Total revenue was $45.4 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●**Annual Recurring Revenue** was $156.7 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●**Gross margin:** GAAP gross margin was 31% and non-GAAP gross margin was 41%. GAAP subscriptions gross margin was 44% and non-GAAP subscriptions gross margin was 73%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●**Loss from Operations:** GAAP loss from operations was $21.1 million. Non-GAAP loss from operations was $7.2 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●**Cash and Cash Equivalents** were $47.5 million on January 31, 2023.

**Recent Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Ended the year with 1,203 subscription customers including 147 subscription customers with ARR greater than $100,000, an increase of 25% year over year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Awarded 2022 Global Digital Risk Protection Competitive Strategy Leadership Award by Frost & Sullivan for leadership in Digital Risk Protection.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Released key research on 2023 cyber threat predictions and executive protection in conjunction with SANS Institute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Launched PII removal solution to find and remove executive personal information from over 100 data broker sites that could be leveraged for digital or physical attacks.

**Financial Outlook** 

ZeroFox is providing the following guidance for the first fiscal quarter of 2024:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Revenue of $44.0 million to $44.6 million.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Non-GAAP loss from operations of $9.8 million to $9.3 million.

ZeroFox is providing the following guidance for full year fiscal 2024:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Revenue of $183.0 million to $187.0 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Non-GAAP loss from operations of $29.0 million to $26.0 million.

ZeroFox has not reconciled its expectations as to non-GAAP loss from operations to their most directly comparable GAAP measures because certain items are out of ZeroFox's control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP loss from operations is not available without unreasonable effort.

Additional information regarding the non-GAAP financial measures and key business measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading "Use of Non-GAAP Financial Measures and Key Business Measures." A reconciliation of non-GAAP to GAAP financial measures has also been provided in the financial tables included below and is available on our Investor Relations website.

Note that the comparison to prior year GAAP operating results is not meaningful because the financial results for the prior year's period consist only of our predecessor, ZeroFox, Inc. and do not include the operating results of IDX. Supplemental financial information that includes historical, stand-alone financial statements for ZeroFox and IDX is available on our Investor Relations website.

**About ZeroFox**

ZeroFox (Nasdaq: ZFOX), an enterprise software-as-a-service leader in external cybersecurity, has redefined security outside the corporate perimeter on the internet, where businesses operate, and threat actors thrive. The ZeroFox platform combines advanced AI analytics, digital risk and privacy protection, full-spectrum threat intelligence, and a robust portfolio of breach, incident and takedown response capabilities to expose and disrupt phishing and fraud campaigns, botnet exposures, credential theft, impersonations, data breaches, and physical threats that target your brands, domains, people, and assets. Join thousands of customers, including some of the largest public sector organizations as well as finance, media, technology and retail companies to stay ahead of adversaries and address the entire lifecycle of external cyber risks. ZeroFox and the ZeroFox logo are trademarks or registered trademarks of ZeroFox, Inc. and/or its affiliates in the U.S. and other countries. Visit www.zerofox.com for more information.

**Conference Call and Webcast Information**

ZeroFox will host a conference call today, March 14, 2023, at 8:00 a.m. to discuss its financial results. To access this call, please pre-register using this link: ZeroFox F4Q23 Earnings Pre-Registration. The live webcast and a webcast replay of the conference call can be accessed from the investor relations page of ZeroFox's website at https://ir.zerofox.com.

