Intrusion Inc 8-K, filed Oct 5, 2020
Intrusion Inc (INTZ)
About this 8-K
Intrusion Inc filed this 8-K on October 5, 2020.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
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): October 5, 2020
INTRUSION INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 000-20191 | 75-1911917 |
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 1101 East Arapaho Road, Suite 200, Richardson, Texas | 75081 |
| (Address of Principal Executive Offices) | (Zip Code) |
(972) 234-6400
(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:
| ☐ | 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)) |
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. ☐
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 | OTCQZB Venture Market |
Item 8.01 Other Events.
Intrusion Inc. (the “Company”) issued two press releases on October 5, 2020. The first press release announced the initial results of the Company’s Beta testing of its INTRUSION Shield solution, the first in the Company’s family of new cybersecurity and intrusion protection solutions. The second press release announced the launch of the Company’s public offering of common stock (the “Public Offering”). Copies of the press releases are attached hereto as Exhibits 99.1 and 99.2. We have also included a copy of the Company’s Roadshow Presentation that will be used in connection with the Public Offering as Exhibit 99.3.
Item 9.01. Financial Statements And Exhibits
(d) Exhibits
99.3 – Intrusion Inc. Roadshow Presentation, dated October 5, 2020
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SIGNATURES
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: October 5, 2020 | By: /s/ Jack B. Blount |
| Jack B. Blount | |
| President and CEO |
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Exhibit 99.1
| NEWS RELEASE |  |
| 1101 E. Arapaho Road, Suite 200 | |
| Richardson, TX 75081 | |
| (972) 234-6400 |
Contact
Julia Kramer
jkramer@intrusion.com
P: 972-301-3635
Initial Beta Testing for INTRUSION Shield Stops More Than 400,000 Threats in Their Tracks
In first days of testing among three companies, INTRUSION Shield shuts down threats without obstructing business operations
Richardson, Texas – Oct. 5, 2020 – Preliminary beta testing results from installations of INTRUSION Shield™, the highly anticipated cybersecurity solution from INTRUSION Inc. (OTCQB:INTZ), underscore the significant need for companies to change their approach to cybersecurity. Within the first three days of beta testing, Shield identified and immediately shut down a total of 461,562 threats to three companies, defending them against possible cyberattacks.
INTRUSION Shield is the first cybersecurity solution to protect organizations by not only identifying malicious traffic on a company’s network, but also using artificial intelligence (AI) to immediately neutralize threats on both incoming and outgoing traffic, effectively stopping ransomware, viruses, malware, data theft and more. Where other solutions only alert IT managers and often cannot even identify silent threats, Shield identifies and immediately stops them.
“Our beta testing results reveal there is no way a person could effectively manage the number of threats a typical company faces each day,” said Jack B. Blount, President and CEO of INTRUSION. “At one of the beta companies, we detected and blocked more than 137,000 threats in just a single day. It would be impossible for someone to research that many alerts and stop all of the threats successfully, thereby leaving companies incredibly vulnerable to cyberattacks without Shield. Our solution never takes a break and is always on – monitoring, analyzing and defending.”
Shield monitors and quarantines known threats based on INTRUSION’s threat-enriched, Big Data Cloud. Unlike other cybersecurity solutions, Shield utilizes AI to research this inventory and understand how malicious activity behaves. The solution then monitors and identifies – in real-time – all packets of data coming into or leaving a network and then instantly neutralizes and shuts down any that are acting in a way that is consistent with criminal activity.
“It was amazing how many potential threats were blocked in such a short period of time with the Shield solution. We didn’t realize how many connections were being attempted each day,” said the CEO of a defense company that is participating in the beta testing. A vice president of IT at a large manufacturing company commented, “It was easy to install Shield and because of the blocking we have seen we have installed a second Shield at a subsidiary company. We anticipate purchasing Shield when it is shipping.”
“During National Cybersecurity Awareness Month, it is critical that IT and cybersecurity professionals understand that their networks are infected. Cybercriminals are already present as they oftentimes come in through hardware manufactured overseas, or they have figured out a way around the firewall,” said Blount. “They live on a network for months, analyzing the information they can access and determining the best way to attack a company. If those threats are not detected and blocked immediately, they have the potential to do significant damage.”
