Filing Analysis
Intrusion Inc. completed the acquisition of 100% of OW Cyber, LLC by securing a $1.615 million secured promissory note from Streeterville Capital, LLC. The financing was used to fund the final $1.3 million cash payment for the acquisition and provide working capital.
🚩 Red Flags
- High-cost debt: The 17.65% monitoring fee and daily compounding interest significantly increase the effective cost of capital.
- Asset encumbrance: The note is secured by a first-priority lien on all company assets and intellectual property.
- Liquidity pressure: The investor has monthly redemption rights of $150,000, creating a potential cash drain.
- Restrictive covenants: The note includes restrictions on variable-rate securities issuances and requires maintenance of Nasdaq listing.
📋 Key Facts
- Issued a Secured Promissory Note to Streeterville Capital, LLC for $1,615,000 principal ($1,500,000 cash proceeds).
- Note bears 7% interest per annum, compounded daily, maturing August 28, 2028.
- Includes a monitoring fee provision that increases the outstanding balance by ~17.65% after 90 days.
- Note is secured by a first-priority security interest in all company assets and intellectual property.
- The investor has monthly redemption rights of up to $150,000 starting six months after issuance.
- Completed the 'Second Closing' of the acquisition of OW Cyber, LLC, making it a 100% wholly-owned subsidiary.
- Stockholders approved the transaction framework and equity issuances required by Nasdaq Rules 5635(a) and 5635(d).
Intrusion Inc. has launched a Warrant Inducement Program to encourage holders of existing warrants to exercise them at a significantly discounted price of $0.795 per share. In exchange for the cash exercise, participants will receive new warrants to purchase additional shares at $0.67 per share, subject to a six-month lock-up on exercisability.
🚩 Red Flags
- Significant dilution: The inducement price ($0.795) is a massive discount to the existing weighted average exercise price ($3.26).
- Aggressive capital raising: The structure suggests the company is desperate for immediate cash, as evidenced by the deep discount and the issuance of 'sweetener' warrants.
- Potential for massive share overhang: The issuance of one new warrant for every share exercised creates significant future dilution.
📋 Key Facts
- Effective period for exercise: August 17, 2026, to August 28, 2026.
- Existing warrants outstanding: Up to 3,198,085 shares.
- Weighted average existing exercise price: ~$3.26 per share.
- Inducement Exercise Price: $0.795 per share.
- New Warrant terms: One new warrant issued for each share purchased; exercise price of $0.67 per share; 6-month + 1-day non-exercisability period; 5-year expiration.
- The program is intended to comply with Nasdaq Listing Rules 5635(d) and 5635(b).
Intrusion Inc. filed an 8-K to furnish its quarterly operating and financial results for the period ending June 30, 2026 via a press release.
📋 Key Facts
- Report date: August 11, 2026
- Reporting period: Quarter ended June 30, 2026
- The filing is an announcement of results under Item 2.02
- Information provided in Exhibit 99.1 is furnished but not 'filed' for purposes of Section 18 liability.
Intrusion Inc. issued a press release providing a business update regarding operational execution and strategic momentum following its combination with VigilAigent. The company also announced an upcoming Investor Technology Day scheduled for July 22, 2026.
📋 Key Facts
- Company reported on operational execution post-combination with VigilAigent.
- Investor Technology Day was scheduled for July 22, 2026.
- The filing is an Item 7.01 disclosure (Regulation FD Disclosure) and does not constitute 'filed' information under Section 18 of the Exchange Act.
Intrusion Inc. entered into an agreement to acquire 100% of the membership interests of OW Cyber LLC in two stages, starting with a 60% acquisition on June 29, 2026. The deal involves significant equity issuance and potential contingent consideration totaling up to $6.9 million.
🚩 Red Flags
- Significant dilution via issuance of 2.2M+ unregistered shares.
- Potential for massive future dilution through $6.9M in contingent 'Earn-Out' shares if milestones are met.
- The acquisition is heavily reliant on achieving aggressive ARR and cash flow targets to satisfy earn-out obligations.
📋 Key Facts
- First Closing (June 29, 2026): Acquired 60% of Target for $1,950,000 ($200k deposit credit, $160k cash, and $1.59M in common stock at $0.67/share).
- Second Closing: Planned acquisition of remaining 40% for $1,300,000 cash, subject to Nasdaq and stockholder approval.
- Contingent Consideration: Seller may receive up to $6,900,000 in unregistered shares based on ARR Run Rate and Adjusted Operating Cash Flow milestones through March 2028.
- Management Change: Company President and CEO Anthony Scott appointed as Target's CEO and Secretary.
- Equity Issuance: Issued 2,223,549 shares of common stock at the first closing; total outstanding shares increased to 22,741,846.
Intrusion Inc. announced its financial and operating results for the first quarter ended March 31, 2026. The results were disclosed via a press release furnished as an exhibit to the filing.
📋 Key Facts
- The report covers the fiscal quarter ended March 31, 2026.
- The press release was issued on May 14, 2026.
- The filing was submitted under Item 2.02 (Results of Operations and Financial Condition).
- Kimberly Pinson, Chief Financial Officer, signed the report.
Intrusion Inc. received a deficiency notice from NASDAQ on May 7, 2026, because its common stock failed to maintain a minimum bid price of $1.00 for 30 consecutive trading days. The company has a 180-day grace period, until November 3, 2026, to regain compliance with the listing standard.
🚩 Red Flags
- Failure to maintain the $1.00 minimum bid price requirement.
