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INTRUSION Inc. (NASDAQ:INTZ), a company specializing in computer communications equipment, has been notified that it is not meeting NASDAQ's minimum bid price requirement, according to a recent 8-K filing with the Securities and Exchange Commission. The notice, received on Monday, indicates that the company's shares have been trading below the $1.00 minimum bid price for the last 30 consecutive business days as of October 25, 2024.
The company, headquartered in Plano, Texas, now has 180 calendar days, or until April 28, 2025, to regain compliance with NASDAQ's Listing Rule 5550(a)(2). To achieve this, the closing bid price of INTRUSION's common stock must reach at least $1.00 per share for a minimum of ten consecutive business days. If INTRUSION successfully meets this criterion within the allotted timeframe, NASDAQ will provide written confirmation of compliance, and the company's stock will continue to be listed and traded on the NASDAQ Capital Market.
In the event that INTRUSION fails to meet the minimum bid price requirement by the end of the 180-day period, but still complies with other NASDAQ Capital Market standards, the company may be eligible for an additional 180-day grace period. This extension would be contingent upon INTRUSION's written assurance to NASDAQ that it would resolve the deficiency, potentially through a reverse stock split.
As of now, INTRUSION has not announced any specific plans on how it intends to address the bid price deficiency. The company is evaluating its options to resolve the issue and regain compliance with NASDAQ's continued listing standards. However, there is no certainty that INTRUSION will be able to restore its compliance with the minimum bid price requirement or maintain compliance with other NASDAQ listing requirements.
In other recent news, Intrusion Inc. has reported significant developments in its financial performance and growth strategies. The company's cybersecurity product, Shield, saw a 50% sequential rise in revenue during the third quarter, amounting to approximately $300,000. Additionally, Intrusion Inc. secured a $2 million contract from the Department of Defense and has made strides in expanding its business development efforts in the Philippines and Guam.
The company also added seven new customers and expanded existing contracts, making a total of 19 new deals for Shield in fiscal year 2024. Despite concerns over the pace of the marketing strategy, the company has expressed optimism about continuous growth and aims to achieve breakeven by 2025.
InvestingPro Insights
INTRUSION Inc.'s current financial situation aligns with the challenges highlighted in the NASDAQ notification. According to InvestingPro data, the company's market capitalization stands at a modest $5.25 million, with its stock price closing at $0.79 as of the last trading session. This price represents only 6.37% of its 52-week high, underscoring the significant decline that led to the NASDAQ compliance issue.
InvestingPro Tips indicate that INTRUSION is "quickly burning through cash" and that "short term obligations exceed liquid assets," which may complicate efforts to boost investor confidence and share price. The company's financial health is further strained by the fact that it's "not profitable over the last twelve months," with a concerning operating income margin of -176.7% for the last twelve months as of Q2 2024.
On a positive note, INTRUSION maintains "impressive gross profit margins," reported at 78.06% for the same period. This could be a potential strength for the company to leverage as it works towards regaining NASDAQ compliance.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for INTRUSION Inc., providing a deeper understanding of the company's financial position and market performance.
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