S-1

As filed with the U.S. Securities and Exchange Commission on April 12, 2024

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Zapata Computing Holdings Inc.

(Exact name of registrant as specified in its charter)


Delaware	7372	87-4706968
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

100 Federal Street, Floor 20

Boston,

02110

(844) 492-7282

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Christopher Savoie

President and Chief Executive Officer

100 Federal Street, Floor 20

Boston,

02110

(844)

492-7282

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Stacie S. Aarestad

Foley Hoag LLP

155 Seaport Boulevard

Boston, MA 02210

Tel: (617)

832-1000

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule

12b-2

of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		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 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a) of the Securities Act, may determine.

The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED APRIL 12, 2024

Zapata Computing Holdings Inc.

Up to 13,000,000 Shares of Common Stock

This prospectus relates to the resale, from time to time, of up to 13,000,000 shares of Common Stock, par value $0.0001 per share (the “Common Stock”), by the selling stockholder, Lincoln Park Capital Fund, LLC (“Lincoln Park” or the “Selling Stockholder”). The Common Stock to which this prospectus relates includes shares that have been or may be issued to Lincoln Park pursuant to a purchase agreement between us, Zapata Computing, Inc. (“Legacy Zapata”) and Lincoln Park dated as of December 19, 2023 (the “Purchase Agreement”). On April 11, 2024, we issued 712,025 shares of Common Stock to Lincoln Park as consideration for its irrevocable commitment to purchase Common Stock under the Purchase Agreement at an effective price of $2.37 per share. We may receive gross proceeds of up to $75,000,000 from the sale of Common Stock to Lincoln Park under the Purchase Agreement, from time to time, in our discretion after the date of the registration statement of which this prospectus is a part is declared effective and after satisfaction of other conditions in the Purchase Agreement. Lincoln Park may sell the Common Stock described in this prospectus in a number of different ways and at varying prices. The price that Lincoln Park will pay for the shares to be resold pursuant to this prospectus (which will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, forward or reverse stock split, or other similar transaction occurring during the business days used to compute such price) will depend upon the timing of sales and will fluctuate based on the trading price of our Common Stock and, depending on whether the purchase is a Regular Purchase (as defined below) or an Accelerated Purchase (as defined below), will be set as either (a) 95% of the lower of (i) the lowest trading price for our Common Stock on the applicable Purchase Date (as defined below) and (ii) the average of the three lowest closing sale prices for our Common Stock during the ten consecutive business days ending on the business day immediately preceding such Purchase Date or (b) 95% of the lower of (x) the closing sale price of our Common Stock on the Accelerated Purchase Date (as defined below) and (y) the volume weighted average price of our Common Stock on the Accelerated Purchase Date (during a time period specified in the Purchase Agreement). The Purchase Agreement prohibits us from directing Lincoln Park to purchase any Common Stock if the closing price of our Common Stock is less than the floor price of $0.50 (the “Floor Price”). While the Purchase Agreement contains certain limitations regarding the number of shares of Common Stock that we can sell to Lincoln Park under the Purchase Agreement, the number of shares of Common Stock that we can sell to Lincoln Park under the Purchase Agreement could constitute a considerable percentage of our public float at the time of such sales. As a result, the resale by Lincoln Park of Common Stock pursuant to this prospectus could have a significant negative impact on the trading price of the Common Stock. See “Lincoln Park Transaction” on page 169 for more information.

We have agreed to bear all of the expenses incurred in connection with the registration of the shares to which this prospectus relates. Lincoln Park will pay or assume discounts, commissions, and fees of underwriters, selling brokers or dealer managers, if any, incurred in connection with the sale of Common Stock. Lincoln Park is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”). See “Plan of Distribution” on page 167 for more information about how Lincoln Park may sell the Common Stock being registered pursuant to this prospectus.

In addition, we expect to file a separate registration statement registering the issuance to and resale by certain third parties (the “Resale Registration Statement”) of up to an aggregate of approximately 44,500,000 shares of Common Stock issued prior to, or in connection with, the Merger or that are issuable upon exercise of outstanding Warrants that have an exercise price of $11.50 per share. The number of shares of Common Stock that these selling securityholders may sell into the public markets pursuant to the Resale Registration Statement may exceed our public float. The approximately 44,500,000 shares of Common Stock (including shares of Common Stock underlying Warrants) that we expect to register for issuance or resale pursuant to the Resale Registration Statement represent approximately 153% of our Common Stock outstanding as of March 28, 2024 (approximately 73% on a fully-diluted basis). On a combined basis with the 13,000,000 shares of Common Stock being registered on this registration statement, we are registering approximately 57,500,000 shares of Common Stock that may be issued or resold from time to time pursuant to the registration statements, representing approximately 198% of the Common Stock outstanding as of March 28, 2024 (approximately 95% on a fully-diluted basis). Any sales of such shares of Common Stock by these third parties could similarly have a significant negative impact on the trading price of our Common Stock.

Our Common Stock is listed on the Nasdaq Global Market and our warrants to purchase Common Stock (the “Warrants”) are listed on the Nasdaq Capital Market (together with the Nasdaq Global Market, “Nasdaq”) under the symbols “ZPTA” and “ZPTAW,” respectively. On April 11, 2024, the last reported sales price of Common Stock, as reported by Nasdaq, was $2.50 per share, and the last reported sales price of the Warrants on Nasdaq was $0.1492 per warrant.

We are an “emerging growth company” and a “smaller reporting company” as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and may elect to do so in future filings.

Investing in Common Stock is highly speculative and involves a high degree of risk. You should review carefully the risks and uncertainties described in the section titled “Risk Factors” beginning on page 19 of this prospectus, and under similar headings in any amendments or supplements to this prospectus.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the Common Stock or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2024

ABOUT THIS PROSPECTUS

This Prospectus is part of a registration statement on Form S-1 that we filed with the SEC. The Selling Stockholder may offer, sell or distribute all or a portion of the Common Stock hereby registered publicly or through private transactions at prevailing market prices or at negotiated prices, from time to time in one or more offerings as described in this prospectus. We will not receive any of the proceeds from such sales of the Common Stock. We will bear all costs, expenses and fees in connection with the registration of these securities, including with regard to compliance with state securities or “blue sky” laws. The Selling Stockholder will bear all commissions and discounts, if any, attributable to its sale of Common Stock. See “Plan of Distribution.”

We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or post-effective amendment, you should rely on the prospectus supplement or post-effective amendment, as applicable. Before purchasing any securities, you should carefully read this prospectus, any post-effective amendment, and any applicable prospectus supplement, together with the additional information described in the “Where You Can Find More Information” section of this prospectus.

You should assume that the information appearing in this prospectus, any post-effective amendment and any applicable prospectus supplement to this prospectus is accurate only as of the date on its respective cover. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus contains, and any post-effective amendment or any prospectus supplement may contain, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included in this prospectus, any post-effective amendment or any prospectus supplement may involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed in the “Risk Factors” section of this prospectus, any post-effective amendment and the applicable prospectus supplement. Accordingly, investors should not place undue reliance on this information.

On March 28, 2024, we consummated the business combination contemplated by the Business Combination Agreement, dated September 6, 2023 (as amended, the “Business Combination Agreement”), by and among the Company, Tigre Merger Sub, Inc. (“Merger Sub”) and Legacy Zapata. Pursuant to the Business Combination Agreement, Merger Sub merged with and into Legacy Zapata resulting in Legacy Zapata becoming a wholly owned subsidiary of the Company. Collectively, we refer herein to these transactions as the “Merger.”

Unless the context indicates otherwise, references in this prospectus to the “Company,” “Zapata,” “Zapata AI,” “we,” “us,” “our” and similar terms refer to Zapata Computing Holdings Inc. and its consolidated subsidiaries. References in this prospectus to “Legacy Zapata” refer to Zapata Computing, Inc., our wholly owned subsidiary. For periods prior to the closing of the Merger, “the Company,” “we,” “us,” “our” and similar terms refer to the Company’s predecessor, Andretti Acquisition Corp.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

This document contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ^® or ^™ symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend the use or display of other companies’ trade names, trademarks or service marks to imply our relationship with, or endorsement or sponsorship by, any other companies.

INDUSTRY AND MARKET DATA

In this prospectus, we present industry data, information and statistics regarding the markets in which we compete as well as publicly available information, industry and general publications and research and studies conducted by third parties. This information is supplemented where necessary with our own internal estimates and information obtained from discussions with our customers, taking into account publicly available information about other industry participants and our management’s judgment where information is not publicly available. This information appears in “Business” and other sections of this prospectus.

Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, we are not aware of any misstatements regarding the industry data presented herein, but such information has not been verified by any independent sources. Additionally, forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under the captions “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

SELECTED DEFINITIONS

In this document:

“2024 ESPP” means the Zapata Computing Holdings Inc. 2024 Employee Stock Purchase Plan.

“2018 Plan” means the Zapata Computing, Inc. 2018 Stock Incentive Plan, as amended, supplemented or modified from time to time.

“ASC” means Accounting Standards Codification.

“Business Combination Agreement” means the Business Combination Agreement, dated as of September 6, 2023, by and among the Company, Merger Sub and Legacy Zapata, as may be amended from time to time.

“Bylaws” means the bylaws of the Company filed as an exhibit to the registration statement of which this prospectus is a part.

“Certificate of Incorporation” means the certificate of incorporation of the Company filed as an exhibit to the registration statement of which the prospectus is a part.

“Class A Common Stock” means the Company’s Class A ordinary shares, par value $0.0001 per share, as in effect immediately prior to the Domestication.

“Class B Common Stock” means the Company’s Class B ordinary shares, par value $0.0001 per share, as in effect immediately prior to the Domestication.

“Closing Date” means March 28, 2024.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” means the common stock of the Company, par value $0.0001 per share.

“Company” means Zapata Computing Holdings Inc. Unless the context indicates otherwise, references in this prospectus to the “Company,” “Zapata,” “Zapata AI,” “we,” “us,” “our” and similar terms refer to Zapata Computing Holdings Inc. and its consolidated subsidiaries. References in this prospectus to “Legacy Zapata” refer to Zapata Computing, Inc., our wholly owned subsidiary. For periods prior to the closing of the Merger, “the Company,” “we,” “us,” “our” and similar terms refer to the Company’s predecessor, Andretti Acquisition Corp.

“Company’s Board” or “our Board” means the board of directors of the Company.

“DGCL” means the General Corporation Law of the State of Delaware.

“Effective Time” means the effective time of the Merger.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Exchange Agreements” means the exchange agreements that were entered into with each holder of Senior Secured Notes who so requested prior to the Closing, pursuant to which such Senior Secured Notes were exchanged for shares of Common Stock in accordance with the terms of such Exchange Agreement and as set forth in the Senior Secured Note Purchase Agreement.

“GAAP” means United States generally accepted accounting principles.

“IPO” means the Company’s initial public offering of units, consummated on January 18, 2022.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

“Key Legacy Zapata Stockholders” means certain stockholders of Legacy Zapata prior to the closing of the Merger who collectively held a Requisite Majority of the outstanding voting power of Legacy Zapata Capital Stock prior to the closing of the Merger.

“Legacy Zapata” means Zapata Computing, Inc., a Delaware corporation.

“Legacy Zapata Board” means the board of directors of Legacy Zapata prior to the consummation of the Merger.

“Legacy Zapata Capital Stock” refers to the Legacy Zapata Common Stock and the Legacy Zapata Preferred Stock.

“Legacy Zapata Common Stock” means Zapata’s common stock, par value $0.0001 per share, each having one vote per share.

“Legacy Zapata Options” means all options to purchase outstanding shares of Legacy Zapata Common Stock, whether or not exercisable and whether or not vested, immediately prior to the Closing under the 2018 Plan or otherwise.

“Legacy Zapata Preferred Stock” means the Legacy Zapata Series Seed Preferred Stock, Legacy Zapata Series A Preferred Stock, Legacy Zapata Series B-1 Preferred Stock and Legacy Zapata Series B-2 Preferred Stock.

“Legacy Zapata Series A Preferred Stock” means Zapata’s Series A Preferred Stock, par value $0.0001 per share.

“Legacy Zapata Series B Preferred Stock” means the Zapata Series B-1 Preferred Stock and the Zapata Series B-2 Preferred Stock.

“Legacy Zapata Series B-1 Preferred Stock” means Zapata’s Series B-1 Preferred Stock, par value $0.0001 per share.

“Legacy Zapata Series B-2 Preferred Stock” means Zapata’s Series B-2 Preferred Stock, par value $0.0001 per share.

“Legacy Zapata Series Seed Preferred Stock” means Zapata’s Series Seed Preferred Stock, par value $0.0001 per share.

“Lincoln Park” means Lincoln Park Capital Fund, LLC.

“Lock-up Agreements” means the lock-up agreements among the Company and certain stockholders of Legacy Zapata, which became effective upon the consummation of the Merger.

“Merger” means the merger of Merger Sub with and into Legacy Zapata with Legacy Zapata that occurred on March 28, 2024 with Legacy Zapata surviving the Merger as a wholly owned subsidiary of the Company as contemplated by the Business Combination Agreement.

“Merger Sub” means Tigre Merger Sub, Inc., a Delaware corporation and wholly owned direct subsidiary of the Company prior to the closing of the Merger.

“Nasdaq” means the Nasdaq Stock Market.

“Preferred Stock” means the preferred stock of the Company, par value $0.0001 per share.

“Private Warrant Agreement” means the Private Warrant Agreement dated as of January 12, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as may be amended from time to time, governing the Private Warrants.

“Private Warrants” means the warrants to purchase Common Stock at an exercise price of $11.50 per share held by the Sponsor and the Sponsor Co-Investor.

“prospectus” means the prospectus included in this registration statement on Form S-1, as amended.

“Public Warrant Agreement” means the Public Warrant Agreement dated as of January 12, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as may be amended from time to time, governing the Public Warrants.

“Public Warrants” means warrants to purchase Common Stock at an exercise price of $11.50 per share that are listed on the Nasdaq Capital Market under the ticker symbol “ZPTAW.”

“Purchase Agreement” means that certain Purchase Agreement, dated December 19, 2023, by and among the Company, Legacy Zapata, and Lincoln Park.

“Registration Rights Agreement” means that certain Registration Rights Agreement, dated December 19, 2023, by and among the Company, Legacy Zapata, and Lincoln Park.

“Requisite Majority” means (i) the holders of at least a majority of the voting power of the outstanding shares of Legacy Zapata Common Stock and Legacy Zapata Preferred Stock, consenting or voting (as the case may be) together on an “as-converted”-to-common-stock basis (as required pursuant to Section 251 of the DGCL), (ii) the holders of at least a majority of the outstanding shares of Legacy Zapata Preferred Stock, consenting or voting (as the case may be) separately as a single class on an “as-converted”-to-common-stock basis, and (iii) the holders of at least a majority of the outstanding shares of the Legacy Zapata Series B Preferred Stock, consenting or voting (as the case may be) separately as a class.

“Resale Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement, dated as of September 6, 2023, by and among the Company and certain of our security holders.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Senior Note Purchase Agreement” means that certain Senior Note Purchase Agreement, dated June 13, 2023, between Legacy Zapata and the persons party thereto.

“Senior Secured Note Purchase Agreement” means that certain Senior Secured Note Purchase Agreement, dated December 15, 2023, between Legacy Zapata and the persons who are or become party thereto.

“Senior Notes” means the senior promissory notes issued by Legacy Zapata pursuant to the Senior Note Purchase Agreement.

“Senior Secured Notes” means the senior secured promissory notes issued by Legacy Zapata pursuant to the Senior Secured Note Purchase Agreement.

“Sponsor” means Andretti Sponsor LLC, a Delaware limited liability company.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This registration statement, of which this prospectus is a part, contains forward-looking statements. Statements regarding the potential combination and expectations regarding the combined business are “forward looking statements.” In addition, words such as “estimates,” “expects,” “anticipates,” “assumes,” “suggests,” “projects,” “forecasts,” “seeks,” “plans,” “possible,” “potential,” “aims,” “intends,” “believes,” “seeks,” “may,” “might,” “will,” “would,” “should,” “can”, “could,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward- looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of the parties, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include:

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our ability to realize anticipated benefits of the Merger;

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the projected financial information, growth rate and market opportunity of the Company;

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the anticipated continued interest and growth of the generative artificial intelligence (“AI”) industry;

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our ability to maintain the listing of our Common Stock on the Nasdaq Global Market and our Warrants on the Nasdaq Capital Market (collectively, “Nasdaq”), and the potential liquidity and trading of such securities;

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our ability to grow and manage such growth and expanding operations profitably;

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our ability to build and maintain relationships with new customers and partners, maintain existing relationships with customers and partners, and compete with existing and new competitors in existing and new markets and offerings;

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risks that our intellectual property (“IP”) will not provide the desired competitive advantage;

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various conflicts of interest that could arise among the Company, its affiliates, investors and partner managers;

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our ability to raise additional capital to execute our business plan, which may not be available on acceptable terms or at all, including pursuant to the Purchase Agreement;

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the restrictions on our incurring additional indebtedness while the Senior Secured Notes are outstanding;

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our success in retaining or recruiting, or implementing changes required in, our officers, key employees or directors;

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our ability to retain existing employees and attract and retain new employees with sufficient expertise in algorithm development, product development, software engineering and support services;

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intense competition and competitive pressures from other companies in the industry in which we operate;

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factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control;

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our ability to pay deferred expenses related to the Merger as they come due;

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our ability to achieve or maintain profitability;

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the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs;

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the effect of legal, tax and regulatory changes;

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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

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our financial performance;

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a decline in the price of our securities if we fail to meet the expectations of investors or securities analysts;

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our ability to improve our operational, financial and management controls;

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the risk that our reporting and compliance obligations as a publicly-traded company disrupts our current plans and operations;

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increases costs associated with operating as a public company;

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our ability to build, maintain and enhance awareness of our brand;

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the performance of our products and services;

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unanticipated technological or project development challenges, including with respect to the cost and or timing thereof;

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expectations regarding the time during which we will be an emerging growth company under the JOBS Act; and

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other factors detailed under the section entitled “Risk Factors.”

The forward-looking statements contained in this registration statement, of which this prospectus is a part, are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in this prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

PROSPECTUS SUMMARY

This summary highlights selected information from this prospectus and does not contain all of the information that is important to you in making an investment decision. This summary is qualified in its entirety by the more detailed information included in this prospectus. Before making your investment decision with respect to our securities, you should carefully read this entire prospectus, including the information under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the financial statements included elsewhere in this prospectus.

Overview

We are an Industrial Generative AI software company that develops generative AI applications and provides accompanying services to solve complex industrial problems. Our approach utilizes the newest mathematical techniques from the quantum physics community to make computation more efficient and to create models that have other advantages over conventional methods. Founded by a team including Harvard University scientists in 2017, we have built a world-class team from leading academic institutions and enterprise software companies with deep expertise across generative AI, quantum science, and enterprise software.

Our primary target customers are enterprise organizations. We offer subscription-based solutions that combine software and services to develop custom Industrial Generative AI applications designed to resolve the highly complex business challenges of these enterprises given the size and scope of their global operations.

We focus on generative AI and use both quantum and classical techniques in our work. Specifically, our specialized generative AI software category, referred to herein as “Industrial Generative AI,” takes generative models similar to those behind popular generative AI tools, such as OpenAI’s ChatGPT and Google’s Bard, and tailors them to business-, domain-, and industry-specific applications, with a focus on industrial problems. We offer enterprise customers Industrial Generative AI solutions designed to address some of the key challenges that arise in connection with solving industrial problems with computing-based solutions: data disarray, unpredictability, large solution spaces, time sensitivity, constrained compute, mission-critical requirements, and security concerns.

We have a suite of three subscription-based Industrial Generative AI offerings that include software and software tools supported by services. Our software offers its customers flexibility in selecting computing resources, including classical, high performance, and quantum computing hardware, as well as deployment environment options: cloud, private cloud, and on-premise. Using techniques based on the math of quantum physics, we can apply our software tools to specific industrial applications and tailor those applications to our customer’s relevant hardware. These offerings consist of:

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Zapata AI Sense (“Sense”): A suite of algorithms and complex mathematical models to enhance analytics and other data-driven applications.

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Zapata AI Prose (“Prose”): Our set of generative AI solutions based on large language models (“LLMs”), similar to widely used generic chatbot applications but customized to an enterprise’s industry and its unique problems.

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Orquestra: Our Industrial Generative AI application development platform on which it provides Sense and Prose to customers.

While our current customers operate in only a few specific industries, we envision opportunities to utilize our software tools in almost any industry.

The Merger

On March 28, 2024, we completed our previously announced business combination with Legacy Zapata, pursuant to which Legacy Zapata became our wholly owned subsidiary. In connection with the Merger, we filed

an application for deregistration with the Cayman Islands Registrar of Companies and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which we were domesticated and continue as a Delaware corporation (the “Domestication”), changing our name to Zapata Computing Holdings Inc. Holders of our ordinary shares prior to the Merger received shares of Common Stock in the Domestication. At the Effective Time of the Merger, the existing stockholders of Legacy Zapata received shares of Common Stock in exchange for their respective securities held immediately prior to the consummation of the Merger. Upon the consummation of the Merger, the holders of certain outstanding Senior Secured Promissory Notes of Legacy Zapata elected to convert their notes and accrued interest thereon into shares of Common Stock in accordance with their terms.

Forward Purchase Agreement

On March 25, 2024, we and Legacy Zapata entered into a Confirmation of an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Agreement”) with Sandia Investment Management LP, acting on behalf of certain funds (collectively, “Sandia” or the “Seller”), which is filed as an exhibit to the registration statement of which this prospectus is a part. Pursuant to the terms of the Forward Purchase Agreement, Sandia purchased, concurrently with the closing of the Merger, 500,000 shares of Common Stock, and, prior to the closing of the Merger, purchased 1,000,000 shares of our Class A ordinary shares from third parties through a broker in the open market (“Recycled Shares”), which represents the maximum number of shares subject to purchase under the Forward Purchase Agreement, subject to adjustment as described below (the “Maximum Number of Shares”).

In connection with Sandia’s purchases described above, we prepaid Sandia an aggregate cash amount (the “Prepayment Amount”) equal to the product of (i) the number of shares subject to the Forward Purchase Agreement and (ii) the redemption price per share as defined in Article 51.5 of our Amended and Restated Articles of Association, effective as of January 12, 2022, as amended on July 14, 2023 (the “Articles of Association,” and such redemption price, the “Initial Price”). In the case of the Recycled Shares, the Prepayment Amount was paid with proceeds from our trust account at the closing of the Merger. The Prepayment Amount for Additional Shares (as defined below) was netted against the proceeds that Sandia was to pay for the purchase of Additional Shares pursuant to the terms of its FPA Funding Amount PIPE Subscription Agreement (as defined below), with Sandia being able to reduce the purchase price for the Additional Shares by the Prepayment Amount.

In the event of a Dilutive Offering Reset, the Maximum Number of Shares will be increased to an amount equal to the quotient of (i) 1,500,000 divided by (ii) the quotient of (a) the price of such Dilutive Offering divided by (b) $10.00. In such event, Sandia has the right to purchase more Additional Shares, up to the Maximum Number of Shares, for which we will be required to provide a cash prepayment to Sandia netted against the purchase price for such shares, and such Additional Shares will be subject to the terms of the Forward Purchase Agreement.

The Forward Purchase Agreement may be early terminated with respect to a portion or all of the shares outstanding thereunder at Sandia’s discretion (such shares, the “Terminated Shares”), at which time Sandia will pay us the Reset Price for each share. The “Reset Price” is $10.00 per share and will be subject to reset on a monthly basis (each a “Reset Date”) with the first such Reset Date occurring 180 days after the closing date of the Merger, to be greater of (a) $4.50 and (b) the 30-day volume weighted average price of shares of Common Stock (for any scheduled trading day, the “VWAP Price”) immediately preceding such Reset Date, subject to reduction in connection with a Dilutive Offering (as defined in the Forward Purchase Agreement).

