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): August 13,2024
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)
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) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | 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 August 13, 2024, Intrusion Inc. issued a press release announcing its financial results for the quarter ended June 30, 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 |
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(d) Exhibits
| 99.1 | Press Release Issued by Intrusion Inc. on August<br> 13, 2024 |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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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: August 13, 2024 | By: | /s/ Kimberly Pinson |
| Kimberly Pinson | ||
| Chief Financial Officer |
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Exhibit 99.1
Intrusion Inc. Reports Second Quarter 2024 Results
Intrusion Shield customer penetrationcontinues to expand
PLANO, Texas, August 13, 2024 (ACCESSWIRE) -- Intrusion Inc. (NASDAQ: INTZ), a leader in cyberattack prevention solutions, announced today financial results for the second quarter ended June 30, 2024.
Recent Financial & Business Highlights:
| · | Revenue for the second quarter increased by 29%<br>on a sequential basis. |
|---|---|
| · | Operating loss improved by 18% or $0.4 million<br>sequentially. |
| · | Awarded a new contract expanding the use of Shield<br>in the government sector. |
| · | Appointed Dion Hinchcliffe, an information technology,<br>business strategy, and next-generation enterprises expert to the Board of Directors. |
“Our ongoing efforts delivered a twenty-nine percent improvement in sequential revenue during the second quarter as our cybersecurity solutions and innovative strategies continue to gain traction with customers across a wide range of industries,” said Tony Scott, CEO of Intrusion. “These successes include the expansion of our government sector customer base, where we have been awarded a new order for Intrusion Shield which marked an important milestone as this was the first large scale adoption of our Shield technology with government customers. As a result of these new government contracts, the other new logos we recently signed over the past few quarters, and our strong pipeline, we believe that we are well-positioned to improve our financial performance in future periods.”
Mr. Scott continued, “During the quarter, we also completed two financing efforts that helped improve the strength of our balance sheet. We are continuing to work closely with our financial partners to enhance our financial flexibility, which will allow us to be more strategic with how we access and deploy capital to support our future business operations. As we look forward to the second half of 2024, our focus continues to remain on driving sales volume and ensuring that we have the funds we need to execute our mission to provide customers with cost-effective cybersecurity solutions for their enterprise.”
Second Quarter Financial Results
Revenue for the second quarter of 2024 was $1.5 million, an increase of 29% on a sequential basis. The sequential increase in revenue during the second quarter of 2024 was driven by the recent award of a large government contract for the use of both Intrusion Shield technology and Consulting services.
The gross profit margin was 76% for the second quarter of 2024, compared to 78% in the second quarter of 2023. Gross margin will vary based on product mix.
Operating expenses in the second quarter of 2024 were $3.1 million, a decrease of $0.2 million sequentially and $0.9 million from the comparable quarter of last year.
The net loss from operating activities for the second quarter of 2024 was $(2.0) million, representing a $0.4 million or 18% improvement over the first quarter and $0.9 million or 30% improvement on a year-over-year basis. The improvement over the first quarter was driven by both gross profit on higher revenues and a decrease in operating expenses.
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The net loss for the second quarter of 2024 was $(2.1) million, or $(0.53) per share, compared to a net loss of $(3.1) million, or $(2.92) per share for the second quarter of 2023.
As of June 30, 2024, cash and cash equivalents were $1.5 million. On April 22, 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. On April 8, the Company also sold 0.2 million shares of common stock through a warrant inducement offering resulting in $0.6 million in net proceeds. The Company has been using these proceeds from the Private Offering for working capital and general corporate purposes.
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: 693877. The call will also be webcast live (https://www.webcaster4.com/Webcast/Page/3014/50743). For those unable to participate in the live conference call, a replay will be accessible beginning tonight at 7:00 P.M. EDT until August 27, 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-LookingInformation
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.
