INTRUSION INC

Previous wording

As discussed in more detail below on June 30, 2024, we had $1.5 million in cash. If we are not able to raise adequate funds under the Company’s ATM program or obtain additional equity financing, the Company may be unable to implement the Company’s business plan, fund its liquidity needs or even continue its operations.

Current wording

As discussed in more detail below on September 30, 2024, we had $1.1 million in cash. If we are not able to raise adequate funds under the Company’s ATM program or obtain additional equity financing, the Company may be unable to implement the Company’s business plan, fund its liquidity needs or even continue its operations.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and June 30, 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024, and 2023

Previous wording

Revenues. Revenue for the three and six month periods ended June 30, 2024, was $1.5 and $2.6 million compared to $1.5 and $2.8 million for the same periods in 2023. Revenue from consulting totaled $1.2 and $1.9 million for the three and six month periods ended June 30, 2024, compared to $1.1 and $2.1 million for the three and six month periods ended June 30, 2023. The continuing resolution and delay in the approval of a federal budget for the 2024 year which did not occur until March 22, 2024, impacted the timing of renewals and task orders received for long-standing contracts which resulted in a decline in consulting revenues for the six month period ended June 30, 2024.INTRUSIONShield revenues were $0.3 and $0.7 million for the three and six month periods ended June 30, 2024, compared to $0.4 million and $0.7 million for the three and six month periods ended June 30, 2023. The decline in Shield revenues for the three month period resulted from the loss of a large earlyINTRUSIONShield customer that had implemented a highly customized and non-standard configuration of the product. The loss of revenues from this customer was partially offset by revenues from new customers signed in recent quarters. We believe the revenues from these new customers and several transactions that we anticipate will close in the second half of this year will fully offset this loss and driveINTRUSIONShield revenue growth in 2024.

Current wording

Revenues. Revenue for the three and nine month periods ended September 30, 2024, was $1.5 and $4.1 million compared to $1.5 and $4.2 million for the same periods in 2023. Revenue from consulting totaled $1.1 and $2.9 million for the three and nine month periods ended September 30, 2024, compared to $1.0 and $3.1 million for the three and nine month periods ended September 30, 2023. The continuing resolution and delay in the approval of a federal budget for the 2024 year which did not occur until March 22, 2024, impacted the timing of renewals and task orders received for long-standing contracts which resulted in a decline in consulting revenues for the nine month period ended September 30, 2024.INTRUSIONShield revenues were $0.4 and $1.2 million for the three and nine month periods ended September 30, 2024, which is flat when compared to the prior year periods but represents a 49% increase over the June 2024 quarter. Shield revenues for the June 2024 quarter had declined as a result of the loss of a large earlyINTRUSIONShield customer that had implemented a highly customized and non-standard configuration of the product. The loss of revenues from this customer has been fully offset by revenues from new customers signed in recent quarters. We believe the revenues from these new customers and several transactions that we anticipate will close in the fourth quarter will driveINTRUSIONShield revenue growth into 2025.

Previous wording

Concentration of Revenues. For the three and six month periods ended and June 30, 2024, revenues from sales to various U.S. government entities totaled $1.3 and $2.0 million, or 89.0% and 75.7% of revenues compared to $0.7 and $1.3 million, or 46.7% and 47.5% of revenues, for the same periods in 2023. Although we expect our concentration of revenues to vary among customers in future periods depending upon the timing of certain sales, we anticipate that sales to government customers will continue to account for a significant portion of our revenues in future periods. Sales to the government present risks in addition to those involved in sales to commercial customers which could adversely affect our revenues, including, without limitation, potential disruption to appropriation and spending patterns and the government’s reservation of the right to cancel contracts and purchase orders for its convenience. Although we do not anticipate that any of our revenues from government customers will be renegotiated, any cancelled or renegotiated government orders could have a material adverse effect on our financial results. We had one commercial customer in the six months ended June 30, 2024, and two commercial customers in the 2023 period, that each contributed individually to more than 10% of our total revenue. Our similar product and service offerings are not viewed as individual segments, as its management analyzes the business as a whole and expenses are not allocated to each product offering.

