Netskope Inc Debt Disclosure

Note 9 - Convertible Notes

2028 Notes

In December 2022, the Company issued $401.0 million in aggregate principal amount of its 2028 Notes pursuant to an indenture, dated as of December 22, 2022 (as supplemented by that certain First Supplemental Indenture, dated April 25, 2025 and Second Supplemental Indenture, dated September 19, 2025, the "2028 Notes Indenture"), between the Company and U.S. Bank Trust Company, National Association, as trustee.The 2028 Notes are senior unsecured obligations of the Company, which accrue interest quarterly at a rate of 3.75% per annum, with such interest to be paid in kind through an increase in the principal amount of the 2028 Notes, or paid in cash, at the election of the Company, on a quarterly basis. The 2028 Notes will mature on December 15, 2028 unless earlier redeemed, repurchased, or converted.

Holders of the 2028 Notes may convert their 2028 Notes in the following circumstances:

In April 2025, the Company amended certain terms of the 2028 Notes, which amendments became effective upon the effectiveness of the IPO in September 2025. The amendments included the following:

Following the Company's IPO in September 2025, if any of the 2028 Notes are converted by the holders thereof, the Company may elect to settle such conversion by paying or delivering, as the case may be, cash, shares of its Class B common stock, or any combination thereof. However, for the conversions that occur before the Qualified IPO, conversions could only be settled in shares of the Company's common stock. The conversion rate of the 2028 Notes is 42.1046 shares per $1,000 principal amount of 2028 Notes, which is equal to a conversion price of approximately $23.75 per share.

The Company may not redeem the 2028 Notes before the one-year anniversary of the IPO, or the period between the effective date of a Fundamental Change up to the sixty-fifth trading day following the date the Company issues the related Fundamental Change notice, or the Redemption Trigger Date (as defined in the 2028 Notes Indenture) unless it is a redemption in connection with a change in tax law. After the Redemption Trigger Date and before maturity of the 2028 Notes, the Company may redeem some or all of the 2028 Notes if the last reported sale price of its Class B common stock is at least 200% (or 230% post-December 15, 2027) of the conversion price for a specific trading-day periods and if certain liquidity conditions are satisfied. The redemption price will equal the principal plus accrued and unpaid interest on the 2028 Notes called for redemption, except that redemptions in connection with certain corporate events will be subject to the Fundamental Change repurchase price as described below. The Company may not redeem less than all of the 2028 Notes if following such redemption, fewer than $100.0 million aggregate principal amount of the 2028 Notes would remain outstanding.

Holders of the 2028 Notes have the right to request the Company to repurchase all or part of the 2028 Notes in cash during the period beginning 120 days prior to the maturity date of the 2028 Notes and ending 91 days prior to the maturity date of the 2028 Notes. The repurchase price included principal, accrued interest, and a minimum return multiple equal to a quarterly compounded 14.0% rate, reduced for any prior cash interest payments.

If a Fundamental Change occurs prior to maturity, the holders of the 2028 Notes may require the Company to repurchase all or any whole number of their 2028 Notes for cash. The repurchase price would be the greater of (i) a specified premium ranging from 140% to 170% of principal amount of the 2028 Notes, depending on the date of such repurchase, and (ii) the principal amount plus all accrued and unpaid interest thereon. The definition of Fundamental Change in the 2028 Notes Indenture includes certain business combination transactions involving the Company, as well as certain de-listing events concerning the Company's common stock.

The 2028 Notes Indenture contains customary terms, covenants, and events of default. Upon an event of default related to insolvency or bankruptcy of the Company, the 2028 Notes become immediately due and payable without further action or notice by any person. Upon certain other events of default, the 2028 Notes may be accelerated by the trustee under the 2028 Notes Indenture or by holders representing at least 25% of the outstanding aggregate principal amount of the 2028 Notes. Upon acceleration, the amount due includes the aggregate principal amount of the outstanding 2028 Notes, plus any accrued and unpaid interest, and an acceleration premium designed to ensure a minimum total return of 140% to 170% of the principal amount of the 2028 Notes, taking into account any prior cash interest payments made.