To the extent Sandia does not early terminate the Forward Purchase Agreement, Sandia will pay us, following a valuation period after the valuation date, which is the earliest to occur of (a) the second anniversary of the closing date of the Merger, (b) the date specified by Sandia in a written notice delivered to us at Sandia’s

discretion in certain circumstances, and (c) 90 days after we deliver written notice in the event that for any 20 trading days during a 30 consecutive trading day-period at least six months after the closing of the Merger, the VWAP Price (as defined in the Forward Purchase Agreement) is less than the then applicable Reset Price, provided that a Registration Statement was effective and available for the entire Measurement Period and remains continuously effective and available during the entire 90 day notice period (the “Valuation Date”). Sandia will pay us a per share settlement amount in cash of the volume-weighted daily VWAP Price over the Valuation Period. At the same time, we will pay Sandia an adjustment amount in cash of $2.00 per share (or in shares of Common Stock at a price of $2.25 per share in certain circumstances in which the adjustment exceeds Sandia’s settlement amount). If the settlement adjustment payable by us is less than the settlement amount payable by Sandia, our payment will be netted against Sandia’s payment.

FPA Funding Amount PIPE Subscription Agreement

In connection with the entry into the Forward Purchase Agreement, on March 25, 2024, we entered into a subscription agreement (the “FPA Funding Amount PIPE Subscription Agreement”) with Sandia, which is filed as an exhibit to the registration statement of which this prospectus is a part. Pursuant to the FPA Funding Amount PIPE Subscription Agreement, Sandia purchased, and we issued and sold to Sandia, on the closing date of the Merger, an aggregate of 500,000 shares of Common Stock (the “Additional Shares”), which Additional Shares shall be subject to the Forward Purchase Agreement.

Lincoln Park Transaction

As described above, on December 19, 2023, we entered into the Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has agreed to purchase from us up to an aggregate of $75,000,000 of Common Stock (subject to certain limitations) from time to time over the term of the Purchase Agreement. Also on December 19, 2023, we entered into a Registration Rights Agreement with Lincoln Park and Legacy Zapata (the “Registration Rights Agreement”), pursuant to which we have filed with the SEC the registration statement that includes this prospectus to register for resale under the Securities Act the shares of Common Stock that have been or may be issued to Lincoln Park under the Purchase Agreement.

This prospectus covers the resale by Lincoln Park of up to 13,000,000 shares of Common Stock, comprised of: (i) 712,025 shares of Common Stock that we already issued, at an effective issuance price of $2.37 per share, to Lincoln Park as Commitment Shares for making the commitment under the Purchase Agreement and (ii) an additional 12,287,975 shares of Common Stock that we may sell to Lincoln Park under the Purchase Agreement from time to time from and after the Commencement Date, as defined in the Purchase Agreement. All sales are at our sole discretion.

We do not have the right to commence any sales of Common Stock to Lincoln Park under the Purchase Agreement until the Commencement Date. After the Commencement Date, we have the right, but not the obligation, from time to time to direct Lincoln Park to purchase shares of Common Stock having a value of up to $150,000 on any business day (the “Purchase Date”), which may be increased to up to $1,000,000 depending on certain conditions as set forth in the Purchase Agreement (and subject to adjustment for any reorganization, recapitalization, non-cash dividend, share split, reverse share split or other similar transaction as provided in the Purchase Agreement) (each, a “Regular Purchase”). The purchase price per share of Common Stock for a Regular Purchase will be 95% of the lower of: (i) the lowest trading price for Common Stock on the applicable Purchase Date and (ii) the average of the three lowest closing sale prices for Common Stock during the ten (10) consecutive business days ending on the business day immediately preceding such Purchase Date. The purchase price per Common Share will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, forward or reverse share split, or other similar transaction occurring during the business days used to compute such price.

From and after the Commencement Date, we also have the right, but not the obligation, to direct Lincoln Park on each Purchase Date to make “accelerated purchases” on the following business day (the “Accelerated Purchase Date”) up to the lesser of (i) 300% of the number of shares of Common Stock purchased pursuant to a Regular Purchase or (ii) 30% of the total number (or volume) of shares of Common Stock traded on the Nasdaq during the period on the applicable Accelerated Purchase Date beginning at the Accelerated Purchase Commencement Time (as defined below) for such Accelerated Purchase and ending at the Accelerated Purchase Termination Time (as defined below) for such Accelerated Purchase, at a purchase price equal to 95% of the lower of (x) the closing sale price of Common Stock on the Accelerated Purchase Date and (y) of the volume weighted average price of Common Stock on the Accelerated Purchase Date (during a time period between the Accelerated Purchase Commencement Time and the Accelerated Purchase Termination Time) (each, an “Accelerated Purchase”). We have the right in our sole discretion to set a minimum price threshold for each Accelerated Purchase in the notice provided with respect to such Accelerated Purchase and we may direct multiple Accelerated Purchases in a day provided that delivery of shares of Common Stock has been completed with respect to any prior Regular Purchases and Accelerated Purchases that Lincoln Park has purchased.

“Accelerated Purchase Commencement Time” means the period beginning at 9:30:01 a.m., Eastern time, on the applicable Accelerated Purchase Date, or such other time publicly announced by the Nasdaq as the official open (or commencement) of trading on the Nasdaq on such applicable Accelerated Purchase Date.

“Accelerated Purchase Termination Time” means the earliest of (A) 4:00:00 p.m., Eastern time, on such applicable Accelerated Purchase Date, or such other time publicly announced by the Nasdaq as the official close of trading on the Nasdaq on such applicable Accelerated Purchase Date, (B) such time, from and after the Accelerated Purchase Commencement Time for such Accelerated Purchase, that the total number (or volume) of shares of Common Stock traded on the Nasdaq has exceeded the number of shares of Common Stock equal to (i) the applicable Accelerated Purchase Share Amount (as defined below) to be purchased by the Investor pursuant to the applicable purchase notice delivered for such Accelerated Purchase (the “Accelerated Purchase Notice”), divided by (ii) 30%, and (C) such time, from and after the Accelerated Purchase Commencement Time for such Accelerated Purchase, that the trade price for the Common Stock on the Nasdaq as reported by the Nasdaq, has fallen below the applicable minimum per share price threshold set forth in the applicable Accelerated Purchase Notice.

“Accelerated Purchase Share Amount” means, with respect to an Accelerated Purchase, the number of shares of Common Stock directed by the Company to be purchased by Lincoln Park in an Accelerated Purchase Notice, which number of shares of Common Stock shall not exceed the lesser of (i) 300% of the number of shares of Common Stock directed by the Company to be purchased by Lincoln Park pursuant to the corresponding notice for the corresponding Regular Purchase and (ii) an amount equal to (A) 30% multiplied by (B) the total number (or volume) of shares of Common Stock traded on the Nasdaq during the period on the applicable Accelerated Purchase Date beginning at the Accelerated Purchase Commencement Time for such Accelerated Purchase and ending at the Accelerated Purchase Termination Time for such Accelerated Purchase.

The Purchase Agreement may be terminated by us at any time after the Commencement Date, at our sole discretion, without any cost or penalty, by giving one business day notice to Lincoln Park to terminate the Purchase Agreement.

Actual sales of Common Stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including (among others) market conditions, the trading price of our Common Stock and determinations by us as to available and appropriate sources of funding for our operations. The Purchase Agreement prohibits us from issuing or selling and Lincoln Park from acquiring any Common Stock if (i) the closing price of the Common Stock is less than the Floor Price of $0.50 or (ii) those shares of Common Stock, when aggregated with all other shares of Common Stock then beneficially owned by

Lincoln Park and its affiliates, would result in Lincoln Park and its affiliates having beneficial ownership of more than 4.99%, or at Lincoln Park’s election, up to 9.99%, of the then issued and outstanding shares of Common Stock, as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder.

Immediately following the closing of the Merger on March 28, 2024, there were 29,092,879 shares of Common Stock outstanding, excluding the 712,025 shares of Common Stock that we have already issued to Lincoln Park under the Purchase Agreement. Although the Purchase Agreement provides that we may sell up to an aggregate of $75,000,000 of Common Stock to Lincoln Park, only 13,000,000 shares of Common Stock are being offered under this prospectus to Lincoln Park, which represents the 712,025 Commitment Shares that we have already issued to Lincoln Park under the Purchase Agreement and 12,287,975 additional shares of Common Stock which may be issued to Lincoln Park in the future under the Purchase Agreement, if and when we sell Common Stock to Lincoln Park under the Purchase Agreement. Depending on the market prices of Common Stock at the time we elect to issue and sell shares to Lincoln Park under the Purchase Agreement, we may need to register for resale under the Securities Act additional shares of Common Stock in order to receive aggregate gross proceeds equal to the $75,000,000 total commitment available to us under the Purchase Agreement. At an assumed average purchase price equal to the Floor Price of $0.50, we would need to register an additional 137,712,025 shares of Common Stock, to bring the total number of shares issued to Lincoln Park to 150,712,025 in order to sell the entire $75.0 million of shares of Common Stock to Lincoln Park under the Purchase Agreement. We are not required to register any additional shares of Common Stock.

The 13,000,000 shares of Common Stock offered by Lincoln Park under this prospectus represent 45% of the total number of shares of Common Stock outstanding as of March 28, 2024 (approximately 21% on a fully-diluted basis). If we elect to issue and sell more than the 13,000,000 shares of Common Stock offered under this prospectus to Lincoln Park, which we have the right, but not the obligation, to do, we must first register for resale under the Securities Act any such additional shares of Common Stock, which could cause additional substantial dilution to our stockholders. The number of shares of Common Stock ultimately offered for resale by Lincoln Park is dependent upon the number of shares of Common Stock we sell to Lincoln Park under the Purchase Agreement. On a combined basis with the approximately 44,500,000 shares of Common Stock we expect to register on a separate resale registration statement (including approximately 25,000,000 shares of Common Stock issuable upon exercise of outstanding Warrants that have an exercise price of $11.50 per share), we will be registering approximately 57,500,000 shares of Common Stock that may be issued or resold pursuant to the registration statements from time to time, representing approximately 198% of the shares of Common Stock outstanding as of March 28, 2024 (approximately 95% on a fully-diluted basis). Any sales of such shares of Common Stock by Lincoln Park could similarly have a significant negative impact on the trading price of our Common Stock.

The number of shares of Common Stock ultimately offered for resale by Lincoln Park is dependent upon the number of shares of Common Stock we sell to Lincoln Park under the Purchase Agreement.

The Purchase Agreement specifically provides that we may not issue or sell any shares of Common Stock under the Purchase Agreement if such issuance or sale would breach any applicable rules or regulations of the Nasdaq.

Issuances of shares of Common Stock in this offering will not affect the rights or privileges of our existing stockholders, except that the economic and voting interests of each of our existing stockholders will be diluted as a result of any such issuance. Although the number of shares of Common Stock that our existing stockholders own will not decrease, the shares of Common Stock owned by our existing stockholders will represent a smaller percentage of our total outstanding shares after any such issuance to Lincoln Park.

Other than as described above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing and amount of any sales of Common Stock to Lincoln Park.

The Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification provisions by, among and for the benefit of the parties. Lincoln Park has agreed that neither it nor any of its agents, representatives or affiliates will enter into or effect, directly or indirectly any short selling or hedging that establishes a net short position with respect to the Common Stock. There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on our ability to enter into a similar type of agreement or equity line of credit during the term of the Purchase Agreement, excluding an At-The-Market transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement.

The Purchase Agreement also includes certain suspension events, including, among others, a lapse in the effectiveness or availability of the registration statement of which this prospectus is a part, the suspension of our Common Stock from the Nasdaq, failure to deliver shares of Common Stock to Lincoln Park within a specified period of time and certain events of bankruptcy. Lincoln Park does not have the right to terminate the Purchase Agreement upon any of the suspension events set forth above. During a suspension event following any applicable grace or cure period, all of which are outside of Lincoln Park’s control, we may not direct Lincoln Park to purchase any shares of Common Stock under the Purchase Agreement.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement other than a prohibition on entering into a “Variable Rate Transaction,” as defined in the Purchase Agreement.

All 13,000,000 shares of Common Stock registered in this offering which have been or may be issued or sold by us to Lincoln Park under the Purchase Agreement are expected to be freely tradable.

See the section entitled “Lincoln Park Transaction” below.

Summary Risk Factors

Investing in our securities involves a high degree of risk. You should carefully consider the risks described below, as well as other information included in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors,” which may be relevant to decisions regarding an investment in or ownership of our securities. The occurrence of any of these risks could have a significant adverse effect on our reputation, business, financial condition, results of operations, growth and ability to accomplish our strategic objectives.

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The sale or issuance of Common Stock to Lincoln Park may cause dilution and the sale of the Common Stock by Lincoln Park that it acquires pursuant to the Purchase Agreement, or the perception that such sales may occur, could cause the price of Common Stock to decrease.

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We are an early-stage company with a limited operating history, in a nascent industry, making it difficult to forecast future results.

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We have a history of operating losses, which are expected to continue for the foreseeable future.

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We will need additional capital to continue as a going concern, implement our business plan or respond to business opportunities or unforeseen circumstances and such financing may not be available on acceptable terms or at all.

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We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these weaknesses, identify additional material weaknesses in the future, or otherwise fail to maintain an effective system of internal control over financial reporting, this may result in misstatements in our financial statements, cause us to fail to meet periodic reporting obligations, or cause our access to capital markets to be impaired.

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Our business plan could suffer if we are not able to renew existing contractual relationships with third parties or enter into certain important strategic partnerships, and if we are unable to ensure that our Industrial Generative AI solutions offerings interoperate with a variety of software applications that are developed by others, we may become less competitive and our resulting operations may be harmed.

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We are highly dependent on our founders and key employees.

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Our business is dependent on growing and retaining competitive teams of sufficient size in the areas of algorithm development, product development, and software engineering.

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Our estimate of market opportunities may prove to be inaccurate.

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A limited number of customers have accounted for most of our revenue. If existing customers do not renew or expand their contracts with us, or if our relationships with these customers are impaired or terminated, our revenue could decline, and our results of operations would be adversely impacted.

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Our business depends on our ability to attract new customers and on our existing customers purchasing additional subscriptions from us and/or renewing their existing subscriptions.

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If the market for our Industrial Generative AI solutions fails to develop or grow as we expect, or if businesses fail to adopt our Industrial Generative AI solutions, our business, operating results, and financial condition could be adversely affected.

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Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.

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Any failure to offer high-quality support services for our customers may harm our relationships with our customers and, consequently, our business.

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Competitors may develop products and technologies that are superior to our Industrial Generative AI solutions.

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Our patent applications may not result in issued patents or our patent rights may be contested, circumvented, invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent others from interfering with our commercialization of our products.

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There is no guarantee that our IP will provide the desired competitive advantage.

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Our use of third-party open source software could negatively affect our ability to offer and sell subscriptions to our Industrial Generative AI solutions and subject us to possible litigation.

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Laws and regulations governing data use, privacy, and security could burden our business.

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Our business relies on computer systems which are vulnerable to attack and/or failure.

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An active trading market for our Common Stock may never develop or be sustained.

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We will incur significant increased costs as a result of the Merger and as a result of being a public company, and our management will be required to devote substantial time to new compliance initiatives.

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There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

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Our management team has limited experience in operating a public company.

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Future issuances of our Common Stock or rights to purchase our Common Stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

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We are an “emerging growth company,” and a “smaller reporting company,” and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

Corporate Information

We were incorporated as Andretti Acquisition Corp. on January 20, 2021. On March 28, 2024, Andretti Acquisition Corp. closed the Merger with Legacy Zapata, as a result of which Legacy Zapata became a wholly owned subsidiary of Andretti Acquisition Corp., and Andretti Acquisition Corp. changed its name to Zapata Computing Holdings Inc. Our principal place of business is located at 100 Federal Street, Floor 20, Boston, Massachusetts 02110, and our telephone number is (844) 492-7282. Our website address is www.zapata.ai. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We are an “emerging growth company” as defined in the JOBS Act. As such, we may take advantage of reduced disclosure and other requirements otherwise generally applicable to public companies, including:

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exemption from the requirement to have our registered independent public accounting firm attest to management’s assessment of our internal control over financial reporting;

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exemption from compliance with the requirement of the Public Company Accounting Oversight Board (“PCAOB”), regarding the communication of critical audit matters in the auditor’s report on the financial statements;

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reduced disclosure about our executive compensation arrangements; and

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exemption from the requirement to hold non-binding advisory votes on executive compensation or golden parachute arrangements.

We will remain an emerging growth company until the earliest to occur of: (1) the last day of the fiscal year in which we have at least $1.235 billion in annual gross revenue; (2) the date we qualify as a “large accelerated filer”; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

Additionally, we are a “smaller reporting company” as defined in the rules promulgated under the Securities Act. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company only so long as (i) the market value of the Common Stock held by non-affiliates is less than $250 million, calculated as of the end of the most recently completed second financial quarter or (ii) our annual revenue is less than $100 million in our previous financial year and during such completed financial year and the market value of the Common Stock held by non-affiliates is less than $700 million.

THE OFFERING

Issuer

Zapata Computing Holdings Inc.

Securities Offered by Selling Stockholder

712,025 shares of Common Stock issued to Lincoln Park as consideration for its commitment to purchase Common Stock under the Purchase Agreement (the “Commitment Shares”). We did not receive any cash proceeds from the issuance of these Commitment Shares; and

12,287,975 shares of Common Stock that we may sell to Lincoln Park, from time to time over the 36 months following the Commencement Date in accordance with the Purchase Agreement. All sales are at our sole discretion.

Common Stock Outstanding Before the Offering

29,804,904 (including the 712,025 Commitment Shares issued to Lincoln Park on April 11, 2024).

Common stock Outstanding after the Offering

up to 42,092,879 shares (assuming the issuance of all of the shares that may be issued after the date of this prospectus under the Purchase Agreement that are being offered by this prospectus). The actual number of Common Stock issued will vary depending on the prices at which we sell Common Stock, if any, to Lincoln Park.

Use of Proceeds

We will receive no proceeds from the sale of Common Stock by Lincoln Park in this offering. We may receive up to $75,000,000 in gross proceeds from the sale of shares of Common Stock to Lincoln Park pursuant to the Purchase Agreement from time to time after the date that the registration statement of which this prospectus is a part is declared effective. Any proceeds we receive, we intend to use for general corporate purposes, which may include business opportunities and the repayment of indebtedness. See “Use of Proceeds” for additional information.

Risk Factors

Any investment in the securities offered hereby is speculative and involves a high degree of risk. You should carefully consider the information set forth under “Risk Factors” and elsewhere in this prospectus.

Nasdaq Global Market Symbol

“ZPTA”

Unless we specifically state otherwise or the context otherwise requires, the information above is as of the closing of the Merger on March 28, 2024, does not give effect to issuances of Common Stock, warrants or options to purchase Common Stock, or the exercise of warrants or options after such date, and excludes:

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3,491,146 shares initially reserved under the 2024 Equity and Incentive Plan (the “2024 Plan”);

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581,858 shares initially reserved under the 2024 Employee Stock Purchase Plan (the “2024 ESPP”);

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13,550,000 shares of Common Stock underlying Private Warrants;

RISK FACTORS

Investing in our Common Stock involves a high degree of risk. Before you decide to invest in our Common Stock, you should consider carefully the risks described below, together with the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus. We believe the risks described below are the risks that are material to us as of the date of this prospectus. If any of the following risks actually occur, our business, results of operations and financial condition would likely be materially and adversely affected. In these circumstances, the market price of our Common Stock could decline, and you may lose part or all of your investment.

Risks Related to the Offering

The sale or issuance of Common Stock to Lincoln Park or any issuance of Additional Shares under the Forward Purchase Agreement may cause substantial dilution and the sale of the Common Stock by Lincoln Park that it acquires pursuant to the Purchase Agreement, or the perception that such sales may occur, could cause the price of our Common Stock to decrease. In addition, certain selling securityholders whose shares of Common Stock we expect to register for resale on a separate registration statement, purchased shares of Common Stock at prices that are below the current trading price of our Common Stock. As a result, these selling securityholders may effect sales of Common Stock at prices significantly below the current market price, which could cause market prices to decline further.

On December 19, 2023, we and Legacy Zapata entered into the Purchase Agreement with Lincoln Park pursuant to which Lincoln Park has agreed to purchase, at our option, up to $75,000,000 of Common Stock from time to time over a 36-month period following the Commencement Date (as defined below and any such Common Stock, the “Purchased Shares”). On April 11, 2024, we issued 712,025 shares of our Common Stock to Lincoln Park as Commitment Shares. The purchase price for the Common Stock that we may sell to Lincoln Park under the Purchase Agreement will fluctuate based on the trading price of Common Stock. We generally have the right to control the timing and amount of any future sales of Common Stock to Lincoln Park. Additional sales of Common Stock, if any, to Lincoln Park will depend upon market conditions and other factors to be determined by us. While the Purchase Agreement limits the rate at which we can sell Common Stock to Lincoln Park, due to the significant number of Common Stock that were redeemed in connection with the Merger, and our flexibility to sell shares of Common Stock for so long as the closing price of our Common Stock is not less than $0.50 , the number of shares of Common Stock that we can sell to Lincoln Park under the Purchase Agreement could constitute a considerable percentage of our public float at the time of such sales. As a result, the resale by Lincoln Park of Purchased Shares pursuant to this prospectus could have a significant negative impact on the trading price of our Common Stock. The 13,000,000 shares of our Common Stock that may be resold into the public markets pursuant to this prospectus represent approximately 45% of the shares of our Common Stock outstanding as of March 28, 2024, prior to giving effect to this offering. We may ultimately decide to sell to Lincoln Park all, some or none of the Common Stock that may be available for us to sell pursuant to the Purchase Agreement.

For illustrative purposes, at an approximate minimum average purchase price of $6.11 per share of Common Stock, the offering of Common Stock pursuant to this prospectus, which provides for the sale of 13,000,000 shares of Common Stock (including 712,025 Commitment Shares), would be sufficient to sell the entirety of the $75.0 million of Common Stock permitted to be sold to Lincoln Park under the Purchase Agreement. At a lower average purchase price per share, the registration of additional shares of Common Stock would be required if we sought to sell the entire $75.0 million of Common Stock. At an assumed average purchase price equal to the Floor Price of $0.50, we would need to register an additional 137,712,025 shares of Common Stock (or 150,712,025 shares of Common Stock in aggregate) in order to sell the entire $75.0 million of Common Stock to Lincoln Park under the Purchase Agreement. Assuming that the Common Stock was sold at an average price equal to the Floor Price of $0.50 per share and that we were to register sufficient additional shares of Common Stock in order to sell the entire $75.0 million of Common Stock to Lincoln Park under the Purchase Agreement, after giving effect to the assumed sale of such 150,000,000 shares of Common Stock, the issuance of 712,025 shares to Lincoln Park as Commitment

Shares and after deducting estimated offering expenses of $250,000 payable by us, our pro forma as-adjusted net tangible book value as of December 31, 2023 would have been approximately $58.0 million, or $0.32 per share. This represents an immediate increase in net tangible book value of $0.90 per share to existing shareholders and an immediate dilution of $0.18 per share to investors in this offering.

If and when we do sell Common Stock to Lincoln Park, after Lincoln Park has acquired such Common Stock, Lincoln Park may resell all, some or none of such Common Stock at any time or from time to time in its discretion, subject to compliance with securities laws. Therefore, sales to Lincoln Park by us could result in substantial dilution to the interests of other holders of our Common Stock. Additionally, the sale of a substantial number of Common Stock to Lincoln Park, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that it might otherwise wish to effect sales. See “Lincoln Park Transaction” on page 160 for more information regarding the Purchase Agreement.

If we sell Common Stock to Lincoln Park, Lincoln Park would receive shares of Common Stock for up to 36 months following the Commencement Date at a discount to the then current market price (or at a discount to the average of the three lowest closing sale prices during the ten consecutive business days ending on the business day immediately preceding the purchase date). This gives Lincoln Park an incentive to sell such shares immediately. As such, Lincoln Park would not be subject to the same level of market risk as other investors. Each potential Lincoln Park purchase would result in the issuance of additional shares of Common Stock, which would further dilute our stockholders, and may in turn decrease the trading price of our Common Stock and our ability to obtain additional financing.