- Explicit mention of a potential reverse stock split as a cure for the deficiency.
- Risk of delisting if compliance is not regained within the provided grace periods.
📋 Key Facts
- Notice received from NASDAQ on May 7, 2026, regarding Listing Rule 5550(a)(2).
- Closing bid price was below $1.00 for 30 consecutive trading days from March 25, 2026, through May 6, 2026.
- The company has until November 3, 2026, to regain compliance by maintaining a $1.00 bid price for 10 consecutive business days.
- A second 180-day extension may be available if the company meets other listing standards and notifies NASDAQ of intent to cure, potentially via reverse split.
Intrusion Inc. entered into a $3.23 million secured note purchase agreement with Streeterville Capital, receiving $3 million in net proceeds. The debt is heavily collateralized by all company assets and intellectual property and includes onerous terms such as a 17.65% balance increase after 90 days.
🚩 Red Flags
- Extremely high effective cost of capital including OID and a 17.65% balance step-up.
- First-priority lien on all intellectual property puts the company's core value at risk.
- Daily compounding interest is highly unusual and aggressive.
- Monthly redemption requirements of $250,000 could create significant liquidity pressure starting in late 2026.
- Lender (Streeterville Capital) is known for high-cost financing in the micro-cap sector.
📋 Key Facts
- Original principal amount of $3,230,000 for cash proceeds of $3,000,000 (OID of $210,000).
- Note bears 7% interest per annum, compounded daily, with a 24-month maturity.
- First-priority security interest granted in all assets and intellectual property.
- Automatic 'monitoring fee' increases the outstanding balance by approximately 17.65% after 90 days.
- Monthly redemption rights of up to $250,000 begin six months after issuance.
- Includes a 10% participation right for the investor in future debt or equity financings.
Intrusion Inc. (INTZ) announced its financial results for the fiscal year ended December 31, 2025, via a press release on March 24, 2026.
📋 Key Facts
- The filing reports financial results for the fiscal year ended December 31, 2025.
- The disclosure was made under Item 2.02 (Results of Operations and Financial Condition).
- A press release detailing the results was included as Exhibit 99.1.
- The report was signed by Kimberly Pinson, Chief Financial Officer.
Intrusion Inc. filed an 8-K to announce its financial results for the quarterly period ending September 30, 2025.
📋 Key Facts
- The filing was made on November 12, 2025, regarding events occurring on November 11, 2025.
- The company issued a press release (Exhibit 99.1) detailing financial results for the quarter ended September 30, 2025.
- The report was signed by Kimberly Pinson, Chief Financial Officer.
Intrusion Inc. held its Annual Meeting of Stockholders on August 19, 2025, where stockholders voted on director elections, auditor ratification, and executive compensation.
🚩 Red Flags
- High number of 'Broker Non-Votes' (7,688,349) across all director elections suggests a significant portion of the voting power was not exercised for these specific items, though it did not prevent a quorum or election.
📋 Key Facts
- Annual Meeting held on August 19, 2025.
- Quorum was established with 11,032,314 shares (approx. 55.45% of eligible votes) represented.
- Five directors were elected: Anthony Scott, Anthony J. LeVecchio, Katrinka B. McCallum, Gregory K. Wilson, and Dion Hinchcliffe.
- Whitley Penn LLP was ratified as independent auditors for the fiscal year ending December 31, 2025.
- Executive compensation was approved on an advisory non-binding basis.
Intrusion Inc. filed an 8-K to announce its financial results for the quarterly period ending June 30, 2025.
📋 Key Facts
- The filing was made on August 12, 2025.
- The report pertains to Item 2.02 (Results of Operations and Financial Condition).
- Financial results for the quarter ending June 30, 2025, were released via press release (Exhibit 99.1).
Intrusion, Inc. entered into an 'At The Market' (ATM) offering agreement with H.C. Wainwright & Co., LLC to facilitate the sale of up to $50,000,000 in common stock.
🚩 Red Flags
- Potential significant dilution of existing shareholders through the issuance of up to $50M in new shares.
- ATM offerings are often used by micro-cap companies to raise immediate working capital, which can indicate liquidity needs.
📋 Key Facts
- Entered into At The Market Offering Agreement on June 12, 2025.
- Manager: H.C. Wainwright & Co., LLC.
- Maximum aggregate sales amount: $50,000,000 of common stock.
- Commission to Manager: Up to 3.0% of the gross sales price (or a negotiated price if acting as principal).
- The offering will be conducted via an effective shelf registration statement on Form S-3 (File No. 333-281565) declared effective Feb 10, 2025.
- Company to reimburse Manager for legal fees up to $50,000 plus due diligence update costs.
Intrusion, Inc. has terminated its At-The-Market (ATM) Sales Agreement with B. Riley Securities, effective June 11, 2025. The company confirmed it has not sold any shares under the current $50 million ATM Prospectus Supplement and does not intend to make further sales through this mechanism.
🚩 Red Flags
- Termination of a primary equity financing mechanism (ATM) may indicate a shift in capital raising strategy or difficulty in accessing secondary markets for equity.
📋 Key Facts
- Termination of At Market Sales Agreement with B. Riley Securities, Inc.
- Effective date of termination: June 11, 2025.
- The original agreement was dated August 5, 2021.
- The associated ATM Prospectus Supplement (effective Feb 10, 2025) had an aggregate offering price limit of $50,000,000.
- As of the report date, zero shares have been sold under this specific ATM Prospectus Supplement.