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INTRUSION INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
| December 31, 2023 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current Assets: | |||||
| Cash and cash equivalents | 1,506 | $ | 139 | ||
| Accounts receivable, net | 708 | 364 | |||
| Prepaid expenses and other assets | 414 | 635 | |||
| Total current assets | 2,628 | 1,138 | |||
| Noncurrent Assets: | |||||
| Property and equipment: | |||||
| Equipment | 1,864 | 2,069 | |||
| Capitalized software development | 3,418 | 2,791 | |||
| Leasehold improvements | 15 | 15 | |||
| Property and equipment | 5,297 | 4,875 | |||
| Accumulated depreciation and amortization | (2,330 | ) | (1,955 | ) | |
| Property and equipment, net | 2,967 | 2,920 | |||
| Finance leases, right-of-use assets, net | 87 | 382 | |||
| Operating leases, right-of-use assets, net | 1,502 | 1,637 | |||
| Other assets | 293 | 171 | |||
| Total noncurrent assets | 4,849 | 5,110 | |||
| TOTAL ASSETS | 7,477 | $ | 6,248 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||
| Current Liabilities: | |||||
| Accounts payable, trade | 1,399 | $ | 2,215 | ||
| Accrued expenses | 239 | 222 | |||
| Finance lease liabilities, current portion | 122 | 384 | |||
| Operating lease liabilities, current portion | 260 | 178 | |||
| Notes payable | 511 | 10,823 | |||
| Deferred revenue | 578 | 439 | |||
| Total current liabilities | 3,109 | 14,261 | |||
| Noncurrent Liabilities: | |||||
| Finance lease liabilities, noncurrent portion | – | 3 | |||
| Operating lease liabilities, noncurrent portion | 1,420 | 1,539 | |||
| Total noncurrent liabilities | 1,420 | 1,542 | |||
| Commitments and Contingencies | |||||
| Stockholders’ Equity (Deficit): | |||||
| Series A preferred stock, 0.01 par value: Authorized shares – 20; Issued and outstanding shares – 9 in 2024 and 0 in 2023 | 8,956 | – | |||
| Common stock, 0.01 par value: Authorized shares – 80,000; Issued shares – 5,441 in 2024 and 1,848 in 2023; Outstanding shares – 5,440 in 2024 and 1,847 in 2023 | 54 | 18 | |||
| Common stock held in treasury, at cost – 1 share | (362 | ) | (362 | ) | |
| Additional paid-in capital | 108,343 | 101,049 | |||
| Accumulated deficit | (114,000 | ) | (110,217 | ) | |
| Accumulated other comprehensive loss | (43 | ) | (43 | ) | |
| Total stockholders’ equity (deficit) | 2,948 | (9,555 | ) | ||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | 7,477 | $ | 6,248 |
All values are in US Dollars.
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INTRUSION INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||
| Revenue | $ | 1,460 | $ | 1,468 | $ | 2,591 | $ | 2,777 | ||||
| Cost of revenue | 350 | 330 | 576 | 643 | ||||||||
| Gross profit | 1,110 | 1,138 | 2,015 | 2,134 | ||||||||
| Operating expenses: | ||||||||||||
| Sales and marketing | 1,158 | 1,423 | 2,335 | 3,161 | ||||||||
| Research and development | 1,035 | 1,451 | 2,054 | 3,247 | ||||||||
| General and administrative | 950 | 1,185 | 2,131 | 2,691 | ||||||||
| Operating loss | (2,033 | ) | (2,921 | ) | (4,505 | ) | (6,965 | ) | ||||
| Interest expense | (34 | ) | (233 | ) | (262 | ) | (518 | ) | ||||
| Interest Accretion and amortization of debt issuance costs, net | – | 25 | 990 | (421 | ) | |||||||
| Other (expense) income, net | – | – | (6 | ) | 41 | |||||||
| Net loss | $ | (2,067 | ) | $ | (3,129 | ) | $ | (3,783 | ) | $ | (7,863 | ) |
| Net loss per share: | ||||||||||||
| Basic | $ | (0.53 | ) | $ | (2.92 | ) | $ | (1.31 | ) | $ | (7.40 | ) |
| Diluted | $ | (0.53 | ) | $ | (2.92 | ) | $ | (1.31 | ) | $ | (7.40 | ) |
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 4,327 | 1,070 | 3,099 | 1,062 | ||||||||
| Diluted | 4,327 | 1,070 | 3,099 | 1,062 |
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