On March 25, 2024, we entered into the Forward Purchase Agreement, pursuant to which Sandia has the right to purchase shares from us up to the Maximum Number of Shares (as defined in the Forward Purchase Agreement). Any transaction that constitutes a Dilutive Offering will trigger an increase in the Maximum Number of Shares to an amount equal to the quotient of (i) 1,500,000 divided by (ii) the quotient of (a) the price of such Dilutive Offering divided by (b) $10.00. Sandia’s payment for the purchase of any Additional Shares will be netted against our equal cash prepayment to Sandia for such Additional Shares, so we will not receive any proceeds for such issuance until the end of the term of the Forward Purchase Agreement, unless Sandia elects to early terminate some or all of the shares subject to such agreement. Accordingly, Sandia may be incentivized to purchase Additional Shares immediately following a Dilutive Offering. The Forward Purchase Agreement excludes from the definition of Dilutive Offering drawdowns on the Purchase Agreement occurring during the 180 days after the effectiveness of the registration statement of which this prospectus is a part, but following the end of such period, any drawdowns under the Purchase Agreement may constitute a Dilutive Offering. Additional purchases of Additional Shares pursuant to the Forward Purchase Agreement by Sandia may substantially dilute our Common Stock (See “We will need additional capital to continue as a going concern, implement our business plan or respond to business opportunities or unforeseen circumstances and such financing may not be available”).

In addition, we expect to file the Resale Registration Statement registering the issuance to and resale by certain third parties of up to an aggregate of approximately 44,500,000 shares of Common Stock issued prior to, or in connection with, the Merger or that are issuable upon exercise of outstanding Warrants that have an exercise price of $11.50 per share. The approximately 44,500,000 shares of Common Stock (including shares of Common Stock underlying Warrants) that may be issued or resold pursuant to the Resale Registration Statement represent approximately 153% of the Common Stock outstanding as of March 28, 2024 (approximately 73% on a fully-diluted basis). On a combined basis with the up to 13,000,000 shares of Common Stock being registered on this registration statement, we expect to register approximately 57,500,000 shares of Common Stock that may be issued or resold from time to time pursuant to the registration statements, representing approximately 198% of the shares of Common Stock outstanding as of March 28, 2024 (approximately 95% on a fully-diluted basis). Once the Resale Registration Statement is filed and effective, the shareholders selling pursuant to the Resale Registration Statement will determine the timing, pricing and rate at which they sell such shares into the public

market and such sales could have a significant negative impact on the trading price of our Common Stock. Although the current trading price of our Common Stock is below $10.00 per share, which was the sales price for the units in the Company’s IPO, certain of the selling securityholders under the Resale Registration Statement may have an incentive to sell because they purchased shares of Common Stock at prices below the Company’s IPO price. Sales by such investors may prevent the trading price of our securities from exceeding the initial public offering price and may cause the trading prices of our securities to experience a further decline.

Our management team may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a significant return.

Our management will have broad discretion over the use of proceeds from the sale of Common Stock to Lincoln Park pursuant to the Purchase Agreement, if any. We intend to use the net proceeds from the sale of Common Stock to Lincoln Park pursuant to the Purchase Agreement, if any, for general corporate purposes, which may include business opportunities and the repayment of indebtedness, including deferred expenses incurred in connection with the Merger. Our management will have considerable discretion in the application of the proceeds from the sale of Common Stock to Lincoln Park pursuant to the Purchase Agreement, if any, and you will not have the opportunity, as part of your investment decision, to assess whether such proceeds are being used appropriately. The proceeds from the sale of Common Stock to Lincoln Park pursuant to the Purchase Agreement, if any, may be used for corporate purposes that do not increase our operating results or enhance the value of our Common Stock.

The terms of the Purchase Agreement limit the number of shares of Common Stock we may issue to Lincoln Park, which may limit our ability to utilize the arrangement to enhance our cash resources.

The Purchase Agreement includes restrictions on our ability to sell Common Stock to Lincoln Park, including, subject to specified limitations, if a sale would cause Lincoln Park and its affiliates to beneficially own more than 4.99%, or at Lincoln Park’s election, up to 9.99%, of our issued and outstanding Common Stock (the “Beneficial Ownership Limitation”). Accordingly, we cannot guarantee that we will be able to sell all $75,000,000 million of shares of Common Stock in this offering. If we cannot sell the full amount of the Common Stock that Lincoln Park has committed to purchase because of these limitations, we may be required to utilize more costly and time-consuming means of accessing the capital markets, which could materially adversely affect our liquidity and cash position. If we choose to sell more shares of Common Stock than are offered under this prospectus, we must first register for resale under the Securities Act such additional shares of Common Stock.

We expect to require additional capital to pursue our business objectives, growth strategy and respond to business opportunities, challenges or unforeseen circumstances, and to pay off deferred expenses incurred in connection with the Merger, and we may be unable to raise capital or additional financing when needed on acceptable terms, or at all.

We expect to seek additional financing in the future to fund our growth, such as use of the funds available under the Purchase Agreement, expand go-to-market functions and drive market demand, grow and manage our offerings, hire employees, respond to competitive pressures or make acquisitions or other investments. Our business plans may change, general economic, financial or political conditions in our markets may deteriorate or other circumstances may arise, in each case that have a material adverse effect on our cash flows and the anticipated cash needs of our business. Any of these events or circumstances could result in significant additional funding needs, requiring us to raise additional capital. We cannot predict the timing or amount of any such capital requirements at this time.

If financing is not available on satisfactory terms, or at all, we may be unable to expand our business at the rate desired and our results of operations may suffer. In addition, any financing through issuances of equity securities would be dilutive to holders of our shares.

Sales of a substantial amount of the Common Stock in the public markets may cause the market price of the Common Stock to decline.

Pursuant to Lock-Up Agreements and restrictions in our Bylaws related to securities issued to Legacy Zapata stockholders in connection with the Merger and subject to certain exceptions, Legacy Zapata stockholders are contractually restricted from selling or transferring any of their shares. However, simultaneously with the closing of the Merger, we released from lock-up restrictions an aggregate of 2,300,000 shares of Common Stock held by stockholders subject to the Zapata Preferred Stock Lock-Up Agreement on a pro rata basis. Additionally, following the expiration of the lock-up periods prescribed in such documents, Legacy Zapata stockholders will not be restricted from selling Common Stock held by them, other than by applicable securities laws. As such, sales of a substantial number of shares of our Common Stock in the public market could occur at any time following the expiration of the applicable lock-up period. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Stock.

As restrictions on resale end and registration statements, such as this one, are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in the price of our Common Stock or the market price of our Common Stock could decline if the holders of currently restricted shares of Common Stock sell them or are perceived by the market as intending to sell them. Moreover, the sale of shares under the Purchase Agreement, any announcement or other public disclosure regarding such sales should they occur, the perceived risk of such sales, the dilution that would result from such sales should they occur and the resulting downward pressure on our share price as a result of the foregoing could encourage investors to engage in short sales of our Common Stock. By increasing the number of shares of Common Stock offered for sale as a result of the resale registration statements we are filing and expect to file, material amounts of short selling could further contribute to progressive price declines in our Common Stock.

After this registration statement becomes effective, if and when we sell our Common Stock to Lincoln Park, Lincoln Park may resell all, some or none of such shares at any time or from time to time in its discretion, subject to compliance with applicable securities laws. Therefore, sales to Lincoln Park could result in substantial dilution to the interests of other holders of our Common Stock. Additionally, the sale of a substantial number of shares of our Common Stock to Lincoln Park, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at prices that it might otherwise wish to effect such sales.

We may issue additional Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of our Common Stock.

We may issue additional shares of common stock or other equity securities of equal or senior rank in the future in connection with, among other things, financings, future acquisitions, repayment of outstanding indebtedness, employee benefit plans and exercises of outstanding options, warrants and other convertible securities without stockholder approval, in a number of circumstances.

On December 19, 2023, we and Legacy Zapata entered into the Purchase Agreement with Lincoln Park pursuant to which Lincoln Park has agreed to purchase from us, at our option, up to $75,000,000 of Common Stock from time to time over a 36-month period following the Commencement Date. The Purchase Agreement is subject to certain limitations including, but not limited to, the filing and effectiveness of the Lincoln Park Registration Statement. Pursuant to the Purchase Agreement, we also agreed to pay Lincoln Park the Commitment Fee of $1,687,500. We paid the Commitment Fee entirely in Common Stock, consisting of 712,025 shares of Common Stock issued on April 11, 2024.

Our issuance of additional shares of Common Stock or other equity securities of equal or senior rank would have the following effects:

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a stockholder’s proportionate ownership interest in the Company would decrease;

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the amount of cash available per share, including for payment of dividends (if any) in the future, may decrease;

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the relative voting strength of each previously outstanding share of Common Stock may be diminished; and

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the market price of the Common Stock may decline.

Risks Related to Zapata’s Financial Condition and Status as an early-stage Company

We are an early-stage company with a limited operating history, in a nascent industry, making it difficult to forecast future results.

We were founded in 2017 to develop and provide software with related services and proprietary IP to utilize quantum math on near term classical and future quantum hardware. Most recently, we are an Industrial Generative AI software company that develops custom quantum-inspired generative AI applications and provides accompanying services to solve complex industrial problems. The market focus for our Industrial Generative AI (as defined in “Prospectus Summary—Overview) solutions and the use of quantum math and algorithms are nascent fields with uncertainly on future market uptake and in technological progress in the field.

There can be no assurance that we can or will meet the challenges commonly faced by early-stage companies, including the need to scale operations and to achieve and manage rapid growth. A number of factors could cause our scaling efforts to be adversely impacted, including any increased competition, lesser-than-expected growth or contraction of our overall market, our inability to accurately forecast demand for our customer offerings, our inability to establish sales or other partnerships with service firms, an inability to develop repeatable solutions, an inability to grow our team, or our failure, for any reason, to capitalize on growth opportunities. We have encountered and will encounter risks and uncertainties frequently experienced by early-stage companies in rapidly changing industries, such as the risks and uncertainties described herein. We cannot provide assurance that we can meet the challenges faced by all companies, including established companies, in rapidly changing or nascent industries. The failure to address these challenges successfully or promptly could have a material adverse effect on our future profitability.

We have a history of operating losses, which are expected to continue for the foreseeable future.

Legacy Zapata has incurred significant operating losses since its inception. Legacy Zapata incurred net losses of $23.4 million for the fiscal year ended December 31, 2022, $29.7 million for the fiscal year ended December 31, 2023, and has a cumulative deficit since the formation of Legacy Zapata in November 2017 through December 31, 2023 of approximately $89.5 million. We believe that we will continue to incur operating and net losses each quarter at least for the foreseeable future. The size of future losses will depend on several factors, including the degree to which we expand our scientific, product, software engineering, sales and other teams, and the revenue that we can generate from sales of our Industrial Generative AI solutions. We also expect that our operating expenses will increase as a result of becoming a public company and will continue to increase as we grow our business.

On December 19, 2023, we and Legacy Zapata entered into the Purchase Agreement with Lincoln Park pursuant to which Lincoln Park has agreed to purchase from the Company, at our option, up to $75.0 million of Common Stock from time to time over a 36-month period following the Commencement Date (as defined in the Purchase Agreement). The Purchase Agreement is subject to certain limitations including, but not limited to, the filing and effectiveness of the registration statement of which this prospectus is a part.

We may not be able to scale our business and Industrial Generative AI solutions quickly enough to meet customer and market demand and to remain competitive in the Industrial Generative AI solutions market.

In order to grow our business, we will need to scale our operations in every area from our existing start-up capacity. These challenges will require that we:

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scale our product design team to design and continually re-design our Industrial Generative AI solutions in order to maintain a competitive position in the market, including increasing the number of employees following our previous reductions in force;

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increase the size of our software engineering team to produce in a competitively timely manner stable Industrial Generative AI solutions based on the chosen design elements;

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increase the size of our services team to provide ongoing services in connection with our Industrial Generative AI solutions;

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expand our customer-support services;

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expand our scientific research and development in order to generate IP required or helpful to our business, including IP to develop our Industrial Generative AI solutions, to provide freedom to operate for our Industrial Generative AI solutions and/or, and to create barriers to competition, on an accelerated time frame in order to minimize the risk that third-parties might first create potentially blocking IP;

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increase our sales and marketing teams and efforts;

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develop and expand relationships with large service firms to leverage sales of our Industrial Generative AI solutions;

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develop and expand our operational, financial and legal systems and teams to accommodate an expected increase in customer and partner relationships and additional expected legal requirements imposed as a result of international data privacy regulations and securities compliance and reporting obligations imposed by the Merger;

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establish and maintain and scale effective financial disclosure controls and procedures;

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expand our executive and administrative teams in all areas including finance, accounting, operations, human resources, and legal, in order to effectively manage our growth; and

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expand our access to computing hardware and specifically Graphics Processing Unit chips (“GPUS”), which have faced supply limitations.

If we cannot successfully overcome these challenges and manage the organizational growth required to do so, then our business, including our ability to establish and maintain a competitive place in the market, financial condition, and profitability, may be materially adversely affected.

We will need additional capital to continue as a going concern, implement our business plan or respond to business opportunities or unforeseen circumstances and such financing may not be available.

Through December 31, 2023, we have funded our operations primarily with proceeds from sales of Legacy Zapata Preferred Stock, Senior Notes (which were subsequently exchanged for Senior Secured Notes) and the Senior Secured Notes. Our continuation as a going concern is dependent upon our ability to identify future debt or equity financing and generate profitable operations from our operations. There can be no assurance that such capital will be available in sufficient amounts or on terms acceptable to us. These factors raise substantial doubt about our ability to continue as a going concern.

Our business plan also contemplates a substantial scaling of Zapata across all departments, including science, software engineering, and product design, in order to launch multiple products and/or offerings in a timely manner to obtain and preserve a competitive advantage. This scaling will require substantial capital at a

time when we project we will be operating at a loss before we become profitable, and this may take longer than we anticipate. Consequently, our expansion is limited in proportion to our growth in revenue and available capital. The capital required to sustain our business during this period may be greater than anticipated. We have also deferred certain costs incurred in connection with the Merger, with deferred payments coming due as early as May 2024. In addition, presently unforeseen opportunities or circumstances may require capital beyond what we currently project. The period during which we expect to operate at a loss may be extended by circumstances beyond our control.

We may obtain additional financing through public or private equity or debt financings (subject to the limitations under the Senior Secured Notes), such as the Purchase Agreement, that may result in dilution to stockholders, the issuance of securities with priority as to liquidation and/or dividend and other rights more favorable than the Common Stock, or the imposition of debt covenants and repayment obligations or other restrictions that may adversely affect our business. For example, at the closing of the Merger, we issued to holders of Senior Secured Notes who elected to exchange such notes for shares of Common Stock an aggregate of 3,257,876 shares of Common Stock at a conversion price of $4.50 per share, which was a substantial discount to the market price of such shares at the time of issuance. Additionally, an aggregate principal amount of $2.0 million remains outstanding under the Senior Secured Notes. The remaining Senior Secured Notes, among other things, convert at the option of the holder at $8.50 per shares and prohibit Legacy Zapata from issuing additional indebtedness, subject to limited exceptions. There is no guarantee that future financing will be at financial terms equal to or more favorable than these, and we may need to enter into future equity or, if available, debt financing at significantly less favorable terms. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

In addition, on December 19, 2023, we and Legacy Zapata entered into the Purchase Agreement with Lincoln Park pursuant to which Lincoln Park has agreed to purchase from us up to $75.0 million of Common Stock (subject to certain limitations contained in the Purchase Agreement) from time to time over a 36-month period following the Commencement Date. Holders of Common Stock will experience dilution in connection with any issuances of Common Stock under the Purchase Agreement (see “Risks Related to the Offering”).

Additionally, the Forward Purchase Agreement may negatively impact our ability to raise additional capital through equity or debt financings, due to the potential substantial dilution to our stockholders that could occur during the term of the instrument (which will be no more than two years from the date of the closing of the Merger), or may negatively affect our ability to obtain favorable or acceptable terms in connection with any such equity or debt financing. Under the Forward Purchase Agreement, the Reset Price is $10.00 per share. Beginning 180 days after the closing of the Merger, the Reset Price will subject to monthly resets, to be the greater of (a) $4.50 and (b) the VWAP Price of the shares immediately preceding the reset date (but not to exceed $10.00). If during the term of the Forward Purchase Agreement, we sell or issue any shares of Common Stock or securities convertible or exercisable for shares of Common Stock at an effective price of less than the Reset Price (a “Dilutive Offering”), then the Reset Price would immediately reset to the effective price of such offering, subject to certain exceptions, including drawdowns under the Purchase Agreement during the 180 days following effectiveness of the registration of which this prospectus is a part. Reduction of the Reset Price would reduce any payments Sandia may be obligated to pay us with respect to any Terminated Shares. Additionally, in the event of a Dilutive Offering, the maximum number of shares available under the Forward Purchase Agreements could be increased if the Dilutive Offering occurs at a price below $10.00 per share. The maximum number of shares would be reset to the quotient of (i) 1,500,000 divided by (ii) the quotient of (a) the price of such Dilutive Offering divided by (b) $10.00. Depending on the Reset Price over the 24 months following the closing of the Merger (which may be impacted by the price at which shares of our Common Stock could be sold through a potential public or private equity offering) and the manner in which the Forward Purchase Agreement transactions are settled, we may never receive any payments under the Forward Purchase Agreement, and will still be required to pay an adjustment amount of $2.00 per share in cash or $2.25 per share in issuances of additional shares, which would adversely affect our liquidity and capital needs. Additionally, any proceeds to which we may be entitled pursuant to the Forward Purchase Agreement are not held in any bankruptcy-protected

account, escrow account, trust account, or any similar arrangement, and there is no requirement for Sandia to hold such amount separate or apart from any other funds of Sandia prior to the settlement of the transactions pursuant to the Forward Purchase Agreement. The lack of any such bankruptcy-protected arrangement subjects us to further risk that we may never have access to the settlement proceeds if the Sellers fail to make payments when due, default under the Forward Purchase Agreement, become insolvent or declare bankruptcy.

We may also seek additional financing even if in our view such additional financing is not required in order to take advantage of favorable market conditions or for strategic considerations. There can be no assurance that additional financing will be available on favorable terms, or at all. The inability to obtain such additional financing if needed may adversely affect our ability to operate at the levels necessary to execute our business plan or may force us into bankruptcy.

While the Senior Secured Notes are outstanding, Legacy Zapata is subject to substantial restrictions, including on the ability to incur additional indebtedness, which could adversely affect Legacy Zapata’s and our business and financial condition.

Pursuant to the Senior Secured Note Purchase Agreement, we issued and sold, or issued in exchange for Senior Notes, an aggregate of $16.2 million in aggregate principal amount of Senior Secured Notes. Following the closing of the Merger, $2.0 million in aggregate principal amount of Senior Secured Notes remain outstanding. The Senior Secured Notes bear compounding interest at the rate of 15% per annum and all accrued but unpaid interest thereon will be due and payable on December 15, 2026. If the aggregate principal amount of all Senior Secured Notes outstanding is $3.0 million or less, Legacy Zapata can repay the Senior Secured Notes until after December 15, 2025. While any Senior Secured Notes are outstanding, Legacy Zapata cannot incur additional indebtedness for borrowed money, and cannot create, incur, assume or suffer to exist any lien on any property or assets, in each case except in limited circumstances. Accordingly, we will be significantly limited in our ability to obtain additional debt financing for so long as the Senior Secured Notes remain outstanding. The Senior Secured Notes are convertible at the option of the holder at a conversion price of $8.50 per share. However, there is no guarantee that the remaining noteholders will convert their Senior Secured Notes.

A significant portion of the assets of Legacy Zapata, which serves as our operating entity, are pledged to the holders of the Senior Secured Notes and failure to repay obligations to these noteholders when due, or any other default events, will have a material adverse effect on Legacy Zapata’s and our business and could result in foreclosure on Legacy Zapata’s assets.

In connection with the issuance of Senior Secured Notes in December 2023, Legacy Zapata entered into a Security Agreement with Acquiom Agency Services LLC as collateral agent on behalf of the noteholders. The Security Agreement creates a security interest in all of the property of Legacy Zapata and Zapata Government Services, Inc., its wholly owned subsidiary, subject to certain exceptions specified in the Security Agreement (the “Collateral”). Pursuant to the Security Agreement, Zapata Government Services, Inc. has agreed to guarantee the obligations of Zapata under the Security Agreement and the Senior Secured Note.

Upon the occurrence of an Event of Default under the Security Agreement, the Collateral Agent will have certain rights under the Security Agreement, including the right to take control of the Collateral and, in certain circumstances, sell the Collateral to cover obligations owed to the holders of the Senior Secured Notes pursuant to its terms. “Event of Default” under the Security Agreement means (i) any default of the terms, conditions or covenants of the Security Agreement (after giving effect to any applicable grace or cure period); (ii) failure to pay any principal or interest payment on the due date or any other payments required under the terms of the Senior Secured Note within 15 days of notification of such failure to pay, (iii) Legacy Zapata or any guarantor is in default under any loan agreement or any other indebtedness for borrowed money, in each case in a principal amount of greater than $200,000 that has not been cured or waived, or (iv) Legacy Zapata or any guarantor enters into any voluntary or involuntary bankruptcy or insolvency proceedings. Any such default would have a material adverse effect on Legacy Zapata’s and, by extension, our, business and our stockholders could lose their entire investment in us.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of Nasdaq, including regular attestations by management concerning its internal control over financial reporting. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the Merger. If we are not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, it may not be able to assess whether its internal control over financial reporting is effective and may fail to provide timely and accurate financial information to investors. This may subject us to adverse regulatory consequences and could harm investor confidence. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time consuming, and costly, and place significant strain on our personnel, systems, and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. The controls required are not currently in place, however, we are working to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also working to design and maintain our internal control over financial reporting.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. In addition, changes in accounting principles or interpretations could also challenge our internal controls and require that we establish new business processes, systems, and controls to accommodate such changes. We have limited experience with implementing the systems and controls that will be necessary to operate as a public company, as well as adopting changes in accounting principles or interpretations mandated by the relevant regulatory bodies. Additionally, if these new systems, controls, or standards and the associated process changes do not give rise to the benefits that we expect or do not operate as intended, it could adversely affect our financial reporting systems and processes, the effectiveness of internal control over financial reporting, and/or our ability to produce timely and accurate financial reports. Moreover, our business may be harmed if we experience problems with any new systems and controls, resulting in delayed implementation or increased costs to correct any issues.

Further, in addition to the material weaknesses described below, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our business or cause us to fail to meet our reporting obligations. That failure could result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting. Those reports will eventually be included in our periodic reports filed with the SEC. Ineffective disclosure controls or internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We are not currently required to comply with the SEC rules that implement Section 404(a) of the Sarbanes-Oxley Act (“Section 404”) and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting. If we are not able to implement the additional requirements of Section 404 in a

timely manner or with adequate compliance, we may not be able to assess whether its internal control over financial reporting is effective and may fail to provide timely and accurate financial information to investors.

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until our first annual report filed with the SEC when we are an accelerated filer or a large accelerated filer. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting has been designed, documented, or is actively operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could harm our business and could cause a decline in the trading price of our common stock.

In connection with the preparation and audit of Legacy Zapata’s financial statements as of and for the fiscal years ended December 31, 2023, and 2022, material weaknesses have been identified in its internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses we identified include:

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Legacy Zapata did not employ sufficient accounting and financial reporting personnel with requisite knowledge and experience in the application of generally accepted accounting principles in the United States (“U.S. GAAP”) and SEC rules to facilitate accurate and timely financial reporting.

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Legacy Zapata did not maintain an effective risk assessment process, which led to improperly designed controls.

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Legacy Zapata did not design and maintain appropriate control activities; including those to support the appropriate segregation of duties over the review of account reconciliations, manual journal entries and safeguarding of assets.

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Legacy Zapata did not design and maintain formal accounting policies, procedures and controls over significant accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures.

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Legacy Zapata did not document, thoroughly communicate, and monitor controls processes and relevant accounting policies and procedures.

These material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement to Legacy Zapata’s annual or interim financial statements and, consequently, our combined annual or interim financial statements, that would not be prevented or detected. Had Legacy Zapata performed an evaluation of its internal control over financial reporting in accordance with Section 404, additional control deficiencies may have been identified by management, and those control deficiencies could have also represented one or more material weaknesses.

In an effort to remediate the material weaknesses, we have retained an accounting consulting firm to provide additional depth and breadth in its technical accounting and financial reporting capabilities. We intend to complete a risk assessment to identify relevant risks and specify needed objectives. We intend to formalize and communicate our policies and procedures surrounding our financial close, financial reporting and other accounting processes. We intend to further develop and document necessary policies and procedures regarding its internal control over financial reporting, such that we are able to perform a Section 404 analysis of our internal

control over financial reporting when and as required. We cannot assure that these measures will significantly improve or remediate the material weaknesses described above. We also cannot assure that we have identified all or that we will not have additional material weaknesses in the future. Accordingly, a material weakness may still exist when we report on the effectiveness of our internal control over financial reporting for purposes of our management’s required attestation. Further, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

We expect to incur additional costs to remediate these control deficiencies, though there can be no assurance that our efforts will be successful or avoid potential future material weaknesses. If we are unable to successfully remediate our existing or any future material weaknesses in its internal control over financial reporting, or if we identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our stock price may decline as a result. We also could become subject to investigations by Nasdaq, the SEC or other regulatory authorities.

