Company Leadership Changes - Andrew McKenna has been promoted to the roles of Chief Operating Officer and Chief Financial Officer at ZeroFox, overseeing finance, operations, and corporate strategy to drive execution and long-term growth [1][2] - McKenna joined ZeroFox in 2024 and has significantly contributed to the company's financial stability and growth trajectory, including the successful divestment of IDX [2] Company Strategy and Innovation - ZeroFox emphasizes the need for alignment between strategy and execution to achieve growth, with McKenna expressing eagerness to enhance core priorities and empower teams [3] - The company is recognized for its relentless innovation and sustained growth in the external cybersecurity landscape, positioning itself as a leader in protecting organizations from threats beyond traditional perimeters [3] Competitive Advantage - ZeroFox differentiates itself through a combination of AI-driven technology, comprehensive threat intelligence, and expert-led response capabilities, addressing risks such as phishing and brand abuse [4] - The platform is designed for mature enterprises seeking a best-in-class security posture, providing rapid exposure and remediation of external threats while fostering long-term resilience [4] Company Overview - ZeroFox is a trusted solution for defending organizations against daily cyber threats, unifying various cybersecurity services into one platform [5] - The company has over a decade of SaaS expertise and serves thousands of customers across multiple sectors, including finance, media, and government, delivering actionable intelligence to reduce risk and enhance response [5]

Core Insights - ZeroFox released its annual 2025 Threat Forecast Report, predicting an increase in ransomware and digital extortion threats, lowered barriers for threat actors, and risks to organizations' downstream partners [1][2][3] Cybersecurity Landscape - The report provides a comprehensive analysis of the global cybersecurity landscape, focusing on emerging threat trends and leveraging insights from 2024, including a rise in ransomware and digital extortion incidents and record sales of compromised credentials in deep and dark web marketplaces [2][3] Anticipated Threat Trends - **Deep and Dark Web (DDW) Landscape**: DDW marketplaces will continue to be influenced by law enforcement and geopolitical factors, with actors aiming to maximize profit while maintaining reputation and operational continuity [3] - **Ransomware and Digital Extortion (R&DE)**: 2024 saw record levels of R&DE incidents, and this trend is expected to persist in 2025, with new collectives like RansomHub posing significant threats [3] - **Generative Artificial Intelligence (GenAI)**: Malicious actors are expected to leverage GenAI to enhance existing tactics and techniques, increasing the efficiency and accessibility of cyber threats [3] - **Social Engineering**: Social engineering will remain a critical threat vector, with evolved tactics such as phishing and bypassing multi-factor authentication to exploit vulnerabilities [3] - **Initial Access Brokers (IABs)**: IABs are predicted to increasingly monetize access to third-party service providers, posing risks to organizations reliant on interconnected systems [3] - **Geopolitical and Cyber Convergence**: Geopolitical developments will significantly impact the cyber threat landscape, with actors targeting the private sector in response to trade policies, particularly in regions like the EU, China, Russia, and the Middle East [3] Strategic Recommendations - The report offers strategic recommendations for security practitioners to counter external cyber threats and protect against evolving risks, emphasizing the need for proactive measures in the face of a dynamic threat environment [4]

Core Insights - ZeroFox has divested its subsidiary IDX to Kingswood Capital Management, allowing both entities to concentrate on their core market strengths and service offerings [1][2] - The transaction, signed and closed on November 22, 2024, does not require a regulatory waiting period, indicating a smooth transition [1] - This strategic move aligns with ZeroFox's focus on enhancing its external cybersecurity solutions, including digital risk protection, threat intelligence, and attack surface management [2] Company Focus - ZeroFox aims to accelerate innovation in its differentiated capabilities by realigning its portfolio, which is expected to deliver more value to its global customer base of nearly 1,300 organizations [2] - The company has over 800 employees and has been recognized as a leader in external cybersecurity by industry analysts such as Forrester and Frost & Sullivan [2] IDX Overview - IDX, acquired by ZeroFox in 2022, specializes in post-breach forensics, incident response, and regulatory compliance support, positioning it to effectively serve its distinct client base under new ownership [3] - The divestment allows IDX to continue its growth trajectory while enhancing its capabilities in breach response and incident management [4] Market Position - Kingswood Capital Management sees an opportunity to invest in IDX's talented team and advanced capabilities, positioning the company for further growth in a critical market segment [4] - ZeroFox's platform integrates advanced AI analytics and a robust portfolio of services to address various external cyber risks, catering to a diverse range of industries including finance, media, technology, and retail [5]