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Shield was recently recognized by ASIS International, the world’s largest membership organization for security management companies, as the 2020 Innovative Product Award winner at the Global Security Exchange Plus virtual conference. The award recognizes peer-distinguished solutions that address critical industry trends and represent innovation that is shaping the security industry.
Another beta tester, Anson, who is an IT manager for a civil engineering construction company, stated, “I think it’s great how much Shield is blocking, but what may be even better is that business operations are running just fine in spite of all that is blocked. If my guys are happy and able to do their work while the network is protected, then my job just got a lot easier.”
INTRUSION Shield is a plug-n-play solution that is easy to install and manage. Greg, an IT manager at a retail organization who is participating in beta testing said, “Installation was an absolute breeze. Shield is like a traditional firewall on steroids where you’re really paying attention to the ports and blocking them, but all the work is done for you.”
Twelve companies are currently in the process of beta testing INTRUSION Shield, and final results will be released once the full, 90-day testing is complete.
For more information visit https://www.intrusion.com/shield/.
###
About INTRUSION Inc.
INTRUSION, Inc. is a global provider of entity identification, high speed data mining, cybercrime and advanced persistent threat detection solutions. INTRUSION’s solution families include TraceCop™ for identity discovery and disclosure, and Savant™ for network data mining and advanced persistent threat detection. INTRUSION’s solutions help protect critical information assets by quickly detecting, protecting, analyzing and reporting attacks or misuse of classified, private and regulated information for government and enterprise networks. For more information, please visit www.intrusion.com.
Cautionary Statement Regarding Forward Looking Information
This release may contain certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward looking statements involve a number of risks and uncertainties. Such statements include, without limitation, statements regarding the introduction of our new INTRUSION Shield solution, as well as other statements. 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. These factors include, without limitation, uncertainties related to the success of our new INTRUSION Shield solution, the outcome of the current Beta testing, the development and testing of our new Shield CLOUD solution, and other facts and circumstances that might cause actual results to differ materially from our current expectations, some of which are detailed in the Company's most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.”
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Exhibit 99.2
| NEWS RELEASE | |
| 1101 E. Arapaho Road, Suite 200 | |
| Richardson, TX 75081 | |
| (972) 234-6400 |
|
IR Contact Joel Achramowicz sheltonir@sheltongroup.com P: 415-845-9964 |
Company & Media Contact Julia Kramer jkramer@intrusion.com P: 972-301-3635 |
INTRUSION Launches Proposed Public Offering of Common Stock
Richardson, Texas – Oct. 5, 2020 – INTRUSION Inc. (OTCQB:INTZ), a leading provider of entity identification, high speed data mining, cybercrime and advanced persistent threat detection services, today announced the launch of the Company’s proposed public offering of 3.1 million shares of common stock, including 2 million shares of common stock to be issued and sold by INTRUSION, and 1.1 million shares of common stock to be offered by a group of selling shareholders. In addition, INTRUSION intends to grant the underwriters a 30-day option to purchase up to 465,000 shares of common stock in connection with the offering to cover over-allotments, if any. The proposed offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. Net proceeds from the proposed offering are intended to fund several growth initiatives, including the commercialization of its new INTRUSION Shield plug-n-play, AI-enabled threat detection and neutralization solution designed for the worldwide enterprise market.
In connection with this offering, the Company has applied to list its common stock on the Nasdaq Capital Market (“Nasdaq”) under the symbol “INTZ.” The uplisting of INTRUSION’s common stock remains subject to approval by Nasdaq. Until the uplisting is effective, the Company will continue to trade on the OTCQB under the current symbol “INTZ”. The Company cannot guarantee that they will be successful in listing its common stock on Nasdaq.
B. Riley Securities is acting as the sole book-running manager for the proposed offering.
A registration statement on Form S-1 (File No. 333-248398) relating to these securities was filed with the Securities and Exchange Commission on August 25, 2020 but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
A prospectus related to the offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. A copy of the preliminary prospectus supplement relating to this offering may be obtained, when available, by contacting B. Riley Securities, Attention: Prospectus Department, 1300 17th St. North, Ste. 1300, Arlington, VA 22209, or by telephone at (703) 312-9580 or by email at prospectuses@brileyfin.com.
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About INTRUSION Inc.