Our ability to use existing or future net operating loss carryforwards and other tax attributes may be limited.

We have incurred net operating losses (“NOLs”) for tax purposes for each year since our incorporation and we expect to continue to operate at a loss for the foreseeable future. As of December 31, 2023, Legacy Zapata had a cumulative U.S. federal carryforward of approximately $62.1 million and a cumulative state NOL carryforward of approximately $37.7 million. If not utilized, an immaterial amount of U.S. federal NOLs generated prior to 2018 will expire at various dates through 2037 and the state NOLs will expire at various dates through 2042. The U.S. federal NOLs generated after 2017 can be carried forward indefinitely. Under the Code as currently in effect, the deductibility of the U.S. federal NOL carryforward as of December 31, 2023 (other than the immaterial amount generated prior to 2018) and all future U.S. federal NOL carryforwards is limited to 80% of taxable income, limiting or delaying in part the use of NOL carryforwards if and when we cease operating at a loss. We may potentially use these U.S. federal and state NOLs to offset taxable income for U.S. federal and state income tax purposes. However, the use of these NOLs may be subject to numerous limitations under the Code and under state tax laws. Among such limitations, Section 382 of the Code may limit the use of these NOLs in any year for U.S. federal income tax purposes in the event of certain past or future changes in ownership of us or Legacy Zapata. An ownership change under Section 382 of the Code, referred to in this discussion as an ownership change, generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We have not conducted a Section 382 study to determine whether the use of our NOLs is impaired under Section 382 of the Code as a result of any prior ownership change. We may have previously undergone one or more ownership changes. An ownership change in respect of us also could be deemed to be an ownership change in respect of Legacy Zapata. The Merger, or future issuances or sales of our securities, including certain transactions involving our securities that are outside of our control, could result in ownership changes. Ownership changes that have occurred in the past or that may occur in the future could result in the imposition of an annual limit under Section 382 of the Code on the amount of pre ownership change NOLs and other tax attributes that we or Legacy Zapata could use to reduce our taxable income, potentially increasing or accelerating its liability for income taxes, and also potentially causing those tax attributes to expire unused. States may impose similar limitations on the use of applicable NOLs. We have recorded a valuation allowance related to NOL carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.

Any limitation on using NOLs, whether under Section 382 of the Code or otherwise under U.S. federal or state tax laws, could, depending on the extent of such limitation and the NOLs previously used, result in Legacy Zapata or us retaining less cash after payment of U.S. federal and state income taxes in respect of any year in which we have taxable income, rather than losses, than we would be entitled to retain if such NOLs were

available as an offset against such income for U.S. federal and state income tax reporting purposes, which could adversely impact our operating results.

Risks Related to our Business and Industry

Because we derive all of our current revenue from our Orquestra and Zapata AI Sense and related services, and our Industrial Generative AI offerings include only these solutions and Zapata AI Prose, failure of generative AI solutions in general and our Industrial Generative AI solutions in particular to satisfy customer demands or to achieve increased market acceptance would adversely affect our business, results of operations, financial condition, and growth prospects, and the current state of the generative AI industry is still new and rapidly evolving, so there is no guarantee that it will succeed.

We derive and expect to continue for the foreseeable future to derive all of our revenue from our Industrial Generative AI solutions, including corresponding services. As such, the market acceptance of generative AI solutions in general, and our Industrial Generative AI solutions in particular, are critical to our continued success. Market acceptance of generative AI solutions depends in part on market awareness of the benefits that generative AI solutions can provide over legacy products and services. In addition, in order for cloud-based generative AI solutions to be widely accepted, organizations must overcome any concerns with placing sensitive information on a cloud-based platform. Demand for our Industrial Generative AI solutions in particular is affected by a number of other factors, some of which are beyond our control. These factors include continued market acceptance of our software, the pace at which existing customers realize benefits from the use of our Industrial Generative AI solutions and provide word of mouth success stories, the timing of development and release of new products by our competitors, technological change, reliability and security, the pace at which enterprises undergo digital transformation, and developments in data privacy regulations. We expect that the needs of our current and potential customers will continue to rapidly change and increase in complexity. We will need to improve the functionality and performance of our software continually to meet those rapidly changing, complex demands. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of generative AI solutions in general or our Industrial Generative AI solutions in particular, our business operations, financial results, and growth prospects will be materially and adversely affected.

While generative models have existed for about two decades in largely their current form, the larger commercial impact and growth of generative AI occurred quite recently. This is exemplified through recent investment increases in generative AI by venture capitalists, who have increased their positions in generative AI from $408 million in 2018 to $4.8 billion and $4.5 billion in 2021 and 2022, respectively. We believe that the release of ChatGPT by OpenAI in late 2022 represents an inflection point for growth in the generative AI industry. This expected influx of investment could accelerate development from fundamental science to new technology applications. As generative AI is applied to new areas with untested conditions and new use cases, it is possible that, despite post-ChatGPT market enthusiasm, we could discover that generative AI is unfit for an application or use case. The field as a whole is rapidly evolving, which could mean that techniques that were once competitive become quickly outpaced by new techniques. With so many players entering the market, new techniques could be discovered by our competitors, allowing competitors to develop superior products or processes. If new techniques are discovered and shared publicly, the cost of re-implementing or adopting new best practices could be substantial. Given many of our competitors are larger companies with more employees and better access to financial resources, we may not be able to implement such new techniques as quickly as its competitors, or at all.

Generative AI is about creating numerical models from training data and then sampling from those models to generate new data. This process is inherently complex with many opportunities for flaws. Even with excellent training data and strong application, these models are non-deterministic, meaning they can give different outputs

for the same inputs at different times. All of these factors can lead to false predictions and incorrect outputs. Additionally, many implementations of these techniques are not explainable, meaning a person is unable to clearly explain the reason why a model provided a certain output. This unpredictability could deter potential

customers from purchasing our solutions. For these reasons, the impact of generative AI may be far more limited than analysts currently predict following the release of ChatGPT and other well-known generative AI programs.

There can also be no assurance that our analysis of the eventual market need is correct. If our judgment on this topic is incorrect then the future value of our products and services, our competitive place in the market, and our future profitability may be materially less than we currently project.

As an Industrial Generative AI solutions company, our solutions must provide our customers with the ability to use products of third parties, such as GPUs, which we do not manufacture. The cost or availability of these dependencies could be adversely affected by a variety of factors, including the transition to a clean energy economy, local and regional environmental regulations, and geopolitical disruptions. Our Industrial Generative AI solutions must integrate with a variety of hardware and software platforms, and we need to continuously modify and enhance our AI software libraries to adapt to changes in hardware and software technologies. In particular, we have developed our AI software libraries to be able to easily integrate with key third-party applications, including the applications of software providers that compete with us as well as our partners. We are typically subject to standard terms and conditions of such providers or open source licenses, which govern the distribution, operation, and fees of such software systems, and which are subject to change by such providers from time to time. Our business will be harmed if any provider of such software systems:

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discontinues or limits our access to its software;

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modifies its terms of service or other policies, including fees charged to, or other restrictions on us, or other platform and application developers;

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changes or modifies its open source license;

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changes how information is accessed by us or our customers;

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establishes more favorable relationships with one or more of our competitors; or

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develops or otherwise favors its own competitive offerings over AI software libraries.

Third-party services and products are constantly evolving, and we may not be able to modify our Industrial Generative AI solutions to assure their compatibility with that of other third parties as they continue to develop or emerge in the future or we may not be able to make such modifications in a timely and cost-effective manner. In addition, some of our competitors may be able to disrupt the operations or compatibility of our AI software libraries with their products or services, or exert strong business influence on our ability to, and terms on which we, operate our Industrial Generative AI solutions. Should any of our competitors modify their products or standards in a manner that degrades the functionality of our AI software libraries or gives preferential treatment to our competitors or competitive products, whether to enhance their competitive position or for any other reason, the interoperability of our AI software libraries with these products could decrease and our business, results of operations, and financial condition would be harmed. If we are not permitted or able to integrate with these and other third-party applications in the future, our business, results of operations, and financial condition would be harmed.

Our business plan could suffer if we are not able to enter into important strategic partnerships.

As part of our growth plans, we expect to expand, sell to, with, and through partners, including developing repeatable solutions built with services firms, and developing partnerships with system integrators and consulting

services firms. However, our relationships with these partners may not result in additional business. If we are unable to enter into beneficial and contractual strategic partnerships, or further its relationship with existing partners, or is unable to do so on favorable terms, then its growth could be limited or delayed.

We are highly dependent on our founders and key employees.

Our performance to date has relied and will for the foreseeable future rely heavily on our founders and key employees. The retention of these key employees, together with additional key hires, is considered critical to the long-term success of the company. All of our personnel, including the key scientists, engineers, and executives, are “at will” employees who could leave the company to accept alternative employment at any time. The more success we achieve serves to increase the risk that competitors, including large, well-established companies with far greater resources, will seek to hire our employees, including key employees. We are aware of this vulnerability and seek to address it through both succession planning and retention incentives. The loss of any key employee, especially to a competitor, could have a material adverse effect on our business, including by delaying the roll-out of products or diminishing the quantity or quality of our scientific output.

Our future success is also highly dependent on locating and hiring highly qualified key employees, both to replace any losses of key employees, including following our previous reductions in force, as well as to supplement our current employees.

Our business is dependent on growing and retaining competitive teams of sufficient size in the areas of algorithm development, product development, and software engineering; the failure to achieve any one of these objectives could materially affect its business.

Our core business model is to develop and sell software capable of delivering Industrial Generative AI solutions to enterprise customers at scale and services in connection with such software. This requires a science team to develop algorithms, capable of addressing valuable problems using quantum techniques and other mathematics. This requires a product development team that can describe software that not only is able to use the quantum techniques developed by its team, but also is able to handle enterprise production issues at scale. It also requires a software engineering team that can implement the product design through products that comply with the myriad legal and enterprise IT requirements and are robust enough to function in an enterprise production environment. Finally, these teams must have the capacity to complete their respective tasks in time to be of value to the market.

The ability to hire the personnel required to execute our business plan depends, in part, on the availability of qualified applicants, something which is beyond our control. Quantum information processing and generative AI are relatively new fields and are inherently difficult. Although the pool of qualified quantum scientists and AI engineers is growing, it is limited and competition for that talent is global and aggressive, pitting us against large, well-established companies with larger financial resources than we have, as well as programs sponsored by foreign countries. In addition, limitations in or changes to immigration and work permit laws and regulations or the administration or interpretation of those laws could impair our ability to attract and retain highly qualified employees.

There is no assurance that we will be able to hire and retain an adequate number of AI experts, quantum scientists, product design specialists, and/or software engineers with the qualifications required to execute our business plan. Our failure to build and maintain any one or more of these requisite teams could have a material adverse effect on our future prospects.

Our estimate of market opportunities may prove to be inaccurate.

At present, there is no mature market for generative AI. This creates significant uncertainty in determining the potential market for our Industrial Generative AI solutions. For example, it is possible to estimate the current

and potential total addressable market for generative AI as an industry, but these estimates are based on third-party estimates and our own internal judgment, both of which may be materially inaccurate. There can be no assurance that our or third-party estimates of the potential total addressable market for generative AI are correct, and such numbers do not account for the substantially more limited service obtainable market for our Industrial Generative AI solutions. Additionally, our market opportunities, future prospects, and future profitability will be materially lessened by delays in widespread enterprise adoption of generative AI, if enterprises adopt generative AI at all, which would reduce the relevant total addressable market.

As of December 31, 2023, our accounts receivable was from three main customers, representing approximately 43%, 31% and 26% of our total accounts receivable. We had four customers that represented greater than 10% of our total revenue for the year ended December 31, 2023 and revenue recognized from these four customers represented approximately 35%, 26%, 20% and 17% of total revenue. In total, we had five customers during the year ended December 31, 2023, including two enterprise customers and agreements with two customers that we deem to be government contracts, consisting of a direct contract with the Defense Advanced Research Projects Agency (“DARPA”), a part of the United States Department of Defense, and a subcontract with L3Harris Technologies, Inc. (“L3Harris”) in connection with their work for DARPA.] Historically, we had seven customers during the twelve months ended December 31, 2022, and four customers during the twelve months ended December 31, 2021. Until we can successfully broaden and diversify our customer base, we may continue to rely on only a few customers to generate our revenues. Although it is our strategy to market our products and services to a larger number of enterprise customers, there is no assurance that our strategy or efforts will be successful. By enterprise customers, we mean large businesses that have the size and resources to dominate a specific market, high revenue and a significant number of employees. If we fail to generate revenue from a broader customer base, our reliance on just a few customers may continue for an extended period of time, and the loss of any key customer will have material adverse effect on our operating results and financial condition.

Our customers have no obligation to renew, upgrade, or expand their subscriptions with us after the terms of their existing subscriptions expire. In addition, our customers may opt to decrease their usage of our Industrial Generative AI solutions. It is not possible for us to predict the future level of demand from our larger customers for our Industrial Generative AI solutions. As a result, we cannot provide assurance that our customers will renew, upgrade, or expand their subscriptions with us, if they renew at all. If one or more of our customers elect not to renew their subscriptions with us, or if our customers renew their subscriptions with us for shorter time periods, or if our customers decrease their usage of our Industrial Generative AI solutions, or if our customers otherwise seek to renegotiate terms of their existing agreements on terms less favorable to us, our business and results of operations would be adversely affected. Achieving renewal or expansion of usage and subscriptions may require us to engage increasingly in sophisticated and costly sales and support efforts that may not result in additional sales. In addition, the rate at which our customers expand the deployment of our Industrial Generative AI solutions depends on a number of factors. If our efforts to expand our relationships with our customers are not successful, our business, financial condition, and results of operations may be harmed. Additionally, if our customers do not provide word of mouth support for our Industrial Generative AI solutions, this could limit our ability to attract new customers.

Our business depends on our ability to attract new customers and on our existing customers purchasing additional subscriptions from us and/or renewing their existing subscriptions.

To increase our revenue, we must continue to attract new customers. As an early-stage company, we have limited experience with sales and, in particular, sales to our target large enterprise customers. Our success will

depend to a substantial extent on the level of adoption of our Industrial Generative AI solutions. Generative AI is a new and evolving industry, so the level of adoption is uncertain. Numerous factors may impede our ability to add new customers, including but not limited to, our failure to compete effectively against alternative products or services, to attract and effectively train new sales and marketing personnel, to develop relationships with partners, to successfully innovate and deploy new applications and other solutions, to provide a quality customer experience and customer services, including increasing our employee headcount to provide for additional service providers, or to ensure the effectiveness of our marketing programs. If we are not able to attract new customers, it will have an adverse effect on our business, financial condition and results of operations.

Our current Industrial Generative AI solutions, as well as applications, features, and functionality that we may introduce in the future or that we offer but have not yet sold, may not be widely accepted by our customers or may receive negative attention, each of which may lower our margins and harm our business.

Our ability to engage, retain, and increase our base of customers and to increase our revenue will depend on our ability to successfully market our existing Industrial Generative AI solutions, as well as create new applications, features, and functionality. Additionally, we have not yet sold one of our Industrial Generative AI solutions, Zapata AI Prose, to any customers. We may introduce significant changes to our existing Industrial Generative AI solutions or develop and introduce new applications, including technologies with which we have little or no prior development or operating experience. These new applications and updates, as well as our existing solutions that we have marketed but not yet sold, may fail to engage, retain, and increase our base of customers or may suffer from lag in adoption. New applications may initially suffer from performance and quality issues that may negatively impact our ability to market and sell such applications to new and existing customers. The short- and long-term impact of any major change to our Industrial Generative AI solutions, or the introduction of new applications or initial sales of our applications to enterprise customers, is particularly difficult to predict. If new or enhanced applications fail to engage, retain, and increase our base of customers, we may fail to generate sufficient revenue, operating margin, or other value to justify our investments in such applications, any of which may harm our business.

It is difficult to predict customer adoption rates and demand for our Industrial Generative AI solutions, the entry of competitive software, platforms and services. A substantial majority of our revenue has come from sales of our subscription-based software and related services, which we expect to continue for the foreseeable future. We cannot be sure that the generative AI market will continue to grow or, even if it does grow, that businesses will adopt our Industrial Generative AI solutions. Our future success will depend in large part on our ability to create a market for Industrial Generative AI solutions. Our ability to create such a market depends on a number of factors, including the cost, performance, and perceived value associated with our Industrial Generative AI solutions, as well as enterprise customers’ willingness to adopt a bespoke approach to resolving industrial problems. Potential customers may have made significant investments in legacy analytics software systems and may be unwilling to invest in new platforms and applications, and may prefer to work with larger, more established companies that have entered the broader generative AI market. If the market fails to develop or grows more slowly than we currently expect, our business, operating results, and financial condition could be adversely affected.

Our business plan relies upon the adoption of its Industrial Generative AI solutions by enterprise customers.

Our primary targeted customers are large enterprises with intractable problems that require addressing at scale. The success of our business plan, therefore, materially depends upon its ability to sell its Industrial Generative AI solutions to such large enterprise customers. Sales to such customers involve risks that are different from or greater than risks involved in selling to smaller customers. Such risks include difficulties

associated with longer sales, product, evaluation, and implementation cycles; higher customer-tailored requests and greater bargaining power on the part of the customer; and more intense competition from vendors who have been providing other software and services for years to the customer and are embedded in the customer’s IT infrastructure. If we are not able to overcome these risks and successfully establish a meaningful share of the enterprise market, then its business prospects and future profitability could suffer.

Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.

Our results of operations may fluctuate, in part, because of the complexity of customer problems that our Industrial Generative AI solutions address, the resource-intensive nature of our sales efforts, the length and variability of the sales cycle for our offerings, and the difficulty in making short-term adjustments to our operating expenses. The timing of our sales is difficult to predict. The length of our sales cycle, from initial evaluation to payment for our subscriptions and related services can vary substantially from customer to customer and could extend over a number of years for some customers. Our sales efforts involve educating our customers about the use, technical capabilities, and benefits of our offerings. Customers often undertake a prolonged evaluation process. In addition, the size of potential customers may lead to longer sales cycles. We may also face unexpected deployment challenges with large organizations or more complicated deployment of our offerings. Large organizations may demand additional features, support services, and pricing concessions or require additional security management or control features. Some organizations may also require an on-premise solution rather than a cloud solution, which potentially requires additional implementation time and potentially a longer sales cycle. We may spend substantial time, effort and money on sales efforts to large organizations without any assurance that our efforts will produce any sales. As a result, it is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers.

Individual sales can be part of a long sales cycle, which impacts our ability to plan and manage cash flows and margins. These large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. If our sales cycle lengthens or our substantial upfront investments do not result in sufficient revenue to justify our investments, our operating results could be adversely affected. In addition, within each quarter, it is difficult to project which month a deal will close. Therefore, it is difficult to determine whether we are achieving our quarterly expectations and whether we will achieve annual expectations. Most of our expenses are relatively fixed or require time to adjust. Therefore, if expectations for our business are not accurate, we may not be able to adjust our cost structure on a timely basis, and our margins and cash flows may differ from expectations.

If we fail to respond to rapid technological changes, extend our Industrial Generative AI solutions, or develop new features and functionality, our ability to remain competitive could be impaired.

The market for our Industrial Generative AI solutions is characterized by rapid technological change, particularly since generative AI is a new and evolving industry, including frequent new platform and application introductions and enhancements, changing customer demands, and evolving industry standards. The introduction of software embodying new technologies can quickly make existing software obsolete and unmarketable. Generative AI, particularly incorporating quantum techniques, are inherently complex, and it can take a long time and require significant research and development expenditures to develop and test new or enhanced software. The success of any enhancements or improvements to our existing Industrial Generative AI solutions or any new applications depends on several factors, including timely completion, competitive pricing, adequate quality testing, integration with existing technologies, and overall market acceptance, particularly as we provide custom solutions for specific use cases.

Any failure of our Industrial Generative AI solutions to operate effectively with future infrastructure platforms and technologies could impact our ability to attain new customers. If we are unable to respond to these changes in a timely and cost-effective manner, our Industrial Generative AI solutions may become less marketable, less competitive, or obsolete, and our business may be adversely affected.

The introduction of new generative AI platforms and applications by competitors or the development of entirely new technologies to replace existing offerings could make our Industrial Generative AI solutions obsolete or adversely affect our business, results of operations, and financial condition. We may experience difficulties with software development, design, or marketing that could delay or prevent our development, introduction, or implementation of new Industrial Generative AI solutions, features, or capabilities, applying our existing Industrial Generative AI solutions to new use cases. Any delays could result in adverse publicity, loss of revenue or market acceptance, or claims by customers brought against us, all of which could harm our business.

Our business could be negatively impacted by delays in development of its software platform.

We have plans, including adequate staffing and other resources, that we believe will result in the development of and continued improvements to its software platform on a schedule that permits the execution of our business plan in a timely manner. Any delays in platform design and engineering work required to accomplish this could result in corresponding delays in the implementation of our business plan in the market. We are presently unaware of any outstanding design or engineering issues that cannot be resolved in the normal course, but the failure to complete necessary components of or improvements to its platform in a timely manner would have a serious negative impact on the company and might cause the company to fail.

The failure to attract and retain additional qualified personnel or to maintain our company culture could harm our business and prevent us from executing our business strategy.

To execute our business strategy, we must attract and retain highly qualified personnel. Competition for executives, data scientists, engineers, software developers, sales personnel, and other key employees in our industry is intense. In particular, we compete with many other companies for employees with high levels of expertise in generative AI, quantum science, and enterprise software, as well as sales and operations professionals. At times, we have experienced, and we may continue to experience, difficulty in hiring personnel who meet the demands of our selection process and with appropriate qualifications, experience, or expertise, and we may not be able to fill positions as quickly as desired, particularly in light of our previous reductions in force. Potential candidates may not perceive our compensation package, including our equity awards, as favorably as employees hired prior to the Merger. In addition, our recruiting personnel, methodology, and approach may need to be altered to address a changing candidate pool and profile. We may not be able to identify or implement such changes in a timely manner.

Many of the companies with which we compete for experienced personnel have greater resources than we have, and some of these companies may offer more attractive compensation packages. If the perceived value of our equity awards declines, or if the mix of equity and cash compensation that we offer is unattractive, it may adversely affect our ability to recruit and retain highly skilled employees. Job candidates may also be threatened with legal action under agreements with their existing employers if we attempt to hire them, which could impact hiring and result in a diversion of our time and resources. Additionally, laws and regulations, such as restrictive immigration laws, or export control laws, may limit our ability to recruit internationally. We must also continue to retain and motivate existing employees through our compensation practices, company culture, and career development opportunities.

Companies with greater resources than we have in the past recruited or attempted to recruit our employees. If we cannot retain these employees, it may adversely affect our ability to deliver on our Industrial Generative AI solutions. Furthermore, third-party offers to our employees of greater compensation have in the past forced and may in the future force us to offer significant additional compensation, which may adversely impact our financial performance. Additionally, continued high inflation, without regard to competition, may also require us to increase compensation and failure to do so might impact our employee retention. Such increases would also adversely impact our financial performance.

We believe that a critical component to our success and our ability to retain our best people is our culture. As we continue to grow and develop a public company infrastructure, we may find it difficult to maintain our

company culture. If we fail to attract new personnel or to retain our current personnel, our business would be harmed.

Any failure to offer high-quality support services for our customers may harm our relationships with our customers and, consequently, our business.

Once our Industrial Generative AI solutions are deployed, our customers depend on our services teams to resolve technical and operational issues relating to our Industrial Generative AI solutions. Our ability to provide effective support is largely dependent on our ability to attract, train, and retain qualified personnel with experience in interfacing with customers. If the number of our customers grows, this will put additional pressure on our customer services teams. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support. We also may be unable to modify the future, scope, and delivery of our support to compete with changes in the services provided by our competitors. Increased customer demand for support services, without corresponding revenue, could increase costs and negatively affect our operating results. In addition, if we experience increased customer demand for support, we may face increased costs that may harm our results of operations. If our customer base expands, we will need to hire additional support staff to deliver and support our Industrial Generative AI solutions, and our business may be harmed. Our ability to attract new customers is highly dependent on our business reputation and on our ability to deliver value to our customers. Any failure to deliver value, or a perception that we do not deliver value for our customers, would harm our business.

