Intrusion Inc Q2 FY2021 Earnings Call

Good afternoon and welcome to Intrusion’s Second Quarter 2021 Financial Results Conference Call. As a reminder, today’s conference call is being recorded for replay purposes. I would now like to turn the call over to Joel Achramowicz of Shelton Group Investor Relations. Joel, please go ahead.

Good afternoon and welcome to Intrusion’s second quarter 2021 earnings conference call. I am Joel Achramowicz, Managing Director of Shelton Group, Intrusion’s Investor Relations Firm. Joining me today are Intrusion’s Co-Founder and CTO, Joe Head, the company’s CFO, Franklin Byrd, and also the Chief Marketing Officer, Gary Davis. Also on today’s call is Intrusion’s Chairman of the Board, Tony LeVecchio, who will be available for questions after management’s prepared remarks. Before we begin, I want to remind you that today’s conference call may contain forward-looking statements regarding future events, including, but not limited to expectations for Intrusion’s future business, financial performance and goals, customer-industry adoption of Shield technology, successfully bringing to market Intrusion’s design pipeline, executing on its business plan, anticipated capital needs as well as the engagement of investment professionals to assist the company. These and all forward-looking statements are based on estimates, judgments, current trends and market conditions and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We encourage you to review the company’s SEC filings, including the 2020 Form 10-K filed with the SEC on March 9, 2021 and other SEC filings made from time to time in which we may discuss risk factors associated with investing in Intrusion. All forward-looking statements are made as of the date of this call, Thursday, August 12, 2021, and except as required by law, we do not intend to update this information. This conference call will be available for audio replay for at least 90 days in the Investor Relations section of Intrusion’s website at www.intrusion.com. With that, it’s my pleasure to turn the call over to Franklin. Franklin, please go ahead.