INTRUSION Inc. is a global provider of entity identification, high speed data mining, cybercrime and advanced persistent threat detection products. INTRUSION’s product families include TraceCop™ for identity discovery and disclosure, and Savant™ for network data mining and advanced persistent threat detection. INTRUSION’s products help protect critical information assets by quickly detecting, protecting, analyzing and reporting attacks or misuse of classified, private and regulated information for government and enterprise networks. For more information, please visit www.intrusion.com.
Cautionary Statement Regarding Forward Looking Information
This release may contain certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward looking statements involve a number of risks and uncertainties. Such statements include, without limitations, statements regarding the results of the proposed public offering of shares of the Company’s common stock, the expected use of the proceeds from that offering, the potential uplisting to The Nasdaq Capital Market and the anticipated benefits of such listing for the Company and its shareholders, statements around our planned growth initiatives, the introduction of the new INTRUSION Shield solution, as well as other statements. 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. These factors include, without limitation, uncertainties related to the success of the proposed offering, the potential that the Company may not be able to list its common stock on The Nasdaq Capital Market and achieve the resulting benefits expected from such uplisting, or that the Company’s planned growth strategies, including its new INTRUSION Shield solution, may not achieve the marketplace acceptance expected and result in increased revenue for the Company, and other facts and circumstances that might cause actual results to differ materially from current expectations, some of which are detailed in the Company's most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.”
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Exhibit 99.3
Roadshow Presentation October 2020
This presentation has been prepared by INTRUSION Inc. (the “Company”) solely for informational purposes based on its own info rma tion, as well as information from public sources. This presentation has been prepared to assist interested parties in making their own evaluation of the Com pany and does not propose to contain all of the information that may be relevant. In all cases, interested parties should conduct their own investigation an d analysis of the Company and the data set forth in the presentation and any other information provided by or on behalf of the Company. This presentation does not c ons titute an offer to sell, nor a solicitation of an offer to buy, any securities of the Company by any person in any jurisdiction in which it is unlawful for suc h person to make such an offering or solicitation. Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of the se curities of the Company or passed upon the accuracy or adequacy of this presentation. Any representation to the contrary is a criminal offense. Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, u nde r any circumstances, create any implication that there has been no change in the affairs of the Company after the date hereof. Certain of the information contained herein may be derived from information provided by industry sources. The Company believe s t hat such information is accurate and that the sources from which it has been obtained are reliable. The Company cannot guarantee the accuracy of such informat ion and has not independently verified such information. This presentation contains forward - looking statements within the meaning of the federal securities laws. These forward - looking s tatements can be identified by the use of forward - looking terminology, including the terms “believe,” “estimate,” “project,” “anticipate,” “expect,” “seek,” “predi ct,” “continue,” “possible,” “intend,” “may,” “might,” “will,” “could,” would” or “should” or, in each case, their negative, or other variations or comparable terminology. Th ese forward - looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and include statements reg arding our intentions, beliefs or current expectations concerning, among other things, our product candidates, research and development, commercialization obje cti ves, prospects, strategies, the industry in which we operate and potential collaborations. We derive many of our forward - looking statements