Business Context and Reporting Period
Company: Intrusion Inc. (INTZ)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal Year Ended December 31, 2025
Business Overview: Intrusion Inc. is a cybersecurity company based in Plano, Texas, specializing in threat intelligence and network security. Its primary offerings include the INTRUSION Shield (a Zero Trust SaaS solution), TraceCop (IP intelligence database), and Savant (network monitoring). The company relies heavily on U.S. government contracts, which accounted for 94.6% of 2025 revenue.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $7.1 million | $5.8 million |
| Gross Profit | $5.4 million (75.8% margin) | $4.4 million (76.8% margin) |
| Operating Loss | ($9.2 million) | ($8.4 million) |
| Net Loss | ($9.1 million) | ($7.8 million) |
| Cash Flow from Operations | ($6.8 million) | ($6.3 million) |
| Cash and Equivalents (Year-End) | $3.6 million | $4.9 million |
| Working Capital | $2.4 million | $1.9 million |
| Debt | $0 (All notes retired/exchanged) | $0.5 million (Streeterville note) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 22.9% year-over-year, driven primarily by U.S. Department of Defense work for the Shield OT Defender solution and increased consulting revenues ($5.3M in 2025 vs. $4.2M in 2024).
- Customer Concentration: Dependence on government customers intensified, rising from 83.8% of revenue in 2024 to 94.6% in 2025. Three government entities individually accounted for over 10% of total revenue.
- Expense Increases: Operating expenses rose 13.0% to $14.5 million. Increases were attributed to higher share-based compensation ($0.7M increase), cost-of-living adjustments, and increased R&D spending on infrastructure and personnel.
- Debt Elimination: The company fully retired remaining Streeterville debt in March 2025 through a debt-for-equity exchange, eliminating interest accretion costs that impacted the 2024 period.
- Stock Split: All share and per-share data has been retroactively adjusted for a 1-for-20 reverse stock split effected in March 2024.
Guidance, Outlook, Risks, and Contingencies
- Going Concern Warning: The independent auditor has issued a "Going Concern" opinion. The company reports substantial doubt about its ability to continue operations due to recurring losses, negative operating cash flows, and dependence on future equity/debt financing.
- Liquidity Strategy: The company plans to fund operations through a registered direct offering (completed in 2025), a Standby Equity Purchase Agreement (SEPA), and an At-The-Market (ATM) program. No ATM sales occurred in 2025.
- Revenue Outlook: Management anticipates future growth from the Shield OT Defender solution and commercial expansion, though Q4 2025 revenue declined 25% sequentially due to government funding delays and shutdown impacts.
- Key Risks:
- Customer Concentration: Loss of major government contracts could materially harm financial results.
- Financing Risk: Inability to raise additional capital could force a cessation of operations.
- Market Volatility: Stock price volatility (ranging from $0.71 to $5.20 in 2025) complicates capital raising and may lead to significant dilution.
- Legal Proceedings: A stockholder derivative claim was settled in April 2024; the company does not believe other pending legal matters will have a material adverse effect.
Investor Verification Checklist
- Capital Runway: Verify the sufficiency of the $3.6 million cash balance against the $6.8 million annual operating cash burn rate.
- Government Contract Stability: Assess the risk of revenue disruption given that 94.6% of revenue comes from U.S. government entities, specifically three major customers.
- Dilution Impact: Review the terms of the SEPA and ATM program to understand potential dilution to existing shareholders required to fund future operations.
- Commercial Pivot: Monitor the progress of commercial sales for INTRUSION Shield, which currently represent only 5.4% of total revenue.
- Debt Status: Confirm that all Streeterville and Scott notes have been fully extinguished via equity exchanges as reported.