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): November 10, 2010

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:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

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

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 November 10, 2010, Intrusion Inc. issued a press release announcing its financial results for the third quarter ended September 30, 2010.  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 November 10, 2010.

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: November 10, 2010	By:	/s/ MICHAEL L. PAXTON
		Michael L. Paxton
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit  No.	Description of Exhibit
99.1	Press release issued by Intrusion Inc. on November 10, 2010.

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EX-99.1

Exhibit 99.1

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

Financial Contact

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

INTRUSION INC. ACHIEVES SIXTH CONSECUTIVE PROFITABLE QUARTER IN THE THIRD QUARTER OF 2010

Richardson, Texas — November 10, 2010 — Intrusion Inc. (OTCBB: INTZ), (“Intrusion”) announced today financial results for the three and nine months ended September 30, 2010.

Intrusion’s net income was $203 thousand in the third quarter 2010 compared to $79 thousand net income for the third quarter 2009.  Intrusion achieved net income for the sixth consecutive quarter in the third quarter 2010.

Revenue for the third quarter 2010 was $1.6 million compared to $1.3 million in the third quarter 2009.

Gross profit margin was 62 percent of revenue in the third quarter of 2010 compared to 65 percent in the third quarter 2009.

Intrusion’s third quarter 2010 operating expenses were $0.8 million compared to $0.7 million in the third quarter 2009.

As of September 30, 2010, Intrusion reported cash and cash equivalents of $0.3 million, a working capital deficiency of $0.6 million and debt of $0.7 million.

“Our sixth consecutive profitable quarter is outstanding and is the result of good gross profit margins and continued operating expense control.  Our total orders booked in the third quarter were $1.8 million.” 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., CST today.  Interested investors can access the call at 1-800-399-2043 (if outside the United States, 1-706-634-5518).  For those unable to participate in the live conference call, a replay will be accessible beginning today at 7:00 P.M., CST until November 17, 2010 by calling 1-800-642-1687 (if outside the United States, 1-706-645-9291).  At the replay prompt, enter conference identification number 23921753.  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 global provider of entity identification systems, high speed data mining, regulated information compliance, data leak prevention and data privacy protection, and network intrusion prevention and detection products.  Intrusion’s product families include TraceCop™ for entity identification, Savant™ for network data mining, Compliance Commander™ for regulated information compliance, data leak prevention and data privacy protection, and Intrusion SecureNet for network intrusion prevention and 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.

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.”

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INTRUSION INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands except par value amounts)

	September 30,			December 31,
	2010			2009
ASSETS
Current Assets:
Cash and cash equivalents	$	298		$	519
Accounts receivable	466			351
Inventories, net	29			7
Prepaid expenses	32			68
Total current assets	825			945
Property and equipment, net	135			146
Other assets	39			39
TOTAL ASSETS	$	999		$	1,130
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Loan payable to officer	$	670		$	—
Accounts payable and accrued expenses	639			674
Dividends payable	35			360
Deferred revenue	107			93
Total current liabilities	1,451			1,127
Loan payable to officer	—			970
Stockholders’ Deficit:
Preferred stock, $.01 par value:
Authorized shares — 5,000
Series 1 shares issued and outstanding — 220 Liquidation preference of $1,128 as of September 30, 2010	778			778
Series 2 shares issued and outstanding — 460 Liquidation preference of $1,155 as of September 30, 2010	724			724
Series 3 shares issued and outstanding — 354 Liquidation preference of $775 as of September 30, 2010	504			504
Common stock, $.01 par value:
Authorized shares — 80,000
Issued shares — 11,786 in 2010 and 11,715 in 2009 Outstanding shares — 11,776 in 2010 and 11,705 in 2009	118			117
Common stock held in treasury, at cost — 10 shares	(362		)	(362		)
Additional paid-in capital	55,578			55,545
Accumulated deficit	(57,566		)	(58,094		)
Accumulated other comprehensive loss	(226		)	(179		)
Total stockholders’ deficit	(452		)	(967		)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	999		$	1,130

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INTRUSION INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Revenue	1,577			1,253			4,650			3,401
Cost of revenue	594			435			1,696			1,145
Gross profit	983			818			2,954			2,256
Operating expenses:
Sales and marketing	179			198			639			733
Research and development	379			288			1,024			904
General and administrative	262			235			778			768
Operating income (loss)	163			97			513			(149		)
Interest expense, net	(7		)	(18		)	(32		)	(44		)
Other income	47			—			47			—
Income (loss) before income taxes	203			79			528			(193		)
Income tax provision	—			—			—			—
Net income (loss)	$	203		$	79		$	528		$	(193	)
Preferred stock dividends accrued	(38		)	(38		)	(113		)	(116		)
Net income (loss) attributable to common stockholders	$	165		$	41		$	415		$	(309	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.01		$	0.00		$	0.04		$	(0.03	)
Diluted	$	0.01		$	0.00		$	0.03		$	(0.03	)
Weighted average common shares outstanding:
Basic	11,744			11,704			11,728			11,669
Diluted	14,126			13,529			13,898			11,669

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