from our operating b udgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very diffic ult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Forward - looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be ac hie ved. In light of these risks and uncertainties, the forward - looking events and circumstances discussed in this presentation may not occur and actual results coul d differ materially from those anticipated or implied in the forward - looking statements. A number of important factors could cause our actual results to differ materially from those indicated in these forward - looking statements, including the following: risk factors described under the heading “Risk Factors” in the Company’s re gistration statement on Form S - 1, filed with the Securities and Exchange Commission (File No. 333 - 248398). The Company has filed a registration statement on Form S - 1 (including a Prospectus), which is preliminary and subject to complet ion, with the Securities and Exchange Commission for the offering to which this presentation relates. Before you invest, you should read the Prospectus in th at registration statement and the other documents that the Company has filed with the Securities and Exchange Commission carefully and in their entirety for mo re complete information about the Company and this offering. You may obtain these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alter nat ively, the Company, or any underwriter or dealer participating in the offering, will arrange to send you the Prospectus if you request it by contacting B. Riley Securities, Inc., Attention: Prospectus Department, 1300 17th St. North, Ste. 1300, Arlington, VA 22209, or by email at prospectuses@brileyfin.com , or by telephone at (703) 312 - 9580. SAFE HARBOR STATEMENT 2
TRANSACTION SUMMARY OFFERING DETAILS ISSUER: INTRUSION Inc. (Nasdaq: INTZ)* TRANSACTION: Follow - On and Secondary Offering with NASDAQ Uplisting OFFERING SIZE (INCLUDING OVER - ALLOTMENT OPTION): 2 million primary shares + 1.1 million secondary shares (by insiders) OVER - ALLOTMENT OPTION: 30 days at 15% USE OF PROCEEDS TO COMPANY: • Completion, promotion, marketing of INTRUSION Shield • Development of sales & distribution channels • General corporate purposes INSIDER LOCK - UP: 120 days EXPECTED PRICING: Week of 10/5 SOLE - BOOKRUNNER : B. Riley Securities *Nasdaq listing subject to final approval 3
INTRUSION LEADERSHIP JACK BLOUNT President & CEO 40 years in technology as a visionary in the personal computer, local area networking, ERP, mobile computing, big data, cybersecurity and AI. CIO of USDA, the 4th largest data center in federal government SVP of Business Development at Novell, helping company grow from $50 million to $2 billion in 6 years Served as CEO, CTO, COO of 8 technology companies Began career as software engineer at IBM PRIOR AFFILIATIONS JOE HEAD Co - Founder & SVP Strategic Projects Recognized by the federal government as a top expert on cyberwar. Integral in the development of both INTRUSION Shield and Savant. Co - founder of INTRUSION, serving 37+ years as a director Named Vice Chairman of the BOD in 2000, and VP in 2003 Product Marketing Manager & Marketing Engineer at Honeywell Optoelectronics PRIOR AFFILIATIONS TONY LEVECCHIO Chairman of our board. President and Owner of The James Group, Inc., a general business consulting firm that has advised CEOs in both public and private companies. Has served on the boards of over 20 companies Lecturing professor in the School of Management at University of Texas, Dallas. Member of the advisory board for The Institute for Excellence in Corporate Governance at UTD. Named an Outstanding Public Company Director by the Dallas Business Journal in 2014. PRIOR AFFILIATIONS 4
OUR HISTORY 1983 INTRUSION is established, building secure, fiber optic LAN equipment 1991 Corporate espionage case is uncovered, producing a historically - large settlement for the client & positioning INTRUSION as a formative watchdog in cybercrime. 2001 2004 2012 INTRUSION Savant launched, offering invaluable insight necessary to eliminate company infrastructure and performance issues. 2020 INTRUSION Shield to launch 5 INTRUSION Compliance Commander is launched, protecting against leakage of confidential customer information INTRUSION TraceCop launched, helping analysts and investigators dramatically reduce time & complexity in tracking cybercriminals
