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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 14,
2023
INTRUSION
INC.
(Exact Name of Registrant as Specified
in Its Charter)
Delaware |
001-39608 |
75-1911917 |
(State or Other Jurisdiction
of Incorporation) |
(Commission File
Number) |
(IRS Employer
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) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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 |
The following information is furnished pursuant
to Item 2.02, Disclosure of Results of Operations and Financial Condition.
On August 14, 2023, Intrusion Inc. issued a press
release announcing its financial results for the quarter ended June 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 |
(d) Exhibits
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 14, 2023 |
By: |
/s/ Kimberly Pinson |
|
|
Kimberly Pinson |
|
|
Chief Financial Officer |
Exhibit 99.1
Intrusion, Inc. Reports Second Quarter 2023
Results
INTRUSION Shield revenue continues
to gain traction
PLANO, Texas, August 14, 2023 (GLOBE NEWSWIRE)
-- Intrusion Inc. (NASDAQ: INTZ), a leader in cyberattack prevention solutions, announced today financial results for the second quarter
ended June 30, 2023.
Recent Financial & Business Highlights:
| · | Second quarter revenue of $1.5 million was up $0.2 million sequentially or 12%. |
| · | Gross margin increased to 79% during the second quarter, an increase of 2.4% sequentially. |
| · | Successfully implemented cost reduction measures resulting in $1.5 million in second quarter savings |
| · | Improved second quarter EPS of $(0.15) per share from $(0.22) per share in the first quarter 2023. |
"The second quarter of 2023 was a period
of continued progress toward growing our INTRUSION Shield revenue, gaining traction across our suite of value-added products,
and improving our financial flexibility to support our growth objectives,” said Tony Scott, CEO of Intrusion. “Our team has
been working hard, and we are beginning to see the early-stage financial performance benefits of our improved sales and marketing efforts.
As we look toward the second half of the year, we anticipate additional growth in both INTRUSION Shield and our Consulting
business as a result of new bookings in the second and early third quarters. We are also encouraged by the volume and nature of discussions
we are having within our qualified pipeline as the demand for our products and consulting services continues to grow. This positions us
well to improve our revenue and booking performance as more customers seek better and more cost-effective cybersecurity solutions for
their enterprises.”
Mr. Scott continued, “We have taken broad
steps toward reducing our cash burn and providing the capital necessary to execute our business plan. The cost reduction efforts we implemented
in late March contributed $1.5 million in cost savings during the June quarter. Last week, we filed an initial S-1 registration statement
to raise up to $8.5 million from the sale of common stock and warrants. We believe these combined actions, along with the recent restructuring
of our debt with Streeterville, will provide the resources needed to fund our growth objectives and financial commitments.”
Second Quarter Financial Results
Revenue for the second quarter of 2023 was $1.5
million, an increase of $0.2 million sequentially and a decrease of $0.6 million compared with the second quarter of the prior year.
The gross profit margin was 79% for the second
quarter of 2023, compared to 76% in the March 2023 quarter and 56% in the second quarter of 2022.
Operating expenses in the second quarter of 2023
were $4.1 million, a decrease from $5.1 million in the comparable quarter of last year.
The net loss for the second quarter of 2023 was
$(3.1) million, or $(0.15) per share, compared to a loss of $(4.1) million, or $(0.21) per share for the second quarter of 2022.
As of June 30, 2023, cash and cash equivalents
were $0.3 million, down from $3.0 million on December 31, 2022. Subsequent to the quarter end, we entered into a Forbearance and Standstill
Agreement with Streeterville Capital, LLC to extend the maturity date for each of our two convertible notes by 12 months to September
10, 2024, and December 29, 2024. On August 11, 2023, we filed a preliminary registration statement on Form S-1 to raise up to $8.5
million in gross proceeds from a best-efforts fully marketed offering of common stock and warrants.
Conference Call
Intrusion’s management will host a conference
call today at 4:00 P.M., CDT. 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: 732778. The call will also be webcast live at https://events.q4inc.com/attendee/361845743.
For those unable to participate in the live conference call, a replay will be accessible beginning tonight at 6:00 P.M. CDT until August
21, 2023, by dialing 1-929-458-6194, or 1-866-813-9403 for international callers, and entering the following access code: 372323. 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. INTRUSION
Shield 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-Looking
Information
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.