**Forward-Looking Statements**

Certain statements in this press release are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including statements related to our anticipated financial results for our first quarter of fiscal year 2024 and fiscal year 2024, growth opportunities in external cybersecurity and our progress to achieving profitability are forward-looking statements. Forward-looking statements involve risks and uncertainties that

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could cause actual results to differ materially from those anticipated by these forward-looking statements. The inclusion of any statement in this press release does not constitute an admission by ZeroFox or any other person that the events or circumstances described in such statement are material. These risks and uncertainties include, but are not limited to, the following: our ability to recognize the anticipated benefits of the business combination; defects, errors, or vulnerabilities in the ZeroFox platform, the failure of the ZeroFox platform to block malware or prevent a security breach, misuse of the ZeroFox platform, or risks of product liability claims that would harm our reputation and adversely impact our business, operating results, and financial condition; if our enterprise platform offerings do not interoperate with our customers' network and security infrastructure, or with third-party products, websites or services, our results of operations may be harmed; we may not timely and cost-effectively scale and adapt our existing technology to meet our customers' performance and other requirements; our ability to introduce new products and solutions and features is dependent on adequate research and development resources and our ability to successfully complete acquisitions; our success depends, in part, on the integrity and scalability of our systems and infrastructure; we rely on third-party cloud providers to host and operate our platform, and any disruption of or interference with our use of these offerings may negatively affect our ability to maintain the performance and reliability of our platform which could cause our business to suffer; we rely on software and services from other parties; we have a history of losses, and we may not be able to achieve or sustain profitability in the future; if organizations do not adopt cloud, and/or SaaS-delivered external cybersecurity solutions that may be based on new and untested security concepts, our ability to grow our business and our results of operations may be adversely affected; we have experienced rapid growth in recent periods, and if we do not manage our future growth, our business and results of operations will be adversely affected; we face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition, and results of operations; competitive pricing pressure may reduce revenue, gross profits, and adversely affect our financial results; adverse general and industry-specific economic and market conditions and reductions in customer spending, in either the private or public sector, including as a result of inflation and geopolitical uncertainty such as the ongoing conflict between Russia and Ukraine, may reduce demand for our platform or products and solutions, which could harm our business, financial condition and results of operations; the COVID-19 pandemic could adversely affect our business, operating results, and financial condition; if we fail to adapt to rapid technological change, evolving industry standards and changing customer needs, requirements or preferences, our ability to remain competitive could be impaired; one U.S. government customer accounts for a substantial portion of our revenues; and we rely heavily on the services of our senior management team.

Additional information concerning these, and other risks, is described under the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations of ZeroFox" and "Management's Discussion and Analysis of Financial Condition and Results of Operations of IDX" sections of our final prospectus filed with the Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b) under the Securities Act of 1933 on October 7, 2022, in connection with our registration statement on Form S-1 and in subsequent prospectus supplements filed with the SEC. We expressly disclaim any obligation to update any of these forward-looking statements, except to the extent required by applicable law.

**Use of Non-GAAP Financial Measures and Key Business Measures**

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures and key business measures are useful in evaluating our operating performance. We use the following non-GAAP financial information and key business measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business, results of operations or outlook. However, non-GAAP financial information is presented for

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supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures and key business measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures and key business measures as tools for comparison.

A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

**Non-GAAP Gross Profit and Non-GAAP Gross Margin** 

We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, respectively, excluding stock-based compensation expense and amortization of acquired intangible assets.

**Non-GAAP Subscription Gross Profit and Non-GAAP Subscription Gross Margin** 

We define non-GAAP subscription gross profit and non-GAAP subscription gross margin as GAAP subscription gross profit and GAAP subscription gross margin, respectively, excluding stock-based compensation expense and amortization of acquired intangible assets.

**Non-GAAP Services Gross Profit and Non-GAAP Services Gross Margin** 

We define non-GAAP services gross profit and non-GAAP services gross margin as GAAP services gross profit and GAAP services gross margin, respectively, excluding stock-based compensation expense and amortization of acquired intangible assets.

**Non-GAAP Research and Development Expense, Non-GAAP Sales and Marketing Expense and Non-GAAP General and Administrative Expense** 

We define these non-GAAP measures as their respective GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, and costs incurred for the business combination.

**Non-GAAP Loss from Operations**

We define non-GAAP loss from operations as GAAP loss from operations, excluding stock-based compensation expense, amortization of acquired intangible assets, costs incurred for the business combination and goodwill impairment charge.