Sales to government entities and highly regulated organizations are subject to a number of challenges and risks.

While our primary revenue model is based on multi-year engagements with enterprise customers, we selectively pursue U.S. government contracts as a complementary revenue source. This includes our existing work with DARPA, which in 2022 selected us, alongside several other enterprise, academic, and technology partners, to quantify the long-term utility of quantum computers. We may also target highly regulated organizations. Sales to such entities are subject to a number of challenges and risks. Selling to such entities can be highly competitive, expensive, and time consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Government contracting requirements may change and in doing so restrict our ability to sell into the government sector. Government demand and payment for our Industrial Generative AI solutions may be affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our Industrial Generative AI solutions.

Further, governmental and highly regulated entities may demand contract terms that differ from our standard arrangements and may be less favorable than terms agreed with private sector customers.

Contracts with governmental entities may also include preferential pricing terms, including, but not limited to, “most favored customer” pricing. In the event that we are successful in being awarded a government contract, such award may be subject to appeals, disputes, or litigation, including but not limited to bid protests by unsuccessful bidders.

As a government contractor or subcontractor, we must comply with laws, regulations, and contractual provisions relating to the formation, administration, and performance of government contracts, which affect how we and our partners do business with government agencies. As a result of actual or perceived noncompliance with government contracting laws, regulations, or contractual provisions, we may be subject to non-ordinary course audits and internal investigations which may prove costly to our business financially, divert management time, or limit our ability to continue selling our products and services to our government customers. These laws and regulations may impose other added costs on our business, and failure to comply with these or other

applicable regulations and requirements, including non-compliance in the past, could lead to claims for damages from our channel partners, downward contract price adjustments or refund obligations, civil or criminal penalties, and termination of contracts and suspension or debarment from government contracting for a period of time with government agencies. Any such damages, penalties, disruption, or limitation in our ability to do business with a government would adversely impact, and could have a material adverse effect on, our business, results of operations, financial condition, public perception and growth prospects.

Governmental and highly regulated entities may have statutory, contractual, or other legal rights to terminate contracts with us or our partners for convenience or for other reasons. Any such termination may adversely affect our ability to contract with other government customers as well as our reputation, business, financial condition, and results of operations. All these factors can add further risk to business conducted with these customers. If sales expected from a government entity or highly regulated organization for a particular quarter are not realized in that quarter or at all, our business, financial condition, results of operations, and growth prospects could be materially and adversely affected.

Our success could be materially affected by problems with or defects in the Orquestra platform or our other software offerings.

In addition to issues commonly facing all providers of commercial software, the development of our Industrial Generative AI solutions involves converting novel, complex scientific algorithms into software code. We may experience unintended design and/or implementation defects or other quality issues in our software code. We may also experience defects in the products and services of third parties on which we rely to provide our products and services, including third-party cloud providers. Problems can be caused by a variety of factors, including premature or failed introduction of new products, vulnerabilities or defects in proprietary and open source software, human error or misconduct, design limitations, or denial of service or other security-related incidents. We do not have a contractual right with our public cloud providers that will compensate us for any losses due to availability interruptions in the public cloud.

Any defects in the Orquestra platform or other software offerings, whether caused by defective design, defective coding, or defects introduced through third-party components; any disruptions in our ability to provide our Industrial Generative AI solutions, including by means of public cloud; and/or any other quality issues with our Industrial Generative AI solutions could affect our business reputation and brand, could cause us to spend material amounts to address the defects, could cause material delays in the execution of our business plan, and could have a material adverse effect on our business opportunities, revenue, and future profitability.

The pursuit of inorganic growth opportunities could result in harm to our business.

We may pursue growth opportunities by acquiring complementary businesses or other assets for strategic purposes, such as companies with expertise in software development, data management such as Extract Transform, Load (ETL), AI, natural language understanding (NLU), or market verticals in which we are interested; companies with an IP portfolio that could compliment ours; companies with customer lists that could shorten the sales cycle to significant customers. The pursuit of such strategic opportunities could be both expensive and distracting, could have a significant impact on the company’s capital structure, and even if the transaction is completed as desired the results may not be as predicted.

We do not have any negotiations in progress, nor have we entered into any contracts for acquisitions as of the date of this prospectus. However, to the extent such opportunities may arise, there can be no assurance that the pursuit of any such opportunities will succeed and, if they fail, they could have a material adverse effect on our business and future profitability.

Risks Related to Competition

Competitors may develop products and technologies that are superior to our Industrial Generative AI solutions.

Our business plan is based on the belief that the value of our Industrial Generative AI solutions will be enhanced by delivering, in a single unified software platform,the ability to: allow deployment in any desired environment; permit the development or implementation of applications and services that are capable of all data handling tasks, including processing input data in a manner calculated to maximize the ultimate Industrial Generative AI solution. Presently, we are unaware of any competing product either on the market or announced as being under development that we believe reasonably could be deemed to provide all of these features in a unified platform. However, products and services addressing enterprise level computational problems are presently being supplied by large, well-established companies in the areas of data management and AI, such as DataRobot, Inc., Dataiku Inc., Databricks, Inc., Domino Data Lab, Inc., Palantir Technologies Inc. and C3.ai, Inc. These companies, by using existing talent or hiring Ph.D.-level experts in mathematics, computer science, physics, and related fields, could develop software that utilizes similar or better mathematical techniques as to what we have found to date, and develop and offer these to the market as competitive libraries, services, and applications. Large-scale public cloud providers, such as Google, Inc., Microsoft, Inc. and Amazon Web Services, Inc. have all-in-one machine learning solutions. It is possible, if not likely, that, if they have not already begun, these existing companies will seek to build advanced algorithm expertise and integrate quantum techniques running on currently available classical hardware into their existing platforms and leverage their existing customer relationships to press adoption of these solutions, which could create a direct competition to our software platform.

Many of our existing and potential competitors have, or could have, substantial competitive advantages such as:

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greater name recognition, longer operating histories, and larger customer bases;

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larger sales and marketing budgets and resources and the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services;

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existing, broader, deeper, or otherwise more established relationships with sales partners and customers;

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wider geographic presence or greater access to larger customer bases;

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greater focus in specific geographies or industries;

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lower labor and research and development costs;

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larger and more mature intellectual property portfolios; and

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substantially greater financial, technical, and other resources to provide support, make acquisitions, hire talent, and develop and introduce new products and services.

There can be no guarantee that a competitor will not develop a product superior to ours or one that is perceived by the market to be superior. Nor can there be any guarantee that a combination of products will not be able to provide solutions that are superior, or are perceived to be superior, to our Industrial Generative AI solutions. The introduction of such a product or combination of products could have a material adverse effect on our business, profitability, and financial condition.

The generative AI industry is highly competitive and we may not be successful in establishing itself as a viable competitor without regard to the value of our Industrial Generative AI solutions.

Generative AI is an industry with great promise that has attracted global interest and participation. In addition, the recent rapid rise of the generative AI industry has given rise to less-established public and private companies, including new startups, which may compete, in whole or in part, with our products and services. This competition in the market for generative AI is already great and is expected to intensify over time.

To compete successfully in this market, we must develop our products and technologies in a timely manner, effectively market these products against multiple competitors, and support these products at levels expected by enterprise customers. Delays in the introduction of new products may cause our existing or potential customers to adopt our competitors’ products, making it difficult or impossible for our products later to displace the competitive products without regard to the relative value of the respective products.

There can be no assurance that we can timely deliver products that will result in us having a material share of this market, even if our products are superior. Our inability to establish a position and market share in this highly competitive industry will adversely affect our future prospects and may cause the company to fail.

Our business plan depends, in part, on access to public clouds through major cloud providers and there is no guarantee that access will be available on reasonable terms.

Our Industrial Generative AI solutions will permit deployment of our software in various scenarios, including on the premises of a customer, hybrid clouds controlled by the customer, or a public cloud controlled by us. Although not necessary in all customer engagements, an important aspect of business plan is to make our Industrial Generative AI solutions available via a public cloud controlled by us. To accomplish this, we are required to negotiate cloud access with one or more cloud providers. The two largest public cloud providers, Amazon Web Services (“AWS”) and Microsoft Azure (“Azure”), are both engaged in their own initiatives that could compete with our Industrial Generative AI solutions in whole or in part. There is a risk that a cloud provider important to our business plan could use control of their public cloud to deny or place us at a competitive disadvantage by various means, including embedding innovations or privileged interoperating capabilities in products competing with ours, bundling competing products, requiring unfavorable pricing, including terms or conditions or regulatory requirements that make our Industrial Generative AI solutions uncompetitive, or leveraging their existing relationships with our customers to pressure customers to use their products rather than ours.

There can be no guarantee that we will be able to deploy our Industrial Generative AI solutions on public clouds controlled by competitors. The failure to be able to access public clouds, or the imposition of restrictive terms as a condition to such access, limit the adoption and use of our Industrial Generative AI solutions by customers, increase our operating expenses, damage our brand, and/or place us at a disadvantage when competing for customer accounts. Any of these could have a material adverse effect on Zapata’s business operations, market share, and profitability.

Our business plan depends, in part, on access to GPU and other specialized hardware either directly through the purchase of computing hardware and installation in data centers, or through third party providers. There is no guarantee that access through either path will be available on reasonable terms, or at all.

Many of the techniques developed by us would require the use of specialized hardware to execute an algorithm in a time or cost efficient manner as required by the constraints of an application. Access to this hardware can be obtained through the purchase of this hardware and installation in a data center, or through a third-party infrastructure service provider. Hardware could be purchased from providers such as NVIDIA, Intel, AMD, D-Wave, or Fujitsu. Supply chain problems, chip shortages, or geopolitical conditions beyond our control could all impact our ability to access this hardware, either directly or through a third-party provider. Additionally, getting space in an existing facility and maintaining the hardware would require additional expertise that would need to be either hired or contracted by us, and identifying and hiring such experts could be costly and time-consuming. We could also face difficulties securing terms to host this hardware on reasonable terms, or at all.

Alternatively, instead of competing to purchase hardware directly, we could rent time on that hardware from infrastructure service providers. In this case, we would rely on third party providers to provide cloud-based network access to these on an hourly, annual, or other basis. However, there can be no assurance that these third party provides could obtain access to hardware on reasonable terms, or at all.

Additionally, external factors, including the coronavirus pandemic, have caused a chip shortage, making it difficult for third party suppliers, such as NVIDIA and AMD, to keep up with demand. Consequently, we may have difficulty obtaining access to GPUs at reasonable prices, or at all.

Risks Related to Intellectual Property

Our patent applications may not result in issued patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours. The status of patents involves complex legal and factual questions and the breadth of claims allowed is uncertain. As a result, we cannot be certain that the patent applications that we file will result in patents being issued, or that our patents and any patents that may be issued to us will afford protection against competitors with similar technology. Numerous patents and pending patent applications owned by others exist relating to generative AI, algorithms and software, differential equations and optimization, and hardware optimization. In addition to those who may have patents or patent applications directed to relevant technology with an effective filing date earlier than any of our existing patents or pending patent applications, any of our existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable. Furthermore, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications related to issued U.S. patents will be issued.

Even if our patent applications succeed and we are issued patents in accordance with them, it is still uncertain whether these patents will be contested, circumvented, invalidated or limited in scope in the future. The rights granted under any issued patents may not provide us with meaningful protection or competitive advantages, and some foreign countries provide significantly less effective patent enforcement than in the United States. In addition, the claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. The intellectual property rights of others could also bar us from licensing and exploiting any patents that issue from our pending applications. In addition, patents issued to us may be infringed upon or designed around by others and others may obtain patents that it needs to license or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating results.

There is no guarantee that our IP will provide the desired competitive advantage.

We seek to provide ourselves with a competitive advantage by making key elements of our Industrial Generative AI solutions proprietary, through one of two means. First, we pursue patent protection for some inventions that we believe qualify for protection under the patent laws. In cases in which patent protection is sought, the details of the invention eventually will be made public in the normal course, usually within eighteen months of filing. As to these inventions, competitors will eventually know the details of and can use the inventions to compete with us, unless a patent is granted prohibiting such use and we can learn of violations and effectively enforce our patent rights in light of the costs and complexities involved in such enforcement litigation. Second, some elements of our Industrial Generative AI solutions we seek to protect as trade secrets. As to our trade secrets, competitors will not be able to know our techniques provided the trade secrets are not improperly disclosed, but if a competitor independently develops the same technique and files for and is granted patent protection we could find ourselves prohibited by the patent laws from practicing our trade secret technology.

There is no assurance that our pending or future patent applications will be granted and provide us patent protection as to the claims in those applications. Moreover, we cannot guarantee that our patent rights will not be violated by competitors, that we will be able to detect such violations, or that if violations are detected we will be

in a position effectively to enforce our patent rights. Nor can we guarantee that our trade secrets will remain secret and not be disclosed to competitors either inadvertently or through violation of contractual secrecy agreements, or that our trade secrets are not independently developed by competitors. The failure of our IP strategy to protect key elements of our Industrial Generative AI solutions could materially reduce any competitive advantage we might otherwise have and have a corresponding adverse effect on our market share and/or profitability.

We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs (including indemnification of third parties or costly licensing arrangements (if licenses are available at all)) and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies, which could result in a significant expenditure and otherwise harm our business.

We may become subject to intellectual property disputes. Our success depends, in part, on our ability to develop and commercialize our products, services and technologies without infringing, misappropriating or otherwise violating the intellectual property rights of third parties. However, we may not be aware that our products, services or technologies are infringing, misappropriating or otherwise violating third-party intellectual property rights and such third parties may bring claims alleging such infringement, misappropriation or violation. For example, there may be issued patents of which we are unaware, held by third parties that, if found to be valid and enforceable, could be alleged to be infringed by our current or future products, services or technologies. There also may be pending patent applications of which we are not aware that may result in issued patents, which could be alleged to be infringed by our current or future products, services or technologies. Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover our current or future products, services or technologies. Lawsuits can be time-consuming and expensive to resolve, and they divert management’s time and attention. Numerous patents and pending patent applications owned by others exist in the fields in which we have developed and are developing our technology. Companies that have developed and are developing technology are often required to defend against litigation claims based on allegations of infringement, misappropriation or other violations of intellectual property rights. Our products, services or technologies may not be able to withstand any third-party claims against their use. In addition, many companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. In a patent infringement claim against us, we may assert, as a defense, that we do not infringe the relevant patent claims, that the patent is invalid or both. The strength of our defenses will depend on the patents asserted, the interpretation of these patents, and its ability to invalidate the asserted patents. However, we could be unsuccessful in advancing non-infringement and/or invalidity arguments in its defense. In the United States, issued patents enjoy a presumption of validity, and the party challenging the validity of a patent claim must present clear and convincing evidence of invalidity, which is a high burden of proof. Conversely, the patent owner need only prove infringement by a preponderance of the evidence, which is a lower burden of proof. Our patent portfolio may not be large enough to deter patent infringement claims, and our competitors and others may now and in the future have significantly larger and more mature patent portfolios. Any litigation may also involve patent holding companies or other adverse patent owners that have no relevant solution revenue, and therefore, our patent portfolio may provide little or no deterrence as it would not be able to assert its patents against such entities or individuals. If a third party is able to obtain an injunction preventing us from accessing such third-party intellectual property rights, or if we cannot license or develop alternative technology for any infringing aspect of our business, we may be forced to limit or stop sales of its products, services or technologies or cease business activities related to such intellectual property. Although the company carries general liability insurance, our insurance may not cover potential claims of this type or may not be adequate to indemnify us for all liability that may be imposed. We cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on its business, financial condition or results of operations. Any intellectual property litigation to which we might

become a party, or for which it is required to provide indemnification, regardless of the merit of the claim or its defenses, may require us to do one or more of the following:

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cease selling or using solutions or services that incorporate the intellectual property rights that allegedly infringe, misappropriate or violate the intellectual property of a third party;

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make substantial payments for legal fees, settlement payments or other costs or damages;

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obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology;

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redesign the allegedly infringing solutions to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible; or

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indemnify organizations using our services or platform or third-party service providers.

Even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of its management and harm its business and operating results. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. The occurrence of infringement claims may grow as the market for our products, services and technologies grows. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust its financial and management resources.

Our use of third-party open source software could negatively affect our ability to offer and sell subscriptions to our Industrial Generative AI solutions and subject us to possible litigation.

A portion of the technologies we use incorporates third-party open source software, and we may incorporate third-party open source software in our solutions in the future. Open source software is generally licensed by its authors or other third parties under open source licenses. From time to time, companies that use third-party open source software have faced claims challenging the use of such open source software and requesting compliance with the open source software license terms. Accordingly, we may be subject to suits by parties claiming ownership of what we believe to be open source software or claiming non-compliance with the applicable open source licensing terms. Some open source software licenses require end users who use, distribute or make available across a network software and services that include open source software to offer aspects of the technology that incorporates the open source software for no cost. We may also be required to make publicly available source code (which in some circumstances could include valuable proprietary code) for modifications or derivative works we create based upon, incorporating or using the open source software and/or to license such modifications or derivative works under the terms of the particular open source license. Additionally, if a third-party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose any of our source code that incorporates or is a modification of our licensed software. While we employ practices designed to monitor our compliance with the licenses of third-party open source software and protect our valuable proprietary source code, we may inadvertently use third-party open source software in a manner that exposes us to claims of non-compliance with the terms of their licenses, including claims of intellectual property rights infringement or for breach of contract. Furthermore, there exists today an increasing number of types of open source software licenses, almost none of which have been tested in courts of law to provide guidance of their proper legal interpretations. If we were to receive a claim of non-compliance with the terms of any of these open source licenses, we could be required to incur significant legal expenses defending against those allegations and could be subject to significant damages, enjoined from offering or selling our solutions that contained the open source software, and required to comply with the foregoing conditions, and we may be required to publicly release certain portions of our proprietary source code. We could also be required to expend substantial time and resources to re-engineer some of our software. Any of the foregoing could disrupt and harm our business.

In addition, the use of third-party open source software typically exposes us to greater risks than the use of third-party commercial software because open source licensors generally do not provide warranties or controls on the functionality or origin of the software. Use of open source software may also present additional security risks because the public availability of such software may make it easier for hackers and other third parties to determine how to compromise our Industrial Generative AI solutions. Any of the foregoing could harm our business and could help our competitors develop platforms and applications that are similar to or better than ours.

In addition, companies that currently sponsor and maintain open source software may choose to change the terms of their open source software licenses. These license changes could cause us to lose access to upgrades for commercial use that are currently available to us or otherwise restrict the way we are currently using them. These changes could mean that we must invest engineering resources to maintain that library itself, move to a different underlying software library, or engineer a replacement in order to keep the same feature set in its offerings.

Because of the characteristics of open source software, there may be fewer technology barriers to entry by new competitors and it may be relatively easy for new and existing competitors with greater resources than we have to compete with us.

One of the characteristics of open source software is that the governing license terms generally allow liberal modifications of the code and distribution thereof to a wide group of companies and/or individuals. As a result, others could easily develop new platforms and applications based upon those open source programs that compete with existing open source software that we support and incorporate into our Industrial Generative AI solutions. Such competition with use of the open source projects that we utilize can materialize without the same degree of overhead and lead time required by us, particularly if the customers do not value the differentiation of our proprietary components. It is possible for new and existing competitors with greater resources than ours to develop their own open source software or hybrid proprietary and open source software offerings, potentially reducing the demand for, and putting price pressure on, our Industrial Generative AI solutions. In addition, some competitors make open source software available for free download and use or may position competing open source software as a loss leader. We cannot guarantee that we will be able to compete successfully against current and future competitors or that competitive pressure and/or the availability of open source software will not result in price reductions, reduced operating margins and loss of market share, any one of which could seriously harm our business.

If open source software programmers, many of whom we do not employ, or our own internal programmers do not continue to develop and enhance open source technologies, we may be unable to develop new technologies, adequately enhance our existing technologies or meet customer requirements for innovation, quality and price.

We rely to a significant degree on a number of open source software programmers, or committers and contributors, to develop and enhance components of our Industrial Generative AI solutions. Additionally, members of the corresponding Apache Software Foundation Project Management Committees (“PMCs”), many of whom are not employed by us, are primarily responsible for the oversight and evolution of the codebases of important components of the open source data management ecosystem. If the open source data management committees and contributors fail to adequately further develop and enhance open source technologies, or if the PMCs fail to oversee and guide the evolution of open source data management technologies in the manner that we believe is appropriate to maximize the market potential of our solutions, then we would have to rely on other parties, or we would need to expend additional resources, to develop and enhance our Industrial Generative AI solutions. We also must devote adequate resources to our own internal programmers to support their continued development and enhancement of open source technologies, and if we do not do so, we may have to turn to third parties or experience delays in developing or enhancing open source technologies. We cannot predict whether further developments and enhancements to these technologies would be available from reliable alternative sources. In either event, we may incur additional development expenses and experience delays in technology release and upgrade. Delays in developing, completing, or delivering new or enhanced components to our

Industrial Generative AI solutions could cause our offerings to be less competitive, impair customer acceptance of our solutions, and result in delayed or reduced revenue for our solutions.

Risks Related to Government Regulation and Litigation

Laws and regulations governing data use, privacy, and security could burden our business.

Our business has remote employees and subsidiary offices located in different countries worldwide. We also serve customers located around the world. We are subject to all applicable laws regulating data use, privacy and security, whether U.S. federal, state, or local, or internationally, including the General Data Protection Regulation (“GDPR”) of the European Union. These laws are complex and can change in material ways. Compliance with these laws is time-consuming and expensive. A failure, or even the perceived failure, to comply with these laws could provoke regulatory investigation requiring a legal response and lead to action that could require a major overhaul of our data systems.

There can be no assurance that we will budget sufficient resources to ensure compliance with data use, privacy, and security laws and regulations, or that we will be successful in our efforts to comply. A failure on our part to accomplish either of these goals could harm our future financial condition and results of operations.

Compliance with data use, privacy, and security laws will be an inherent feature in our product design and a change in those laws could negatively affect the value of our Industrial Generative AI solutions.

We seek to provide generative AI solutions, as well as quantum inspired and quantum information processing enhanced AI solutions to large enterprise users located anywhere in the world. We anticipate that the data required to be processed by such solutions can be located in different jurisdictions, subject to different and changing data laws. We also anticipate that our future enterprise customers may have their own policies with respect to the manner in which the data they maintain can be handled, stored, and used. Our Industrial Generative AI solutions are and will continue to be designed to permit compliance with any applicable data laws or internal IT policy of enterprise customers.

There can be no assurance, however, that our software product design is adequate to permit the deployment of our Industrial Generative AI solutions in compliance with existing data laws or customer policies or that these laws and/or policies will not change in the future in a way that makes deployment of our solutions impossible or more costly. A failure on our part to design and re-design our software platform to permit compliance with applicable data laws and customer policies could limit our sales, harming our growth and profitability, or in the worst case create substantial contract liability to a customer for causing a breach of applicable data laws with respect to the customer’s data.

We are potentially subject to governmental export and import control laws that could negatively impact our business.

As are all U.S.-based businesses, we are subject to various U.S. laws prohibiting the export of certain goods and services and imposing certain trade sanctions. Presently, quantum software including quantum inspired techniques and AI software are not generally subject to the U.S. export control regime but could be subject to those controls depending on the specific application the software would be used to address. Moreover, the list of goods and services subject to the U.S. export control regime is expected to change and grow in the future to include additional items relating to quantum computing. These laws might limit our ability to sell our Industrial Generative AI solutions to customers.

In addition, under the “deemed export” rules, to the extent the export control laws prohibit a sale of certain technology to non-U.S. customers the laws also prohibit disclosure of that technology to non-U.S. persons. Our workforce is global and includes non-U.S. employees. A prohibition on disclosure of certain of our technology to such employees could be disruptive to our business and cause delays and additional expense in developing, selling, and supporting our Industrial Generative AI solutions.

There can be no assurance that our efforts to comply with current and future export control laws will be successful and the failure to do so could result in significant expense associated with governmental investigation and/or enforcement action. There also can be no assurance that the export control laws or changes to those laws will not limit our ability to sell our Industrial Generative AI solutions or affect our internal operations in a way that causes a material adverse impact on our financial condition or profitability.

