Business Context and Reporting Period
Company: Intrusion Inc. (INTZ)
Filing Type: Form 8-K (Current Report)
Date of Report: August 28, 2026
Reporting Period: Events occurring on August 27 and August 28, 2026.
The filing reports the consummation of the Second Closing of an acquisition, the entry into a material debt financing agreement, and the results of the 2026 Annual Meeting of Stockholders.
Key Financial Metrics and Transactions
Debt Financing (Item 1.01)
- Instrument: Secured Promissory Note issued to Streeterville Capital, LLC.
- Principal Amount: $1,615,000.
- Cash Proceeds: $1,500,000 (reflecting a $105,000 original issue discount and $10,000 in transaction expenses).
- Interest Rate: 7% per annum, compounded daily.
- Maturity: August 28, 2028 (24 months).
- Security: First-priority security interest in all Company assets and intellectual property.
- Guaranty: Unconditionally guaranteed by subsidiary OW Cyber, LLC.
- Use of Proceeds: Funding the cash portion of the Second Closing of the OW Cyber acquisition and general working capital.
Acquisition Completion (Item 2.01)
- Target: OW Cyber, LLC (100% ownership achieved).
- Transaction Structure: Two-closing Membership Interest Purchase Agreement (MIPA).
- First Closing (June 29, 2026): Acquired 60% of membership interests.
- Second Closing (August 28, 2026): Acquired remaining 40% of membership interests.
- Consideration for Second Closing: $1,300,000 in cash.
Stockholder Voting Results (Item 5.07)
- Attendance: 13,608,357 shares represented (approx. 59.79% of eligible voting power).
- Proposal 1 (Directors): All five nominees elected.
- Proposal 2 (Auditor): Whitley Penn LLP ratified (13,498,117 For vs. 41,865 Against).
- Proposal 3 (Nasdaq Approval for Acquisition): Approved (4,392,822 For vs. 432,643 Against). Note: 2,223,549 shares held by the Seller were excluded from voting on this proposal.
- Proposal 4 (Adjournment): Approved (6,779,709 For vs. 239,700 Against).
Material Changes and Terms
The filing details significant changes to the Company's capital structure and asset base:
- Debt Obligation: Creation of a new direct financial obligation of $1,615,000 principal. The Note includes a monitoring fee provision that automatically increases the Outstanding Balance by approximately 17.65% after 90 days.
- Redemption Rights: The Investor has monthly redemption rights of up to $150,000 beginning six months after issuance.
- Acquisition Status: Transition from partial ownership (60%) to full ownership (100%) of OW Cyber, LLC.
- Covenants: The Purchase Agreement includes restrictions on future variable-rate or restricted securities issuances without Investor consent, a most-favored-nation clause, and a 10% participation right for the Investor in future financings.
Outlook, Risks, and Contingencies
- Liquidity Risk: The Company has secured short-term liquidity via the Note to fund the acquisition and operations, but the debt carries a high effective cost due to the original issue discount, transaction expenses, and the automatic balance increase (monitoring fee) after 90 days.
- Collateral Risk: The debt is secured by a first-priority lien on all Company assets and intellectual property, limiting future unsecured borrowing capacity.
- Future Obligations: The acquisition framework includes potential Earn-Out obligations and equity issuances exceeding 19.9% of outstanding stock, which were approved by stockholders to satisfy Nasdaq rules.
- Management Commentary: The filing does not provide forward-looking guidance on revenue or earnings; it focuses on the execution of the financing and acquisition.
Key Facts for Investor Verification
- Debt Cost Calculation: Verify the effective annualized interest rate including the $105,000 OID, $10,000 expenses, and the 17.65% monitoring fee increase after 90 days.
- Redemption Schedule: Confirm the Company's ability to meet the monthly $150,000 redemption rights starting February 2027.
- Asset Valuation: Review the valuation of OW Cyber, LLC, given the total consideration (equity issued in First Closing + $1.3M cash in Second Closing + potential earn-outs).
- Collateral Impact: Assess the impact of the first-priority security interest on the Company's ability to secure future financing.
- Stockholder Approval: Note that the Seller (VigilAigent Corp.) was excluded from voting on the Nasdaq approval proposal, which may indicate potential conflicts of interest or regulatory safeguards.