**Annual Recurring Revenue (ARR)**

We define ARR as the annualized contract value of all recurring revenue related to contracts in place at the end of the reporting date assuming any contract is renewed on its existing terms. We continue to include ARR from customers whose term has expired within 90 days of the applicable measurement date for which we are actively negotiating renewal.

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**Subscription Customer**

We define a subscription customer as any entity that has entered into a distinct subscription agreement for access to the ZeroFox platform or services for which the term has not ended or with which we are continuing to provide service and negotiating a renewal contract that expired within 90 days of the applicable measurement date. We do not consider our channel partners as customers, and we treat managed service security providers, who may purchase our offerings on behalf of multiple companies, as a single subscription customer.

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ZEROFOX HOLDINGS, INC.

Consolidated Statement of Operations

(Unaudited)

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| | | |
|:---|:---|:---|
| **(in thousands, except share and per share data)** | **Three Months Ended<br>January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Revenue |  |  |
| &nbsp;&nbsp;Subscriptions | $16505 | $31679 |
| &nbsp;&nbsp;Services | 28892 | 56707 |
| Total revenue | 45397 | 88386 |
| Cost of revenue (1)(2) |  |  |
| &nbsp;&nbsp;Subscriptions | 9304 | 18225 |
| &nbsp;&nbsp;Services | 22241 | 43600 |
| Total cost of revenue | 31545 | 61825 |
| Gross profit | 13852 | 26561 |
| Operating expenses (1)(2) |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | 6497 | 12134 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 19112 | 35859 |
| &nbsp;&nbsp;&nbsp;General and administrative | 9316 | 18218 |
| &nbsp;&nbsp;&nbsp;Goodwill impairment |  | 698650 |
| Total operating expenses | 34925 | 764861 |
| Loss from operations | (21073) | (738300) |
| Other (expense) income |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (3439) | (7867) |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | (473) | 5364 |
| &nbsp;&nbsp;&nbsp;Change in fair value of sponsor earnout shares | 423 | 9634 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other (expense) income | (3489) | 7131 |
| Loss before income taxes | (24562) | (731169) |
| Benefit from income taxes | (8073) | (10522) |
| Net loss after tax | $(16489) | $(720647) |
| Net loss per share attributable to common stockholders, basic and diluted | $(0.14) | $(6.17) |
| Weighted-average shares used in computation of net loss per share attributable to common stockholders, basic and diluted | 116870963 | 116862277 |
| Other comprehensive loss |  |  |
| Foreign currency translation | (83) | (101) |
| Total other comprehensive loss | (83) | (101) |
| Total comprehensive loss | $(16572) | $(720748) |

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ZEROFOX HOLDINGS, INC.

Consolidated Statement of Operations

(Unaudited)

<sup>1</sup> Includes stock-based compensation as follows:

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| | | |
|:---|:---|:---|
| **(in thousands)** | **Three Months Ended<br>January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Cost of revenue - subscriptions | $89 | $97 |
| Cost of revenue - services | 35 | 36 |
| Research and development | 395 | 452 |
| Sales and marketing | 434 | 518 |
| General and administrative | 1242 | 1397 |
| Total stock-based compensation expense | $2195 | $2500 |

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<sup>2</sup> Includes amortization of acquired intangible assets as follows:

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| | | |
|:---|:---|:---|
| **(in thousands)** | **Three Months Ended<br>January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Cost of revenue - subscriptions | $4790 | $9425 |
| Cost of revenue - services |  |  |
| Research and development |  |  |
| Sales and marketing | 6044 | 11894 |
| General and administrative | 883 | 1737 |
| Total amortization of acquired intangible assets | $11717 | $23056 |

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ZEROFOX HOLDINGS, INC.

