8-K
INTRUSION INC (INTZ)
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 11,2023
INTRUSION
INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 001-39608 | 75-1911917 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission File<br><br>Number) | (IRS Employer<br><br>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)
NOT APPLICABLE
(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:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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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 |
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The following information is furnished pursuant to Item 2.02, Disclosure of Results of Operations and Financial Condition.
On May 11, 2023, Intrusion Inc. issued a press release announcing its financial results for the quarter ended March 31, 2023. 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 |
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(d) Exhibits
| 99.1 | Press Release Issued by Intrusion Inc. on May 11, 2023 |
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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 11, 2023 | By: | /s/ Kimberly Pinson |
| Kimberly Pinson | ||
| Chief Financial Officer |
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Exhibit 99.1
****
Intrusion, Inc.Reports First Quarter 2023 Results
Intrusion Shield Continues to Gain Traction
PLANO, Texas, May 11, 2023 (GLOBE NEWSWIRE) -- Intrusion Inc. (NASDAQ: INTZ), a leader in cyberattack prevention solutions, announced today financial results for the first quarter ended March 31, 2023.
Recent Financial & Business Highlights:
| · | First quarter revenue of $1.3 million was down $0.1 million sequentially or 7%. |
|---|---|
| · | Intrusion Shield revenues for the first quarter totaled $0.3 million, representing 24% of total<br>revenues. |
| · | Gross margin increased to 76% during the first quarter, an increase of 21% sequentially, as the Company<br>focuses on building and retaining higher margin business. |
“While our financial performance was below our expectations, we are beginning to see positive market response to our revamped product suite, which we believe will continue to develop and drive further growth,” said Tony Scott, CEO of Intrusion. “The reception for our Shield family of products remains strong, as we continue to enhance our product capabilities, and expand and strengthen our relationships with technical partners and work closely with our sales and marketing channel partners which have also expanded. We continue to have several large important deals in our qualified pipeline, but we have also seen (as have many others in our space) elongated sales cycles due to uncertain economic conditions and also a rationalization and prioritization process for cybersecurity spend among buyers. “
Mr. Scott continued, “Our financing needs continue to remain a priority, and we are working closely with our financial partners, who are committed to providing the financial support we need. This gives us the confidence that we will have the funding levers and flexibility needed to support the promising long-term investments and rising security challenges where we believe businesses are going to prioritize spending on this important market, regardless of economic conditions in the near term.”
First Quarter Financial Results
Revenue for the first quarter of 2023 was $1.3 million, a decrease of $0.1 million sequentially and $0.5 million compared with the first quarter of the prior year. The decline in total revenue for the quarter was largely due to the loss of a consulting contract in the fourth quarter of 2022 in which Intrusion’s prime sponsor chose not to renew the final option year of a contract that had been in place since 2018.
The gross profit margin was 76% for the first quarter of 2023, compared to 51% in the first quarter of 2022.
Operating expenses in the first quarter of 2023 were $5.0 million, an increase from $0.1 million in the comparable quarter of last year.
The net loss for the first quarter of 2023 was $(4.7) million, or $(0.22) per share, compared to a loss of $(4.1) million, or $(0.21) per share for the first quarter of 2022.
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As of March 31, 2023, cash and cash equivalents were $0.4 million, down from $3.0 million on December 31, 2022. Subsequent to quarter end, we had a customer contract renewal which provided for annual billing in advance of services of $1.3 million. In late March 2023, we implemented cost reduction measures which included the voluntary reduction in salaries of certain of our executive officers for a 6-month period, reduction of 16 full-time positions and reduction in use of contractors. We estimate these cost reductions result in cash savings of approximately $1.5 million per quarter on a go-forward basis. These combined actions provide some liquidity relief and bridge some cash needs while we continue to evaluate available financing options; however, there can be no assurances that the Company will be able to raise the needed financing on a timely basis. Intrusion expects to obtain at least a portion of its 2023 financing needs through sales of its common stock through registered direct offerings, private placements and the use of its At-The-Market program.
Conference Call
Intrusion’s management will host a conference call today at 4:00 P.M., CST. Interested investors can access the live call by dialing 1-888-330-2041, or 1-646-960-0151 for international callers, and providing the following access code: 6774917. 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. CST until May 18, 2023, by dialing 1-800-770-2030, or 1-647-362-9199 for international callers, and entering the following access code: 6774917. 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 exclusively with government entities, the Company released its first commercial product in 2021. Intrusion Shield is designed to allow businesses to incorporate a Zero Trust, reputation-based security solution into their existing infrastructure. IntrusionShield observes traffic flow and instantly blocks known malicious or unknown connections from both entering or exiting a network to help protect against Zero-Day and ransomware attacks. Incorporating Intrusion Shield into a network can elevate an organization's overall security posture by enhancing the performance and decision-making of other solutions in its cybersecurity architecture.