Intrusion Inc. issued an 8-K to announce its financial results for the three months ended March 31, 2025 via a press release.
📋 Key Facts
- Report date: April 29, 2025
- Reporting period: Three months ended March 31, 2025
- The filing includes Exhibit 99.1 containing the earnings press release
- Information is released under Item 2.02 (Results of Operations and Financial Condition)
Intrusion Inc. has entered into an agreement to retire a portion of its debt by exchanging $236,642.64 of principal from a 2022 Promissory Note for 228,551 shares of common stock.
🚩 Red Flags
- Debt-for-equity swap indicates potential liquidity constraints or a preference for preserving cash over equity dilution.
- Ongoing debt obligations remain from the original $5.35M note.
📋 Key Facts
- Exchange date: March 17, 2025
- Debt amount retired: $236,642.64 principal from Promissory Note #1 (originally $5,350,000.00)
- Shares issued: 228,551 shares of common stock
- Counterparty: Streeterville Capital, LLC
- Note original date: March 10, 2022
Intrusion Inc. has filed a prospectus supplement to facilitate the sale of up to $7.9 million in shares under an existing Standby Equity Purchase Agreement (SEPA) and has agreed to exchange $150,000 of debt for common stock with Streeterville Capital, LLC.
🚩 Red Flags
- Use of Standby Equity Purchase Agreement (SEPA) often leads to significant shareholder dilution as shares are issued at floating prices.
- Debt-for-equity swap indicates potential liquidity constraints or a need to reduce debt obligations through equity issuance.
- The SEPA amount ($7.9M) is substantial relative to the micro-cap profile, suggesting high potential for dilution.
📋 Key Facts
- Filed a prospectus supplement on March 17, 2025, relating to the issuance/sale of up to $7.9 million in Advance Shares under a SEPA.
- The SEPA was originally entered into on July 3, 2024, and approved by shareholders on August 27, 2024.
- On March 13, 2025, the Company agreed to exchange $150,000 of Promissory Note #1 (originally $5.35M) for 153,295 shares of common stock.
- The debt-for-equity swap involves Streeterville Capital, LLC, a Utah limited liability company.
- The SEPA allows the Company to sell shares at prices determined at the time of offering.
Intrusion Inc. entered into an agreement on March 5, 2025, to exchange $150,000 of principal from a long-standing promissory note for 170,474 shares of common stock issued to Streeterville Capital, LLC.
🚩 Red Flags
- Debt-for-equity swap indicates potential liquidity constraints or a need to reduce interest/principal obligations.
- The company is servicing a very large original debt ($5.35M) relative to its likely micro-cap scale, as evidenced by the need for periodic principal exchanges.
📋 Key Facts
- Agreement date: March 5, 2025
- Exchange amount: $150,000 aggregate principal from Promissory Note #1 (originally $5,350,000 dated March 10, 2022)
- Recipient: Streeterville Capital, LLC
- Consideration: 170,474 shares of common stock
- Issuance method: Section 3(a)(9) exemption from registration requirements
Intrusion Inc. filed an 8-K to announce its financial results for the fiscal year ended December 31, 2024.
📋 Key Facts
- Report date: February 27, 2025
- Reporting period: Fiscal year ended December 31, 2024
- The filing includes a press release (Exhibit 99.1) detailing results of operations and financial condition.
Intrusion Inc. has regained compliance with Nasdaq's minimum bid price requirement after its stock traded above $1.00 for 20 consecutive business days. The previous delisting notice issued in October 2024 is now considered closed.
🚩 Red Flags
- Historical delisting risk (though currently resolved)
📋 Key Facts
- The Company was previously notified on October 28, 2024, of non-compliance with Nasdaq Listing Rule 5550(a)(2) due to a sub-$1.00 bid price.
- Nasdaq provided a compliance period until April 28, 2025.
- As of January 29, 2025, the Company regained compliance after maintaining a closing bid price of $1.00 or greater for 20 consecutive business days (Dec 27, 2024 – Jan 28, 2025).
- The matter regarding the minimum bid price requirement is now officially closed by Nasdaq.
Intrusion Inc. issued an 8-K to announce a press release containing a balance sheet update as of January 15, 2025. While the specific financial details are contained in Exhibit 99.1, the filing's purpose is to provide material updates regarding the company's financial position.
🚩 Red Flags
- Balance sheet updates in micro-cap companies often signal significant changes in liquidity, debt restructuring, or capital erosion.
📋 Key Facts
- Report date: January 15, 2025
- The company issued a press release specifically addressing a balance sheet update.
- The announcement was made pursuant to Item 7.01 (Regulation FD Disclosure).
Intrusion Inc. entered into a Securities Purchase Agreement on January 6, 2025, to conduct a registered direct offering of common stock and prefunded warrants. The transaction is expected to raise approximately $7.5 million in net proceeds for working capital and general corporate purposes.