Current wording

Concentration of Revenues. For the three and nine month periods ended and September 30, 2024, revenues from sales to various U.S. government entities totaled $1.3 and $3.3 million, or 86% and 80% of revenues compared to $0.6 and $1.9 million, or 43% and 46% of revenues, for the same periods in 2023. Although we expect our concentration of revenues to vary among customers in future periods depending upon the timing of certain sales, we anticipate that sales to government customers will continue to account for a significant portion of our revenues in future periods. Sales to the government present risks in addition to those involved in sales to commercial customers which could adversely affect our revenues, including, without limitation, potential disruption to appropriation and spending patterns and the government’s reservation of the right to cancel contracts and purchase orders for its convenience. Although we do not anticipate that any of our revenues from government customers will be renegotiated, any cancelled or renegotiated government orders could have a material adverse effect on our financial results. As a result of sales to U.S. government entities representing a higher percentage of our revenues in 2024, no commercial customer individually represented more than 10% of our total revenues as compared to two commercial customers in the 2023 period. Our similar product and service offerings are not viewed as individual segments, as management analyzes the business as a whole and expenses are not allocated to each product offering.

Previous wording

Gross Profit. Gross profit was $1.1 and $2.0 million or 76.0% and 77.8% of revenues for the three and six month periods ended June 30, 2024, compared to $1.1 and $2.1 million or 77.5% and 76.8% of revenues for the three and six months ended June 30, 2023. The gross profit margin will vary depending on product mix.INTRUSIONShield revenues represented 20.5% and 28.3% of revenues for the three and six month periods ended June 30, 2024, compared to 28.6% and 26.3% in the same periods 2023.

Current wording

Gross Profit. Gross profit was $1.2 and $3.2 million or 77.1% and 77.5% of revenues for the three and nine month periods ended September 30, 2024, compared to $1.1 and $3.3 million or 77.9% and 77.2% of revenues for the three and nine months ended September 30, 2023. The gross profit margin will vary depending on product mix.INTRUSIONShield revenues represent between 27% to 30% of revenues for the three and nine month periods ended September 30, 2024, and 2023.

Previous wording

Operating Expenses. Operating expenses for the three and six months ended June 30, 2024, totaled $3.1 and $6.5 million, representing a decrease of 23% and 28% when compared to $4.1 and $9.1 million for the same periods in 2023. The decrease was most notably due to a reduction in staffing and contract labor expenses in addition to reduced spend on sales and marketing and reduced litigation defense costs.

Current wording

Operating Expenses. Operating expenses for the three and nine months ended September 30, 2024, totaled $3.2 and $9.7 million, representing a decrease of 17% and 25% when compared to $3.8 and $12.9 million for the same periods in 2023. The decrease was most notably due to a reduction in staffing and contract labor expenses in addition to reduced spend on litigation defense costs, sales, and marketing.

Previous wording

In late March 2023 we implemented cost reduction measures that resulted in the reduction of sixteen permanent positions, the reduced use of contractors and renegotiating or replacing spend on certain sales support and marketing services with less costly programs. Headcount at June 30, 2024, and 2023 was fifty and forty-nine, respectively. Many of the reductions were in Research and Development, which will impact the number and frequency of product releases. As we grow our customer base and increase our revenues, we may choose to accelerate our product development in future periods, which would result in increased spending.

Current wording

In late March 2023 we implemented cost reduction measures that resulted in the reduction of sixteen permanent positions, the reduced use of contractors and renegotiating or replacing spend on certain sales support and marketing services with less costly programs. Many of the reductions were in Research and Development, which will impact the number and frequency of product releases. As we grow our customer base and increase our revenues, we may choose to accelerate our product development in future periods, which would result in increased spending. Headcount on September 30, 2024, and 2023 was 50 and 49, respectively.

Previous wording

Sales and Marketing. Sales and marketing expenses decreased to $1.2 and $2.3 million for the three and six months ended June 30, 2024, compared to $1.4 and $3.2 million for the three and six month periods ended June 30, 2023. The 2024 six month period includes approximately $0.2 million in one-time negotiated contract savings. Certain discretionary spend, inclusive of participation in trade shows, utilization of third-party contractors for content and product messaging and travel, are likely to vary over time based on savings initiatives that may be necessary.

Current wording

Sales and Marketing. Sales and marketing expenses decreased to $1.2 and $3.5 million for the three and nine months ended September 30, 2024, compared to $1.4 and $4.5 million for the three and nine month periods ended September 30, 2023. The 2024 nine month period includes approximately $0.2 million in one-time negotiated contract savings. Certain discretionary spend, inclusive of participation in trade shows, utilization of third-party contractors for content and product messaging and travel, are likely to vary over time based on savings initiatives that may be necessary.

Previous wording

Research and Development. Research and development expenses totaled $1.0 and $2.1 million for the three and six months ended June 30, 2024, a $0.4 and $1.2 million decrease compared to the same periods in 2023. The savings are a result of cost reduction measures implemented in late March 2023 which included the reduction of 13 FTEs and the reduced use of contractors. Research and development costs may vary over time as we determine the frequency of new releases, improved functionality and enhancements needed to be competitive with our product offering.

