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): August 11, 2011

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 August 11, 2011, Intrusion Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2011.  A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

ITEM 5.07             Submission of Matters to a Vote of Security Holders.

The 2011 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company was held on May 19, 2011.  Matters submitted to the stockholders of the Company entitled to vote at the Annual Meeting (the “Stockholders”) and voted upon at the Annual Meeting, which are more fully described in the Company’s proxy statement, filed with the Securities and Exchange Commission on April 05, 2011, were: (1) the election of five directors to serve until the 2012 Annual Meeting of Stockholders of the Company, (2)  the amendment to the Company’s 2005 Stock Option Plan (the “Plan”) to increase by 400,000 the number of shares issuable under the Plan, and (3) the ratification of the selection of Whitley Penn LLP as the Company’s independent auditors for fiscal year 2011.

On April 1, 2011, the record date for the Annual Meeting, there were 11,817,732 shares of Common Stock issued, outstanding and entitled to vote.  Stockholders holding 11,453,038 shares were present at the meeting, in person or represented by proxy.

Each of the director nominees set forth below was elected to hold office until his respective successor is duly elected and qualified or until his earlier death, resignation or removal.  The Stockholders ratified the selection of Whitely Penn LLP as the Company’s independent auditors for the fiscal year ending December 31, 2011.  The Stockholders also approved an amendment to the Plan to increase by 400,000 the number of shares of Common Stock that may be issued pursuant to awards granted under the Plan.

The table below shows the number votes cast for, against or withheld, as well as the number of abstentions and broker non-votes for the proposal regarding the election of the five directors to serve until the 2012 Annual Meeting of Stockholders of the Company.

Name of Director Nominee	For	Against	Withheld	Abstentions	Broker Non- Votes
G. Ward Paxton	7,264,302		980,633
T. Joe Head	7,270,217		974,718
J. Fred Bucy, Jr.	7,270,717		974,218
James F. Gero	7,271,117		973,818
Donald M. Johnston	7,271,092		973,843

The table below shows the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes for the proposal regarding an amendment to the Plan to increase by 400,000 the number of shares that may be issued pursuant to awards granted under the Plan.

For	Against	Withheld	Abstentions	Broker Non- Votes
7,875,969	128,310		240,656

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The table below shows the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes for the proposal regarding the ratification of the selection of Whitely Penn LLP as the Company’s independent auditors for fiscal year 2011.

For	Against	Withheld	Abstentions	Broker Non- Votes
11,129,890	296,583		26,565

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(d)   Exhibits

99.1 —  Press release issued by Intrusion Inc. on August 11, 2011.

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: August 11, 2011	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 August 11, 2011.

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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. RELEASES RESULTS FOR THE SECOND QUARTER OF 2011

Richardson, Texas — August 11, 2011 — Intrusion Inc. (OTCBB: INTZ), (“Intrusion”) announced today financial results for the three and six months ended June 30, 2011.

Intrusion’s net loss was $473 thousand in the second quarter 2011 compared to $121 thousand net income for the second quarter 2010.

Revenue for the second quarter 2011 was $1.1 million compared to $1.5 million in the second quarter 2010.

Gross profit margin was 62 percent of revenue in the second quarter of 2011 compared to 64 percent in the second quarter 2010.

Intrusion’s second quarter 2011 operating expenses were $1.1 million compared to $0.9 million in the second quarter 2010.

As of June 30, 2011, Intrusion reported cash and cash equivalents of $0.2 million, a working capital deficiency of $1.7 million and debt of $1.1 million.

“During the second quarter we booked $0.2 million of new orders.  This was significantly below our expected level of new orders for the quarter and was due in part to U.S government budget delays; however, we have already booked $0.2 million of new orders in the third quarter and expect to book several more new orders in the near future.  These new orders should generate revenue over the next twelve months,” 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 August 18, 2011 by calling 1-855-859-2056 (if outside the United States, 1-404-537-3406).  At the replay prompt, enter conference identification number 90993009.  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, 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, the 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)

	June 30,			December 31,
	2011			2010
ASSETS
Current Assets:
Cash and cash equivalents	$	233		$	540
Accounts receivable	294			222
Inventories, net	61			61
Prepaid expenses	29			23
Total current assets	617			846
Property and equipment, net	83			117
Other assets	39			39
TOTAL ASSETS	$	739		$	1,002
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	774		$	529
Dividends payable	46			22
Deferred revenue	367			983
Loan payable to officer	1,130			—
Total current liabilities	2,317			1,534
Loan payable to officer	—			230
Stockholders’ Deficit:
Preferred stock, $.01 par value:
Authorized shares — 5,000
Series 1 shares issued and outstanding — 220  Liquidation preference of $1,114 as of June 30, 2011	778			778
Series 2 shares issued and outstanding — 460 Liquidation preference of $1,169 as of June 30, 2011	724			724
Series 3 shares issued and outstanding — 354 Liquidation preference of $785 as of June 30, 2011	504			504
Common stock, $.01 par value:
Authorized shares — 80,000
Issued shares — 11,892 in 2011 and 11,828 in 2010 Outstanding shares — 11,882  in 2011 and 11,818 in 2010	119			118
Common stock held in treasury, at cost — 10 shares	(362		)	(362		)
Additional paid-in capital	55,628			55,570
Accumulated deficit	(58,743		)	(57,868		)
Accumulated other comprehensive loss	(226		)	(226		)
Total stockholders’ deficit	(1,578		)	(762		)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	739		$	1,002

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INTRUSION INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Revenue	$	1,068		$	1,538		$	2,110		$	3,073
Cost of revenue	406			548			805			1,102
Gross profit	662			990			1,305			1,971
Operating expenses:
Sales and marketing	381			258			726			460
Research and development	440			343			836			645
General and administrative	302			256			602			516
Operating income (loss)	(461		)	133			(859		)	350
Interest expense, net	(12		)	(12		)	(16		)	(25		)
Income (loss) before income taxes	(473		)	121			(875		)	325
Income tax provision	—			—			—			—
Net income (loss)	$	(473	)	$	121		$	(875	)	$	325
Preferred stock dividends accrued	(38		)	(38		)	(75		)	(75		)
Net income (loss) attributable to common stockholders	$	(511	)	$	83		$	(950	)	$	250
Net income (loss) per share attributable to common stockholders: Basic	$	(0.04	)	$	0.01		$	(0.08	)	$	0.02
Diluted	$	(0.04	)	$	0.01		$	(0.08	)	$	0.02
Weighted average common shares outstanding: Basic	11,844			11,734			11,831			11,719
Diluted	11,844			13,957			11,831			13,784

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