8-K
Intrusion Inc (INTZ)
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): February 25, 2021
INTRUSIONINC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 000-20191 | 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 1300 Plano, Texas | 75074 | |
| --- | --- | |
| (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) |
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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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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 | Nasdaq Capital Market |
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following information is furnished pursuant to Item 2.02, Disclosure of Results of Operations and Financial Condition.
On February 25, 2021, Intrusion Inc. issued a press release announcing its financial results for the year ended December 31, 2020. 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
(d) Exhibits
99.1 — Press release issued by Intrusion Inc. on February 25, 2021.
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: February 25, 2021 | By: | /s/ Jack B. Blount |
| Jack B. Blount <br><br>President and Chief Executive Officer |
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Exhibit 99.1
| NEWS RELEASE |  |
|---|---|
| 101 East Park Blvd, Suite 1300<br><br> Plano, TX 75074<br><br> (972) 234-6400 |
Investor Relations Contact
Joel Achramowicz
sheltonir@sheltongroup.com
P: (415) 845-9964
INTRUSION Reports Fourth Quarter andFull Year 2020 Results
Released Shield to Market AfterSuccessful Beta Testing Killed 77 Million Threats
Plano, Texas – February 25, 2021– INTRUSION, Inc. (NASDAQ: INTZ) announced today financial results for the fourth quarter and full year ended December 31, 2020.
Fourth Quarter and Recent Business Highlights
| · | Ramping orders for its revolutionary Shield™<br>threat detection and prevention solution after successful market release |
|---|---|
| · | Expanded network of channel distributors<br>and resellers to sell Shield |
| · | Further broadened executive team, particularly<br>in sales and marketing, in support of rapid growth |
| · | Hired Chief Marketing Officer with direct<br>prior experience at McAfee and Intel |
| · | Appointed new Board member with prior<br>executive experience at Red Hat, Inc., within the enterprise software industry and in scaling organizations globally |
| · | Ended the quarter with strengthened balance<br>sheet and $16.7 million in cash |
| --- | --- |
“Since releasing INTRUSION’s revolutionary Shield solution only 6 weeks ago, we have received an unprecedented amount of interest and a growing pipeline of customers that is nothing short of extraordinary,” said Jack B. Blount, President and CEO of INTRUSION. “Shield is the first platform that uses real-time artificial intelligence to not just block intruders, but to kill cyberattacks including zero-days.
“Also during the quarter, we continued to expand our executive team with highly experienced individuals that offer deep domain expertise across the cybersecurity and software industries as well as channel sales. I firmly believe we have the right team in place to drive our company to the next level of growth, and I am very pleased with the progress we have made. I’m also encouraged by the early signs of recovery in our government business that should contribute to our growth this year as it returns to historical levels. Overall, the strong momentum we have generated in such a short period of time is indicative of the market need for our Shield family of solutions, for which we expect to see increasing traction and growth throughout the coming year.”
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Fourth Quarter Financial Results
Revenue for the fourth quarter 2020 was $1.6 million, compared to $2.6 million in the fourth quarter 2019 and $1.6 million for the third quarter 2020. For the full year 2020, revenue was $6.6 million as compared to $13.6 million in 2019.
Gross profit margin was 58% of revenue in the fourth quarter of 2020, compared to 61% in the fourth quarter 2019 and 59% in the third quarter 2020. For the full year 2020, gross margin was 59% as compared to 61% in the prior year.
Operating expenses in the fourth quarter of 2020 were $4.8 million, which included a $1.1 million non-cash write-off related to a prior office lease agreement. This compares to operating expenses of $1.3 million in the fourth quarter 2019 and $2.3 million in the third quarter 2020. Full year 2020 operating expenses were $10.4 million, which included the aforementioned non-cash write-off, compared to $3.8 million in 2019.
Net loss in the fourth quarter of 2020 was $3.9 million, which included the $1.1 million non-cash write-off and compares to net income of $0.3 million in the fourth quarter 2019 and a net loss of $1.4 million in the third quarter 2020. For the full year 2020, net loss was $6.5 million, which included the fourth quarter non-cash write-off, compared to net income of $4.5 million in the prior year.
As of December 31, 2020, cash and cash equivalents amounted to $16.7 million. In October, INTRUSION raised $18.2 million in net proceeds from a follow-on public issuance of approximately 2.5 million shares of its common stock.
Conference Call
INTRUSION’s management will host a conference call today at 4:00 P.M., CST. Interested investors can access the call at 1-833-366-0416 or +1-236-712-2506 for international callers and provide the following Conference ID: 5796455. For those unable to participate in the live conference call, a replay will be accessible beginning tonight at 7:00 P.M. CST until March 4, 2021 by calling 1-800-585-8367 or +1-416-621-4642 for international callers. At the replay prompt, enter conference ID number 5796455. Additionally, a live and archived audio webcast of the conference call will be available at www.intrusion.com.
About INTRUSION Inc.
INTRUSION Inc. protects any-sized company by leveraging advanced threat intelligence with real-time artificial intelligence to kill cyberattacks as they occur – including zero-days. INTRUSION’s solution families include Shield™, a combination of plug-n-play hardware, software, global data, and real-time Artificial Intelligence (AI) services that provide organizations with the most robust cybersecurity defense possible; 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 ForwardLooking Information
This release may contain certain forward-looking statements, including, without limitations, statements about the performance of protections provided by our Shield products, the effect of the recent additions to our board and executive management team, the anticipated recovery of our governmental customers and an expanded need for them and an increasing customer base to address cybersecurity risks, leading to expected growth in our sales performance for this year, as well as any other statements which 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 the Company does not benefit as anticipated from sales of our current solutions--including the INTRUSION Shield solution and the performance of our expanded management team; and that customers will address and mitigate their perceived cybersecurity risks through the purchase of our products and solutions. 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.”