Current wording

Research and Development. Research and development expenses totaled $1.2 and $3.2 million for the three and nine months ended September 30, 2024, compared to $1.2 and $4.4 million for the same periods in 2023. The savings for the nine month period is a result of cost reduction measures implemented in late March 2023 which included the reduction of 13 FTEs and the reduced use of contractors. Research and development costs may vary over time as we determine the frequency of new releases, improved functionality and enhancements needed to be competitive with our product offering.

Previous wording

General and Administrative. General and administrative expenses totaled $1.0 and $2.1 million for the three and six months ended June 30, 2024, compared to $1.2 and $2.7 million for the three and six months ended June 30, 2023. The $0.6 million reduction in the six month period relates to the elimination of two positions, reduced share-based compensation and one-time negotiated cost savings of $0.1 million.

Current wording

General and Administrative. General and administrative expenses totaled $0.8 and $3.0 million for the three and nine months ended September 30, 2024, compared to $1.3 and $4.0 million for the three and nine months ended September 30, 2023. The $1.0 million reduction in the nine month period relates to the elimination of two positions, reduced share-based compensation, and one-time negotiated cost savings of $0.2 million.

Previous wording

Interest Expense. Interest expense for the three and six months ended June 30, 2024, was $34 thousand and $262 thousand consisting principally of the stated interest related to the Streeterville notes, interest associated with the note’s payable issued to Scott, our CEO and finance leases. Interest expense for the three and six months ended June 30, 2023, was $233 thousand and $530 thousand. The decreased interest expense resulted principally from the aggregate exchange of the Streeterville debt to both common and preferred stock. At June 30, 2024, only $511 thousand of Streeterville debt remains outstanding. Interest expense will vary in the future based on our cash flow and borrowing needs.

Current wording

Interest Expense. Interest expense for the three and nine months ended September 30, 2024, was $12 thousand and $274 thousand consisting principally of the stated interest related to the Streeterville and Scott notes, and finance leases. Interest expense for the three and nine months ended September 30, 2023, was $211 thousand and $729 thousand. The decreased interest expense resulted principally from the aggregate exchange of the Streeterville debt to both common and preferred stock. On September 30, 2024, only $520 thousand of the Streeterville Note One remains outstanding. Interest expenses will vary in the future based on our cash flow and borrowing needs.

Previous wording

Interest Accretion and Amortization of Debt Issuance Costs. During the March 2024 quarter, the Company entered into exchange agreements to convert $9.5 million in Streeterville debt to $9.3 million of Series A preferred stock and $0.2 million to common stock and, as a result, the Company reversed the interest accretion associated with the ability to stock-settle principal redemptions and wrote-off the remaining deferred debt issue costs resulting in a net credit to interest expense of $1.0 million. For the six months ended June 30, 2023, the interest accretion and amortization of debt issuance costs totaled $0.4 million.

Current wording

Interest Accretion and Amortization of Debt Issuance Costs. During the quarter ended March 31, 2024, the Company entered into exchange agreements to convert $9.5 million in Streeterville debt to $9.3 million of Series A preferred stock and $0.2 million to common stock and, as a result, the Company reversed the interest accretion associated with the ability to stock-settle principal redemptions and wrote-off the remaining deferred debt issue costs resulting in a net credit to interest expense of $1.0 million. For the three and nine months ended September 30, 2023, the interest accretion and amortization of debt issuance costs totaled $0.3 and $0.7 million.

Previous wording

Other (Expense) Income, Net. Other income and expense were nominal amounts for the three and six months ended June 30, 2024, and 2023.

Current wording

Other (Expense) Income, Net. Other income and expenses were nominal amounts for the three and nine months ended September 30, 2024, and 2023.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $1.5 million and a working capital deficit of $(0.5) million. Management plans to fund the operations of the Company through the continued use of the ATM and or additional equity financings. If the Company is not able to raise adequate funds, the Company may be unable to implement the Company’s business plan, fund its liquidity needs or even continue its operations.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $1.1 million and a working capital deficit of $(1.0) million. Management plans to fund the operations of the Company through the continued use of the ATM and or additional equity financings. If the Company is not able to raise adequate funds, the Company may be unable to implement the Company’s business plan, fund its liquidity needs or even continue its operations.

Previous wording

Our principal sources of cash for funding operations for the six months ended June 30, 2024, has been proceeds received from the issuance of common stock in a series of transactions which include $3.3 million from ATM sales, $2.6 million from a private placement, and $0.6 million from the exercise of warrants. Our principal source of cash for funding operations in 2023 was $1.3 million from sales of common stock utilizing the ATM program and changes in working capital which includes the receipt of $1.2 million in Employee Retention Tax Credit refunds recorded in 2022.

