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Intrusion Inc. (NASDAQ:INTZ), a company specializing in computer communications equipment with a market capitalization of $18.17 million, has announced an unregistered exchange of equity securities. On Monday, the company disclosed an agreement to convert a portion of its outstanding debt into common stock. According to InvestingPro data, the company maintains impressive gross profit margins of 76.76%, though it has been quickly burning through cash.
Specifically, Intrusion has agreed to exchange $150,000 of principal from a promissory note with Streeterville Capital, LLC, dated March 10, 2022, for 170,474 shares of its common stock. The original note was for a total of $5,350,000.00. The exchange agreement, dated March 5, 2025, allows the company to issue shares with a par value of $0.01 each.
This transaction is facilitated under Section 3(a)(9) of the Securities Act of 1933, which exempts certain exchanges of securities from registration requirements. The exchange is a private transaction, negotiated directly between Intrusion Inc. and Streeterville Capital, LLC. The company’s stock, currently trading at $0.94, has experienced significant volatility, with a year-to-date decline of 69.46%.
The company’s decision to convert debt to equity could be a strategic move to manage its capital structure and reduce the burden of debt repayments. However, the transaction will dilute existing shareholders’ stakes in the company. InvestingPro analysis indicates a WEAK financial health score of 1.4, with a debt-to-equity ratio of 1.13. Subscribers to InvestingPro can access 12 additional key insights and a comprehensive Pro Research Report, helping investors make more informed decisions about INTZ’s financial outlook.
Intrusion Inc., headquartered in Plano, Texas, operates under Delaware incorporation laws. The company’s fiscal year concludes on December 31. The details of this financial maneuver were filed with the Securities and Exchange Commission (SEC) on March 11, 2025, as part of a Form 8-K report.
This report is based on a press release statement and provides a factual account of Intrusion Inc.’s recent financial transaction. It should be noted that the issuance of new shares in exchange for debt repayment is a common practice among corporations seeking to optimize their balance sheets.
In other recent news, Intrusion Inc. reported a significant rise in revenue for the fourth quarter of 2024, achieving $1.7 million, which reflects an 11% increase sequentially and a 23% rise compared to the previous year. Despite this revenue growth, the company faced a net loss of $2 million, or $0.36 per share, for the quarter. Full-year revenue for 2024 was reported at $5.8 million, marking a 3% increase from 2023. The company also managed to reduce operating expenses by 21% over the year. Intrusion Inc. has been actively launching new cybersecurity products and is focusing on larger sales deals to expand its market presence. The company is optimistic about its future, planning to fund operations through 2025 while considering strategic acquisitions and technology enhancements. Additionally, Intrusion Inc. has improved its financial position by eliminating its Series A preferred stock and maintaining enough cash to support its operations.
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