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): November 14,2023
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 | |
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| (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 November 14, 2023, Intrusion Inc. issued a press release announcing its financial results for the quarter ended September 30, 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
| Exhibit<br><br> <br>No. | Description |
|---|---|
| 99.1 | Press Release Issued by Intrusion Inc. on November 14, 2023 |
| 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: November 14, 2023 | By: | /s/ Kimberly Pinson |
| Kimberly Pinson | ||
| Chief Financial Officer |
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Exhibit 99.1
Intrusion, Inc. Reports Third Quarter 2023 Results
Intrusion Shield gaining traction
PLANO, Texas, November 14, 2023 (ACCESSWIRE) -- Intrusion Inc. (NASDAQ: INTZ), a leader in cyberattack prevention solutions, announced today financial results for the third quarter ended September 30, 2023.
Recent Financial & Business Highlights:
| · | Improved third quarter EPS to $(0.14) per share from $(0.15) per share in the second quarter 2023. |
|---|---|
| · | Announced the award of a $5 million agreement with a large telecommunications company to provide IntrusionShield support for its data centers. |
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| · | Announced a Securities Purchase Agreement though a Private Offering resulted in net proceeds of approximately<br>$2.4 million. |
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“During the third quarter, we made great progress toward growing our business and overcoming our short-term liquidity issues,” said Tony Scott, CEO of Intrusion. “We continued to see promising signs that our go-to-market strategy for Intrusion Shield with our partners is working, which is evident by our recent $5 million multi-year Shield agreement with a large telecommunications provider, as well as the booking of four other new contracts across a diverse range of industries, which are all expected to grow over time. Our sales pipeline continues to remain solid, as we are seeing a growing demand for both our Shield family of products and our Consulting business due to customers continuing to seek better and more cost-effective cybersecurity solutions for their enterprises. This gives us confidence that we are well positioned to improve our revenue and booking performance in future periods.”
Mr. Scott continued, “Last week, we announced that we entered into a Securities Purchase Agreement through a Private Offering, through which we received net proceeds of approximately $2.4 million. The Private Offering was heavily participated in by members of our Executive Team, Board of Directors, and existing shareholders, which we believe demonstrates the confidence that both our organization and shareholders have in our unique technology. In addition to the Private Offering, we also agreed to exchange $0.4 million aggregate principal of our Streeterville Capital debt for an aggregate of approximately one million shares of common stock. We believe that these combined efforts will provide us with the liquidity and runway needed to execute our strategy to grow the business.”
Third Quarter Financial Results
Revenue for the third quarter of 2023 was $1.5 million, a decrease of $0.7 million compared with the third quarter of the prior year. The decrease resulted from the loss of a contract in the fourth quarter of 2022 in which Intrusion’s prime sponsor chose not to renew the final option year of a contract. While the loss of this contract significantly impacted top-line revenue, the gross margin on this contract was 14% and, as a result, had a marginal impact on profitability.
The gross profit margin was 78% for the third quarter of 2023, compared to 55% in the third quarter of 2022.
Operating expenses in the third quarter of 2023 were $3.8 million, a decrease from $5.0 million in the comparable quarter of last year.
The net loss for the third quarter of 2023 was $(3.2) million, or $(0.14) per share, compared to a loss of $(2.9) million, or $(0.15) per share for the third quarter of 2022.
As of September 30, 2023, cash and cash equivalents were $0.2 million, down from $3.0 million on December 31, 2022. Subsequent to the quarter end, the Company received approximately $2.4 million in net proceeds from the sale of 4.4 million shares of common stock and warrants in a private offering. The Company intends to use the net proceeds from the Offering for working capital, general corporate purposes, and the potential partial repayment of outstanding indebtedness to Streeterville Capital, LLC.
