Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): May 14, 2024

INTRUSION INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	001-39608	75-1911917
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

101 East Park Blvd, Suite 1200 Plano, Texas	75074
(Address of Principal Executive Offices)	(Zip Code)

(888) 637-7770

(Registrant’s Telephone Number, Including Area Code)

N/A

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

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

☐

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

☐

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

☐

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

☐

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	INTZ	NASDAQ Capital Market

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

Emerging growth company ☐

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

ITEM 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following information is furnished pursuant to Item 2.02, Disclosure of Results of Operations and Financial Condition.

On May 14, 2024, Intrusion Inc. issued a press release announcing its financial results for the quarter ended March 31, 2024. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

	99.1	Press Release Issued by Intrusion Inc. on May 14, 2024
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

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

	Intrusion, Inc.

Dated: May 14, 2024	By:	/s/ Kimberly Pinson
		Kimberly Pinson
		Chief Financial Officer

Exhibit 99.1

Intrusion Inc. Reports First Quarter 2024 Results

Intrusion Shield customer penetration continues to expand

PLANO, Texas, May 14, 2024 (ACCESSWIRE) -- Intrusion Inc. (NASDAQ: INTZ), a leader in cyberattack prevention solutions, announced today financial results for the first quarter ended March 31, 2024.

Recent Financial & Business Highlights:

	·	Improved first quarter EPS to $(0.94) per share from $(4.49) per share in the first quarter of 2023.
	·	In partnership with iOne Resources, announced a notice of award to supply the Secure Electronic Transmission Services (SETs) for the 2025 Philippines midterm elections.
	·	Partnered with Total Information Management Corporation (TIM) to provide advanced threat detection and prevention solutions to Orca Cold Chain Solutions to enhance supply chain security.
	·	Acquired a minority stake in Klever AI to help improve Intrusion Shield technology and broaden customer penetration into multiple industries.
	·	Regained compliance with Nasdaq’s minimum bid price and equity standard requirements.

First Quarter Financial Results

Revenue for the first quarter of 2024 was $1.1 million, a decrease of $0.2 million on both a sequential and year-over-year basis. The decline in revenue during the first quarter of 2024 was driven by a decrease in consulting revenue that was mainly associated with the federal budget not being approved until the end of the first quarter, which hindered the timing of new contract awards.

The gross profit margin was 80% for the first quarter of 2024, compared to 76% in the first quarter of 2023.

Operating expenses in the first quarter of 2024 were $3.4 million, a decrease from $5.0 million in the comparable quarter of last year.

The net loss for the first quarter of 2024 was $(1.7) million, or $(0.94) per share, compared to a net loss of $(4.7) million, or $(4.49) per share for the first quarter of 2023.

As of March 31, 2024, cash and cash equivalents were $0.1 million. Subsequent to the end of the quarter, Intrusion entered into a private placement subscription agreement pursuant to which the Company sold to purchasers in a Private Offering 1.3 million shares of its common stock each of which is coupled with a warrant to purchase two shares of common stock at an aggregate offering price of $1.95 per share. The Private Offering resulted in net proceeds to Intrusion of $2.6 million. Also subsequent to March 31^st, Intrusion sold 0.2 million shares of common stock through a warrant inducement offering resulting in $0.6 million in net proceeds. The Company intends to use the net proceeds from the Private Offering for working capital and general corporate purposes. The cash balance as of May 10, 2024 was $2.4 million.

“During the first quarter, we continued to make progress toward growing our Intrusion Shield customer base as we build on the strong momentum we experienced at the end of 2023,” said Tony Scott, CEO of Intrusion. “Our robust Shield partnerships have continued to benefit our business, which is evident by the announcement that we made recently with iOne Resources, where Intrusion’s technology will be a part of a $25 million award to help protect the cybersecurity and integrity of the midterm elections in the Philippines, with the award creating over $1 million in ARR for our Shield business in the second half of 2024. This partnership, along with our other recently announced customer wins, highlights the success we have been achieving through our go-to-market strategy for our compelling and innovative strategies that provide customers with the tools they need to better identify, deflect, and eliminate any cyber threats they may encounter.”

Mr. Scott continued, “Over the past several weeks, we have also successfully been able to complete the final stages of our strategic plan to regain compliance with Nasdaq’s minimum listing requirements with the announcement of our most recent Private Offering and converting $9.5 million of our senior debt to equity. Both of which helped us achieve the minimum equity standard required to remain listed on the Nasdaq Capital Markets. Looking ahead, we continue to remain focused on ensuring we have the funds we need to not only propel our growth but also satisfy our customers’ needs with cost-effective cybersecurity solutions for their enterprise.”