Well, thanks, Joel and thank you to everyone who has joined us on our call today. Clearly there have been a number of significant developments at the company since our first quarter conference call. On July 20, we published the press release in which we provided preliminary revenue results for the second quarter. As part of this press release, we also announced certain organizational changes and new strategic activities, including the engagement of an investment banking firm to evaluate various funding sources as well as potentially constructive longer-term strategic options. Additionally, we announced that Intrusion CEO, Jack Blount had left the company. In conjunction with these developments, the Board has Joe Head and me to assume operating responsibilities until a new CEO could be appointed. It is our aim to address each of these developments during the course of today’s call. Let me start with the review of the company’s second quarter financial results. Second quarter 2021 revenue was $2.0 million, which was in line with the preliminary revenue results we reported in our July 20th release. This compares to $1.9 million in the first quarter of this year and $1.7 million in the second quarter of last year. The majority of the second quarter revenue consisted of our government business. Even though our Shield revenue was much higher in the second quarter than in the first, it only represented approximately 7% of our total second quarter revenue as it was still in the early stages of deployment. As indicated in a recent announcement, the ramping up of the Shield solution has been slower than anticipated due to longer customer evaluation cycles. While we had hoped our appliance model would allow customers to simply plug the platform in and use Shield immediately, we found that customers actually wish to evaluate additional metrics and this renders the actual time to close more in line with the procurement processes for normal enterprise security software sales. Activity in our government sector remained stable as reopenings occurred, and we expect this recovery to continue in the coming quarters. Gross margin in the second quarter was 63% compared to 66% last quarter and 61% in the second quarter of 2020. Second quarter operating expenses were $6.9 million compared to $5.1 million last quarter and $1.7 million in the same quarter a year ago. Included in these operating expenses were increases in non-cash stock compensation expense of $0.6 million resulting from the rollout of our 2021 stock option plan and $0.2 million in legal expense attributable to our annual shareholder meeting and ongoing legal matters. As indicated last quarter, the major increase in our operating expenses was primarily due to the additional hiring we had done to expand our sales and leadership team, combined with increased marketing spend around the development and launch of Shield. At the quarter end, our total headcount was 112 compared to 80 in the prior quarter. In conjunction with the previously mentioned developments, on July 30, we took decisive action to significantly reduce expenses and our cash burn by implementing a reduction in force. After the reduction in force and additional recent terminations, our headcount has been reduced to 76. Reductions were made across the entire company with some of the largest reductions coming from the sales, marketing, and general administrative areas. Net loss for the second quarter of 2021 was $5.0 million or minus $0.28 per share on 17.6 million weighted average shares compared to a net loss of $3.9 million or minus $0.22 per share in the prior quarter, and a net loss of $0.7 million or minus $0.05 per share in the second quarter of 2020. Turning to the balance sheet, at quarter end, June 30, 2021, the company had cash and cash equivalents of $9.3 million, which is down from $13.1 million at the end of the first quarter. Working capital was $7.3 million and we had no outstanding debt at the end of the quarter. As previously indicated, we believe the company’s current cash positioning combined with a slower ramp of revenue from Shield are likely to result in a need for additional capital in order to fund near-term operating losses and execute on our strategic growth initiatives before we reach profitability. Given these expectations, on August 5, the company completed a multipurpose shelf registration, which provides the flexibility to take in additional capital through various types of security transactions. I would like to emphasize that the primary intended purpose of the shelf is to satisfy the potential requirements for additional capital in the near term at the discretion of the Board. As of today, the registration has not yet become effective. Separately, the company is evaluating other potential funding and long-term strategic options. However, these evaluations are still in the early stages. Both the company and its Board are firmly committed to considering all potential options that are consistent with our goals of accelerating Intrusion’s growth, achieving improved operating results, as well as maximizing shareholder value. Regarding the company’s outlook for the third quarter, together with recent developments, our near-term visibility remains very limited with respect to the timing of recovery of the government business and the ramp on our Shield revenues. Given the difficulties in forecasting regarding timing, some of which is outside the control of the company, we are maintaining our policy of not providing quarterly guidance. We will, however, continue to reevaluate our approach on an ongoing basis as the business and visibility evolve in future quarters. With that, I’d like to turn the call over to Joe Head for an update on current market dynamics and our product initiatives. Joe?