Core Insights - ZeroFox is participating as a Gold sponsor at the 15th Annual Billington CyberSecurity Summit, showcasing its external cybersecurity solutions [1][4] - The conference theme focuses on advancing cybersecurity in the AI age, with discussions on the emerging threats posed by AI systems [2] Company Overview - ZeroFox is a leader in external cybersecurity, providing a platform that combines AI analytics, digital risk protection, and threat intelligence to combat various cyber threats [5] - The company's solutions are designed to protect government organizations and other sectors from impersonations, data leaks, and threats against their assets [3][5] Event Participation - ZeroFox's Chief Technology Officer, Mike Price, will participate in a panel discussion on September 4, 2024, addressing the technical and ethical challenges introduced by AI in cybersecurity [2] - The company will demonstrate its External Cybersecurity Platform, which offers critical visibility and compliance reporting for public sector clients [3][4]

Core Insights - ZeroFox and VirusTotal have announced a partnership to enhance online threat detection capabilities, providing greater visibility into external cyber threats for the security community [1][2] - The collaboration allows VirusTotal to access ZeroFox's extensive threat intelligence data lake, which includes attacks and indicators of compromise (IoCs) [1][5] - ZeroFox's platform utilizes advanced AI analytics and a comprehensive suite of threat intelligence and response capabilities to combat various cyber threats, including phishing and fraud [3] ZeroFox Overview - ZeroFox is a leader in external cybersecurity, focusing on security beyond the corporate perimeter, where businesses operate and threat actors are active [3] - The company offers a range of solutions, including domain monitoring and threat intelligence, to help customers detect and respond to external threats [2][3] - ZeroFox processes tens of thousands of malicious URLs, IPs, and phishing domains daily, leveraging global intelligence for threat detection [5] VirusTotal Overview - VirusTotal is recognized as a leading crowdsourced threat intelligence platform, providing users with actionable threat intelligence on potential digital risks [1][6] - The platform integrates ZeroFox's Global Disruption Network (GDN) intelligence, enhancing its capabilities in URL, IP, and domain intelligence [5][6] - VirusTotal combines Google's infrastructure with its own innovations to deliver a comprehensive threat intelligence suite [8]

Cybersecurity Threats and Solutions - ZeroFox reported a significant increase in external cybersecurity threats, including targeted phishing attacks and account takeovers, necessitating continuous monitoring of the external threat environment[21]. - The company’s platform integrates protection, intelligence, adversary disruption, and response services, enhancing its capabilities to address external threats[22]. - ZeroFox's platform employs advanced analytics to process millions of data points, enhancing its ability to detect external threats across various digital platforms[23]. - The company emphasizes the importance of a platform-based approach to secure the public attack surface, combining multiple cybersecurity capabilities into a single solution[31]. - ZeroFox Protection provides real-time asset and vulnerability awareness, enabling organizations to continuously protect their external digital footprint[33]. - The platform's digital risk protection capabilities include monitoring for malicious domains and fraudulent social media profiles, enhancing brand security[35]. - ZeroFox Intelligence offers a broad array of global threat intelligence solutions, allowing customers to predict emerging threat vectors and integrate data into existing security tools[36]. - The integration of threat intelligence and attack surface management capabilities from the acquisition of LookingGlass enhances the platform's visibility into external threats[25]. - The company provides continuous monitoring and protection of the public attack surface, addressing the challenges posed by external cyber threats[30]. - The platform's ZeroFox Protection capabilities include continuous monitoring of domains and digital accounts to secure customers' digital presence against targeted attacks[35]. - The company offers comprehensive response services, including breach response and incident response, to assist organizations in managing cybersecurity incidents[24]. Company