🚩 Red Flags
- Significant dilution potential due to the issuance of over 1.8 million prefunded warrants (nearly 3x the number of common shares being sold)
- The offering is structured as a registered direct offering, often used by micro-cap companies needing immediate liquidity
- Warrant structure includes a beneficial ownership limit which can lead to complex settlement mechanics or potential 'death spiral' characteristics if pricing were floating (though price here appears fixed)
📋 Key Facts
- Date of agreement: January 6, 2025
- Total aggregate gross proceeds: Approximately $7.5 million
- Securities issued: 653,000 shares of common stock at $3.05 per share and 1,806,016 prefunded warrants at $3.0499 per warrant
- Warrant terms: Exercisable immediately at $0.0001 per share; subject to a 4.99% beneficial ownership limit
- Lock-up period: 90 days for the Company and its directors/officers regarding the sale of securities
- Use of proceeds: Working capital and general corporate purposes
Intrusion Inc. entered into five separate agreements with Streeterville Capital, LLC between December 30, 2024, and January 3, 2025, to exchange Series A Preferred shares for a significant volume of common stock. These transactions involve the issuance of over 3 million new common shares, contributing to a total outstanding share count of 16,885,394.
🚩 Red Flags
- Significant dilution: The issuance of over 3 million shares in a single week represents a substantial portion of the total share count.
- Aggressive capital raising: Multiple rapid-fire equity exchanges with the same entity suggest urgent liquidity needs.
- ATM Program usage: The company has already utilized $22.0 million of its ATM program since inception, indicating reliance on continuous dilution to fund operations.
📋 Key Facts
- Five separate exchange agreements were executed with Streeterville Capital, LLC between Dec 30, 2024 and Jan 3, 2025.
- Total value of the exchanges reported across the five agreements is approximately $9.78 million.
- The company issued a total of 3,163,926 common shares in exchange for Series A Preferred stock during this period.
- As of January 3, 2025, total common shares outstanding are 16,885,394.
- B. Riley Securities, Inc. acts as sales agent for the company's At-The-Market (ATM) program.
Intrusion Inc. has extended its Warrant Exercise Inducement Program, which allows warrant holders to exercise their warrants at a lower price in exchange for receiving new warrants. This move is designed to encourage the conversion of existing warrants into common stock.
🚩 Red Flags
- Aggressive dilution: The issuance of 'New Warrants' for every share exercised creates significant potential future dilution for existing shareholders.
- Desperation signal: Extending an inducement period often suggests the company is struggling to meet its target conversion numbers, indicating a need for immediate liquidity or capital structure cleanup.
📋 Key Facts
- The Board approved an extension of the 'Warrant Exercise Inducement Program' on December 17, 2024.
- The program was originally set to expire on December 19, 2024; it is now extended until December 27, 2024.
- Inducement includes lowering the exercise price of existing warrants and providing a 'New Warrant' for each share exercised.
- Warrants involved include tranches from Sept 2022, Nov 2023, April 2, 2024, and April 22, 2024.
- Total shares covered by the warrants being incentivized involve several large blocks, including a significant block of up to 2,697,136 shares.
Intrusion Inc. has entered into an inducement letter to incentivize the exercise of existing warrants by lowering their exercise price and offering new warrants as a bonus.
🚩 Red Flags
- Aggressive warrant restructuring suggests urgent need for liquidity or cash infusion.
- Significant potential dilution of existing shareholders via the issuance of 3.19M+ new/exercised shares.
- The lowering of exercise prices is a common tactic used by distressed micro-cap companies to encourage capital inflow.
📋 Key Facts
- Board approved an inducement letter on November 21, 2024.
- Inducement period: November 21, 2024, through December 19, 2024.
- Warrant exercise price reduced to $0.76 per share (includes $0.13 for the New Warrant).
- New Warrant exercise price is set at $0.63 per share with a five-year term.
- Total aggregate shares underlying the warrants: 3,198,082 shares.
Intrusion Inc. entered into a privately-negotiated exchange agreement with Streeterville Capital, LLC on November 18, 2024. The company will issue 110,340 shares of common stock in exchange for 68 shares of Series A Preferred stock.
🚩 Red Flags
- Potential dilution for existing common shareholders through the issuance of 110,340 new shares.
📋 Key Facts
- Agreement date: November 18, 2024
- Counterparty: Streeterville Capital, LLC (Utah limited liability company)
- Exchange terms: 68 Series A Preferred Shares for 110,340 Common Stock shares
- Fair value of exchange: $74,800
- Issuance method: Exemption from registration under Section 3(a)(9) of the Securities Act of 1933
Intrusion Inc. filed an 8-K to announce its financial results for the quarterly period ended September 30, 2024.
📋 Key Facts
- The filing was made on November 12, 2024.
- The report pertains to Item 2.02: Results of Operations and Financial Condition.
- Financial results were released via a press release (Exhibit 99.1) for the quarter ending September 30, 2024.
Intrusion Inc. announced the resignation of director James F. Gero, effective November 20, 2024. The departure is attributed to his decision to enter full-time retirement.
📋 Key Facts
- James F. Gero notified the Board on November 11, 2023 (Note: Filing date says 2024, but text mentions notification in 2023; likely a clerical error in filing or long notice period), to resign effective November 20, 2024.
- The resignation is due to the director's decision to begin full-time retirement at age 80.
- Following the resignation, the Board size will decrease from six directors to five.
Intrusion, Inc. received a notice from Nasdaq stating it is non-compliant with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market.
🚩 Red Flags
- Delisting notice from Nasdaq (Item 3.01)
- Potential for mandatory reverse stock split to maintain listing
- Significant risk of losing exchange listing if share price does not recover
📋 Key Facts
- Non-compliance triggered by closing bid price below $1.00 for 30 consecutive business days as of October 25, 2024.
- The Company has a 180-day period to regain compliance, expiring on April 28, 2025.
- Compliance can be achieved if the stock closes at $1.00 or higher for 10 consecutive business days.
- A second 180-day compliance period may be available via a reverse stock split if other listing standards are met.