Thank you, Franklin. I’m pleased to join you on today’s call. As many of you know, I’m a Co-Founder of Intrusion. I have been at the company since 1983. I’m speaking to you this afternoon as someone who is deeply vested in the company’s success, both professionally and personally. Therefore, I understand and share any disappointment felt by my fellow shareholders. But my focus remains on enabling sales by providing technical clarity on what we’ve accomplished, knocking down barriers to sales by completing bug fixes, filing new patents, and developing new features in Shield. I remain confident in the long-term opportunities for Intrusion, as I believe we have a highly differentiated cybersecurity solution that implements Zero Trust in a natural way. It’s easy to install and is underpinned with one of the most extensive threat intelligence databases in the world. It’s the only product that I am aware of that uses historical IP reputation to determine if you are at risk and it determines immediately if a connection is good or bad. That’s especially important with Zero-Day and malware-free attack techniques, which typically start with a call home from an agent that is already on your network. It is covered by two existing patents. Last August, we filed a provisional patent, and this provisional will be supplemented as a formal filing this month, which is then divided into two patents following up on our provisional filings last August. I’ve witnessed the technology work in the lab, in the federal government, and DOD to defend against some of the world’s most sophisticated adversaries and also successfully deployed and applied private enterprise customers to stop cyberattacks. The point I want to make unmistakably clear is Shield works. It’s simply a matter of ramping up our go-to-market efforts and reducing the sales cycle time. My predominant focus at the company over the last several years has been on our core government business. So I’ll start with a brief update on this area first. Our base government business has remained more or less flat for a long time. This business is steady and renewing with longstanding customers expected to continue renewing as they have for years. Some have slight increases expected, including a few new program starts in the last half of the year. So this business is expected to continue at historical run rates with a slight trend up. Shifting to our enterprise business, over the last several quarters, we’ve made substantial progress with the launch and commercialization of our Shield solution. We took Shield from a concept in late 2019 to working beta in early 2020, and finally the general availability in January of 2021. As with all new product launches, we had early customers who were patient and supportive while helping us get the solution to market. But some customers found certain bugs and corner cases that they felt needed fixing. From March 10 through early July 2021, we made upgrades to Shield, fixed several bugs, and started shipping the latest version in July. We have also separated our core Shield code updates from our reputation whitelist updates so these can be made daily or as needed. Of the things we upgraded, the most important one was related to a future Google tracking change, where DNS common names are beginning to be used instead of cookies to track users. This was a fundamental change and have DNS redirect chains are used. And this change in Shield rules prevent false positives, blocking otherwise good sites to ensure our false positive rates stay very low going forward. As for the non-geek summary, I’ve told the sales force there are no showstoppers or reasons to hold back. Shield was good when we launched it and is far superior with the July 2021 release. We will continue to evolve Shield to meet the needs of the market. We continue to be committed to a channel-first distribution model for Shield both domestically and internationally, to help reduce sales cycle times and barriers to entry. We’re also seeing strong demand in the federal government and we’ll continue our focus there. I think it’s critical that we better leverage our distribution partners to introduce prospective customers to the benefits that Shield offers to their security. Although we have secured a few early customers, we’re working diligently on signing more customers. Of our initial two large customers, one has proceeded with a deployment plan and the other has changed its CISO and hasn’t committed to a deployment schedule yet, but the overall process of launching a new cybersecurity solution to the marketplace and the implementation of our solution across a global organization has been slower than we anticipated. But that has not changed our focus or belief in the effect of Shield and the valuable protection that it offers customers in helping them fight the growing war on cybercrime. With so many recent global network breaches, it’s very clear the market needs a more effective solution to these threats. We remain convinced that Shield stands to be a critically important part of the solution. Overall interest in our solution remains high, and the recognition we are receiving is increasing. You should know that we’re establishing a new advisory board of technical cybersecurity experts and executives, who will collectively serve as a valuable resource to help us further refine and optimize our go-to-market strategy. They are already opening doors for us and assisting us in new opportunities. We have also reached out recently to independent labs and product reviewers, such as IDC’s former Research Vice President, Charles Kolodgy, who currently does cybersecurity consulting and should have his review of Shield by the end of the month, and Ten Mile Square, a product testing company, has just published its findings from their testing of Shield that we can make available to customers. We hope that these new reports will add new objective perspectives that will further validate our plans regarding Shield. Finally, we’ve asked our CMO, Gary Davis, to apply the data-driven rigor and go-to-market discipline he brought to our marketing efforts to lead our sales team and build a more consistent and predictable sales forecast, driving higher closed deal volumes. He will also drive tighter alignment between our sales and marketing teams. He started in this capacity earlier this week. Now Gary will share a few words about our participation at the Black Hat event last week.

Thank you, Joe. I look forward to applying the techniques I used at companies like McAfee and Intel to help propel Shield’s efforts on the sales side going forward. Let me now share some results from our presence at the important Black Hat Security Conference last week. For those unfamiliar with our space, Black Hat is one of the most significant conferences in cybersecurity. This year, I had both a physical and virtual presence. Our booth was between CrowdStrike and Darktrace. It’s difficult to say specifically, but I would say we had over twice as much traffic as either of those companies. In fact, we had such a long line at our booth that some of the Darktrace booth staff started to survey those waiting in our line. We had four live demo stations, which were busy nonstop. Some of our feedback from those attending includes, 'You guys look like you’re here for business.' 'I’ve seen you everywhere here at the event and want to find out more about your product.' And that’s just a sampling. I could not be happier with how the event went. We are still working on the numbers, but between the virtual and live events, I would say that we now have over 200 qualified opportunities and our new channel partner leads to follow up on. Back to you, Joe.

