8-K

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): May 7, 2018

INTRUSION INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware	000-20191	75-1911917
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1101 East Arapaho Road, Sutie 200, Richardson, Texas		75081
(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)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 May 7, 2018, Intrusion Inc. issued a press release announcing its financial results for the first quarter ended March 31, 2018. 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 May 7, 2018.

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: May 7, 2018	By:	/s/ MICHAEL L. PAXTON
		Michael L. Paxton
		Chief Financial Officer

2

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press release issued by Intrusion Inc. on May 7, 2018.

3

EX-99.1

Exhibit 99.1

NEWS RELEASE
	1101 East Arapaho Road Suite 200 Richardson TX 75081 USA (972) 234-6400 main

Contact

Michael L. Paxton, VP, CFO
972.301.3658, mpaxton@intrusion.com

INTRUSION INC. REPORTS NET INCOME OF $346 THOUSAND IN THE FIRST QUARTER OF 2018

Richardson, Texas – May 7, 2018 – Intrusion Inc. (OTCQB: INTZ), (“Intrusion”) today announced financial results for the quarter ended March 31, 2018.

Intrusion’s net income was $346 thousand in the first quarter 2018, compared to a net loss of $351 thousand for the first quarter 2017 and net income of $194 thousand for the fourth quarter 2017.

Revenue for the first quarter 2018 was $2.3 million, compared to $1.6 million for the first quarter 2017 and $2.1 million for the fourth quarter 2017.

Gross profit margin was 62% of revenue in the first quarter 2018; compared to 63% for the first quarter 2017 and 58% for the fourth quarter 2017.

Intrusion’s first quarter 2018 operating expenses were $1.0 million; compared to $1.3 million for the first quarter 2017 and $1.0 million for the fourth quarter 2017.

As of March 31, 2018, Intrusion reported cash and cash equivalents of $0.1 million, a working capital deficiency of $0.3 million and debt of $3.0 million.

“Our orders pipeline as we entered 2018 included twenty-six customers, fifteen of which were existing customers and eleven new customers. Total bookings in the first quarter included five renewal orders from existing customers. Gross profit margin improved to 62% of revenue in the first quarter 2018. Gross profit margin should range from 58% to 65%, depending on product mix. We continue our increased sales efforts in the TraceCop business segment and expect this focus to result in growth in revenue and profit,” stated G. Ward Paxton, President and CEO of Intrusion. 

Intrusion’s management will host its regularly scheduled quarterly conference call to discuss the Company’s financial and operational progress at 4:00 P.M., CDT today. Interested investors can access the call at 1-877-258-4925 (if outside the United States, 1-973-500-2152). For those unable to participate in the live conference call, a replay will be accessible beginning today at 7:00 P.M., CDT until May 14, 2018 by calling 1-855-859-2056 (if outside the United States, 1-404-537-3406). At the replay prompt, enter conference identification number 8979247. Additionally, a live and archived audio webcast of the conference call will be available at www.intrusion.com.

Intrusion

First Quarter 2018 Results

Page 2 of 4

About Intrusion Inc.

Intrusion Inc. is a global provider of entity identification, high speed data mining, cybercrime and advanced persistent threat detection products. Intrusion’s product families include TraceCop™ for identity discovery and disclosure, Savant™ for network data mining and advanced persistent threat detection. Intrusion’s products 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. We develop, market and support a family of entity identification, high speed data mining, cybercrime and advanced persistent threat detection products.

This release may contain certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties.  Such statements include, without limitations, statements regarding future revenue growth and profitability, the difficulties in forecasting future sales caused by current economic and market conditions, the effects of sales and implementation cycles for our products on our quarterly results and difficulties in accurately estimating market growth, the effect of military actions on government and corporate spending on information security products, spending patterns of, and appropriations to, U.S. government departments, as well as other statements. 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. The factors that could cause actual results to differ materially from expectations are detailed in the Company's most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.”

Intrusion

First Quarter 2018 Results

Page 3 of 4

INTRUSION INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands except par value amounts)

	March 31,			December 31,
	2018			2017
ASSETS
Current Assets:
Cash and cash equivalents	$	133		$	224
Accounts receivable		1,244			962
Inventories, net		—			15
Prepaid expenses		181			89
Total current assets		1,558			1,290
Property and equipment, net		169			124
Other assets		38			38
TOTAL ASSETS	$	1,765		$	1,452
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	1,269		$	1,182
Dividends payable		483			447
Obligations under capital lease, current portion		46			44
Deferred revenue		76			406
Total current liabilities		1,874			2,079
Loan payable to officer		2,965			2,865
Obligations under capital lease, noncurrent portion		38			17
Stockholders' Deficit:
Preferred stock, $.01 par value:
Authorized shares – 5,000
Series 1 shares issued and outstanding – 200 Liquidation preference of $1,175 in 2018 and $1,163 in 2017		707			707
Series 2 shares issued and outstanding – 460 Liquidation preference of $1,342 in 2018 and $1,328 in 2017		724			724
Series 3 shares issued and outstanding – 289 Liquidation preference of $736 in 2018 and $728 in 2017		412			412
Common stock, $.01 par value:
Authorized shares – 80,000
Issued shares – 13,022 in 2018 and 12,808 in 2017		130			128
Outstanding shares – 13,012 in 2018 and 12,798 in 2017
Common stock held in treasury, at cost – 10 shares		(362	)		(362	)
Additional paid-in capital		56,567			56,518
Accumulated deficit		(61,183	)		(61,529	)
Accumulated other comprehensive loss		(107	)		(107	)
Total stockholders' deficit		(3,112	)		(3,509	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,765		$	1,452

Intrusion

First Quarter 2018 Results

Page 4 of 4

INTRUSION INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share amounts)

	Quarter ended			Quarter ended
	March 31,			March 31,
	2018			2017
Revenue	$	2,263		$	1,559
Cost of revenue		852			583
Gross profit		1,411			976
Operating expenses:
Sales and marketing		414			361
Research and development		303			585
General and administrative		295			331
Operating income (loss)		399			(301	)
Interest expense, net		(53	)		(50	)
Net income (loss)		346			(351	)
Preferred stock dividends accrued		(36	)		(35	)
Net income (loss) attributable to common stockholders	$	310		$	(386	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.02		$	(0.03	)
Diluted	$	0.02		$	(0.03	)
Weighted average shares outstanding:
Basic		12,946			12,748
Diluted		14,730			12,748