Intrusion Inc. announced a business update call scheduled for October 9, 2024. The company intends to provide updates on recent business activities and preliminary revenue results for the third quarter of 2024.
📋 Key Facts
- Business update call scheduled for Wednesday, October 9, 2024, at 4:15 PM EDT.
- The company will review preliminary revenue results for the third quarter ended September 30, 2024.
- Filing includes a press release (Exhibit 99.1) regarding the upcoming call.
Intrusion Inc. announced a $2.0 million contract award from the U.S. Department of Defense to support cybersecurity efforts. The 12-month performance period is expected to impact earnings starting in Q3 2024.
📋 Key Facts
- Contract value: $2.0 million
- Counterparty: U.S. Department of Defense
- Purpose: Support cybersecurity efforts
- Duration: 12-month period of performance
- Revenue recognition: Expected to contribute to earnings in Q3 2024
Intrusion Inc. held its Annual Meeting of Stockholders on August 27, 2024, where shareholders approved several key items including the election of six directors and significant increases to equity incentive plans.
🚩 Red Flags
- Approval of a $10.0 million Standby Equity Purchase Agreement (SEPA) indicates a need for immediate capital and potential significant dilution for existing shareholders.
- Massive expansion of equity incentive plans (Omnibus Plan increased 2,000% and ESPP increased 2,000%) suggests aggressive future dilution.
📋 Key Facts
- Annual Meeting held on August 27, 2024, with a quorum representing approximately 56.44% of eligible votes.
- Stockholders approved an amendment to the 2021 Omnibus Incentive Plan, increasing reserved shares from 125,000 to 2,500,000.
- Stockholders approved an amendment to the 2023 Employee Stock Purchase Plan (ESPP), increasing reserved shares from 50,000 to 1,000,000.
- Stockholders approved a Standby Equity Purchase Agreement (SEPA) with Streeterville Capital, LLC for the issuance of up to $10.0 million in Common Stock.
- Whitley Penn LLP was ratified as independent auditors for fiscal year ending December 31, 2024.
Intrusion Inc. filed an 8-K to announce the release of its financial results for the quarter ended June 30, 2024.
📋 Key Facts
- The filing was made on August 13, 2024.
- The report pertains to Item 2.02: Results of Operations and Financial Condition.
- Financial results announced are for the quarter ended June 30, 2024.
Intrusion Inc. entered into a $10 million Standby Equity Purchase Agreement (SEPA) with Streeterville Capital, LLC to provide flexible capital over a 24-month term. The agreement allows for the issuance of common stock at a significant discount to market price, which is highly dilutive to existing shareholders.
🚩 Red Flags
- Highly dilutive financing structure (SEPA/Death Spiral features).
- Significant discount to market price (95% of lowest VWAP over 3 days).
- Potential for massive share dilution via the 'Exchange Cap' and subsequent stockholder approval requests.
- Immediate cash outflow for fees ($125,000 total) to secure the financing.
📋 Key Facts
- Entered into a Standby Equity Purchase Agreement (SEPA) with Streeterville Capital, LLC on July 3, 2024.
- Total commitment amount of up to $10.0 million in Common Stock.
- Term of the agreement is 24 months from the date of entry.
- Shares are priced at 95% of the lowest daily VWAP over three consecutive trading days.
- Each 'Advance' (sale) is capped at 4.99% of outstanding shares or 100% of the aggregate 3-day trading volume.
- The company will use 10% of proceeds from each Advance to redeem outstanding Series A Preferred Stock held by Streeterville.
- Company paid a $25,000 structuring fee and a 1% commitment fee ($100,000) to Streeterville.
Intrusion Inc. announced the appointment of Dion Hinchcliffe to its Board of Directors, effective July 1, 2024. Mr. Hinchcliffe is an industry analyst and executive with extensive experience in enterprise technology leadership.
📋 Key Facts
- Dion Hinchcliffe appointed to the Board of Directors on June 26, 2024, effective July 1, 2024.
- Mr. Hinchcliffe serves as Vice President of CIO Practice at The Futurum Group.
- The Board considers Mr. Hinchcliffe an independent director under Nasdaq requirements.
- Annual cash retainer is $30,000, payable in quarterly installments of $7,500.
- Additional annual committee fees range from $7,500 to $18,000.
- Compensation includes restricted stock units (RSUs) based on a $70,000 valuation at the time of grant.
Intrusion Inc. entered into an agreement with Streeterville Capital, LLC to exchange 339 shares of Series A Preferred stock for 243,725 shares of common stock.
🚩 Red Flags
- Potential dilution for existing common shareholders due to the issuance of 243,725 new shares.
- The transaction involves a private exchange of preferred stock for common stock, often indicative of debt/equity restructuring or meeting obligations to preferred holders.
📋 Key Facts
- Agreement date: May 30, 2024
- Counterparty: Streeterville Capital, LLC (a Utah limited liability company)
- Exchange terms: 339 Series A Preferred Shares for 243,725 shares of Common Stock
- Fair value of exchange: $372,900
- Issuance method: Pursuant to Section 3(a)(9) exemption from registration requirements
Intrusion Inc. entered into an Exchange Agreement with Streeterville Capital, LLC on May 10, 2024. The agreement involves the exchange of 125 shares of Series A Preferred stock for 90,460 shares of common stock valued at $137,500.