The 2028 Notes are subject to certain negative covenants that restrict the ability of the Company and its subsidiaries to incur additional indebtedness while at least 10% of the originally issued aggregate principal amount of the 2028 Notes remains outstanding, subject to certain exclusions and exceptions. Prior to the Qualified IPO, the 2028 Notes also contained restrictions on the Company's ability to make dividends or other equity-related payments, redeem or prepay any the Company's or its subsidiaries' subordinated obligations, consummate certain asset sales, or sell or exclusively license material intellectual property, in each case, subject to certain exclusions and exceptions. Prior to the Qualified IPO, the Company was also required to maintain minimum liquidity equal to the excess of its consolidated cash over accounts payable outstanding more than 90 days from invoice date in an amount of at least $40.0 million. However, the 2028 Notes permit the Company to secure and draw on a revolving credit facility of up to $150 million.

2029 Notes

In August 2024, the Company entered into a Note Purchase Agreement, or the Note Agreement, with certain investors. Pursuant to the Note Agreement, in September 2024 or the Issuance Date, the Company issued $75.0 million in an aggregate principal amount of its 2029 Notes pursuant to an indenture, dated September 30, 2024 (as supplemented by that certain First Supplemental Indenture,

dated as of September 19, 2025, the "2029 Notes Indenture"), between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2029 Notes are senior unsecured obligations of the Company, which accrue interest quarterly at a rate of 3.00% per annum, with such interest to be paid in kind through an increase in the principal amount of the 2029 Notes, or paid in cash, at the election of the Company, on a quarterly basis. The 2029 Notes will mature on August 1, 2029, or Maturity Date, unless earlier redeemed, repurchased, or converted.

Holders of the 2029 Notes may convert their 2029 Notes in the following circumstances:

Following the Company's IPO, if any of the 2029 Notes are converted by the holders thereof, the Company may elect to settle such conversions by paying or delivering, as the case may be, cash, shares of its Class B common stock, or any combination thereof. However, for any conversions that occur before a Qualified IPO, such conversion could only be settled in shares of the Company's common stock. The conversion rate of the 2029 Notes is 40.4858 shares per $1,000 principal amount of 2029 Notes, which is equal to a conversion price of approximately $24.70 per share.

The Company may not redeem the 2029 Notes before the one-year anniversary of the IPO, or the period between the effective date of a Fundamental Change up to the sixty-fifth trading day following the date the Company issues the related Fundamental Change notice, or the Redemption Trigger Date (as defined in the 2029 Notes Indenture) unless it is a redemption in connection with a change in tax law. After the Redemption Trigger Date and before maturity of the 2029 Notes, the Company may redeem some or all of the 2029 Notes if the last reported sale price of its Class B common stock is at least 200% of the conversion price for specified trading-day periods and if certain liquidity conditions are satisfied. The redemption price will equal the principal plus accrued and unpaid interest on the 2029 Notes called for redemption, except that redemptions in connection with certain corporate events will be subject to the Fundamental Change repurchase price as described below. The Company may not redeem less than all of the 2029 Notes if, following such redemption, fewer than $50.0 million aggregate principal amount of the 2029 Notes would remain outstanding

Holders of the 2029 Notes have the right to request the Company to repurchase all or part of the 2029 Notes in cash after the earlier of (i) the fourth anniversary of the issue date of the 2029 Notes and (ii) the third anniversary of the IPO, but prior to 91 days before maturity. The repurchase price includes principal, accrued interest, and a required minimum return based on a 13.50% quarterly compounded rate.

The terms relating to Fundamental Change, negative covenants, and events of default under the 2029 Notes are substantially similar as those governing the 2028 Notes. Refer to 2028 Notes description above for a full summary of these terms.

PIK interest expense included in the fair value changes for the 2028 Notes was $16.5 million, $15.9 million and $15.3 million for the fiscal years ended January 31, 2026, 2025, and 2024, respectively. For the 2029 Notes, PIK interest expense was $2.3 million and $0.8 million for the fiscal years ended January 31, 2026 and 2025, respectively. No interest expense was recorded in the fiscal year ended January 31, 2024.