Growth and Customer Base - As of January 31, 2024, ZeroFox had over 1,300 subscription customers, with a significant presence across various industry verticals including education, financial services, and healthcare[50]. - A single government customer accounted for 35% of ZeroFox's revenue for fiscal year 2024, while no other customer exceeded 5% of total revenue[51]. - The company plans to drive new customer acquisition by expanding sales capacity and strengthening channel partner relationships, targeting the emerging market for external cybersecurity solutions[49]. - The company aims to increase adoption and platform usage among existing customers by pursuing cross-sell opportunities and expanding the use of its Platform[52]. - ZeroFox is focused on expanding its higher margin enterprise platform subscription business in sectors experiencing high rates of cyberattacks[49]. - The company intends to grow its international customer base by investing in global go-to-market efforts and delivery capabilities[49]. - The company has over 1,300 subscription customers as of January 31, 2024, with key reference customers across various industries including education, energy, and financial services[50]. Acquisitions and Innovations - Following the acquisition of IDX in August 2022, ZeroFox expanded its service offerings to include comprehensive breach response and incident response services[24]. - ZeroFox expanded its capabilities through the acquisition of IDX in August 2022, enhancing its breach response solutions and identity monitoring services[48]. - The Company completed the acquisition of Lookingglass Cyber Solutions, Inc. on April 21, 2023, enhancing its cybersecurity offerings[81]. - The April 2023 acquisition of LookingGlass added threat intelligence and attack surface management capabilities, improving actionable intelligence for threat disruption[25]. - The company is committed to ongoing investment in its intellectual property portfolio through business acquisitions and strategic licensing relationships[61]. - The company plans to continue investing heavily in innovation to enhance and expand the capabilities of its Platform, aiming to increase customer value and growth opportunities[52]. Financial Performance and Revenue - As of January 31, 2024, the Company reported total deferred revenue of $86.8 million, excluding a backlog of approximately $76.5 million, with about $64.0 million expected to be billed in fiscal year 2025[65]. - The company faces intense competition and potential market share loss, which could adversely affect its financial condition and results of operations[14]. Employee Relations and Corporate Culture - The workforce consists of 914 employees and 13 contractors, with no current employees represented by a labor union, indicating good employee relations[66]. - The Company emphasizes a diverse and inclusive corporate culture, encouraging employee collaboration and recognition through initiatives like global town hall meetings[68]. - The company is committed to protecting employee health and safety, implementing protocols to ensure safety during onsite work[72]. - The Company has implemented health and safety protocols in response to COVID-19, with a majority of employees working from home and a flexible hybrid work model in place[72]. Legal and Regulatory Compliance - The company is subject to various domestic and international laws regarding data protection and privacy, which may require additional operational measures and could impact costs[74]. - The company operates under various laws and regulations related to data protection, including GDPR and CCPA, which may increase operational costs[77]. - ZeroFox Holdings, Inc. is in material compliance with applicable laws and regulations[76]. - The company has policies in place to adapt to evolving regulatory obligations in the cybersecurity industry[77]. - The company is actively monitoring potential regulatory changes that could affect its go-to-market model[77]. - The company is subject to U.S. export licensing requirements and trade sanctions, which could impact operations[75]. Marketing and Sales Strategy - The company has a channel-first sales and marketing strategy, leveraging its partner community to reach desired customer cohorts[53]. - The company has a comprehensive marketing strategy focused on inbound marketing to drive high contact-to-opportunity conversion rates[54]. - ZeroFox's marketing strategy emphasizes inbound marketing and thought leadership to drive engagement and conversion rates, utilizing various channels including webinars and social media[54]. Intellectual Property - The Company has 72 issued patents and 9 pending patent applications related to various cybersecurity technologies, with active patents expected to expire between 2029 and 2042[60]. - The cybersecurity industry is characterized by frequent claims and litigation regarding patent infringement, which poses risks to the Company's intellectual property rights[63].