🚩 Red Flags
- Potential dilution for existing common shareholders via the issuance of 90,460 new shares
- Transaction involves a specific entity (Streeterville Capital) which is often associated with micro-cap financing/arbitrage activities
📋 Key Facts
- Date of event: May 10, 2024
- Counterparty: Streeterville Capital, LLC (Utah Limited Liability Company)
- Exchange mechanism: Conversion of 125 Series A Preferred shares into 90,460 common shares
- Total value of exchanged common shares: $137,500
- Issuance conducted under Section 3(a)(9) exemption from registration
Intrusion Inc. amended its Series A Preferred Stock Certificate of Designations to allow preferred returns and dividends to accrue if the company lacks sufficient cash or shares for payment. Additionally, the amendment removed several restrictive covenants regarding SEC reporting timeliness and maintaining stock exchange listing/trading status.
🚩 Red Flags
- Removal of SEC filing compliance covenants suggests potential inability to meet reporting deadlines.
- Removal of exchange listing requirements indicates high risk of delisting or loss of liquidity.
- Accruing dividends and preferred returns increases the company's long-term debt-like obligations (liquidation preference/preference overhang).
- Language regarding 'inability to pay in cash' is a strong indicator of liquidity distress.
📋 Key Facts
- Amended Series A Certificate of Designations filed on May 9, 2024.
- Added provision: Preferred Return accrues if company cannot pay in cash and no shares are available for issuance.
- Added provision: Quarterly Dividends accrue if company cannot pay in cash and no shares are available for issuance.
- Removed covenant requiring timely SEC filings under Sections 13 or 15(d).
- Removed requirement to maintain listing on NYSE, NYSE American, or Nasdaq.
- Removed requirement to ensure trading does not reach zero bid or cease trading.
Intrusion Inc. filed an 8-K to announce its financial results for the fiscal quarter ended March 31, 2024.
📋 Key Facts
- The filing was made on May 14, 2024.
- The report pertains to Item 2.02: Results of Operations and Financial Condition.
- Financial results for the quarter ended March 31, 2024, were released via press release (Exhibit 99.1).
Intrusion Inc. has received written notice from Nasdaq confirming it has regained compliance with the minimum bid price and equity requirements. The Nasdaq Hearings Panel has decided to continue the company's listing on the Exchange, effectively closing the matter.
🚩 Red Flags
- Historical delisting risk: The company was previously facing potential delisting due to bid price and equity requirements.
📋 Key Facts
- Company regained compliance with Nasdaq Listing Rule 5550(a)(2) (Bid Price Rule).
- Company regained compliance with Nasdaq Listing Rule 5550(b)(1) (Equity Rule).
- The decision follows a previous Hearings Panel decision reported on February 8, 2024.
- Nasdaq has decided to continue the listing of the Company's securities.
Intrusion Inc. entered into subscription agreements for a private placement of 1,348,569 shares and warrants to raise approximately $2.6 million. The offering is part of an urgent effort to meet Nasdaq's minimum stockholders' equity requirement ($2.5 million) following a delisting warning.
🚩 Red Flags
- Delisting risk: The company is facing a critical deadline (April 23, 2024) to prove compliance with Nasdaq's equity requirement.
- Dilutive financing: Issuance of significant warrants (2x the number of shares being sold) at an exercise price ($1.70) below the current offering price ($1.95).
- Lack of registration rights: The filing explicitly states that the shares and warrants do not carry registration rights, meaning investors cannot easily liquidate their positions in the public market.
- Desperation capital raise: The timing of the offering (one day before the Nasdaq extension expires) indicates a highly distressed liquidity situation.
📋 Key Facts
- Private placement of 1,348,569 shares of common stock at $1.95 per share.
- Issuance of warrants to purchase 2,697,138 shares at an exercise price of $1.70 per share.
- Gross proceeds expected to be approximately $2.6 million before expenses.
- Warrants expire five years from the date of issuance.
- The company is seeking a compliance determination from Nasdaq regarding the Equity Standard (Listing Rule 5550(b)(1)).
- Nasdaq extension for equity compliance expires on April 23, 2024.
Intrusion Inc. announced the exercise of warrants at a reduced price of $3.04 per share, resulting in the issuance of 180,668 common shares and the creation of new warrants for an additional 180,668 shares.
🚩 Red Flags
- Potential dilution: The issuance of 180,668 shares plus the potential issuance of another 180,668 via new warrants increases the float.
- Inducement/Price Reduction: Lowering exercise prices to encourage warrant exercise is often a sign of liquidity needs or attempts to prevent expiration of debt-related instruments.
📋 Key Facts
- Board approved inducement letter on April 1, 2024, to lower warrant exercise prices.
- Warrant exercise price reduced to $3.04 per share (includes $0.13 for a 'New Warrant').
- On April 8, 2024, holders exercised warrants resulting in the issuance of 180,668 shares of common stock.
- The company received an aggregate cash payment of $549,230.72 from the exercise.
- New Warrants were issued for an additional 180,668 shares with an exercise price of $2.91 and a five-year term.
Intrusion Inc. announced the court approval of a derivative settlement agreement and an exchange of preferred shares for common stock. Additionally, the company has implemented a significant warrant inducement program to encourage exercise.
🚩 Red Flags
- Warrant inducement programs are often used by micro-cap companies facing liquidity issues or high dilution risks.
- The company has already exhausted its $0.5 million insurance retention for legal fees, indicating significant prior litigation costs.
- Significant potential dilution from the exercise of over 9.9 million total warrants (September 2022 and November 2023 tranches).