KEY BUSINESS HIGHLIGHTS Differentiated cybersecurity vendor undergoing dramatic TAM expansion under new leadership 1 New management team brings emphasis on growth and vision for INTRUSION 2 INTRUSION has an irreplaceable, proprietary data asset that has historically been under - monetized 3 Highly differentiated, custom business in federal network forensics 4 New solution for commercial cybersecurity market significantly expands INTRUSION ’s TAM 6 Long - term roadmap with several releases building on core technology assets 5 Transitioning company to recurring revenue model, focused on new solutions and Enterprise business 6
$3 trillion in global cybercrime losses in 2019, projected to grow to $6 trillion by 2021 SIZE OF PROBLEM & OPPORTUNITY GROWTH OF LOSSES RESULTING FROM CYBERCRIME (BY YEAR) *The Economic Impact of Cybercrime: No Slowing Down by Center for Strategic and International Studies (CSIS) McAfee ** CyberSecurity Ventures 2014 2018 2019 2021 $500 BILLION* $600 BILLION* $6 TRILLION** estimated TOTAL GOVERNMENT AND ENTERPRISE SPENDING ON SECURITY SOFTWARE AND HARDWARE CYBERSECURITY VENTURES PREDICTS GLOBAL SPENDING ON CYBERSECURITY PRODUCTS AND SERVICES WILL EXCEED $1 TRILLION CUMULATIVELY OVER THE FIVE - YEAR PERIOD FROM 2017 TO 2021 Average Annual Cybersecurity Spend per Employee Source: Gartner 2020E $1800 2012 $584 $3 TRILLION** 7
“If our firewalls stay updated, the network will stay protected” “Software and hardware from trusted vendors are secure when delivered” “Bad actors can be locked out with the right tools” “The right number of people with the right talent will keep the network safe” Myths… …Realities Firewalls are breached everyday by armies of attackers employed by nation - states using AI and Supercomputing Malicious code is routinely embedded on all types of IT hardware shipping from China The average time to identify a network breach in 2019 was 206 days; the average lifecycle of a breach is 314 days from breach to containment Average company gets 11,000 Alerts a day which would require 275 IT professionals to resolve Sources: IBM, INTRUSION COMMON MISCONCEPTIONS ABOUT CYBERSECURITY THREATS 8
1 2 ROGUE AGENTS ARE ON YOUR NETWORK NOW ACCEPT THAT BAD ACTORS CANNOT BE KEPT OUT FOCUS ON TECHNOLOGY THAT IDENTIFIES BAD ACTORS ON YOUR NETWORK EMPLOY A SOLUTION THAT CAN NEUTRALIZE BAD ACTORS IN REAL - TIME RATHER THAN GENERATING ALERTS The market doesn’t need yet another ‘door lock’ when adversaries are already embedded on networks 3 4 CONSTANTLY EVOLVING CYBERTHREATS CALL FOR AN ENTIRELY NEW PARADIGM 9
EXISTING SOLUTIONS 10
Monetized over 20+ years as a Network Forensics Tool for Federal Customers CUSTOMERS CONSIST OF FEDERAL AGENCIES, INCLUDING THE DOD AND THE TREASURY HOLDS MORE THAN 400 TERABYTES OF THREAT - ENRICHED DATA REVENUE MODEL IS BIFURCATED DEPENDING ON CUSTOMER REQUIREMENTS: > Analytical services delivered under yearly contracts (largely noncompete awarded under IDIQ funding vehicles with automatic renewal features) > Licensed datasets priced as recurring monthly data access fee INTRUSION CONSTANTLY EXPANDS THE SCOPE OF INFORMATION INDEXED IN TRACECOP IN ORDER TO FURTHER ENHANCE ATTRIBUTION CAPABILITIES INTRUSION HAS MINIMAL COMPETITION AND HIGH RENEWAL RATES - THE MARKET FOR TraceCop IS AN ESTIMATED $50 MILLION TAM INTRUSION TraceCop ™ 11
INTRUSION TraceCop ™ IS THE MOST COMPLETE SYSTEM FOR INTERNET ATTRIBUTION Only reputation engine of its kind with indexed Internet ownership data and traffic flow Domain WhoIs 12 million IPv4/IPv6 netBlock allocations 830 million observed domains since 2002 21 billion historical hostname/IP associations since 2001 *AS & **BGP Routes 115+ open source threat intelligence feeds NetBlock WhoIs DNS Records IP Traffic Metadata TRACECOP DATABASE Protection against a total of 3.2 Billion “bad” actors *Autonomous System **Border Gateway Protocol 12
Patented network appliance designed to carryout bidirectional protocol decoding in RAM INTRUSION Savant ™ FOR REAL - TIME PROCESS FLOW ANALYSIS > Extract identifiers (URLs, hosts, emails, IPs) > Accumulate the number of times an event occurs > Record a histogram of number of times traffic appears for each minute of the day USED FOR INTRUSION CONSULTING & THREAT ANALYSIS, SAVANT IS A POWERFUL FORENSIC TOOL THAT HAS: 20 Gb/s network capture platform with multi - protocol, metadata extraction of 100+ network protocols Customizable capture filters to allow field extraction and accumulation of time - based statistics Patented Packet File Systems for recording at line rates Patented, Concise Summaries for mass - enrichment, analysis and indefinite storage Full packet capture in PCAP format HIGH - SPEED MULTI - PROTOCOL NETWORK COLLECTION PLATFORM INTRUSION Savant 13