We are subject to U.S. and foreign anti-corruption, anti-bribery, and similar laws, the violation of which can lead to substantial harm to our business.

We are subject to various anti-corruption and anti-bribery laws in the U.S., including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the U.S. domestic bribery laws, the U.K. Bribery Act, and other anti-corruption and anti-money laundering laws in the countries in which we conduct activities. Such laws prohibit companies, their employees, and their third-party agents and representatives from authorizing, promising, offering, soliciting, or accepting, directly or indirectly, improper payments or benefits to or form any person whether in the public or private sector. Awareness of and compliance with these laws is of particular concern to us, because we are and intend in the future to be doing business with both U.S. and foreign entities, some of which are affiliates of the U.S. or foreign governments. In addition, our business is likely to require us to seek governmental approvals from time to time. Detecting, investigating, and resolving any actual or alleged violations of these laws can be expensive and time-consuming.

There can be no assurance that our efforts to comply with these laws will be successful and a failure to comply, whether such failure results from the actions of our own employees or a third-party representing us, could result in costly internal or outside investigations, whistleblower complaints, governmental investigations and enforcement actions, substantial financial settlements, fines or other criminal penalties, injunctions or other bans limiting our ability to do business, reputational harm, and other collateral consequences, any of which could have a material adverse effect on our profitability and the value of our Common Stock.

We have customers and sales teams outside the United States, where we may be subject to increased business and economic risks that could harm our business.

We have customers in two countries. We also have several active business development activities in countries outside of North America, including Asia (e.g., Japan and Singapore) and Europe (e.g., the United Kingdom, Spain and Denmark). We expect to continue to expand our international marketing efforts. Any new markets or countries into which we attempt to sell our Industrial Generative AI solutions may not be receptive. For example, we may not be able to expand further in some markets if we are not able to satisfy certain government-and industry-specific requirements. In addition, our ability to manage our business and conduct our operations internationally in the future may require considerable management attention and resources and is subject to the particular challenges of supporting an early-stage company with limited resources in an environment of multiple languages, cultures, customs, legal and regulatory systems, alternative dispute systems, and commercial markets. Future international expansion will require investment of significant funds and other resources. Operating internationally subjects us to new risks and may increase risks that we currently face, including risks associated with:

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recruiting and retaining talented and capable employees outside the United States and maintaining our company culture across all of our offices;

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potentially different pricing environments, longer sales cycles, and longer accounts receivable payment cycles and collections issues;

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compliance with applicable international laws and regulations, including laws and regulations with respect to privacy, data protection, and consumer protection, and the risk of penalties to us and individual members of management or employees if our practices are deemed to be out of compliance;

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operating in jurisdictions that do not protect intellectual property rights to the same extent as does the United States and the practical enforcement of such intellectual property rights outside of the United States;

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securing our locally operated systems and our data and the data of our customers and partners accessible from such jurisdictions;

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compliance by us and our business partners with anti-corruption laws, import and export control laws, tariffs, trade barriers, economic sanctions, anti-money laundering laws and other regulatory limitations on our ability to provide our Industrial Generative AI solutions in certain international markets;

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foreign exchange controls that might require significant lead time in setting up operations in certain geographic territories and might prevent us from repatriating cash earned outside the United States;

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political and economic instability, including military actions affecting Russia, Ukraine and/or surrounding regions, changes in political conditions in China and changes in the state of China-U.S. relations, including any tensions relating to potential military conflict between China and Taiwan;

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changes in diplomatic and trade relationships, including the imposition of new trade restrictions, trade protection measures, import or export requirements, trade embargoes, and other trade barriers;

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generally longer payment cycles and greater difficulty in collecting accounts receivable;

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double taxation of our international earnings and potentially adverse tax consequences due to changes in the income and other tax laws of the United States or the international jurisdictions in which we operate; and

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higher costs of doing business internationally, including increased accounting, travel, infrastructure, and legal compliance costs.

Compliance with laws and regulations applicable to our global operations substantially increases our cost of doing business in international jurisdictions. We may be unable to keep current with changes in laws and regulations as they occur. Although we have implemented policies and procedures designed to support compliance with these laws and regulations, there can be no assurance that we will always maintain compliance or that all of our employees, contractors, partners, and agents will comply. Any violations could result in enforcement actions, fines, civil and criminal penalties, damages, injunctions, or reputational harm. If we are unable to comply with these laws and regulations or manage the complexity of our global operations successfully, we may need to relocate or cease operations in certain foreign jurisdictions.

We are exposed to risks associated with litigation, investigations, and regulatory proceedings.

We may in the future face legal, administrative, regulatory, and/or criminal proceedings that are based on a variety of individual or governmental complaints against us, including by way of example: shareholder direct or derivative actions alleging violations of the securities laws by the company or breach of fiduciary duty by our directors; challenges to our IP brought by competitors; breach of contract claims asserted by customers; employee lawsuits asserting violation of various employment or whistleblower laws; or governmental actions based on alleged violations of securities, tax, anti-trust, export control, data privacy, or other applicable laws. Litigation and regulatory proceedings are inherently uncertain, but in nearly every instance are time-consuming, expensive, and cause reputational damage. The potential outcomes can include substantial monetary awards, limitations on our ability to do business, or criminal liability on the part of the company and/or some of its officers, directors, or employees. In some instances, it may not be possible to obtain insurance against specific risks. Even when insurance is available, we may not have purchased such insurance either by oversight or by a conscious decision that the cost of the insurance did not justify its purchase. We also cannot guarantee that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.

In addition, we may conclude in the future to bring a legal action against a customer or competitor, for example to recover damages caused to us. Such litigation can be lengthy, time-consuming, and expensive and the

outcome is uncertain. Because of these considerations, such litigation is often settled for an amount materially less than the actual damage caused.

There can be no assurance that we will not be subject of litigation, investigations, and/or regulatory proceedings which, whether singly or cumulatively, will have a material adverse effect on our financial condition or ability to do business. Nor can there be any assurance that we will prevail in any litigation brought by us or even if we do prevail that an award or settlement will timely or adequately compensate us for the losses the litigation sought to recover.

Our business and operations could be negatively affected if we become subject to any securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the stock price of our Common Stock or other reasons may in the future cause us to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and the attention and resources of our board of directors (our “Board”) from our business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist shareholder matters. Further, its stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

Risks Outside Our Specific Business

Our business relies on computer systems which are vulnerable to attack and/or failure.

As is the case with nearly every business, we rely on computers and computer networks, both public and private, to perform most of the actions required for us to do business, including internal and external communications, development of our software and IP, storage of our business and financial records, and deployment of our Industrial Generative AI solutions. Such computer systems are inherently susceptible to unintentional failures as well as various forms of cyber-attack, including denial of service attacks, ransomware attacks, email hacking and phishing, computer malware and viruses, and social engineering attacks. Like other companies, we may also be the subject of unauthorized access resulting from employee misconduct. These risks are potentially greater for us because the nature of our business provides an additional incentive for bad actors, including foreign nation states and domestic and foreign businesses, to attack our systems for the purpose of gaining information about generative AI, quantum computing and quantum algorithms, the development of which currently is a priority for many businesses and countries.

Our Orquestra platform is built to be accessed through third-party public cloud providers such as AWS and Azure. These providers may also experience breaches and attacks to their products which may impact our systems. Data security breaches may also result from non-technical means, such as actions by an employee with access to our systems. While we and our third-party cloud providers have implemented security measures designed to protect against security breaches, these measures could fail or may be insufficient, resulting in the unauthorized disclosure, modification, misuse, destruction, or loss of sensitive or confidential information.

Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information, or our technology systems, or those of the third

parties upon whom we rely. A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our platform or other software. Any actual or potential security breach of our software, our operational systems, our physical facilities, or the systems or facilities of our vendors, or the perception that one has occurred, could result in adverse consequences, such as litigation, indemnity obligations, regulatory enforcement actions, investigations, fines, penalties, mitigation and remediation costs, disputes, reputational harm, diversion of management’s attention, and other liabilities and damage to our business. Even though we do not control the security measures of third parties, we may be perceived or asserted to be responsible for any breach of such measures or suffer reputational harm even where we do not have recourse to the third party that caused the breach. In addition, any failure by our vendors to comply with applicable law or regulations could result in proceedings against us by governmental entities or others, with further financial, operational, and reputational damage.

The costs to respond to a security breach and/or to mitigate any security vulnerabilities that may be identified could be significant, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service, negative publicity, and other harm to our business and our competitive position. We could be required to fundamentally change our business activities and practices in response to a security breach or related regulatory actions or litigation, which could have an adverse effect on our business. In addition, laws, regulations, government guidance, and industry standards and practices in the United States and elsewhere are rapidly evolving to combat these threats. We may face increased compliance burdens regarding such requirements from regulators and customers regarding our products and services and also incur additional costs for oversight and monitoring of security risks relating to our own services. Most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities, and others of security breaches involving certain types of data. In addition, our agreements with certain customers and partners may require us to notify them in the event of a security breach involving customer or partner data on our systems. Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures, and require us to expend significant capital and other resources to respond to or alleviate problems caused by the actual or perceived security breach may cause us to breach customer contracts.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information; litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms. Litigation resulting from security breaches may adversely affect our business. Unauthorized access to our software, systems, networks, or physical facilities could result in litigation with our customers or other relevant stakeholders. These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business, or adversely affect our reputation. We could be required to fundamentally change our business activities and practices or modify our software capabilities in response to such litigation, which could have an adverse effect on our business. If a security breach were to occur, and the confidentiality, integrity or availability of our data or the data of our partners or our customers was disrupted, we could incur significant liability, or our software, systems, or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.

We may not have adequate insurance coverage for security incidents or breaches, including fines, judgments, settlements, penalties, costs, attorney fees and other impacts that arise out of incidents or breaches. Depending on the facts and circumstances of such an incident, the damages, penalties and costs could be significant and may not be covered by insurance or could exceed our applicable insurance coverage limits. If the impacts of a security incident or breach, or the successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), it could have an adverse effect on

our business. In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to all or part of any future claim or loss. Our risks are likely to increase as we grow our customer base, and store, transmit, and otherwise process increasingly large amounts of proprietary and sensitive data. There can be no assurance that we can successfully prevent such occurrences, which could damage our reputation and/or result in the theft our important IP, either of which could damage our business prospects and future profitability.

Widespread damage to the global economy would likely adversely affect our business.

The global economy as a whole is susceptible to conditions unrelated to us or the computing industry, including pandemics such as COVID-19, economic recession or depression, international trade wars, the imposition of tariffs on our products, political unrest, natural catastrophes, climate change, terrorism, wars between nation states, or other matters that could have a general widespread negative impact on global commerce. Any such condition could affect our business in one or more of a variety of ways, including reducing or eliminating the availability of capital at a time we require such capital, denying us the ability to sell our Industrial Generative AI solutions in certain countries around the world, restricting our ability to hire qualified employees needed to effectuate our business plan, causing customers to reduce or eliminate their expenditures on generative AI computing or quantum techniques enhanced software, and/or preventing our customers from paying amounts owed to us.

Damage to the global economy could materially harm our business and if we are unable to persevere through such adverse conditions could cause us to fail.

Risks Relating to Ownership of our Common Stock

An active trading market for our Common Stock may never develop or be sustained, which may cause shares of our Common Stock to trade at a discount to the price implied by the Merger and make it difficult to sell shares of our Common Stock.

Our Common Stock is listed on Nasdaq under the symbol “ZPTA.” However, we cannot assure you that an active trading market for our Common Stock will develop on that exchange or elsewhere or, if developed, that any such trading market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our Common Stock will develop or be maintained, the liquidity of any trading market, your ability to sell your shares of our Common Stock when desired or the prices that you may obtain for your shares.

The market price of our Common Stock may be volatile and fluctuate substantially, which could cause the value of your investment to decline.

The trading price of our Common Stock is likely to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our Common Stock. Factors that could cause fluctuations in the trading price of our Common Stock include the following:

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price and volume fluctuations in the overall stock market from time to time;

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volatility in the trading prices and trading volumes of technology industry stocks;

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changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;

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sales of shares of our Common Stock by stockholders or by us;

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failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors;

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the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections;

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announcements by us or our competitors of new offerings;

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the public’s reaction to our press releases, other public announcements and filings with the SEC, including the registration statement of which this prospectus is a part;

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rumors and market speculation involving us or other companies in our industry;

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actual or anticipated changes in our results of operations or fluctuations in our results of operations;

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actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally;

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litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;

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developments or disputes concerning our intellectual property or other proprietary rights;

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announced or completed acquisitions of businesses, services or technologies by us or our competitors;

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new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

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changes in accounting standards, policies, guidelines, interpretations or principles;

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any significant change in our management;

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economic instability in the global financial markets and slow or negative growth of our markets; and

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other factors described in this “Risk Factors” section.

In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

As a former shell company, we will face certain disadvantages relative to companies that pursue a traditional initial public offering, including ineligibility for certain forms and rules for extended periods.

Prior to the Merger, we were a special purpose acquisition company, a form of shell company under the rules of the SEC. Shell companies are more highly regulated than non-shell operating companies and face significant additional restrictions on their activities under federal securities laws. Following the Merger, we are no longer a shell company. However, companies that were formerly shell companies continue to face disadvantages under SEC rules, including (a) the inability to use Form S-3 until at least one year after the filing of information equivalent to that required by Form 10 after ceasing to be a shell company, (b) the inability to qualify as a “well-known seasoned issuer” and file automatically effective registration statements for three years after ceasing to be a shell company, (c) the inability to “incorporate by reference” information in certain registration statements filed under the Securities Act for a period of three years after ceasing to be a shell company, (d) the inability to use most free writing prospectuses until at least three years after a qualifying business combination, (e) the inability to use Form S-8 to register shares issuable in connection with certain compensatory plans and arrangements until 60 days after the filing of information equivalent to that required by Form 10, (f) the inability of stockholders to rely on Rule 144 for resales of securities until at least one year after the filing of information equivalent to that required by Form 10 and the provision of current public information, and (g) exclusion from certain safe harbors for offering-related communications under the Securities Act for three years after ceasing to be a shell company, including for research reports and certain communications in connection with business combinations. For more information about Rule 144 and its potential impact on our stockholders, please see the section titled “Securities Act Restrictions on Resale of Common Stock” in this

prospectus. We expect that these disadvantages will make it more challenging and expensive, and create greater risks and delays, for us and our stockholders to offer securities. These challenges may make our securities less attractive than those of companies that are not former shell companies and may raise our relative cost of capital.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Common Stock, the market price and trading volume of our Common Stock could decline.

The trading market for our Common Stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our business. We do not currently have, and may never obtain, research coverage by industry or financial analysts. If no, or few, analysts commence coverage of us, the trading price of our Common Stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts covering our business downgrade their evaluations of our Common Stock, the price of our Common Stock could decline. If one or more of these analysts cease to cover our Common Stock, we could lose visibility in the market for our Common Stock, which in turn could cause our stock price to decline.

Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of Common Stock.

Securities research analysts may establish and publish their own periodic projections for us. These projections may vary widely and may not accurately predict the results we actually achieve. The share price of our Common Stock may decline if our actual results do not match the projections of these securities research analysts. If any of the analysts who may cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, change their recommendation regarding shares of our Common Stock adversely or provide more favorable relative recommendations about our competitors, the price of shares of our Common Stock would likely decline. If one or more of these analysts ceases covering us or fails to publish reports on us regularly, the share price or trading volume of our Common Stock could decline.

We incurred significant costs as a result of the Merger and will incur significant increased costs as a result of being a public company, and our management will be required to devote substantial time to new compliance initiatives.

We and Legacy Zapata have both incurred significant, non-recurring costs in connection with consummating the Merger, and have deferred certain closing costs for which we will become obligated to pay as early as May 2024. We may also incur additional costs to retain key employees.

As a public company, we will incur significant legal, accounting and other expenses that Legacy Zapata did not incur as a private company. These expenses may increase even more after it is no longer an “emerging growth company.” Our management and other personnel will need to devote a substantial amount of time and incur significant expense in connection with compliance initiatives. For example, we will need to implement additional internal controls, both generally and to address the material weaknesses discussed in “Risks Related to Zapata’s Financial Condition and Status as an Early Stage Company,” and disclosure controls and procedures, retain a transfer agent and adopt an insider trading policy. As a public company, we will bear all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under the securities laws.

In addition, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act, and the related rules and regulations implemented by the SEC and Nasdaq, have increased legal and financial compliance costs and will make some compliance activities more time-consuming. For example, Nasdaq imposes requirements to obtain stockholder approval for the issuance of equity securities in a variety of circumstances, and this requirement can limit the financing alternatives available to us and thereby increase the cost of capital, which could reduce shareholder returns. We intend to invest resources to comply

with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from our other business activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and we could be subject to the delisting of our Common Stock, fines, sanctions and other regulatory action, which may be harmful to its business. In the future, it may be more expensive or more difficult for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on its audit committee and compensation committee, and qualified executive officers.

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

Our Common Stock is listed on Nasdaq under the symbol “ZPTA.” However, there is no guarantee that we will be able to comply with the continued listing standards of Nasdaq. If Nasdaq delists our Common Stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences, including:

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reduced liquidity;

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a limited availability of market quotations for Common Stock;

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a potential determination that Common Stock is a “penny stock,” which will require brokers trading in Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of Common Stock;

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a limited amount of analyst coverage; and

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a decreased ability to issue additional securities or obtain additional financing in the future.

Our management team has limited experience in operating a public company.

Our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Executives’ limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage as they will likely need to devote an increasing amount of their time to these activities, resulting in less time being devoted to our management and growth. We may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies.

Future issuances of Common Stock or rights to purchase Common Stock, including pursuant our 2024 Plan or 2024 ESPP, or in connection with a Dilutive Offering Reset under the Forward Purchase Agreement, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We have approximately 571.0 million shares of Common Stock authorized but unissued as of March 31, 2024. Our Certificate of Incorporation and the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”) authorize us to issue these shares of Common Stock and options, rights, warrants and appreciation rights relating to Common Stock for the consideration and on the terms and conditions established by our Board in its sole discretion, whether in connection with acquisitions, or otherwise.

We have outstanding Senior Secured Notes with an aggregate principal amount of $2,000,000 that are convertible at the option of the holder at a price of $8.50 per share, a Purchase Agreement with Lincoln Park,

pursuant to which we may instruct Lincoln Park to purchase our shares, and a Forward Purchase Agreement, pursuant to which, in certain circumstances, Sandia may be entitled to purchase Additional Shares from us. See “Risk Factors—We will need additional capital to continue as a going concern, implement our business plan or respond to business opportunities or unforeseen circumstances and such financing may not be available.”

In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt (subject to the limitations under the Senior Secured Notes) or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our then-existing stockholders, reduce the market price of our Common Stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Common Stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond its control, which may adversely affect the amount, timing, or nature of its future offerings. As a result, holders of our Common Stock bear the risk that our future offerings may reduce the market price of our Common Stock and dilute their percentage ownership.

We do not currently intend to pay cash dividends on our Common Stock, so any returns will be substantially limited to the value of our Common Stock.

We have no current plans to pay any cash dividends on our Common Stock. The declaration, amount and payment of any future dividends on shares of our Common Stock will be at the sole discretion of our Board. We currently anticipate that we will retain future earnings for the development, operation and expansion of its business and do not anticipate declaring or paying any cash dividends from future earnings for the foreseeable future. In addition, our ability to pay dividends may be limited by covenants under indebtedness that we or our subsidiaries may incur in the future, as well as other limitations and restrictions imposed by law. As a result, you may not receive any return on an investment in our Common Stock unless you sell our Common Stock at a greater price than that which you paid for it.

Our Certificate of Incorporation designates a state or federal court located within the State of Delaware as the exclusive forum for certain disputes between our stockholders and us, and also provides that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders, or employees.

Our Certificate of Incorporation provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any internal or intra-corporate claim or any action asserting a claim governed by the internal affairs doctrine, including, but not limited to, (i) any derivative action brought by a stockholder on our behalf, (ii) any claim of breach of a fiduciary duty owed by any of our directors, officers, stockholders, or employees and (iii) any claim against us arising under our Certificate of Incorporation, Bylaws or the DGCL. The Certificate of Incorporation designates the United States District Court for the District of Delaware as the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

This exclusive forum provision will not apply to claims under the Exchange Act, but will apply to other state and federal law claims including actions arising under the Securities Act. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.

This choice of forum provision may have the effect of increasing costs for investors to bring a claim against us and our directors and officers and of limiting a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage (but not prevent) lawsuits with respect to such claims.

Delaware law and provisions in our Certificate of Incorporation and Bylaws might discourage, delay or prevent a change in control of the Company or changes in our management and, therefore, depress the trading price of our Common Stock.

Our status as a Delaware corporation and the anti-takeover provisions of the DGCL may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder without the approval of holders of two-thirds of the voting power of our stockholders other than the interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our Certificate of Incorporation and Bylaws contain provisions that may make the acquisition of the Company more difficult, including the following:

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our Board is classified into three classes of directors with staggered three-year terms, and directors can only be removed from office for cause by the affirmative vote of holders of at least a majority of the voting power of our then-outstanding capital stock;

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certain amendments to our Certificate of Incorporation will require the approval of stockholders holding two-thirds of the voting power of its then-outstanding capital stock;

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our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter;

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vacancies on our Board will be able to be filled only by our Board and not by stockholders;

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certain litigation against us can only be brought in Delaware;

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our Certificate of Incorporation authorizes undesignated preferred stock, the terms of which may be established by our Board, which shares may be issued without the approval of the holders of our capital stock; and

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advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

These anti-takeover defenses could discourage, delay, or prevent a transaction involving a change in control of the Company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing or to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of Common Stock.

Our Common Stock is and will be subordinate to all of our indebtedness, future indebtedness, and any preferred stock, and effectively subordinated to all indebtedness and preferred equity claims against its subsidiaries.

Shares of our Common Stock are common equity interests and, as such, is junior to the Senior Secured Notes and will rank junior to all of our future indebtedness and other liabilities. Additionally, holders of our Common Stock may become subject to the prior dividend and liquidation rights of holders of any series of preferred stock that our Board may designate and issue without any action on the part of the holders of our Common Stock. Furthermore, our right to participate in a distribution of assets upon any of its subsidiaries’ liquidation or reorganization is subject to the prior claims of that subsidiary’s creditors and preferred stockholders.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups (“JOBS”) Act, and for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in which we have total annual gross revenue of over $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock held by non-affiliates exceeds $700 million as of the last business day of the second fiscal quarter of such year and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock, and our stock price may be more volatile.

Further, we will also be a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates was less than $700 million measured on the last business day of our second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of its financial statements with other public companies difficult or impossible.

The expected registration of our Common Stock pursuant to certain registration rights granted to the Sponsors, certain stockholders of Legacy Zapata, stockholders who received shares of Common Stock upon conversion and exchange of the Senior Secured Notes, and Sandia, and the potential exercise of additional rights under the Resale Registration Rights Agreement (as defined below) may adversely affect the market price of our Common Stock.

Prior to the Merger, we, the Sponsors, certain stockholders of Legacy Zapata, stockholders who received shares of Common Stock upon conversion and exchange of the Senior Secured Notes, and Sandia, all entered into agreements providing for certain resale registration rights. Pursuant to such agreements, we have agreed to file a registration statement with respect to the registrable securities within the time periods specified in such agreements, up to within 45 days of the closing of the Merger. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Common Stock.

Additionally, up to twice in any 12-month period, certain of our and Legacy Zapata’s stockholders party to the Amended and Restated Registration Rights Agreement, dated as of September 6, 2023, by and among certain of our security holders and us (the “Resale Registration Rights Agreement”) may request to sell all or any portion of their registrable securities in an underwritten offering so long as the total offering price is reasonably expected to exceed $50 million or all of such holders’ remaining registrable securities. We also agreed to provide customary “piggyback” registration rights, subject to certain exceptions.

The exercise of Warrants of our stock would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. Such dilution will increase if more of our shares are redeemed.

As of March 28, 2024, we had outstanding Warrants to purchase an aggregate of 25,019,904 shares of our Common Stock, comprised of 11,469,904 Public Warrants and 13,550,000 Private Warrants. These Warrants will become exercisable at any time commencing on April 27, 2024. The likelihood that those Warrants will be exercised increases if the trading price of shares of our stock exceeds the exercise price of the Warrants. The exercise price of these Warrants is $11.50 per share.

There is no guarantee that the Warrants will ever be in the money after they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless.