Financial Performance - Total revenue for Q4 FY 2024 was $60.5 million, representing a 33% year-over-year increase[4] - Annual Recurring Revenue (ARR) reached $188.4 million, up 20% year-over-year[4] - For the full fiscal year 2024, total revenue was $233.3 million, with a GAAP gross margin of 32%[4] - Total revenue for the three months ended January 31, 2024, was $60,508,000, a 33.3% increase from $45,397,000 in the same period last year[26] - Subscription revenue increased to $24,117,000, up 46% from $16,505,000 year-over-year[26] - Services revenue rose to $36,391,000, representing a 26% increase from $28,892,000 in the prior year[26] - Gross profit for the three months ended January 31, 2024, was $21,468,000, compared to $13,852,000, marking a 55% increase[26] - Net loss for the three months ended January 31, 2024, was $234,804,000, compared to a net loss of $16,489,000 in the same period last year[26] Operating Expenses - Total operating expenses surged to $250,091,000, significantly higher than $34,925,000 in the same quarter last year, primarily due to a goodwill impairment of $212,092,000[26] - Research and development expense for Q1 2024 was $7,906,000, an increase of 21.6% from $6,497,000 in Q1 2023[39] - Non-GAAP sales and marketing expense for Q1 2024 was $13,275,000, up 5.1% from $12,634,000 in Q1 2023[40] - General and administrative expense for Q1 2024 reached $10,026,000, a rise of 7.6% compared to $9,316,000 in Q1 2023[41] - Total research and development expense for the year ended January 31, 2024, was $31,190,000, compared to $29,553,000 for the previous year[39] - Total sales and marketing expense for the year ended January 31, 2024, was $73,790,000, an increase from $52,045,000 in the previous year[40] - General and administrative expense for the year ended January 31, 2024, was $38,758,000, up from $31,205,000 in the previous year[41] Goodwill Impairment - GAAP loss from operations for Q4 was $228.6 million, which included a goodwill impairment charge of $212.1 million[4] - The company recognized a goodwill impairment of $212,092,000 in Q1 2024, contributing to the significant loss from operations[42] Cash and Assets - Cash and cash equivalents increased to $33.1 million as of January 31, 2024, up approximately $3.3 million from October 31, 2023[4] - Cash and cash equivalents decreased to $33,149,000 from $47,549,000 year-over-year[30] - Total assets as of January 31, 2024, were $464,837,000, down from $766,911,000 in the previous year[30] - Total liabilities increased to $319,568,000 from $278,040,000 year-over-year[30] Acquisition and Future Guidance - ZeroFox has entered into a definitive agreement to be acquired by Haveli Investments for an enterprise value of approximately $350 million[4] - The transaction is expected to close in the first half of 2024, subject to customary closing conditions[5] - ZeroFox will not be providing guidance for Q1 or full fiscal year 2025 due to the pending acquisition[6]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39722 ZeroFox Holdings, Inc. (Exact name of Registrant as specified in its Charter) Delaware 98-1557361 (State or other jurisdiction o ...