Thanks, Gary. In closing, I want to let you know that we understand how difficult this period has been for you, our valued investors. We want you to know that we still believe firmly that Shield is a powerful and effective solution for helping organizations fight cybercrime, which is a major global crisis today. Although the sales cycle for Shield will take longer than we anticipated, the feedback we continue to receive from our customers and prospects remains encouraging. As more details become available regarding our progress in the areas I’ve outlined, we will provide them to you as soon as we can. On behalf of Intrusion’s employees and the Board, I want to thank you sincerely for your patience, trust, and support as we continue our efforts to grow our government business while we also work to establish Shield as a unique and powerful tool for combating the increasing prevalence of global cybercrime. With that, we will open the call to your questions. Operator?

Thank you, sir. Your first question is from Zach Cummins with B. Riley Securities.

Great. Hi, Franklin. Hi, Joe. Hi, Gary. Thanks for taking my questions and I appreciate all the incremental information around the recent changes at the company. I mean, Franklin, just starting off, it’s nice to see that some revenue was generated from Shield this quarter. Any sense you can give us on kind of the average price being paid? Is it still safe to assume somewhere around $20 a month?

Yes. Our policy is not to really talk about what’s in the customer contracts, and we’re not going to do so here. But Joe, if you want to add to that, I don’t know if I have much more to add to that, Zach?

In general, though we’re quoting it at $20, and then our resellers get a discount off of it. So in general, that’s our going rate, it’s sort of $20 or $14 if you look at the $30 thing.

Got it. That’s helpful. In terms of the backlog, I guess, of signed seats for some it had last up...

The other comment I’d make, though, is that there are certain markets we’ve had a little progress in like education, where you start looking at the ratio of staff to students. And so there is some price adjustment you have to do in the educational market that’s reasonably standard across the industry if that makes sense.

Understood. Completely. That’s helpful. And I mean, in terms of the last time you updated on kind of the backlog that you had for Shield, I think it was over $50,000. Any update you can give around that? It sounds like at least one of those customers is moving forward, while the other is still kind of regathering itself after a change in leadership?

Yes. I think the best answer is we’re – Gary is in the process of restacking all of our opportunities as well as the things on the backlog to see how those will progress. I think our idea is to get that stuff in a less fuzzy state and then give you guys some periodic updates on how that’s proceeding. Like Gary said at Black Hat and in the commercial world, we’re chasing a lot of nice opportunities. The question is, how do you put numbers on them and when?

But Zach, I think your question is more tied to past deals that we’ve closed, right?

Yes, that’s correct.

Yes. One’s got a schedule, and we should have had some good clarity for you on revenues as the quarters clicked by, but one’s proceeding, one’s pausing, but then we have some others that we’re working that will be falling into place as we go forward.

Understood. That’s helpful. And Gary, I mean, with you taking over the sales motion now, can you give us a sense of maybe some of the changes that you’re thinking of making and some of the techniques that you’ve used in your prior experience here that you want to adopt here at Intrusion?

Well, in certain words, we’re going to stay tuned first, that gives us the quickest time-to-market. Typically, resellers and distributors have a network of customers that they can bring to the table, so we’re going to stay committed to that. I have noticed, just to be transparent, this change happened this week, so I’m still kind of working through and understanding where I need to lean in a bit more. One of the areas I think that we could drive more traction is by coming up with a comp plan that’s more compelling for our reps as well as our channel partners. We need to make sure they are properly incented. And so I’m looking at things I can do there to ensure they have the proper motivation and incentives to sell as quickly as possible. That’s one thing. We’re also looking at finalizing a value-added distributor that covers Europe and the Middle East. We’re also having discussions with a top five distributor that has some 3,100 resellers in the network, and we’re really close to signing them as well. So there are several things we’re doing to make sure that we get as many resellers as possible getting Shield in front of their end-user customers.