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INTRUSION INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCESHEETS
(In thousands except par value amounts)
| 2019 | |||||
| Assets | |||||
| Current Assets: | |||||
| Cash and cash equivalents | 16,704 | $ | 3,334 | ||
| Accounts receivable | 1,233 | 1,566 | |||
| Prepaid expenses | 370 | 152 | |||
| Total current assets | 18,307 | 5,052 | |||
| Property and Equipment: | |||||
| Equipment | 1,453 | 1,138 | |||
| Furniture and fixtures | 43 | 43 | |||
| Leasehold improvements | 67 | 63 | |||
| 1,563 | 1,244 | ||||
| Accumulated depreciation and amortization | (1,097 | ) | (909 | ) | |
| 466 | 335 | ||||
| Finance leases, right-of-use assets, net | 20 | 62 | |||
| Operating leases, right-of-use assets, net | 1,010 | 1,348 | |||
| Other assets | 79 | 38 | |||
| TOTAL ASSETS | 19,882 | $ | 6,835 | ||
| Liabilities and Stockholders’ Equity | |||||
| Current Liabilities: | |||||
| Accounts payable, trade | 408 | $ | 252 | ||
| Accrued expenses | 628 | 828 | |||
| Dividends payable | – | 20 | |||
| Finance leases liabilities, current portion | 21 | 43 | |||
| Operating leases liabilities, current portion | 488 | 284 | |||
| PPP loan payable, current portion | 421 | – | |||
| Deferred revenue | 177 | 516 | |||
| Total current liabilities | 2,143 | 1,943 | |||
| Finance leases liability, noncurrent portion | – | 21 | |||
| PPP loan payable, noncurrent portion | 212 | – | |||
| Operating leases liability, noncurrent portion | 1,866 | 1,315 | |||
| Commitments and contingencies | |||||
| Stockholders’ Equity: | |||||
| Preferred stock, 0.01 par value: | |||||
| Authorized shares — 5,000 | |||||
| Series 1 shares issued and outstanding — 200 Liquidation preference of 1,013 in 2019 | – | 707 | |||
| Series 2 shares issued and outstanding — 460 Liquidation preference of 1,155 in 2019 | – | 724 | |||
| Series 3 shares issued and outstanding — 289 Liquidation preference of 634 in 2019 | – | 412 | |||
| Common stock, 0.01 par value: | |||||
| Authorized shares — 80,000 | |||||
| Issued shares — 17,428 in 2020 and 13,552 in 2019 | |||||
| Outstanding shares — 17,418 in 2020 and 13,542 in 2019 | 174 | 136 | |||
| Common stock held in treasury, at cost—10 shares | (362 | ) | (362 | ) | |
| Additional paid-in-capital | 77,187 | 56,759 | |||
| Accumulated deficit | (61,295 | ) | (54,777 | ) | |
| Accumulated other comprehensive loss | (43 | ) | (43 | ) | |
| Total stockholders’ equity | 15,661 | 3,556 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 19,882 | $ | 6,835 |
All values are in US Dollars.
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INTRUSION INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTSOF OPERATIONS
(In thousands except per share amounts)
| **** | Three Months Ended<br><br><br><br>December31, | **** | Year Ended December 31, | **** | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenue | 1,580 | 2,572 | 6,619 | 13,643 | ||||||||
| Cost<br> of revenue | 660 | 1,002 | 2,709 | 5,342 | ||||||||
| Gross<br> profit | 920 | 1,570 | 3,910 | 8,301 | ||||||||
| Operating<br> expenses: | ||||||||||||
| Sales<br> and marketing | 1,941 | 485 | 3,821 | 1,298 | ||||||||
| Research<br> and development | 1,056 | 539 | 3,797 | 1,314 | ||||||||
| General<br> and administrative | 760 | 252 | 1,723 | 1,182 | ||||||||
| Loss<br> on lease abandonment | 1,092 | – | 1,092 | – | ||||||||
| Operating<br> income (loss) | (3,929 | ) | 294 | (6,523 | ) | 4,507 | ||||||
| Interest expense | (2 | ) | (1 | ) | (6 | ) | (46 | ) | ||||
| Interest<br> income | 3 | 4 | 11 | 4 | ||||||||
| Income<br> (loss) before income taxes | (3,928 | ) | 297 | (6,518 | ) | 4,465 | ||||||
| Income<br> tax provision | – | – | – | – | ||||||||
| Net<br> income (loss) | (3,928 | ) | 297 | (6,518 | ) | 4,465 | ||||||
| Preferred<br> stock dividends accrued | – | (35 | (79 | ) | (139 | ) | ||||||
| Net<br> income (loss) attributable to common stockholders | (3,928 | ) | 262 | (6,597 | ) | 4,326 | ||||||
| Net<br> income (loss) per share attributable to common stockholders: | ||||||||||||
| Basic | (0.23 | ) | 0.02 | (0.45 | ) | 0.32 | ||||||
| Diluted | (0.23 | ) | 0.02 | (0.45 | ) | 0.28 | ||||||
| Weighted<br> average common shares outstanding: | ||||||||||||
| Basic | 17,029 | 13,542 | 14,678 | 13,502 | ||||||||
| Diluted | 17,029 | 15,392 | 14,678 | 15,352 |
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