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 14, 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 August 14, 2018, Intrusion Inc. issued a press release announcing its financial results for the second quarter ended June 30, 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 August 14, 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: August 14, 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 August 14, 2018.

3

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. REPORTS NET INCOME OF $474 THOUSAND

FOR SECOND QUARTER 2018

Richardson, Texas – August 14, 2018 – Intrusion Inc. (OTCQB: INTZ), (“Intrusion”) announced today financial results for the three and six months ended June 30, 2018.

Intrusion’s net income was $474 thousand in the second quarter 2018, compared to a net loss of $438 thousand in the second quarter 2017 and net income of $346 thousand in the first quarter 2018.

Revenue for the second quarter 2018 was $2.4 million compared to $1.5 million in the second quarter 2017 and $2.3 million for the first quarter 2018.

Gross profit margin was 61 percent of revenue in the second quarter of 2018 compared to 59 percent in the second quarter 2017 and 62 percent in the first quarter 2018.

Intrusion’s second quarter 2018 operating expenses were $0.9 million compared to $1.3 million in the second quarter 2017 and $1.0 million in the first quarter 2018.

As of June 30, 2018, Intrusion reported cash and cash equivalents of $0.4 million, a working capital deficiency of $1.0 million and debt of $1.9 million.

“We were able to reduce our debt to $1.9 million at the end of second quarter 2018 compared to $3.0 million at the end of second quarter 2017 and $3.0 million at end of first quarter 2018. Orders for the second quarter 2018 totaled $2.0 million. Also, we are announcing today the receipt of a $5.5 million order within the last several days,” 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. 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 21, 2018 by calling 1-855-859-2056. At the replay prompt, enter conference identification number 6884139. Additionally, a live and archived audio webcast of the conference call will be available at www.intrusion.com.

Intrusion

Second 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, and 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

Second Quarter 2018 Results

Page 3 of 4

INTRUSION INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands except par value amounts)

	June 30,			December 31,
	2018			2017
ASSETS
Current Assets:
Cash and cash equivalents	$	376		$	224
Accounts receivable		1,068			962
Inventories, net		—			15
Prepaid expenses		418			89
Total current assets		1,862			1,290
Property and equipment, net		223			124
Other assets		38			38
TOTAL ASSETS	$	2,123		$	1,452
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	1,379		$	1,182
Dividends payable		520			447
Obligations under capital lease, current portion		56			44
Deferred revenue		947			406
Total current liabilities		2,902			2,079
Loan payable to officer		1,815			2,865
Obligations under capital lease, noncurrent portion		60			17
Stockholders' Deficit:
Preferred stock, $.01 par value:
Authorized shares – 5,000
Series 1 shares issued and outstanding – 200 Liquidation preference of $1,188 in 2018 and $1,163 in 2017		707			707
Series 2 shares issued and outstanding – 460 Liquidation preference of $1,356 in 2018 and $1,328 in 2017		724			724
Series 3 shares issued and outstanding – 289 Liquidation preference of $744 in 2018 and $728 in 2017		412			412
Common stock, $.01 par value:
Authorized shares – 80,000
Issued shares – 13,027 in 2018 and 12,808 in 2017 Outstanding shares – 13,017 in 2018 and 12,798 in 2017		130			128
Common stock held in treasury, at cost – 10 shares		(362	)		(362	)
Additional paid-in capital		56,551			56,518
Accumulated deficit		(60,709	)		(61,529	)
Accumulated other comprehensive loss		(107	)		(107	)
Total stockholders' deficit		(2,654	)		(3,509	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,123		$	1,452

Intrusion

Second Quarter 2018 Results

Page 4 of 4

INTRUSION INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenue	$	2,369		$	1,543		$	4,632		$	3,102
Cost of revenue		926			632			1,778			1,215
Gross profit		1,443			911			2,854			1,887
Operating expenses:
Sales and marketing		431			415			845			776
Research and development		200			594			503			1,179
General and administrative		290			282			585			613
Operating income (loss)		522			(380	)		921			(681	)
Interest expense, net		(48	)		(58	)		(101	)		(108	)
Income (loss) before income taxes		474			(438	)		820			(789	)
Income tax provision		—			—			—			—
Net income (loss)	$	474		$	(438	)	$	820		$	(789	)
Preferred stock dividends accrued		(35	)		(35	)		(69	)		(69	)
Net income (loss) attributable to common stockholders	$	439		$	(473	)	$	751		$	(858	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.03		$	(0.04	)	$	0.06		$	(0.07	)
Diluted	$	0.03		$	(0.04	)	$	0.05		$	(0.07	)
Weighted average common shares outstanding:
Basic		13,017			12,798			12,982			12,772
Diluted		14,791			12,798			14,756			12,772