Consolidated Balance Sheet

(Unaudited)

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| | |
|:---|:---|
| **(in thousands, except share data)** | **January 31, 2023** |
| **Assets** |  |
| Current assets: |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $47549 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for doubtful accounts | 29609 |
| &nbsp;&nbsp;&nbsp;Deferred contract acquisition costs, current | 5456 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 5300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 87914 |
| Property and equipment, net of accumulated depreciation | 671 |
| Capitalized software, net of accumulated amortization | 253 |
| Deferred contract acquisition costs, net of current portion | 7751 |
| Acquired intangible assets, net of accumulated amortization | 262444 |
| Goodwill | 406608 |
| Operating lease right-of-use assets | 720 |
| Other assets | 550 |
| Total assets | $766911 |
| **Liabilities and stockholders' equity** |  |
| Current liabilities: |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $3099 |
| &nbsp;&nbsp;&nbsp;Accrued compensation, accrued expenses, and other current liabilities | 18751 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 15938 |
| &nbsp;&nbsp;&nbsp;Deferred revenue, current | 47977 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, current | 406 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 86171 |
| Deferred revenue, net of current portion | 5981 |
| Long term debt, net of deferred financing costs | 157843 |
| Operating lease liabilities, net of current portion | 427 |
| Warrants | 2581 |
| Sponsor earnout shares | 2445 |
| Deferred tax liability | 22592 |
| Total liabilities | 278040 |
| Commitments and contingencies |  |
| Stockholders' equity |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value; 136,657,312 authorized shares; 118,190,135 shares issued and outstanding | 12 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 1243637 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (754677) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (101) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 488871 |
| Total liabilities and stockholders' equity | $766911 |

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ZEROFOX HOLDINGS, INC.

Consolidated Statement of Cash Flows

(Unaudited)

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| | | |
|:---|:---|:---|
| **(in thousands)** | **Three Months Ended<br>January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(16489) | $(720647) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in<br> operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill impairment | &nbsp;&nbsp;— | 698650 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 213 | 366 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of software development costs | 20 | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of acquired intangible assets | 11717 | 23056 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred debt issuance costs | 13 | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 253 | 526 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 2195 | 2500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for bad debts | 29 | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrants | 473 | (5364) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of sponsor earnout shares | (423) | (9634) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes | (8446) | (10992) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncash interest expense | 3380 | 6564 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (611) | (3736) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred contract acquisition costs | (311) | (1267) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 1454 | (187) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued compensation, accrued<br> expenses, and other current liabilities | 481 | (8274) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 898 | 1365 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (140) | (413) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (5294) | (27406) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from Trust account |  | 34864 |
| &nbsp;&nbsp;&nbsp;Business acquisition - IDX, net of cash acquired |  | (49803) |
| &nbsp;&nbsp;&nbsp;Business acquisition - ZeroFox, net of cash acquired |  | (48369) |
| &nbsp;&nbsp;&nbsp;Purchases of property and equipment | (157) | (313) |
| &nbsp;&nbsp;&nbsp;Capitalized software | (104) | (278) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (261) | (63899) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of convertible notes, net of issuance costs |  | 149872 |
| &nbsp;&nbsp;&nbsp;Proceeds from the PIPE |  | 20000 |
| &nbsp;&nbsp;&nbsp;Exercise of stock options | 10 | 122 |
| &nbsp;&nbsp;&nbsp;Repurchase of class A ordinary shares |  | (24626) |
| &nbsp;&nbsp;&nbsp;Payment of deferred underwriting fee |  | (6054) |
| &nbsp;&nbsp;&nbsp;Repayment of debt | (235) | (469) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities | (225) | 138845 |
| Foreign exchange translation adjustment | (92) | (101) |
| Net change in cash, cash equivalents, and restricted cash | (5872) | 47439 |
| Cash, cash equivalents, and restricted cash at beginning of year | 53521 | 210 |
| Cash, cash equivalents, and restricted cash at end of year | $47649 | $47649 |

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ZEROFOX HOLDINGS, INC.