Understood. That’s helpful. I appreciate the context. And Franklin, I saw a kind of a nice jump in deferred revenue here in Q2 on the balance sheet. Is that related to Shield revenue being booked?

No, that’s not. That’s actually our legacy product. Cash and receipt, yes.

Got it. Okay. Helpful. Then I guess on that legacy business, it sounds like it’s starting to stabilize, and then maybe you can see an uptick there. What’s the overall strategy, I guess, in terms of trying to leverage that to drive more Shield adoption in the government?

Yes. I’ll tell you a little bit about the way I’m seeing it. It's moving what I’m hearing and then maybe Joe might have some more input on how to leverage that into the Shield business. But yes, we are seeing an uptick, and I hope and believe you will see an uptick in Q4 on that. As you probably know, some of the congressional budgets have been on kind of hold for a little while, sitting behind the infrastructure budget that was just approved. So we’re here and starting to get calls about potential new business there. So – but Joe, do you want to comment...

Yes. I mean, I put some words in my prepared remarks about the government business, but it’s been relatively flat for a while with reasonable contribution to the bottom line on the profit from the GPM side. We do see a couple of new programs – well, one new program start, that’s a good one, plus we’ve got some increased spending from some legacy ones. So I mentioned in the comments that we expect an uptick in revenues from the legacy. And then if you turn to the Shield government side, I guess, the center of me and Gary’s focus has been taking that to the commercial world from a government perspective. However, I’ve got a number of government programs that they say they are picking us, and they have rumored amounts, which are non-zero and appreciable.

And compelling, I would say.

Yes. But those haven’t made their way through when, who’s going to place an order for what. But I do think there is some good uptick there, and that’s particularly leverageable because they have a long history of knowing the people that are making the choices. They know that you need a product like Shield to get it done, and we’re already working from the side of being friends with the government tech teams that know what works and what can’t.

Understood. That’s helpful. And Franklin, in terms of restructuring your overall operating expenses, I mean, headcount down to 76, I believe you said now. How should I be thinking about operating expenses as we kind of go forward here in terms of what you guys need to continue to pursue growth opportunities for Shield?

No, that’s a great question. If you kind of look at our headcount, it resembles our Q1 headcount. So I see right now, by Q4, we’re going to be, for OpEx and employees, etcetera, it will be more in the Q1 range. That kind of makes sense. I think we’re kind of launching again almost. We’re still different strategies, different people, different structures a little bit, but we’re launching just like we were in Q1. So Q4, I think it’s going to look a lot like Q1. Q3 is going to be a hybrid, right, because we started a lot of this. Our reduction in force was not quite midway in, but a third of the way into Q3 and the winding down of some of the – we’re doing – there are some cost initiatives that we’ve undergone in Q3 that you’ll see the full benefit for in Q4. So Q3 will be kind of a mixture between Q2 and Q4.

Understood. And yes, absolutely, I appreciate it. Thanks. And then in terms of your funding for going forward, I mean, it seems like you have some initiatives in place. But I mean, can you just give us a sense of kind of where you’re at from a cash perspective now and kind of how we should be thinking about the necessary funding going forward?

Sure, sure. As you saw, we closed the quarter with a little over $9 million on the balance sheet, and we’re going to be very judicious with our spend. It’s a little bit of a change in our approach here, and we’re going to find other ways to supplement that as we roll out the new Shield product, just a little slower than we originally anticipated. I know that you’ve seen and modeled and commented in your release today that about the shelf registration that we filed last week. We do expect to use some of the funding from that to help fund some of the negative cash until Shield comes online fully, and we feel pretty comfortable about it. We’ve also talked about other strategic options that are a little less vetted at this time, with just kind of like early discussions, so I’m not going to talk about those today, but I am happy to talk more about this job.

Good to know. That’s extremely helpful. I appreciate the insight and thanks again guys for taking my questions.

Thanks, Zach.

Thanks, Zach.