To the extent the Warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders of our stock and increase the number of shares eligible for resale in the public market. Holders of Warrants do not have a right to redeem the Warrants. Sales of substantial numbers of shares of Common Stock issued upon the exercise of Warrants in the public market or the potential that such Warrants may be exercised could also adversely affect the market price of our Common Stock.

USE OF PROCEEDS

We will not receive any proceeds from the sale of Common Stock by Lincoln Park in this offering. We may receive up to $75.0 million in gross proceeds from the shares of Common Stock that we may sell to Lincoln Park pursuant to the Purchase Agreement from time to time after the date that the registration statement of which this prospectus is a part is declared effective. However, we are unable to estimate the actual amount of proceeds that we may receive, as it will depend on the number of shares of Common Stock that we choose to sell, our ability to meet the conditions set forth in the Purchase Agreement, market conditions and the price of shares of our Common Stock, among other factors. See “Plan of Distribution” elsewhere in this prospectus for more information.

We intend to use the net proceeds from this offering for general corporate purposes, which may include business opportunities and the repayment of indebtedness, including deferred expenses incurred in connection with the Merger.

The amounts and timing of our actual expenditures will depend on numerous factors, including the factors described under “Risk Factors” in this prospectus and in any accompanying prospectus supplements, as well as the amount of cash used in our operations. We may find it necessary or advisable to use the net proceeds for other purposes, and we will have broad discretion in the application of the net proceeds.

DILUTION

The sale of Common Stock to Lincoln Park pursuant to the Purchase Agreement will have a dilutive impact on our stockholders. In addition, the lower the price of the Common Stock is at the time we exercise our right to sell Common Stock to Lincoln Park, the more Common Stock we will have available to issue to Lincoln Park pursuant to the Purchase Agreement and our existing shareholders would experience greater dilution.

The price that Lincoln Park will pay for the Common Stock to be resold pursuant to this prospectus will depend upon the timing of sales and will fluctuate based on the trading price of Common Stock.

Our net tangible book deficit as of December 31, 2023 on a pro forma basis after giving effect to the closing of the Merger and the other transactions contemplated thereby was $(16.7) million, or $(0.57) per share, based on 29,092,879 shares of Common Stock outstanding as of March 28, 2024, after giving effect to the closing of the Merger. After giving effect to the assumed sale of 13,000,000 shares of Common Stock to Lincoln Park pursuant to the Purchase Agreement at a price of $2.37 per share, the last reported sales price of the Common Stock on Nasdaq on April 10, 2024, (which represents aggregate gross sale proceeds of approximately $29.1 million), and after the issuance of 712,025 shares of Common Stock to Lincoln Park as Commitment Shares and after deducting estimated offering expenses of $250,000 payable by us, our pro forma as-adjusted net tangible book value as of December 31, 2023 would have been approximately $12.2 million, or $0.29 per share. This represents an immediate increase in net tangible book value of $0.86 per share to existing shareholders and an immediate dilution of $2.08 per share to investors in this offering.

For further illustrative purposes, at an approximate minimum average purchase price of $6.11 per share, the offering of Common Shares pursuant to this prospectus, which consists of 13,000,000 shares of Common Stock (including 712,025 Commitment Shares), would be sufficient to sell the entirety of the $75.0 million of Common Stock permitted to be sold to Lincoln Park under the Purchase Agreement. At a lower average purchase price per share, the registration of additional shares of Common Stock would be required if we sought to sell the entire $75.0 million of Common Stock. At an assumed average purchase price equal to the Floor Price of $0.50, we would need to register an additional 137,712,025 shares of Common Stock (or 150,712,025 shares of Common Stock in aggregate) in order to sell the entire $75.0 million of Common Stock to Lincoln Park under the Purchase Agreement. We are not required to sell to Lincoln Park and register for resale any additional shares of Common Stock.

Assuming that that the Common Stock was sold at an average price equal to the Floor Price of $0.50 per share and that we were to register sufficient additional shares of Common Stock in order to sell the entire $75.0 million of Common Stock to Lincoln Park under the Purchase Agreement, after giving effect to the assumed sale of such 150,000,000 shares of Common Stock, the issuance of 712,025 shares to Lincoln Park as Commitment Shares and after deducting estimated offering expenses of $250,000 payable by us, our pro forma as-adjusted net tangible book value as of December 31, 2023 would have been approximately $58.0 million, or $0.32 per share. This represents an immediate increase in net tangible book value of $0.90 per share to existing shareholders and an immediate dilution of $0.18 per share to investors in this offering.

The number of shares of Common Stock outstanding as of December 31, 2023 on a pro forma basis after giving effect to the closing of the Merger and the other transactions contemplated thereby, and the Forward Purchase Agreement, excludes:

•

3,491,146 shares initially reserved under the 2024 Plan;

•

581,858 shares initially reserved under the 2024 ESPP;

•

13,550,000 shares of Common Stock underlying Private Warrants;

•

11,469,904 shares of Common Stock underlying Public Warrants; and

•

3,016,409 shares of our common stock issuable upon the exercise of options assumed from Legacy Zapata as a result of the Merger.

MARKET PRICE AND DIVIDEND INFORMATION

Market Price

The Common Stock is listed on the Nasdaq Global Market under the symbol “ZPTA” and the Public Warrants are listed on the Nasdaq Capital Market under the symbol “ZPTAW.” Prior to the consummation of the Merger, the Company’s Class A Common Stock, units and Public Warrants were traded on the New York Stock Exchange under the symbols “WNNR,” “WNNR.U” and “WNNR.WS,” respectively.

The closing price of the Common Stock and Public Warrants on April 11, 2024, as reported by Nasdaq, was $2.50 and $0.1492, respectively.

Holders

As of April 11, 2024, there were 123 holders of record of our Common Stock. The number of holders of record does not include “street name” holders or beneficial holders whose shares of Common Stock are held of record by banks, brokers and other financial institutions.

Dividend Policy

We have not paid any cash dividends to date. We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. The payment of cash dividends in the future will depend on our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our Board. Our ability to declare dividends may also be limited by restrictive covenants under any future debt financing agreements.

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information (“pro forma financial information”) is based on the historical financial statements of the Company and Legacy Zapata, adjusted to depict the accounting of the Merger as described in Note 1 to the pro forma financial information. The unaudited pro forma condensed combined balance sheet as of December 31, 2023 reflects adjustments that depict the accounting of the Merger (the “Balance Sheet Pro Forma Transaction Accounting Adjustments”). The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023 reflects the Statement of Operations Pro Forma Transaction Accounting Adjustments assuming those adjustments were made as of January 1, 2023, which is the beginning of the earliest period presented (“Statement of Operations Pro Forma Transaction Accounting Adjustments”). Collectively, the Balance Sheet Pro Forma Transaction Accounting Adjustments and Statement of Operations Pro Forma Transaction Accounting Adjustments are referred to in this section as “transaction accounting adjustments.”

The pro forma financial information has been derived from and should be read in conjunction with the following historical financial statements and the accompanying notes, which are included elsewhere in this prospectus:

•

the accompanying notes to the pro forma financial information;

•

the Company’s historical audited financial statements as of and for the year ended December 31, 2023 and the related notes included elsewhere in this prospectus;

•

the historical audited consolidated financial statements of Legacy Zapata as of and for the year ended December 31, 2023 and the related notes included elsewhere in this prospectus;

•

Legacy Zapata’s Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus; and

•

other information relating to the Company and Legacy Zapata included elsewhere in this prospectus; and

The pro forma financial information is provided for illustrative purposes only and is not necessarily indicative of what the actual results of operations and financial position would have been had the Merger taken place on the dates indicated, nor is it indicative of the future consolidated results of operations or financial position of the combined company.

The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

ZAPATA COMPUTING, INC./ANDRETTI ACQUISITION CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2023

(in thousands)


	Historical				Actual Redemption
					Transaction Accounting Adjustments					Pro Forma Balance Sheet
	Company		Legacy Zapata		Transaction Accounting Adjustments					Pro Forma Balance Sheet
ASSETS
Current assets:
Cash and cash equivalents	$	161	$	3,332	$	30		5	(c)	$	8,888
						6,000		5	(d)
						72		5	(f)
						(370	)	5	(l)
						(464	)	5	(m)
						(11	)	5	(n)
						1,923		5	(o)
						(1,785	)	5	(s)
Accounts receivable		—		1,938		(829	)	5	(a)		1,109
Accounts receivable - related party		—		—		829		5	(a)		829
Prepaid expenses and other current assets		44		323		(44	)	5	(k)		323

Total current assets		205		5,593		5,351					11,149
Marketable Securities held in Trust Account		86,265		—		(66,451	)	5	(b)		—
						(11,040	)	5	(h)
						(330	)	5	(i)
						(64	)	5	(m)
						(6,457	)	5	(n)
						(1,923	)	5	(o)
Property and equipment, net		—		156		—					156
Operating lease right-of-use assets		—		238		—					238
Deferred offering costs		—		1,943		(1,943	)	5	(s)		—
Non-current assets		—		137		—					137

Total assets	$	86,470	$	8,067	$	(82,857	)			$	11,680

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—	$	6,452	$	(1,500	)	5	(a)	$	4,140
						(812	)	5	(s)
Accounts payable - related party		—		—		1,500		5	(a)		1,500
Accrued and other current liabilities		885		1,945		(217	)	5	(a)		6,435
						671		5	(m)
						3,151		5	(s)
Accrued and other current liabilities - related party		—		—		217		5	(a)		217
Accrued interest payable - related party		71		—		255		5	(f)		—
						(326	)	5	(i)
Operating lease liability, current		—		252		—					252
Liability for common stock to be issued		—		—		1,688		5	(v)		1,688
Deferred legal fee		—		—		3,330		5	(l)		3,330
Convertible note - related party		—		—		1,577		5	(i)		1,577
Deferred revenue		—		744		—					744

Total current liabilities		956		9,393		9,534					19,883
Deferred underwriting fee payable		8,050		—		(8,050	)	5	(j)		—
Convertible note - related party		2,450		—		72		5	(f)		941
						(1,581	)	5	(i)
Deferred legal fee		4,040		—		(4,040	)	5	(l)		—
Notes payable, non-current		—		8,900		6,091		5	(d)		2,020
						1,000		5	(s)
						150		5	(t)
						539		5	(q)
						(14,660	)	5	(r)

ZAPATA COMPUTING, INC./ANDRETTI ACQUISITION CORP. (Continued)

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2023

(in thousands)


	Historical						Actual Redemption
							Transaction Accounting Adjustments					Pro Forma Balance Sheet
	Company			Legacy Zapata			Transaction Accounting Adjustments					Pro Forma Balance Sheet
Forward purchase agreement derivative liability		—			—			4,935		5	(h)		4,935
Non-current liabilities		—			—			616		5	(m)		616

Total liabilities		15,496			18,293			(5,394	)				28,395

SPAC Class A Common Stock, subject to possible redemption		86,264			—			(66,451	)	5	(b)		—
								(19,813	)	5	(p)
Legacy Zapata Convertible Preferred Stock		—			64,716			(64,716	)	5	(u)		—
Stockholders’ equity (deficit):
SPAC Preference Shares		—			—			—		5	(g)		—
SPAC Class A Common Stock		—			—			—		5	(g)		—
SPAC Class B Common Stock		1			—			(1	)	5	(g) 5(p)		—
Legacy Zapata Common Stock		—			—			—		5	(c)		—
								—		5	(u)
Common Stock		—			—			—		5	(h)		3
								1		5	(p)
								—		5	(r)
								—		5	(s)
								2		5	(u)
								—		5	(w)
Additional paid-in capital		—			14,633			30		5	(c)		84,368
								8,751		5	(e)
								(10,986	)	5	(h)
								8,050		5	(j)
								19,813		5	(p)
								14,660		5	(r)
								(6,775	)	5	(s)
								36,192		5	(u)
								—		5	(w)
Accumulated other comprehensive loss		—			(49	)		—					(49	)
Accumulated deficit		(15,291	)		(89,526	)		(91	)	5	(d)		(101,037	)
								(8,751	)	5	(e)
								(255	)	5	(f)
								(4,989	)	5	(h)
								(44	)	5	(k)
								(1,815	)	5	(m)
								(6,468	)	5	(n)
								340		5	(l)
								(539	)	5	(q)
								(292	)	5	(s)
								(150	)	5	(t)
								28,522		5	(u)
								(1,688	)	5	(v)

Total stockholders’ equity (deficit)		(15,290	)		(74,942	)		73,517					(16,715	)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	86,470		$	8,067		$	(82,857	)			$	11,680

ZAPATA COMPUTING, INC./ANDRETTI ACQUISITION CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR YEAR ENDED DECEMBER 31, 2023

(in thousands, except share and per share data)


	Historical						Actual Redemption
							Transaction Accounting Adjustments					Pro Forma Statement of Operations
	Company			Legacy Zapata			Transaction Accounting Adjustments					Pro Forma Statement of Operations
Revenue	$	—		$	5,683		$	(1,980	)	6(a	)	$	3,703
Revenue - related party		—			—			1,980		6(a	)		1,980

Total revenue		—			5,683			—					5,683
Cost of revenue		—			4,582			—					4,582

Total gross profit		—			1,101			—					1,101
Operating expenses:
Sales and marketing		—			5,885			(2,783	)	6(a	)		3,102
Sales and marketing - related party		—			—			2,783		6(a	)		2,783
Research and development		—			5,915			—					5,915
General and administrative		—			7,409			150		6(j	)		7,559
Formation costs, professional fees and general and administrative costs		8,349			—			(180	)	6(d	)		14,069
								(340	)	6(e	)
								1,815		6(f	)
								2,639		6(g	)
								44		6(h	)
								54		6(n	)
								1,688		6(o	)

Total operating expenses		8,349			19,209			5,870					33,428

Loss from operations		(8,349	)		(18,108	)		(5,870	)				(32,327	)
Other income (expense), net:
Interest earned on marketable securities held in Trust Account		8,157			—			(8,157	)	6(c	)		—
Change in fair value of Convertible Promissory Notes - Related Party		(599	)		—			—					(599	)
Interest expense - Convertible Promissory Notes - Related Party		(71	)		—			(255	)	6(b	)		(326	)
Interest income		—			47			—					47
Extinguishment of Senior Notes		—			(6,864	)		6,864		6(l	)		—
Change in fair value and loss on issuance of Senior Notes and Senior Secured Notes		—			(4,779	)		4,779		6(k	)		—
Loss on issuance of derivative contract		—			—			(4,935	)	6(n	)		(4,935	)
Loss on issuance of Senior Secured Notes		—			—			(8,751	)	6(m	)		(8,751	)
Loss associated with amendments to capital markets advisory agreements		—			—			(3,829	)	6(g	)		(4,121	)
								(292	)	6(i	)
Other expense, net		—			(10	)		—					(10	)

Total other income (expense), net		7,487			(11,606	)		(14,576	)				(18,695	)

Net loss before income taxes		(862	)		(29,714	)		(20,446	)				(51,022	)
Provision for income taxes		—			(20	)		—					(20	)

Net loss	$	(862	)	$	(29,734	)	$	(20,446	)			$	(51,042	)

Weighted average common shares outstanding - basic and diluted		5,750,000			5,104,642			22,213,249		6(p	)		27,963,249

Net loss per share attributable to common stockholders - basic and diluted	$	(0.04	)	$	(5.82	)						$	(1.83	)

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1.	Description of the Merger

Pursuant to the Business Combination Agreement, on March 28, 2024 we completed our planned Merger with Legacy Zapata, pursuant to which Legacy Zapata became our wholly owned subsidiary. In connection with the Merger, we filed an application for deregistration with the Cayman Islands Registrar of Companies and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which we were domesticated and continue as a Delaware corporation (the “Domestication”), and changed our name to “Zapata Computing Holdings Inc.” At the effective time of the Domestication, each outstanding share of Class A Common Stock automatically converted into one share of Common Stock, each outstanding share of Class B Common Stock automatically converted into one share of Common Stock and the Warrants automatically became exercisable for shares of Common Stock. At the effective time of the Merger, existing shareholders of Legacy Zapata received shares of Common Stock in exchange for the securities held prior to the consummation of the Merger. Upon the consummation of the Merger, certain holders of the outstanding Senior Secured Notes elected to convert their notes into shares of Common Stock in accordance with their terms. In connection with the consummation of the Merger, the Common Stock and the Warrants were listed on the Nasdaq Stock Market under the symbols “ZPTA” and “ZPTAW,” respectively. Transaction costs paid and accrued by Legacy Zapata related to the Merger were $7.2 million and will be treated as issuance costs and netted against additional paid-in capital in our pro forma condensed consolidated balance sheet at the Closing of the Merger. Refer to Note 5(s) below.

The aggregate value of the consideration that the holders of Legacy Zapata Capital Stock and Legacy Zapata Options collectively received from the Company in connection with the Merger was approximately $200.0 million.

At the Effective Time:

•

each share of Legacy Zapata Common Stock was converted into the right to receive 0.9141 shares of Common Stock (the “Per Share Common Stock Consideration”).

•

each holder of Legacy Zapata Preferred Stock was converted into the right to receive 0.9141 shares of Common Stock. Legacy Zapata determined that the Merger constituted a deemed liquidation under its charter and, as such, the holders of Legacy Zapata Preferred Stock were entitled to receive an amount per share equal to the greater of i) the applicable original issue price of the applicable series of Legacy Zapata Preferred Stock, plus any dividends declared but unpaid thereon (the “preference”), or ii) such amount per share as would have been payable had all shares of Legacy Zapata Preferred Stock been converted into Legacy Zapata Common Stock immediately prior to the Merger (the “as converted amount”). The Per Share Preferred Stock Consideration was equal to the Per Share Common Stock Consideration because the as converted amount was greater than the preference.

•

Each Legacy Zapata Option was automatically converted into an option to purchase, on the same terms and conditions as were applicable to such Legacy Zapata Option immediately prior to the Effective Time, including applicable vesting conditions, a number of shares of Common Stock determined by multiplying the Legacy Zapata Common Stock subject to the Legacy Zapata Option immediately prior to the Effective Time by the Per Share Common Stock Consideration and rounding the resulting number down to the nearest whole number of shares of Common Stock, at an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per share exercise price for the shares of Legacy Zapata Common Stock subject to the Legacy Zapata Option, as in effect immediately prior to the Effective Time, by the Per Share Common Stock Consideration.

Related events that occurred in connection with the Merger are discussed in more details below:

I. Issuance of Senior Notes and Senior Secured Notes

On June 13, 2023, Legacy Zapata entered into a senior note purchase agreement and senior promissory note agreement (collectively, the “Senior Note Purchase Agreement”) with certain investors. Under the Senior Note Purchase Agreement, Legacy Zapata was authorized to issue additional Senior Notes in an aggregate principal amount of all Senior Notes outstanding not exceeding $20.0 million. In addition, pursuant to the Business Combination Agreement, Legacy Zapata was permitted to negotiate and enter into a committed equity facility or subscriptions to shares of Legacy Zapata capital stock for cash, or issue additional Senior Notes, subject to the aggregate amount of equity financing of Legacy Zapata (including the issuance of Senior Notes) raised, committed or issued prior to the Closing not exceeding $25.0 million (inclusive of principal amount and interest). Interest on borrowings under the Senior Notes was payable at an annum interest rate of 20.0% on the maturity date. The Senior Notes were convertible in connection with a business combination between Legacy Zapata and a publicly-traded special purpose acquisition company, including the Merger, or in connection with an initial public offering, in each case on or prior to the maturity date, at a conversion price of $8.50 per share. The purpose of the issuance of the Senior Notes was to fund general corporate expenses of the Company. As of December 22, 2023, the aggregate principal amount of $5.6 million plus accrued and unpaid interest of $0.6 million of the Senior Notes was exchanged for $6.2 million of the aggregate principal amount of the Senior Secured Notes. Accrued and unpaid interest on the borrowings under the Senior Notes prior to the exchange was calculated at an interest rate of 20.0% based on the 365-day period from the issuance date to the amendment date. As of December 22, 2023, all Senior Notes were canceled in exchange for Senior Secured Notes with a principal amount equal to the principal amount of the Senior Notes plus accrued and unpaid interest through the date immediately prior to the exchange.

In December 2023, Legacy Zapata agreed to issue and sell up to an aggregate principal amount of $14.375 million of Senior Secured Notes, exclusive of any Senior Secured Notes issued in exchange for existing Senior Notes. Through the Closing Date, Legacy Zapata issued Senior Secured Notes in an aggregate principal amount of $16.2 million. The Senior Secured Notes bear compounding interest at the rate of 15% per annum. The outstanding principal amount of the Senior Secured Notes and all accrued but unpaid interest thereon will be due and payable on December 15, 2026 (the “maturity date”). On or after December 15, 2025 or at any time when the aggregate principal amount of all Senior Secured Notes outstanding is $3.0 million or less, the Senior Secured Notes, or a portion thereof, may be prepaid by Legacy Zapata in cash without penalty.

While any Senior Secured Notes are outstanding, Legacy Zapata cannot incur additional indebtedness for borrowed money, except additional Senior Secured Notes, substantially similar notes or other debt instruments that are pari passu with or subordinate to the Senior Secured Notes, subject to certain conditions, and other exceptions described in the Senior Secured Note Purchase Agreement with respect to indebtedness incurred in Legacy Zapata’s ordinary course of business.

The Senior Secured Notes are convertible at the option of the holder in connection with a business combination between Legacy Zapata and a publicly-traded special purpose acquisition company, including the Merger, or in connection with an initial public offering, in each case on or prior to the maturity date, at a conversion price (as may be adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) of (i) $4.50 per share at the closing of such business combination, including the Merger, or initial public offering, as applicable, or (ii) $8.50 per share at any time after the closing of such business combination, including the Merger, or initial public offering, as applicable. Legacy Zapata will notify the holders of the closing of any such business combination or initial public offering at least ten business days prior to the expected closing date of such transaction, and each holder must notify Legacy Zapata of its intention to exchange a portion or all of its Senior Secured Note at least five business days prior to such closing date.

If a holder elects to exchange his or its shares in connection with the Business Combination, Legacy Zapata will cause the Company to (i) enter into Exchange Agreements prior to the Closing, pursuant to which such Senior Secured Notes will be exchanged for shares of Common Stock in accordance with the terms of such Exchange Agreement and as set forth in the Senior Secured Note Purchase Agreement and, (ii) at the Effective Time, issue shares of Common Stock to the holders of Senior Secured Notes then outstanding in exchange for such Senior Secured Notes in accordance with the terms of the Senior Secured Notes and the Exchange Agreements.

Immediately prior to the Closing of the Merger, Legacy Zapata had $16.7 million in aggregate principal and accrued interest of Senior Secured Notes outstanding. This includes the $6.2 million in aggregate principal and accrued interest under the Senior Notes that was converted into the Senior Secured Notes, Senior Secured Notes in an aggregate principal amount of $8.9 million issued for cash through the Closing Date, $1.1 million in aggregate principal amount of Senior Secured Notes issued to third party advisors in lieu of cash payment for services related to the Merger, and $0.5 million of interest accrued on the Senior Secured Notes through the Closing Date. Of the aggregate outstanding balance of the Senior Secured Notes of $16.7 million, $14.7 million was converted into 3,257,876 shares of Common Stock upon the Closing.

II. Actual Redemption

On March 28, 2024, shareholders of the Company holding 6,048,595 shares of Class A Common Stock exercised their redemption rights, for their pro rata share of the funds in the Trust Account in an aggregate redemption payment amount of $66.5 million using a redemption price of approximately $10.99 per share. Refer to Note 5(b) below.

III. Domestication

Immediately preceding the Closing:

Each share of Class A Common Stock and each share of Class B Common Stock then outstanding immediately prior to the effective time of the Domestication was converted into one share of Common Stock, and

Each Public Warrant and each Private Warrant then outstanding immediately prior to the effective time of the Domestication and exercisable for one share of Class A Common Stock was automatically converted into one warrant exercisable for one share of Common Stock.

IV. Merger

Upon the Closing of the Merger:

Each then-outstanding share of Legacy Zapata Capital Stock was converted into the right to receive 0.9141 shares of Common Stock, which is equal to the Per Share Common Stock Consideration of 0.9141.