📋 Key Facts
- Court approved a settlement in Prawitt v. Blount, et al., involving amendments to corporate bylaws and committee charters.
- Settlement payment of $250,000 for attorneys' fees will be covered by insurance as the $0.5 million retention is exhausted.
- On April 3, 2024, Streeterville Capital, LLC agreed to exchange 91 shares of Series A Preferred for 32,248 shares of common stock (fair value: $100,100).
- Board approved a warrant inducement letter effective April 2, 2024, through April 23, 2024.
- The inducement lowers the exercise price of existing warrants to $3.04 and provides 'New Warrants' with an exercise price of $2.91 upon exercise.
This 8-K amendment corrects a compliance deadline and provides an update on the company's ongoing struggle to maintain Nasdaq listing. Despite executing a 1-for-20 reverse stock split, the company remains in non-compliance with minimum bid requirements and faces additional delisting risk due to failing the $5 million stockholders' equity requirement.
🚩 Red Flags
- Delisting notice received for multiple reasons: Minimum Bid Requirement and Market Value Standard.
- Ineligibility for a second 180-day extension due to failure to meet the $5M stockholders' equity requirement.
- Execution of a 1-for-20 reverse stock split (often viewed as a sign of extreme distress).
- Ongoing uncertainty regarding continued listing on Nasdaq.
📋 Key Facts
- The company executed a 1-for-20 reverse stock split effective March 25, 2024, to attempt to regain compliance with Nasdaq's $1.00 minimum bid rule.
- Nasdaq notified the company on March 26, 2024, that it is ineligible for a second 180-day grace period because it fails the $5,000,000 minimum stockholders' equity requirement.
- The Hearings Panel has until April 23, 2024, to consider compliance with Market Value of Listed Securities (MVLS) standards.
- The company must submit views regarding the additional deficiency to the Hearing Panel by April 2, 2024.
Intrusion Inc. has executed a 1-for-20 reverse stock split to attempt compliance with Nasdaq's minimum bid requirement, but received a new notice on March 26, 2024, stating it is ineligible for further extensions due to failing the $5 million stockholders' equity requirement. The company faces imminent delisting from the Nasdaq Capital Market.
🚩 Red Flags
- Delisting notice received due to failure to meet stockholders' equity minimums.
- Ineligibility for a second 180-day extension, significantly increasing delisting risk.
- History of multiple compliance failures (Minimum Bid Requirement and MVLS standard).
- Execution of a reverse stock split, often viewed as a sign of extreme distress in micro-cap stocks.
📋 Key Facts
- Executed a 1-for-20 reverse stock split effective March 25, 2024, to address minimum bid price deficiency.
- Received notice on March 26, 2024, that the company is ineligible for a second 180-day grace period because it fails the $5,000,000 minimum stockholders' equity requirement.
- The company has an upcoming deadline of April 2, 2024, to submit written views to the Hearings Panel regarding delisting.
- Previously failed the Market Value of Listed Securities (MVLS) standard ($35 million requirement).
Intrusion Inc. filed an 8-K to announce its financial results for the fiscal year ended December 31, 2023. The filing serves as a formal notice that the company's annual earnings press release has been issued.
📋 Key Facts
- Reporting date of event: March 26, 2024
- Financial results released cover the year ended December 31, 2023
- The filing includes a press release as Exhibit 99.1
Intrusion Inc. has received Nasdaq approval to lower the exercise price of existing warrants from their November 2023 issuance to $0.20 per share. This move is intended to induce warrant holders to exercise their rights through March 29, 2024.
🚩 Red Flags
- Significant potential dilution: The exercise of up to 8.7 million warrants at a very low price ($0.20) will result in substantial share issuance.
- Desperation signal: Inducement letters and lowering exercise prices are often used by micro-cap companies facing liquidity constraints or needing immediate cash infusion.
📋 Key Facts
- Board approved an Inducement Letter on March 11, 2024, to lower the exercise price of November 2023 Warrants.
- The new Exercise Price is $0.20 per share.
- Nasdaq approved the reduced Exercise Price on March 21, 2024, citing a change in circumstances since original issuance.
- Warrant holders have an exercise window from March 11, 2024, through March 29, 2024.
- The November 2023 Warrants cover up to 8,718,748 shares of common stock.
Intrusion Inc. has entered into a debt-for-equity exchange with Streeterville Capital, LLC and received stockholder approval for a reverse stock split. The company is restructuring its capital structure by eliminating existing preferred series and creating a new Series A Preferred Stock with significant liquidation preferences.
🚩 Red Flags
- Reverse stock split approved (ratio up to 1-for-20), often used to combat delisting or low share prices.
- Significant debt restructuring involving a major creditor (Streeterville Capital).
- New Series A Preferred Stock has highly aggressive liquidation preferences and dividend terms that sit senior to all common stock.
- The company is partitioning existing debt into new promissory notes, indicating ongoing liquidity/debt management issues.
📋 Key Facts
- Entered into an Exchange Agreement with Streeterville Capital, LLC on March 15, 2024.
- Exchanged Note #2 and a partitioned portion of Note #1 for 9,275 shares of new Series A Preferred Stock.
- A Partitioned Promissory Note remains with a principal amount of $3,007,237.26 at 7% simple interest per annum.
- Stockholders approved a reverse stock split ratio between 1-for-2 and 1-for-20.
- New Series A Preferred Stock has a stated value of $1,100 per share and carries a 10% annual compounded preferred return.