Your next question is from Russell Cleveland with RENN Capital. Your line is open.

Thanks for the call. One suggestion, I do a lot of these calls is limit the questions to people, so you don’t have someone talking for 20 minutes. But I’ve got a very simple question. It seems like Shield is such a great idea and the sales cycle seems to be way off here. So give me some flavor about the sales cycle. I mean, it seems like a no-brainer for companies to join this. And you mentioned in your comments that it was more like other software. So give me some thoughts on why the sales cycle was long and how – what do we think we’re going to have to do here to get the Shield moving as it should be? So it’s all about the sales cycle, if you could comment on that?

Yes, 100%. This is a product which is highly differentiated from anything we’ve ever seen before. I’ve been in the market for years and years as well. The distinction is the buying centers are the buying centers, right? And they are accustomed to buying software and services in a certain way. So no matter how innovative Shield is, you’re still going to have to be beholden to the process that a typical large company's procurement would go through. And I think that was the thing that we didn’t really respect and we were doing some of our early planning. And again, I think you’re spot on that the thing that we need is going to kind of break us through the impasse is, once we get enough momentum with early adopters, and those early adopters are kind of proving what we say it does along with these reviews and independent tests, that’s going to be the thing that’s going to really help open up the dam and really start driving a huge amount of opportunities to Shield. Does that answer your question?

Well, yes, is it – are we talking 30 days, 90 days, 6 months, a year, what’s your thought on the process now? And maybe we just don’t know.

Well, I think the typical sales cycle right now is closer to 6 months. I think once we get that critical mass of customers under our belt, it’s going to shrink significantly. Probably the most aggressive we would ever see it is going to be probably 30 days, and that’s once you’re well established, you're well-known and your value is well understood. In fact, last quarter, I believe we had one customer that cradle to grave was less than 60 days. Some of those are happening now, but I wouldn’t say that that’s the norm. That’s more the outlier than what we’re seeing.

Cradle to grave, you said?

Yes, I guess cradle to wedding.

That’s the order.

That's an awkward phrase, but thanks for the clarification.

Okay, thank you so much. I appreciate it.

Thanks, Russell.

Thanks, Russell.

Your next question is from Howard Brous with Wellington Shield.

Joe, you had mentioned earlier – how are you Joe? How is everyone today? Say again?

No, we are doing very great. Go ahead, Howard, sorry.

Okay. Two things. One, tell me about – you mentioned two specific reports, one from IDC and one from CMO that talks about Shield, and that it works. You mentioned you’re spending that – go ahead, you talk.

Let me clarify that. I’ll start with that one. The – what we said, we had an independent testing company called Ten Mile Square, which actually compared the Shield to our marketing claims. And I am happy to report that – I am happy to say that the report was very favorable and that Shield does, in fact, do what we claim it does, which is really what we expect. The other group we are talking to are product reviewers. And one of those reviewers, his name is Charles Kolodgy, he is the Former VP of Research at IDC. He is now has his own company and does security research and things of that nature, but that was just to give context of the type of companies and people we are reaching out to do these reviews and tests.

Okay. Given that, can the Ten Mile Square report be put on the website, sent to customers and prospects?

Absolutely.

Yes. We are using it for that. And Howard, one of our goals was to have that ready before we went to Black Hat. And we had – a number of resellers were there. Some of them were actually looking for independent confirmation. And since we had that, we can lock and load and then necessarily bring their customers by the booth. So, that was a helpful thing to have.

Someone I know attended Black Hat and said that you guys were absolutely packed. Tell me about it.

We were. In a good way. It was funny because we had – this is our big coming out. I think everybody would agree that Intrusion has forever been kind of sitting in the wings, waiting for something to happen, and it was literally refreshing to be between CrowdStrike and Darktrace, which are two goliaths in the space right now and see all the traffic kind of going by them right to our booth. We were busy nonstop. We had four demo stations, and we were constantly being engaged. We had a line for people who wanted to get coffee. It was just energy.