Each then-outstanding Legacy Zapata Option to purchase shares of Legacy Zapata Common Stock, whether or not exercisable and whether or not vested was automatically converted into an option to purchase, on the same terms and conditions as were applicable to such Legacy Zapata Option immediately prior to the Effective Time, including applicable vesting conditions, a number of shares of Common Stock determined by multiplying the Legacy Zapata Common Stock subject to the Legacy Zapata Option immediately prior to the Effective Time by the Per Share Common Stock Consideration of 0.9141 and rounding the resulting number down to the nearest whole number of shares of Common Stock, at an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per share exercise price for the shares of Legacy Zapata Common Stock subject to the Legacy Zapata Option by the Per Share Common Stock Consideration of 0.9141.

An outstanding balance, inclusive of the principal and interest of $14.7 million, of the Senior Secured Notes were exchanged and converted into 3,257,876 shares of Common Stock at $4.50 per share in accordance with the terms of the Senior Secured Notes and the Exchange Agreements. Upon the Closing of the Merger, the Company had $2.0 million, including a de minimis amount of accrued interest, of the Senior Secured Notes outstanding.

V. Capital Markets Advisory, Marketing and Legal Agreements

On July 4, 2023, we entered into an engagement letter with a third party, pursuant to which, the third party will act as a capital markets advisor to us in connection with the Merger. We agreed to pay in the following amounts:

An advisor fee in the sum of:

(a) $500,000 in cash payable upon the Closing of the Merger,

(b) $1,000,000 in either cash or shares of Common Stock, payable 180 calendar days after the Closing of the Merger, and

(c) $1,000,000 payable in either cash or shares of Common Stock, payable 270 calendar days following the Closing of the Merger (notes (b) and (c) collectively, the “Deferred Shares Arrangement”), and

ii.

A transaction fee in the sum of:

(a) 4% of the gross proceeds raised from investors identified by the third party and received by us or Legacy Zapata in connection with the Merger, and

(b) 3% of the proceeds released from the Trust Account with respect to any Company shareholders identified to us by the third party that:

x) entered into a non-redemption agreement or other similar agreement, or

y) did not redeem shares of Class A Common Stock.

Pursuant to above engagement letter, upon the Closing of the Merger, we owed the third party an advisor fee of $0.5 million payable in cash, $2.0 million payable in either cash or shares, and a transaction fee of $0.1 million for an aggregate amount owed of $2.6 million.

On March 25, 2024, we and the third party entered into an amendment to the engagement letter, which amendment replaced the fees to be paid pursuant to the original engagement letter with a cash transaction fee of $6.4 million and reimbursement of out-of-pocket expenses of $11.0 thousand, which were paid out of the Trust Account upon the Closing of the Merger. In addition, we recognized a loss associated with amendments to capital markets advisory agreements of $3.8 million. Refer to Note 6(g).

On September 13, 2023, Legacy Zapata entered into a capital markets advisory agreement with an additional third party, pursuant to which Legacy Zapata agreed to pay (i) $1.3 million for capital markets advisory services provided related to the Merger, and (ii) a placement agent’s fee equal to 5% of the aggregate purchase price paid by each investor of Senior Notes introduced by the third party. In the event the gross cash raised through Merger was below $40.0 million, in lieu of making a cash payment of $1.3 million for capital markets advisory services at Closing, Legacy Zapata agreed to pay $0.8 million in cash at Closing and $0.5 million worth of shares of Common Stock at the trailing 5-day volume-weighted average price (the “VWAP”) as of the date that is 30 calendar days after the Closing.

On March 20, 2024, the capital markets advisory agreement was amended, pursuant to which, Legacy Zapata agreed to pay six monthly installments in cash of $41.7 thousand per month commencing on

May 15, 2024 and issue a Senior Secured Note of $1.0 million. The third party did not convert the Senior Secured Note into shares of Common Stock upon the Closing. We recognized a loss associated with amendments to capital markets advisory agreements of $0.3 million. Refer to Note 5(s).

On February 9, 2024, we entered into a marketing services agreement with an additional third party to promote investor engagement, pursuant to which we agreed to pay $0.3 million worth of shares of Common Stock at issuance price upon the Closing of the Merger. The number of shares to be issued was subject to a 30-day adjustment period following February 12, 2024. In the event that the average trading price of the Company’s Common Stock within the 30-day period was below the issuance price, an adjustment to the number of shares to be paid to the third party would be made based on the lower of (i) the issuance price, or (ii) the average trading price of the Company’s Common Stock within the 30-day period subsequent to February 12, 2024. In connection with the Closing of the Merger, Legacy Zapata issued 30,706 shares of Common Stock to the third party.

On February 9, 2024, we and Legacy Zapata entered into a capital markets advisory agreement with an additional third party, pursuant to which we agreed to pay the third party i) $0.3 million for capital markets advisory services provided related to the Merger, and ii) $0.2 million for services provided related to the benefit of the holders of our and Legacy Zapata’s securities. In connection with the Merger, Legacy Zapata made a cash payment of $0.5 million prior to the Closing.

On March 27, 2024, we and Legacy Zapata agreed to issue to the third party a Senior Secured Note in the aggregate principal amount of $0.1 million immediately prior to the Closing for additional capital markets advisory services provided related to the Merger, which was converted into 33,333 shares of Common Stock at the Closing.

On February 9, 2024, Legacy Zapata and the Company entered into an engagement letter with an additional third party, as amended on February 27, 2024, pursuant to which the third party will continue to act as a capital markets advisor to Legacy Zapata until the date that is eighteen months following the Closing of the Merger (the “Term”). Legacy Zapata and the Company agreed to pay the third party a cash fee of $1.8 million, payable by the Company in monthly payments over 18 months commencing on the earlier of May 31, 2024 or the effectiveness of the Registration Statement on Form S-1 to be filed pursuant to the Purchase Agreement (as defined below) with Lincoln Park (the “Lincoln Park Registration Statement”), with $0.3 million of such payment waivable if the Company voluntarily prepays $1.5 million to the third party prior to December 31, 2024. Notwithstanding the foregoing, Legacy Zapata will pay the full $1.8 million upon consummation of a financing transaction with proceeds of $15.0 million or more (not including sales under the Purchase Agreement or similar financing) during the Term.

In March 2024, Legacy Zapata entered into a placement agent agreement to retain an additional third party for the purpose of raising up to $10.0 million, for a term of 60 days from the execution of the placement agent agreement. Legacy Zapata agreed to pay a cash fee equal to 7.0% of the gross amount of cash proceeds (the “Financing Proceeds”) received by Legacy Zapata from investors introduced by the third party directly to Legacy Zapata. The cash fee is payable from Legacy Zapata within 7 business days following Legacy Zapata’s receipt of proceeds from any investors introduced by the third party. In addition, Legacy Zapata agreed to issue a number of shares of Common Stock equal to 3.0% of the Financing Proceeds divided by $4.50 upon the Closing. In connection with the placement agent agreement, the Company made a cash payment of $0.1 million and issued 11,666 shares of Common Stock upon the Closing.

In connection with the Merger, we had incurred $4.0 million of deferred legal fees to be paid to our legal advisors upon consummation of the Merger, which were recorded as deferred legal fees in our historical audited consolidated financial statements as of and for the year ended December 31, 2023. On March 26, 2024, we entered into a fee letter for legal services rendered in connection with the Merger, pursuant to which the total fee was reduced to $3.7 million, of which $0.4 million was paid in cash upon the Closing of the Merger and the remaining balance will be paid in equal monthly

installments of $0.3 million per month for each of the twelve months following the Closing of the Merger and the effective date of the Company’s Registration Statement (see Note 1.VI).

On February 16, 2021, we entered into a consulting agreement with an additional third party, pursuant to which the third party provided investor and media relations support in connection with the search for a potential business combination. As of the Closing of Merger, we incurred $0.2 million for services rendered under the consulting agreement. On March 25, 2024, we amended the consulting agreement, pursuant to which we agreed to pay a total of $0.2 million in equal monthly installments over a six-month term beginning on the earlier of (i) the sales of Common Stock pursuant to the Purchase Agreement (see Note 1.VI) or (ii) June 30, 2024.

VI. Purchase Agreement with Lincoln Park

On December 19, 2023, we and Legacy Zapata entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park, pursuant to which Lincoln Park has agreed to purchase from the Company, at the option of the Company, an aggregate of up to $75.0 million (the “Commitment”) of Common Stock from time to time over a 36-month period following the Commencement Date, subject to certain limitations contained in the Purchase Agreement including, but not limited to, the filing and effectiveness of the Lincoln Park Registration Statement. In accordance with the Purchase Agreement, the Company must pay Lincoln Park a commitment fee of $1.7 million (the “Commitment Fee”) as follows: (i) on the business day prior to the filing of the Lincoln Park Registration Statement, $0.6 million in shares of Common Stock and (ii) the Company may elect to pay the remaining $1.1 million amount of the Commitment Fee in either cash or shares of Common Stock, with any shares issuable on the business day prior to the filing of the Lincoln Park Registration Statement and any cash due within 90 days of the Closing Date.

In connection with the Purchase Agreement, we and Legacy Zapata also entered into the Registration Rights Agreement, pursuant to which the Company will file the Lincoln Park Registration Statement (including the Commitment Shares) with the SEC within 45 days following the Closing of the Merger.

VII. Sponsor Founder Shares

In contemplation of the Business Combination Agreement, we, Legacy Zapata, the Sponsor, the Sponsor Co-Investor and certain directors entered into the Sponsor Support Agreement. The Sponsor, the Sponsor Co-Investor and directors own an aggregate of 5,750,000 shares of Class B Common Stock. Of the aggregate shares of Class B Common Stock outstanding, 1,005,000 shares of Class B Common Stock are not subject to any vesting or forfeiture provisions in accordance with the Sponsor Support Agreement. The remaining 4,745,000 Sponsor Shares (the Sponsor and the Sponsor Co-Investor holds 3,536,863 and 1,208,137 Sponsor Shares, respectively) are subject to the following vesting and forfeiture provisions:

In the event that the Closing Available Cash is an amount equal to $25.0 million or more, then all Sponsor Shares, or 4,745,000 shares, will be fully vested.

ii.

In the event that the Closing Available Cash is an amount equal to $10.0 million or less, then 30% of the Sponsor Shares, or 1,423,500 shares, will be unvested and subject to forfeiture.

iii.

In the event that the Closing Available Cash is more than $10.0 million but less than $25.0 million, then the number of Sponsor Shares that will be unvested and subject to forfeiture will be determined by straight line interpolation between zero and 30% of the number of Sponsor Shares.

All of the unvested Sponsor Founder Shares will become vested if, within three years of the Closing, the VWAP of Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period, or if there is a change of control of the Company. If neither of these events occur within three years of the Closing, then the

unvested Sponsor Founder Shares will be forfeited and shall be transferred by the Sponsor and the Sponsor Co-Investor to the Company, without any consideration for such transfer.

Upon the Closing of the Merger, the Closing Available Cash as defined by the Sponsor Support Agreement was $13.1 million, resulting in 1,129,630 shares that remain subject to vesting. The Sponsor Founder Shares that are subject to vesting and forfeiture have been accounted for as an equity transaction in accordance with ASC 815, Derivatives and Hedging as the arrangement is considered free-standing. The unvested Sponsor Founder Shares are indexed to the Company’s own stock and are therefore classified as equity in the unaudited pro forma condensed combined balance sheet.

VIII. Forward Purchase Agreement

On March 25, 2024, we and Legacy Zapata entered into a Confirmation of an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Agreement”) with Sandia Investment Management LP, acting on behalf of certain funds (collectively, “Sandia”), pursuant to which Sandia purchased, from the open market, 1,000,000 shares of Class A Common Stock immediately preceding the Closing (the “Recycled Shares”) and the Company issued to Sandia 500,000 shares of Common Stock at a purchase price of $10.99 per share (the “Additional Shares”), which represents the maximum number of shares subject to purchase under the Forward Purchase Agreement, subject to adjustment as described below (the “Maximum Number of Shares”). Legacy Zapata also issued Senior Secured Notes with an aggregate principal amount of $3.0 million to the parties to the Forward Purchase Agreement prior to the Closing of the Merger.

Pursuant to the Forward Purchase Agreement, at the Closing, the Company prepaid to Sandia (the “Prepayment Amount”), (i) with respect to the Recycled Shares, with proceeds from the Trust Account, a cash amount equal to the (x) product of the number Recycled Shares as noted in a pricing notice delivered by Sandia and (y) $10.99 per share and, (ii) with respect to the Additional Shares, a per share amount equal to $10.99 per share netted against the proceeds from the Additional Shares received from Sandia. In the case of the Recycled Shares, the Prepayment Amount was paid with proceeds from the Trust Account at the Closing of the Merger. The Prepayment Amount for Additional Shares was netted against the proceeds that Sandia was to pay for the purchase of such Additional Shares, with Sandia being able to reduce the purchase price for the Additional Shares by the Prepayment Amount.

To the extent Sandia does not early terminate shares purchased under the Forward Purchase Agreement, as described below, the parties will settle the then outstanding shares held by Sandia upon the Valuation Date, such date being two years from the Closing, subject to acceleration under certain circumstances, as described in the Forward Purchase Agreement. On the Cash Settlement Payment Date, which is the tenth business day following the last day of the valuation period commencing on the Valuation Date, as described in the Forward Purchase Agreement (the “Valuation Period”), Sandia will pay the Company a cash amount equal to (A) the number of shares subject to the Forward Purchase Agreement as of the Valuation Date less the number of unregistered shares, multiplied by (B) the volume-weighted average price over the Valuation Period (the “Settlement Amount”); provided, that if the amount of the Settlement Amount Adjustment (as defined below) payable by the Company to Sandia is less than the Settlement Amount, then the Settlement Amount Adjustment will be automatically netted from the Settlement Amount and any remaining amount paid in cash. The Company will pay to Sandia on the Cash Settlement Payment Date an amount (the “Settlement Amount Adjustment”) equal to (1) the Number of Shares as of the Valuation Date multiplied by $2.00 per share if the amount is to be paid in cash, or (2) if the Settlement Amount Adjustment exceeds the Settlement Amount, the Company may at its election pay the Settlement Amount Adjustment to Sandia in shares of Common Stock, in an amount equal to the product of the Number of Shares as of the Valuation Date multiplied by $2.25; provided that, in certain circumstances as described in the Forward Purchase Agreement, including if a Delisting Event (as defined in the Forward Purchase Agreement) occurs during the Valuation Period, such amount must be paid in cash.

In addition, during the term of the Forward Purchase Agreement, Sandia may elect to terminate the transaction in whole or in part by providing a written notice to the Company, which will specify the quantity by

which the number of shares will be reduced (the “Terminated Shares”). The Company shall be entitled to an amount from Sandia, equal to the product of (x) the number of Terminated Shares and (y) the Reset Price, as defined hereafter, on the date of notice.

As of the Closing of the Merger, the reset price (the “Reset Price”) is $10.00 per share and will be subject to reset on a monthly basis (each a “Reset Date”), with the first such Reset Date occurring 180 days after the closing date of the Merger to be greater of (a) $4.50 and (b) the 30-day volume weighted average price of shares of Common Stock immediately preceding such Reset Date. Except as described below, the Reset Price will be reduced immediately to any lower price at which the Company closes any agreement to sell or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition of) any shares of Common Stock or securities of the Company or any of its subsidiaries convertible, exercisable or exchangeable into, or otherwise entitles the holder thereof to receive, shares of Common Stock or other securities (a “Dilutive Offering and, such reset, a Dilutive Offering Reset”).

In the event of a Dilutive Offering Reset, the Maximum Number of Shares will be increased to an amount equal to the quotient of (i) 1,500,000 divided by (ii) the quotient of (a) the price of such Dilutive Offering divided by (b) $10.00. In such event, Sandia has the right to purchase more Additional Shares, up to the Maximum Number of Shares, for which the Company will be required to provide a cash prepayment to Sandia netted against the purchase price for such shares, and such Additional Shares will be subject to the terms of the Forward Purchase Agreement.

In addition, the Company reimbursed Sandia $0.1 million at Closing for reasonable out-of-pocket expenses for costs incurred in connection with the transaction, and (b) $0.1 million in expenses incurred in connection with the acquisition of the Recycled Shares. The Company will also pay to Sandia a quarterly fee of $5.0 thousand payable at the Closing in consideration of certain legal and administrative obligations in connection with this transaction.

IX. Convertible Notes – Related Party

Pursuant to a Deferred Payment Agreement dated as of March 25, 2024, the Company amended the terms of our Convertible Note – Related Party, pursuant to which $0.3 million of the accrued interest outstanding at the Closing of the Merger was paid from the funds available in the Trust Account at Closing. The aggregate principal balance of our Convertible Note—Related Party plus accrued interest through the Closing of the Merger of $2.5 million was deferred at Closing and is due in monthly installments (including interest accruing from the Closing of the Merger through the payment date) for twelve months thereafter beginning thirty days following the effectiveness of the Company’s registration statement on Form S-1 to be filed pursuant to the Purchase Agreement with Lincoln Park (the “Registration Statement”). The Convertible Note – Related Party bears interest at a rate of 4.5% per annum.

2.	Basis of Pro Forma Presentation

The pro forma financial information was prepared in accordance with Article 11 of SEC Regulation S-X. The transaction accounting adjustments presented in the pro forma financial information are made to provide relevant information necessary for an understanding of the Company reflecting the accounting for the Merger.

Management has made significant estimates and assumptions in its determination of the transaction accounting adjustments. The transaction accounting adjustments are based on certain currently available information and certain assumptions and methodologies that management believes are reasonable under the circumstances. The transaction accounting adjustments, which are described in these notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the transaction accounting adjustments, and it is possible the difference may be material.

The pro forma financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Merger. Historically, one of our affiliates, Andretti Global, and Legacy Zapata entered into the Enterprise Solution Subscription Agreement, the Managed Services Agreement, and the Andretti Sponsorship Agreement, prior to the Merger. The Enterprise Solution Subscription Agreement and Andretti Sponsorship Agreement are coterminous and terminate on December 31, 2024. The Managed Services Agreement also terminates on December 31, 2024. Andretti Global agreed to pay Legacy Zapata $5.0 million through the duration of the Enterprise Solution Subscription Agreement. As of December 31, 2023, Legacy Zapata had an aggregate of $0.8 million in accounts receivable related to the Enterprise Solution Subscription Agreement and the Managed Services Agreement. For the year ended December 31, 2023, Legacy Zapata recorded an aggregate of $2.0 million in revenues associated with the Enterprise Solution Subscription Agreement and the Managed Services Agreement. The total commitment under the Andretti Sponsorship Agreement is $8.0 million and is due and payable over the period of February 2022 through July 2024. Through December 31, 2023, Legacy Zapata paid $3.5 million under the Andretti Sponsorship Agreement. As of December 31, 2023, Legacy Zapata had an aggregate of $1.5 million in accounts payable and $0.2 million in accrued and other current liabilities related to the Andretti Sponsorship Agreement. For the year ended December 31, 2023, Legacy Zapata recorded $2.8 million in sales and marketing expenses with respect to the Andretti Sponsorship Agreement. The pro forma financial information gives effect to the above related party transactions that go into effect upon the Closing of the Merger.

The following table summarizes the pro forma number of shares of Common Stock outstanding following the consummation of the Merger, excluding the potential dilutive effect of the exercise or vesting of stock options or warrants and the unvested Sponsor Founder Shares.


	Pro Forma Combined Share Ownership in Zapata Computing Holdings Inc.
	Shares		Percentage
Legacy Zapata equityholders		17,696,425		63	%
Public Shareholders		1,846,206		7	%
Sponsor and Insiders(1)		5,750,000		16	%
Senior Secured Note holders		3,257,876		12	%
Additional Shares issued pursuant to the Forward Purchase Agreement		500,000		2	%
Capital markets advisors		42,372		0	%

Total Shares of Common Stock(2)		29,092,879		100	%

(1)

Reflects the conversion of 5,750,000 shares of Class B Common Stock held by the Sponsor, the Sponsor Co-Investor and certain key stockholders of the Sponsor that are party to the Sponsor Support Agreement (collectively, the “Insiders”), of which 1,129,630 shares are subject to vesting, subject to the notes below.

(2)

Excludes shares issued in connection with the Commitment Fee and any other shares of Common Stock that may be issued to Lincoln Park pursuant to the Purchase Agreement (the “Lincoln Park Shares”). The Commitment Fee is payable in shares with a value of $0.6 million and the remainder of the Commitment Fee ($1.1 million) can be paid, at the election of the Company, in either cash or shares of Common Stock. Sales to Lincoln Park by the Company could result in substantial dilution to the interests of other holders of Common Stock.

The table set forth above does not take into account warrants to purchase shares of Class A Common Stock that will remain outstanding immediately following the Merger. The Public Warrants and Private Warrants will become exercisable 30 days after the completion of the Merger and will expire five years after the completion of the Merger or earlier upon their redemption or liquidation. If we assume that all outstanding 11,500,000 Public Warrants and 13,550,000 Private Warrants were exercisable and exercised following completion of the Merger,

then the combined voting power of the Company and combined economic interest in the Company and Legacy Zapata will be as shown below:


	Pro Forma Combined Share Ownership in Zapata Computing Holdings Inc.
	Shares		Percentage
Legacy Zapata equityholders		17,696,425		33	%
Public Shareholders		1,846,206		3	%
Sponsor and Insiders(1)		5,750,000		11	%
Senior Secured Note holders		3,257,876		6	%
Additional Shares issued pursuant to the Forward Purchase Agreement		500,000		1	%
Capital markets advisors		42,372		0	%
Private Warrant holders(2)		13,550,000		25	%
Public Warrant holders(3)		11,500,000		21	%

Total Shares of Common Stock(4)		54,142,879		100	%

(1)	Reflects the conversion of 5,750,000 shares of Class B Common Stock held by Sponsors and Insiders, of which 1,129,630 shares are subject to vesting, subject to the notes below.

(2)	Represents shares of Common Stock issuable upon exercise of the Private Warrants.

(3)	Represents shares of Common Stock issuable upon exercise of the Public Warrants.

(4)

Excludes the Lincoln Park Shares. The Commitment Fee is payable in shares with a value of $0.6 million and the remainder of the Commitment Fee ($1.1 million) can be paid, at the election of the Company, in either cash or shares of Common Stock. Sales to Lincoln Park by the Company could result in substantial dilution to the interests of other holders of Common Stock.

3.	Accounting for the Merger

The Merger has been accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, although we have acquired all of the outstanding equity interests of Legacy Zapata in the Merger, we are treated as the “acquired” company and Legacy Zapata is treated as the accounting acquirer for financial statement reporting purposes. Accordingly, the Merger has been treated as the equivalent of Legacy Zapata issuing stock for our net assets, accompanied by a recapitalization. Our net assets and Legacy Zapata’s net assets have been stated at historical cost, with no goodwill or other intangible assets recorded. Subsequent to the completion of the Merger, the results of operations are those of Legacy Zapata.

Legacy Zapata has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

•

Legacy Zapata’s existing stockholders have the greatest voting interest in the Company;

•

Legacy Zapata’s existing stockholders have the voting rights to control decisions regarding election and removal of a majority of the directors and officers of the Company;

•

Legacy Zapata comprises the ongoing operations of the Company; and

•

Legacy Zapata’s existing senior management is the senior management of the Company.


ABOUT THIS PROSPECTUS			1
TRADEMARKS, TRADE NAMES AND SERVICE MARKS			1
INDUSTRY AND MARKET DATA			2
SELECTED DEFINITIONS			3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			7
PROSPECTUS SUMMARY			9
THE OFFERING			17
RISK FACTORS			19
USE OF PROCEEDS			58
DILUTION			59
MARKET PRICE AND DIVIDEND INFORMATION			61
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION			62
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			81
BUSINESS			98
MANAGEMENT			114
EXECUTIVE COMPENSATION			122
DIRECTOR COMPENSATION			134
DESCRIPTION OF SECURITIES			136
SECURITIES ACT RESTRICTIONS ON RESALE OF COMMON STOCK			147
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			148
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			158
SELLING STOCKHOLDER			160
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS			162
PLAN OF DISTRIBUTION			167
LINCOLN PARK TRANSACTION			169
LEGAL MATTERS			175
EXPERTS			175
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			176
WHERE YOU CAN FIND MORE INFORMATION			177
INDEX TO FINANCIAL STATEMENTS			F-1


Legacy Zapata Common Stock outstanding prior to the Closing of the Merger			5,136,453
Legacy Zapata Preferred Stock outstanding prior to the Closing of the Merger			14,222,580

			19,359,033
Per Share Common Stock Consideration			0.9141

Shares of Common Stock issued to Legacy Zapata shareholders upon the Closing of the Merger			17,696,425