Cautionary Statement Regarding Forward-LookingInformation
This release may contain certain forward-looking statements, including, without limitation, our expectations for positive results from our recent sales, marketing, and strategic initiatives, which statements reflect management’s expectations regarding future events and operating performance. These forward-looking statements speak only as of the date hereof and involve a number of risks and uncertainties, including the risk that our recent sales, marketing, and strategic efforts will not result in increased product awareness or sales of our Intrusion Shield. 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, the risk that this financing fails to provide the needed capital for the Company to execute its current business strategies, the Company does not achieve the anticipated results from its current sales, marketing, operational, and product development initiatives, as well as 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.
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INTRUSION INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31,<br> <br>2023<br><br> <br>(unaudited) | March 31,<br> <br>2022 | |||||
| Revenue | $ | 1,309 | $ | 1,835 | ||
| Cost of revenue | 313 | 903 | ||||
| Gross profit | 996 | 932 | ||||
| Operating expenses: | ||||||
| Sales and marketing | 1,738 | 1,206 | ||||
| Research and development | 1,796 | 1,650 | ||||
| General and administrative | 1,506 | 2,060 | ||||
| Operating loss | (4,044 | ) | (3,984 | ) | ||
| Interest expense | (731 | ) | (71 | ) | ||
| Interest income | 41 | 1 | ||||
| Net loss | $ | (4,734 | ) | $ | (4,054 | ) |
| Net loss per share: | ||||||
| Basic | $ | (0.22 | ) | $ | (0.21 | ) |
| Diluted | $ | (0.22 | ) | $ | (0.21 | ) |
| Weighted average common shares outstanding: | ||||||
| Basic | 21,065 | 19,113 | ||||
| Diluted | 21,065 | 19,113 |
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INTRUSION INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
| December 31,<br> 2022 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current Assets: | |||||
| Cash and cash equivalents | 411 | $ | 3,015 | ||
| Accounts receivable | 470 | 530 | |||
| Prepaid expenses and other assets | 372 | 1,877 | |||
| Total current assets | 1,253 | 5,422 | |||
| Property and Equipment: | |||||
| Equipment | 2,890 | 2,865 | |||
| Capitalized software development | 1,934 | 1,380 | |||
| Furniture and fixtures | 43 | 43 | |||
| Leasehold improvements | 78 | 78 | |||
| Property and equipment | 4,945 | 4,366 | |||
| Accumulated depreciation and amortization | (2,440 | ) | (2,208 | ) | |
| Property and equipment, net | 2,505 | 2,158 | |||
| Finance leases, right-of-use assets, net | 882 | 1,048 | |||
| Operating leases, right-of-use assets, net | 427 | 504 | |||
| Other assets | 141 | 143 | |||
| Total noncurrent assets | 3,955 | 3,853 | |||
| TOTAL ASSETS | 5,208 | $ | 9,275 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||
| Current Liabilities: | |||||
| Accounts payable, trade | 1,511 | $ | 1,273 | ||
| Accrued expenses | 524 | 446 | |||
| Finance leases liabilities, current portion | 658 | 667 | |||
| Operating leases liabilities, current portion | 240 | 294 | |||
| Notes payable | 10,737 | 10,114 | |||
| Deferred revenue | 166 | 455 | |||
| Total current liabilities | 13,836 | 13,249 | |||
| Noncurrent Liabilities: | |||||
| Finance lease liabilities, noncurrent portion | 5 | 10 | |||
| Operating leases liability, noncurrent portion | 199 | 231 | |||
| Total noncurrent liabilities | 204 | 241 | |||
| Commitments and Contingencies | |||||
| Stockholders’ Equity (Deficit): | |||||
| Preferred Stock 0.01 par value: Authorized shares – 5,000 Issued shares – 0 in 2023 and 2022 | – | – | |||
| Common stock 0.01 par value: Authorized shares — 80,000 Issued shares — 21,258 in 2023 and 21,198 in 2022 Outstanding shares — 21,248 in 2023 and 21,188 in 2022 | 212 | 212 | |||
| Common stock held in treasury, at cost – 10 shares | (362 | ) | (362 | ) | |
| Additional paid-in capital | 92,421 | 92,304 | |||
| Accumulated deficit | (101,060 | ) | (96,326 | ) | |
| Accumulated other comprehensive loss | (43 | ) | (43 | ) | |
| Total stockholders’ deficit | (8,832 | ) | (4,215 | ) | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | 5,208 | $ | 9,275 |
All values are in US Dollars.
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