Non-GAAP Financial Measures and Reconciliation to GAAP Results

(Unaudited)

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| | | |
|:---|:---|:---|
| **Non-GAAP Gross Profit and Non-GAAP Gross Margin** |  |  |
| **(in thousands)** | **Three Months Ended January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Revenue | $45397 | $88386 |
| Gross profit | 13852 | 26561 |
| Add: Stock-based compensation expense | 124 | 133 |
| Add: Amortization of acquired intangible assets | 4790 | 9425 |
| Non-GAAP gross profit | $18766 | $36119 |
| Gross margin | 31% | 30% |
| Non-GAAP gross margin | 41% | 41% |
| **Non-GAAP Subscriptions Gross Profit and Non-GAAP Subscriptions Gross Margin** | **Non-GAAP Subscriptions Gross Profit and Non-GAAP Subscriptions Gross Margin** |  |
| **(in thousands)** | **Three Months Ended January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Subscriptions revenue | $16505 | $31679 |
| Subscriptions gross profit | 7201 | 13454 |
| Add: Stock-based compensation expense | 89 | 97 |
| Add: Amortization of acquired intangible assets | 4790 | 9425 |
| Non-GAAP subscriptions gross profit | $12080 | $22976 |
| Subscriptions gross margin | 44% | 42% |
| Non-GAAP subscriptions gross margin | 73% | 73% |
| **Non-GAAP Services Gross Profit and Non-GAAP Services Gross Margin** | **Non-GAAP Services Gross Profit and Non-GAAP Services Gross Margin** |  |
| **(in thousands)** | **Three Months Ended January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Services revenue | $28892 | $56707 |
| Services gross profit | 6651 | 13107 |
| Add: Stock-based compensation expense | 35 | 36 |
| Add: Amortization of acquired intangible assets |  |  |
| Non-GAAP services gross profit | $6686 | $13143 |
| Services gross margin | 23% | 23% |
| Non-GAAP services gross margin | 23% | 23% |

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ZEROFOX HOLDINGS, INC.

Non-GAAP Financial Measures and Reconciliation to GAAP Results

(Unaudited)

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| | | |
|:---|:---|:---|
| **Non-GAAP Research and Development Expense** |  |  |
| **(in thousands)** | **Three Months Ended January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Research and development expense | $6497 | $12134 |
| Less: Stock-based compensation expense | 395 | 452 |
| Less: Amortization of acquired intangible assets |  |  |
| Non-GAAP research and development expense | $6102 | $11682 |
| **Non-GAAP Sales and Marketing Expense** |  |  |
| **(in thousands)** | **Three Months Ended January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Sales and marketing expense | $19112 | $35859 |
| Less: Stock-based compensation expense | 434 | 518 |
| Less: Amortization of acquired intangible assets | 6044 | 11894 |
| Non-GAAP sales and marketing expense | $12634 | $23447 |
| **Non-GAAP General and Administrative Expense** |  |  |
| **(in thousands)** | **Three Months Ended January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| General and administrative expense | $9316 | $18218 |
| Less: Stock-based compensation expense | 1242 | 1397 |
| Less: Amortization of acquired intangible assets | 883 | 1737 |
| Less: Expenses related to the business combination |  | 1161 |
| Non-GAAP general and administrative expense | $7191 | $13923 |

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| | | |
|:---|:---|:---|
| **Non-GAAP Loss from Operations** | **Non-GAAP Loss from Operations** |  |
| **(in thousands)** | **Three Months Ended January 31, 2023** | **August 4, 2022<br>to January 31, 2023** |
| Loss from operations | $(21073) | $(738300) |
| Add: Stock-based compensation expense | 2195 | 2500 |
| Add: Amortization of acquired intangible assets | 11717 | 23056 |
| Add: Expenses related to the business combination |  | 1161 |
| Add: Goodwill impairment |  | 698650 |
| Non-GAAP loss from operations | $(7161) | $(12933) |

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**Media Inquiries**

Malory Van Guilder

press@zerofox.com

**Investor Relations**

Marc P. Griffin, ICR

Todd Weller, ZeroFox

investor@zerofox.com

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