Conference Call

Intrusion’s management will host a conference call today at 5:00 P.M., EDT. Interested investors can access the live call by dialing 1-888-506-0062, or 1-973-528-0011 for international callers, and providing the following access code: 681222. The call will also be webcast live (LINK). For those unable to participate in the live conference call, a replay will be accessible beginning tonight at 7:00 P.M. EDT until May 28, 2024, by dialing 1-877-481-4010, or 1-919-882-2331 for international callers, and entering the following access code: 50472. Additionally, a live and archived audio webcast of the conference call will be available at www.intrusion.com.

About Intrusion Inc.

Intrusion Inc. is a cybersecurity company based in Plano, Texas. The Company offers its customers access to its exclusive threat intelligence database containing the historical data, known associations, and reputational behavior of over 8.5 billion IP addresses. After years of gathering global internet intelligence and working with government entities, the company released its first commercial product in 2021. Intrusion Shield allows businesses to incorporate a Zero Trust, reputation-based security solution into their existing infrastructure. Intrusion Shield observes traffic flow and instantly blocks known or unknown malicious connections from entering or exiting a network to help protect against zero-day and ransomware attacks. Incorporating Intrusion Shield into a network elevates an organization's overall security posture by enhancing the performance and decision-making of other solutions in its cybersecurity architecture.

Cautionary Statement Regarding Forward-Looking Information

This release may contain certain forward-looking statements, including, without limitations, comments about the performance of protections provided by our Intrusion Shield product and any other words that react to management’s expectations regarding future events and operating performance. These forward-looking statements speak only as of the date hereof. They involve several risks and uncertainties, including, without limitation, the chances that our products and solutions do not perform as anticipated or do not meet with widespread market acceptance. These statements are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including risks that we have detailed in the Company's most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors."

IR Contact:

Alpha IR Group

Mike Cummings or Josh Carroll

INTZ@alpha-ir.com

Source: Intrusion Inc.

INTRUSION INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)


	Three Months Ended
	March 31, 2024			March 31, 2023
Revenue	$	1,131		$	1,309
Cost of Revenue		226			313

Gross Profit		905			996

Operating Expenses:
Sales and marketing		1,177			1,738
Research and development		1,019			1,796
General and administrative		1,181			1,506

Operating Loss		(2,472	)		(4,044	)


Interest expense		(228	)		(285	)
Interest accretion and amortization of debt issuance costs		990			(446	)
Interest (expense) and other income		(6	)		41


Net Loss	$	(1,716	)	$	(4,734	)


Net Loss Per Share:
Basic	$	(0.94	)	$	(4.49	)
Diluted	$	(0.94	)	$	(4.49	)

Weighted Average Common Shares Outstanding:
Basic		1,865			1,054
Diluted		1,865			1,054

INTRUSION INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)


	March 31, 2024			December 31, 2023
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	122		$	139
Accounts receivable, net		256			364
Prepaid expenses and other assets		385			635
Total current assets		763			1,138
Noncurrent Assets:
Property and equipment:
Equipment		1,972			2,069
Capitalized software development		3,131			2,791
Leasehold improvements		15			15
Property and equipment, gross		5,118			4,875
Accumulated depreciation and amortization		(2,105	)		(1,955	)
Property and equipment, net		3,013			2,920
Finance leases, right-of-use assets, net		216			382
Operating leases, right-of-use assets, net		1,569			1,637
Other assets		171			171
Total noncurrent assets		4,969			5,110
TOTAL ASSETS	$	5,732		$	6,248

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable, trade	$	1,893		$	2,215
Accrued expenses		356			222
Finance lease liabilities, current portion		284			384
Operating lease liabilities, current portion		247			178
Notes payable		1,724			10,823
Deferred revenue		915			439
Total current liabilities		5,419			14,261

Noncurrent Liabilities:
Finance lease liabilities, noncurrent portion		2			3
Operating lease liabilities, noncurrent portion		1,480			1,539
Total noncurrent liabilities		1,482			1,542

Commitments and Contingencies

Stockholders’ Deficit:
Series A Preferred stock, $0.01 par value: Authorized shares – 20; Issued & outstanding – 9 in 2024 and 0 in 2023		9,275			–
Common stock, $0.01 par value: Authorized shares – 80,000; Issued shares – 1,958 in 2024 and 1,791 in 2023; Outstanding shares – 1,957 in 2024 and 1,790 in 2023		19			18
Common stock held in treasury, at cost – 1 share		(362	)		(362	)
Additional paid-in capital		101,875			101,049
Accumulated deficit		(111,933	)		(110,217	)
Accumulated other comprehensive loss		(43	)		(43	)
Total stockholders’ deficit		(1,169	)		(9,555	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	5,732		$	6,248

Cover	May 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 14, 2024
Entity File Number	001-39608
Entity Registrant Name	INTRUSION INC.
Entity Central Index Key	0000736012
Entity Tax Identification Number	75-1911917
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	101 East Park Blvd
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75074
City Area Code	(888)
Local Phone Number	637-7770
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	INTZ
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false