A NEW FAMILY OF SOLUTIONS 14
Leverage foundational TraceCop and Savant platforms in expanded new solutions for the Enterprise INTRUSION Shield ™ FAMILY REPRESENTS A NEW PARADIGM FOR CYBERSECURITY EXISTING SOLUTIONS INTRUSION TraceCop ™ “Who breached my network?” INTRUSION Savant™ “Is someone operating on a network?” AI APPLIED TO TRACECOP DATASETS & SAVANT SENSOR INTRUSION Shield™ 1st of its kind and 1 st in a family of solutions Identifies and neutralizes malicious traffic in real - time NEWEST SOLUTION 15
INTRUSION S hield ™ OFFERS NETWORK SECURITY FROM THE INSIDE - OUT Patented technology layers AI on top of TraceCop database, enabling real - time blocking of malicious traffic PLUG - N’ - PLAY IMPLEMENTATION INTRUSION Shield VALUE PROPOSITION Does not replace existing network elements; rather, Shield is positioned as an additional network security layer Only solution on the market that shows in real - time malicious elements operating within a network No Change Management; built on open Dell architecture Daily System Updates as TraceCop database continues to grow Provisional patent filing covering Shield technology 1 st in a family of solutions 16
INTRUSION SHIELD™ DOES NOT SEND THOUSANDS OF ALERTS, Shield USES AI TO BLOCK MALICIOUS TRAFFIC 17
S hield STRATEGY & MARKET SIZE: SECURITY - AS - A - SERVICE (SAAS) $20 per seat, per month pricing model designed to drive mass adoption in commercial enterprise market AGGRESSIVE RAMP UP OF RECURRING REVENUE Leverage established distributor network and channel reach of roughly 12,000 U.S. resellers* No upfront cost or contracts for customers Appliance drop - shipped direct to customers with software pre - installed (no inventory) Validation from early adoption by Fortune 100 ‘beta’ customer Drive increased momentum with rapid expansion of Shield family with introduction of 6 solutions Source: Gartner *Channel Futures 18 0 50 100 150 200 250 2019 2024E Security & Risk Market (in billions) Estimated Commercial Enterprise TAM $124.4 $207.7
INTRUSION Shield ™ PRELIMINARY BETA RESULTS Sample of what 3 d ays of protection looks like for 3 companies in the Beta program 19
INTRUSION Shield ™ PRELIMINARY BETA RESULTS Customer A “Shield was very easy to install and we were seeing breaches being blocked in only minutes!” Customer B “We were amazed by the number of malware connections that were getting blocked every day and that most were outbound connections.” Customer C “We have a more complicated network that required installation of two Shield appliances but once we got the second Shield and turned it on it immediately began blocking connections. What shocked us the most was the high percentage of call homes that were coming from inside our network that were malware.” 3 additional Beta customers comment on their experience with the solution 20
INTRUSION Shield ™ FAMILY OF SOLUTIONS ROADMAP A new family of solutions targeting important sub - segments the Enterprise & SMB markets Shield Shield CLOUD Shield LT (Lateral Traffic) Shield RE (Remote Employees) Shield WIFI Shield MOBILE 21
FINANCIAL OVERVIEW 22
FINANCIAL PERFORMANCE Historical performance driven by TraceCop HISTORICAL REVENUE AND EBITDA PERFORMANCE ($ in millions) 2016A 2017A 2018A 2019A 1H’20 $6.10 $6.86 $10.28 $13.64 $3.46 ($1.08) ($0.54) ($1.11) $2.61 $4.69 Revenue EBITDA 23
P&L SNAPSHOT This information should be read in conjunction with our consolidated financial statements and the related notes included in our Prospectus including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 24
BALANCE SHEET SNAPSHOT This information should be read in conjunction with our consolidated financial statements and the related notes included in our Prospectus including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 25
KEY INVESTMENT HIGHLIGHTS Differentiated cybersecurity vendor undergoing dramatic TAM expansion under new leadership 1 New management team with CEO that has repeated success in technology turnarounds 2 INTRUSION has a uniquely valuable , dynamica lly growing, threat - enriched Big Data Cloud of databases 3 Consistent and mature, 20 - year federal business customer set 4 Moving INTRUSION into the commercial market significantly expands our TAM 6 Developed, strategic solutions roadmap is designed to enable long - term growth 5 Leveraging modern, SaaS revenue model greatly shortens sell cycle and encourages rapid growth 26
CYBERSECURITY AS AN INDUSTRY HAS FAILED. INVEST IN A CYBER DEFENSE SOLUTION THAT WORKS! 27