- Series A Preferred Stock features a quarterly dividend starting one year after issuance (2.5% for years 1-2; 5% thereafter).
- Elimination of Series 1, Series 2, and Series 3 preferred shares approved by stockholders.
Intrusion Inc. entered into a privately-negotiated agreement on March 7, 2024, to exchange $200,000 of principal from an existing Promissory Note for 1,044,932 shares of common stock.
🚩 Red Flags
- Debt-for-equity swap indicates potential liquidity constraints or inability to service debt with cash.
- Significant dilution for existing shareholders via the issuance of over 1 million shares.
📋 Key Facts
- Agreement date: March 7, 2024
- Exchange amount: $200,000 aggregate principal of Promissory Note #1 (originally $5,350,000 dated March 10, 2022)
- Counterparty: Streeterville Capital, LLC
- Shares issued: 1,044,932 shares of common stock
- Issuance method: Section 3(a)(9) exemption from registration requirements
Intrusion Inc. has entered into an inducement letter to lower the exercise price of its September 2022 warrants to $0.19 per share. This move is designed to encourage warrant holders to exercise their rights between March 4 and March 19, 2024.
🚩 Red Flags
- Significant potential dilution of existing shareholders via warrant exercise.
- Extremely low exercise price ($0.19) suggests a distressed capital structure or urgent need for cash/reduction of liability.
- The move to lower the strike price is often a precursor to significant equity overhang.
📋 Key Facts
- Board approved an inducement letter on March 4, 2024.
- September 2022 Warrants cover up to 1,378,677 shares of common stock.
- Exercise price reduced to $0.19 per share for the inducement period.
- Inducement window: March 4, 2024, through March 19, 2024.
Intrusion Inc. received a revised notice from Nasdaq granting continued listing until April 23, 2024, contingent upon shareholder approval of a debt conversion and the creation of new preferred stock. The company also plans to execute a reverse stock split to address minimum bid requirements.
🚩 Red Flags
- Delisting notice/non-compliance with Nasdaq listing rules (Minimum Bid and MVLS).
- Planned reverse stock split to artificially inflate share price.
- Requirement for massive debt conversion ($8.98 million) which may lead to significant dilution.
- Strict deadline of April 23, 2024, for compliance with no further discretionary extensions from the Panel.
📋 Key Facts
- Nasdaq Panel granted a stay for continued listing on Nasdaq Capital Market until April 23, 2024.
- Compliance is contingent upon shareholder approval at a Special Meeting scheduled for March 15, 2024.
- Required actions include the creation of a new class of preferred stock and the conversion of $8.98 million in current debt.
- The company plans to implement a reverse stock split to regain compliance with the $1.00 minimum bid requirement.
- Failure to meet Minimum Bid or Equity Standard requirements by April 23, 2024, will result in delisting.
Intrusion Inc. issued a letter to stockholders via Item 7.01 (Regulation FD Disclosure) on January 31, 2024. The filing does not contain specific financial data in the text but refers to an attached CEO letter.
🚩 Red Flags
- Use of Item 7.01 often indicates non-routine communication or response to market/stockholder pressure, which can sometimes precede significant corporate shifts or distress updates in micro-cap companies.
📋 Key Facts
- The company issued a Stockholder Letter from President and CEO Tony Scott on January 31, 2024.
- The disclosure is made pursuant to Item 7.01 (Regulation FD Disclosure).
- The information in the letter is not considered 'filed' for purposes of Section 18 liability.
Intrusion Inc. has entered into a settlement agreement regarding a stockholder derivative complaint (Prawitt v. Blount, et al.) involving allegations of breach of fiduciary duties by officers and directors. The settlement includes corporate governance changes and the payment of $250,000 in legal fees via insurance.
🚩 Red Flags
- Derivative lawsuit alleging breach of fiduciary duties and waste of corporate assets.
- Company's $0.5 million insurance retention has already been exhausted due to prior litigation costs/investigations.
- Ongoing legal uncertainty regarding the court's final approval of the settlement (hearing moved to April 2024).
📋 Key Facts
- Settlement reached on September 28, 2023, regarding a derivative action filed in June 2022.
- The settlement involves an amendment to Company Bylaws and committee Charters to implement new corporate governance measures.
- A mandatory requirement to designate a lead independent director if the CEO and Chairman are the same individual.
- Settlement payment of $250,000 for plaintiff's attorneys' fees, to be paid by insurance as the $0.5 million retention has been exhausted.
- The U.S. District Court hearing for settlement approval was rescheduled from January 7, 2024, to April 3, 2024.
Intrusion Inc. entered into a $1.08 million invoice financing arrangement with its own CEO, Anthony Scott, on January 2, 2024. The deal involves the issuance of a promissory note secured by all existing and future accounts receivable.
🚩 Red Flags
- Related-party transaction involving the CEO
- High-frequency repayment schedule ($40k/week) may strain short-term liquidity
- The company is pledging its entire accounts receivable as collateral to the CEO, effectively using the CEO as a lender of last resort
- Short maturity date (June 15, 2024) creates significant near-term debt pressure
📋 Key Facts
- Date of agreement: January 2, 2024
- Counterparty: Anthony Scott (President and CEO)
- Principal amount of Note: $1,080,000
- Cash received by Company: $1,000,000
- Repayment terms: $40,000 weekly payments until maturity on June 15, 2024
- Interest rate: 7.0% per annum, compounded daily
- Collateral: Security interest in all accounts receivable or other receivables (subject to prior permitted liens)