INTRUSION Inc. announces warrant exercise incentive program

PLANO, Texas-based INTRUSION Inc. (NASDAQ:INTZ), a company specializing in computer communications equipment, has launched an incentive program to encourage the exercise of outstanding warrants. The company's Board of Directors approved the initiative on November 21, 2024, which will run through December 19, 2024.

Under the terms of the inducement letter, the exercise price of the existing warrants, covering a total of 3,198,082 shares of common stock, has been reduced to $0.76 per share. This price includes a $0.13 per share allocation for the purchase of new warrants. These new warrants, issued upon the exercise of the existing ones, will have an exercise price of $0.63 per share and are valid for a five-year period.

INTRUSION’s incentive program aims to stimulate the conversion of these warrants into common stock, potentially leading to an increased number of shares in the market and additional capital for the company. The initiative reflects INTRUSION’s strategic efforts to manage its capital structure and provide value to its warrant holders.

In other recent news, INTRUSION Inc., a cybersecurity solutions provider, has reported significant developments in its financial performance and capital structure. The company has executed an unregistered exchange of equity securities with Streeterville Capital, LLC, swapping 68 shares of its Series A Preferred for 110,340 shares of its common stock, as per a recent SEC filing. This transaction, valued at $74,800, represents a conversion within the existing capital structure of the company.

In terms of financial performance, INTRUSION Inc. announced its second consecutive quarter of revenue growth during its Third Quarter 2024 Earnings Conference Call. The company's total revenues reached $1.5 million, marking a 3% sequential increase.

This growth was largely driven by the company's Shield product line, which saw a 49% sequential revenue increase, courtesy of a new $2 million contract with the U.S. Department of Defense. Despite a slight decrease in consulting revenue and an overall net loss, the company's net loss improved from $3.2 million to $2.1 million year-over-year.

InvestingPro Insights

INTRUSION Inc.'s recent warrant exercise incentive program comes at a challenging time for the company, as revealed by InvestingPro data. The company's market capitalization stands at a modest $8.99 million, reflecting its current struggles. InvestingPro Tips highlight that INTRUSION is "quickly burning through cash" and has "short term obligations exceed[ing] liquid assets," which may explain the urgency to raise capital through warrant exercises.

The company's financial performance has been concerning, with a negative operating income of $8.93 million in the last twelve months as of Q3 2024. This aligns with another InvestingPro Tip indicating that "analysts do not anticipate the company will be profitable this year." The stock price has also suffered significantly, with a one-year price total return of -91.55% as of the latest data.

Despite these challenges, INTRUSION maintains an impressive gross profit margin of 77.84%, suggesting strong pricing power or efficient operations in its core business. This strength is noted in an InvestingPro Tip as "impressive gross profit margins."

For investors considering INTRUSION, it's worth noting that InvestingPro offers 14 additional tips that could provide further insights into the company's financial health and prospects. These additional tips could be particularly valuable given the company's current efforts to improve its capital position through the warrant exercise program.

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