20 to 40 in the booth at the time. The low ebb, I saw was 30 minutes before close. We had four people there, and then we got mobbed again.

Yes. So from a pure marketing and sales perspective, that’s what you want. When you leave that event and everybody is high-fiving and they are saying how we aggregate to all these new opportunities and start closing deals. It’s a good position to be in for sure.

Great. Let me go off on a tangent and get back to the original business, TraceCop and Savant. You were generating $15 million, $16 million in revenue several years ago before COVID, before the government basically shutdown. What are your chances of getting back to that level, say, in Q4, annualized, of course?

We won’t be that high again. That when we hit $15 million that was sort of an aberration of a gift where we got 9.3% in unspent funds in 2019, if I remember correctly.

Right.

So if you look at our steady state, it ran about $8 million to $8.5 million a year. And we will do better than that this year because we have got some new program starts. But it currently won’t be – I don’t think it will be above 10% based on what we see right now. So I think 9.5% is probably where we get to with what we see.

Alright. Fair enough. And at similar gross margins that you have experienced in the past, is that a correct statement?

Yes, no change there. And I do think – you hit it at one thing. We do believe that Savant as a supplement to Shield in the government space will be a thing, do deeper analysis. And we have actually been so busy with Shield and every other thing we have been doing that we haven’t gotten around to come out with a new pricing model for Savant. But I do believe that’s essential and will contribute and be an upside for us.

Two more comments. One, TraceCop how many bad IP addresses do you currently have in your background of TraceCop? Last time when we spoke with you, you were talking about 3.5 billion.

Those are still conservative and roughly correct. So, the 8.5 billion we have been quoting that has the 3.1 billion and 5.4 billion is still about correct. However, we understated it to the extreme, so there is a lot of IPV6 in there. And it’s actually like the end of the 42nd power of the whitelist that’s already loaded. But even if people take off their shoes and socks, they can’t count that high. So, we have stayed with the 8.5 billion for marketing purposes, but it’s conservative and amazingly lower than what we have already loaded.

It’s important from a marketing perspective that we have highly defensible numbers, right. And when you come in those types of numbers, they are easy for people to get their heads around. And so we tend to lean into that number. But to Joe’s point, the number is much higher than that. It’s just – you have got to be careful that your marketing claims are something that people can understand.

Yes. So, these are very conservative numbers. And part of the thing is I am not going to give somebody a whole list so they can check it because that’s a very valuable list.

So last but not least, given the number, evaluation of TraceCop, which you and I go back many, many years about the same question, is certainly, could I assume that it’s initially greater than the last sale of the stock, $4.70? Is that a fair comment?

I believe so, yes.

Thank you. That’s all I have.

I mean if you look at our space, just to add a little bit more color to that, please, most of all the cybersecurity companies, that’s what they value, right? The threat intelligence they have that informs their products is how they work. And our threat intelligence, to Joe’s point, is very unique and very substantial compared to every cybersecurity company that I am aware of. So, I think that the share price, and this is just my opinion, is not reflective of just the value that’s in TraceCop alone.

Yes.

And that concludes the question-and-answer session for today. I will hand the conference over back to Joe Head for closing remarks.

Thank you, Operator. Before closing the call, I want to quickly highlight several upcoming events at which Intrusion will be participating. We plan to host meetings with investors at the H.C. Wainwright Conference on September 14. We will also attend two important cybersecurity technology conferences, the Gartner Security & Risk Management Conference, September 20 through 22, and Global Security Exchange, September 27 to 29. Then we are also planning to participate at Black Hat Europe in November. Please contact the Shelton Group if you would like to schedule a meeting with us during the H.C. Wainwright investor event. Thank you again for joining us on today’s call and for your continued support of Intrusion. Operator, you may now disconnect the call.

Thank you, sir. For all participants, thank you for joining. This concludes today’s conference call. You may now disconnect. Stay safe and healthy.