Financial Performance - The company reported a net income of $3,704,759 for the three months ended June 30, 2022, driven by a change in fair value of warrant liabilities of $5,714,437 and interest earned on marketable investments of $83,368, offset by operating costs of $2,093,046[143]. - For the six months ended June 30, 2022, the company achieved a net income of $10,682,774, with a change in fair value of warrant liabilities of $14,439,162 and interest income of $100,017, while operating costs totaled $3,856,405[144]. - As of June 30, 2022, net cash used in operating activities was $418,629, with net income affected by changes in fair value of warrant liabilities[151]. - Net income (loss) per ordinary share is calculated by dividing net income (loss) by the weighted average number of ordinary shares outstanding[163]. Cash and Securities - The company had cash and marketable securities in the trust account amounting to $34,831,528 as of June 30, 2022, intended for completing the business combination[153]. - The initial public offering generated gross proceeds of $150,000,000 from the sale of 15,000,000 units at $10.00 per unit, along with an additional $22,500,000 from the underwriters' full exercise of their over-allotment option[148][149]. - The company may need to raise additional capital through loans or investments to meet working capital needs, with no assurance that financing will be available on acceptable terms[156]. Business Combination - The business combination agreement includes a pre-money enterprise value of $866,250,000 for ZeroFox and $338,750,000 for IDX, with shares converting into LNFA Common Stock at a price of $10.00 per share[134]. - The company expects to incur significant costs in pursuing acquisition plans and cannot assure the success of completing a business combination[132]. - The company has until August 24, 2022, to consummate a business combination, after which mandatory liquidation may occur if not completed[157]. Transaction Costs - The company incurred $10,050,665 in transaction costs related to the initial public offering, including $3,450,000 in underwriting fees[150]. Accounting Policies and Controls - The company has not identified any critical accounting policies that could materially affect reported amounts[159]. - Class A ordinary shares subject to possible redemption are classified as temporary equity, reflecting uncertain future events[160]. - The company accounts for warrants based on specific terms, assessing whether they qualify as equity or liability instruments[161]. - The company adopted ASU No. 2021-08 early for fiscal year 2023, expecting it to simplify accounting for anticipated merger transactions[164]. - The Chief Executive Officer and Chief Financial Officer identified a material weakness in internal controls related to complex financial instruments[169]. - Management plans to enhance the evaluation and implementation of applicable accounting standards to address identified weaknesses[170]. - There were no changes in internal control over financial reporting that materially affected the company's financial reporting[171]. Market and Risk Factors - As of June 30, 2022, the company was not subject to market or interest rate risk due to investments in U.S. government obligations[166].

Financial Performance - The company reported a net income of $6,978,015 for the three months ended March 31, 2022, driven by a change in fair value of warrant liabilities of $8,724,725 and interest earned on marketable investments of $16,649, offset by operating costs of $1,763,359 [137]. - For the same period in 2021, the company had a net income of $10,586,342, which included a change in fair value of warrant liabilities of $10,825,645 and interest earned on marketable investments of $8,192, with operating costs of $247,495 [138]. - Net income per ordinary share is calculated using the two-class method, excluding accretion associated with redeemable Class A ordinary shares [154]. Initial Public Offering - The company raised gross proceeds of $150,000,000 from its initial public offering of 15,000,000 units at $10.00 per unit, along with an additional $22,500,000 from the full exercise of the underwriters' over-allotment option [139][140]. - The company incurred $10,050,665 in transaction costs related to the initial public offering, including $3,450,000 in underwriting fees [141]. Business Combination - The company has until August 24, 2022, to consummate a business combination, after which a mandatory liquidation may occur if not completed [147]. - The business combination agreement includes the ZF Merger and IDX Merger, with ZeroFox and IDX continuing as wholly-owned subsidiaries of L&F Holdings [128]. - The pre-money enterprise value for ZeroFox is set at $866,250,000, while IDX's pre-money enterprise value is $338,750,000, with shares converting into LNFA Common Stock at a price of $10.00 per share [129]. - The company expects to incur significant costs in pursuing its acquisition plans and does not guarantee the success of completing a business combination [127]. Financial Position - As of March 31, 2022, the company had cash and marketable securities in the trust account totaling $175,126,678, which will be used to complete its business combination [144]. - The company has no off-balance sheet financing arrangements as of March 31, 2022, and does not participate in transactions that create relationships with unconsolidated entities [148]. Warrant Classification - The company assesses warrants as either equity-classified or liability-classified based on specific terms and applicable guidance, with evaluations conducted at issuance and quarterly [152]. - For warrants classified as equity, they are recorded as additional paid-in capital at issuance; those classified as liabilities are recorded at fair value, with changes recognized as non-cash gains or losses [153]. Risk and Controls - As of March 31, 2022, the company was not subject to market or interest rate risk, with IPO proceeds invested in short-term U.S. government obligations [156]. - The company's disclosure controls were found to be ineffective due to a material weakness in internal control over financial reporting related to complex financial instruments [158]. - Management plans to enhance the evaluation and implementation of accounting standards over time, although the effectiveness of these initiatives cannot be guaranteed [159]. - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected the controls [160].