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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 1-404-975-4839, or 1-833-470-1428 for international callers, and providing the following access code: 996917. 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 6:00 P.M. CST until November 21, 2023, by dialing 1-929-458-6194, or 1-866-813-9403 for international callers, and entering the following access code: 302412. 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
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||
| Revenue | $ | 1,468 | $ | 2,192 | $ | 4,245 | $ | 6,085 | ||||
| Cost of revenue | 324 | 995 | 967 | 2,814 | ||||||||
| Gross profit | 1,144 | 1,197 | 3,278 | 3,271 | ||||||||
| Operating expenses: | ||||||||||||
| Sales and marketing | 1,357 | 1,711 | 4,518 | 4,485 | ||||||||
| Research and development | 1,171 | 1,456 | 4,418 | 4,592 | ||||||||
| General and administrative | 1,309 | 1,852 | 4,000 | 5,961 | ||||||||
| Operating loss | (2,693 | ) | (3,822 | ) | (9,658 | ) | (11,767 | ) | ||||
| Interest and other income | 2 | 2,002 | 43 | 2,004 | ||||||||
| Interest expense | (520 | ) | (1,061 | ) | (1,459 | ) | (1,657 | ) | ||||
| Gain (loss) on lease termination | – | (35 | ) | – | 385 | |||||||
| Net loss | $ | (3,211 | ) | (2,916 | ) | $ | (11,074 | ) | (11.035 | ) | ||
| Net loss per share: | ||||||||||||
| Basic | $ | (0.14 | ) | $ | (0.15 | ) | $ | (0.51 | ) | $ | (0.57 | ) |
| Diluted | $ | (0.14 | ) | $ | (0.15 | ) | $ | (0.51 | ) | $ | (0.57 | ) |
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 23,061 | 19,826 | 21,844 | 19,433 | ||||||||
| Diluted | 23,061 | 19,826 | 21,844 | 19,433 |
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INTRUSION INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
| December 31,<br> 2022 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current Assets: | |||||
| Cash and cash equivalents | 177 | $ | 3,015 | ||
| Accounts receivable, net | 450 | 530 | |||
| Prepaid expenses and other assets | 305 | 1,877 | |||
| Total current assets | 932 | 5,422 | |||
| Noncurrent Assets: | |||||
| Property and equipment: | |||||
| Equipment | 3,115 | 2,865 | |||
| Capitalized software development | 2,527 | 1,380 | |||
| Furniture and fixtures | 43 | 43 | |||
| Leasehold improvements | 78 | 78 | |||
| Property and equipment, gross | 5,763 | 4,366 | |||
| Accumulated depreciation and amortization | (2,921 | ) | (2,208 | ) | |
| Property and equipment, net | 2,842 | 2,158 | |||
| Finance leases, right-of-use assets, net | 549 | 1,048 | |||
| Operating leases, right-of-use assets, net | 237 | 504 | |||
| Other assets | 161 | 143 | |||
| Total noncurrent assets | 3,789 | 3,853 | |||
| TOTAL ASSETS | 4,721 | $ | 9,275 | ||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
| Current Liabilities: | |||||
| Accounts payable, trade | 2,497 | $ | 1,273 | ||
| Accrued expenses | 635 | 446 | |||
| Finance lease liabilities, current portion | 617 | 667 | |||
| Operating lease liabilities, current portion | 113 | 294 | |||
| Notes payable, current portion | 11,021 | 10,114 | |||
| Deferred revenue | 862 | 455 | |||
| Total current liabilities | 15,745 | 13,249 | |||
| Noncurrent Liabilities: | |||||
| Finance lease liabilities, noncurrent portion | 4 | 10 | |||
| Operating lease liabilities, noncurrent portion | 135 | 231 | |||
| Notes payable, noncurrent portion | 370 | – | |||
| Total noncurrent liabilities | 509 | 241 | |||
| Commitments and Contingencies | |||||
| Stockholders’ 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 – 24,620 in 2023 and 21,198 in 2022; Outstanding shares – 24,610 in 2023 and 21,188 in 2022 | 246 | 212 | |||
| Common stock held in treasury, at cost – 10 shares | (362 | ) | (362 | ) | |
| Additional paid-in capital | 96,026 | 92,304 | |||
| Accumulated deficit | (107,400 | ) | (96,326 | ) | |
| Accumulated other comprehensive loss | (43 | ) | (43 | ) | |
| Total stockholders’ deficit | (11,533 | ) | (4,215 | ) | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | 4,721 | $ | 9,275 |
All values are in US Dollars.
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