INTRUSION INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| |
Three Months Ended | | |
Six Months Ended | |
| |
June 30, 2023 | | |
June 30, 2022 | | |
June 30, 2023 | | |
June 30, 2022 | |
Revenue | |
$ | 1,468 | | |
$ | 2,058 | | |
$ | 2,777 | | |
$ | 3,893 | |
Cost of revenue | |
| 330 | | |
| 916 | | |
| 643 | | |
| 1,819 | |
| |
| | | |
| | | |
| | | |
| | |
Gross profit | |
| 1,138 | | |
| 1,142 | | |
| 2,134 | | |
| 2,074 | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
Sales and marketing | |
| 1,423 | | |
| 1,568 | | |
| 3,161 | | |
| 2,774 | |
Research and development | |
| 1,451 | | |
| 1,486 | | |
| 3,247 | | |
| 3,136 | |
General and administrative | |
| 1,185 | | |
| 2,049 | | |
| 2,691 | | |
| 4,109 | |
| |
| | | |
| | | |
| | | |
| | |
Operating loss | |
| (2,921 | ) | |
| (3,961 | ) | |
| (6,965 | ) | |
| (7,945 | ) |
| |
| | | |
| | | |
| | | |
| | |
Interest and other income | |
| – | | |
| 1 | | |
| 41 | | |
| 2 | |
Interest expense | |
| (208 | ) | |
| (525 | ) | |
| (939 | ) | |
| (596 | ) |
Gain on lease termination | |
| – | | |
| 420 | | |
| – | | |
| 420 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (3,129 | ) | |
$ | (4,065 | ) | |
$ | (7,863 | ) | |
$ | (8,119 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss per share: | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | (0.15 | ) | |
$ | (0.21 | ) | |
$ | (0.37 | ) | |
$ | (0.42 | ) |
Diluted | |
$ | (0.15 | ) | |
$ | (0.21 | ) | |
$ | (0.37 | ) | |
$ | (0.42 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average common shares outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 21,383 | | |
| 19,372 | | |
| 21,225 | | |
| 19,238 | |
Diluted | |
| 21,383 | | |
| 19,372 | | |
| 21,225 | | |
| 19,238 | |
INTRUSION INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
| |
June 30,
2023 | | |
December 31,
2022 | |
ASSETS | |
(unaudited) | | |
| |
| |
| | |
| |
Current Assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 300 | | |
$ | 3,015 | |
Accounts receivable, net | |
| 211 | | |
| 530 | |
Prepaid expenses and other assets | |
| 427 | | |
| 1,877 | |
Total current assets | |
| 938 | | |
| 5,422 | |
Noncurrent Assets: | |
| | | |
| | |
Property and equipment: | |
| | | |
| | |
Equipment | |
| 2,886 | | |
| 2,865 | |
Capitalized software development | |
| 2,196 | | |
| 1,380 | |
Furniture and fixtures | |
| 43 | | |
| 43 | |
Leasehold improvements | |
| 78 | | |
| 78 | |
Property and equipment, gross | |
| 5,203 | | |
| 4,366 | |
Accumulated depreciation and amortization | |
| (2,674 | ) | |
| (2,208 | ) |
Property and equipment, net | |
| 2,529 | | |
| 2,158 | |
Finance leases, right-of-use assets, net | |
| 715 | | |
| 1,048 | |
Operating leases, right-of-use assets, net | |
| 348 | | |
| 504 | |
Other assets | |
| 147 | | |
| 143 | |
Total noncurrent assets | |
| 3,739 | | |
| 3,853 | |
TOTAL ASSETS | |
$ | 4,677 | | |
$ | 9,275 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable, trade | |
$ | 1,798 | | |
$ | 1,273 | |
Accrued expenses | |
| 212 | | |
| 446 | |
Finance lease liabilities, current portion | |
| 618 | | |
| 667 | |
Operating lease liabilities, current portion | |
| 184 | | |
| 294 | |
Notes payable | |
| 10,894 | | |
| 10,114 | |
Deferred revenue | |
| 1,121 | | |
| 455 | |
Total current liabilities | |
| 14,827 | | |
| 13,249 | |
| |
| | | |
| | |
Noncurrent Liabilities: | |
| | | |
| | |
Finance lease liabilities, noncurrent portion | |
| 4 | | |
| 10 | |
Operating lease liabilities, noncurrent portion | |
| 167 | | |
| 231 | |
Total noncurrent liabilities | |
| 171 | | |
| 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 – 22,442 in 2023 and 21,198 in 2022; Outstanding shares – 22,432 in 2023 and 21,188 in 2022 | |
| 224 | | |
| 212 | |
Common stock held in treasury, at cost – 10 shares | |
| (362 | ) | |
| (362 | ) |
Additional paid-in capital | |
| 94,049 | | |
| 92,304 | |
Accumulated deficit | |
| (104,189 | ) | |
| (96,326 | ) |
Accumulated other comprehensive loss | |
| (43 | ) | |
| (43 | ) |
Total stockholders’ deficit | |
| (10,321 | ) | |
| (4,215 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
$ | 4,677 | | |
$ | 9,275 | |
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