Current wording

Our principal sources of cash for funding operations for the nine months ended September 30, 2024, has been proceeds received from the issuance of common stock in a series of transactions which include $4.8 million from ATM sales, $2.6 million from a private placement, and $0.6 million from the exercise of warrants. Our principal source of cash for funding operations in 2023 was $3.0 million from sales of common stock utilizing the ATM program and changes in working capital which includes the receipt of $1.4 million in Employee Retention Tax Credit refunds recorded in 2022.

Previous wording

Under applicable Nasdaq rules and the terms of the SEPA, in no event may the Company issue to Streeterville under the SEPA shares of Common Stock equal to greater than 19.99% of the shares of Common Stock outstanding immediately prior to the execution of the SEPA (the “Exchange Cap”), unless (i) the Company obtains stockholder approval to issue shares of Common Stock in excess of the Exchange Cap in accordance with applicable Nasdaq rules, or (ii) the average price per share paid by Streeterville for all of the shares of Common Stock that the Company directs Streeterville to purchase from the Company pursuant to the SEPA, if any, equals or exceeds the lower of (a) the official closing price of the Common Stock on Nasdaq immediately preceding the execution of the SEPA or (b) the average official closing price of the Common Stock on Nasdaq for the five consecutive trading days immediately preceding the execution of the SEPA, adjusted as required by Nasdaq. Moreover, the Company may not issue or sell any shares of Common Stock to Streeterville under the SEPA which, when aggregated with all other shares of Common Stock then beneficially owned by Streeterville and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 thereunder), would result in Streeterville beneficially owning more than 19.99% of the outstanding shares of Common Stock. The Company is seeking stockholder approval under Nasdaq Listing Rule 5635(d) for the sale, issuance or potential issuance by the Company of Common Stock (or securities convertible into or exercisable for our Common Stock) in excess of 20% of the shares of our Common Stock outstanding immediately prior to the SEPA at an exercise price less than the Minimum Price in connection with the SEPA.

Current wording

Under applicable Nasdaq rules and the terms of the SEPA, in no event may the Company issue to Streeterville under the SEPA shares of Common Stock equal to greater than 19.99% of the shares of Common Stock outstanding immediately prior to the execution of the SEPA (the “Exchange Cap”), unless (i) the Company obtains stockholder approval to issue shares of Common Stock in excess of the Exchange Cap in accordance with applicable Nasdaq rules, or (ii) the average price per share paid by Streeterville for all of the shares of Common Stock that the Company directs Streeterville to purchase from the Company pursuant to the SEPA, if any, equals or exceeds the lower of (a) the official closing price of the Common Stock on Nasdaq immediately preceding the execution of the SEPA or (b) the average official closing price of the Common Stock on Nasdaq for the five consecutive trading days immediately preceding the execution of the SEPA, adjusted as required by Nasdaq. Moreover, the Company may not issue or sell any shares of Common Stock to Streeterville under the SEPA which, when aggregated with all other shares of Common Stock then beneficially owned by Streeterville and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 thereunder), would result in Streeterville beneficially owning more than 19.99% of the outstanding shares of Common Stock. At the 2024 annual meeting stockholders approved the sale, issuance or potential issuance by the Company of Common Stock (or securities convertible into or exercisable for our Common Stock) in excess of 20% of the shares of our Common Stock outstanding immediately prior to the SEPA at an exercise price less than the Minimum Price in connection with the SEPA.

Previous wording

Actual sales of shares of Common Stock to Streeterville as an advance under the SEPA will depend on a variety of factors to be determined by the Company from time to time, which may include, among other things, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for our business and operations. The Company will use 10% of the proceeds associated with each Advance to redeem the outstanding Series A Preferred Stock held by Streeterville.

Current wording

During the quarter ended September 30, 2024, we sold 150,000 shares of Common Stock to Streeterville for an aggregate purchase price of $131,460. Future sales of shares of Common Stock to Streeterville as an advance under the SEPA will depend on a variety of factors to be determined by the Company from time to time, which may include, among other things, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for our business and operations. The Company will use 10% of the proceeds associated with each Advance to redeem the outstanding Series A Preferred Stock held by Streeterville.

Previous wording

B. Riley Securities, Inc. acts as sales agent under the Company’s at-the-market program, which allowed us to potentially sell up to $50.0 million of its common stock using the shelf registration statement on Form S-3 filed on August 5, 2021. On April 11, 2023, Instruction I.B.6 of Form S-3 and in agreement with the terms of the sales agreement, the company revised the aggregate offering price of shares of common stock that we can sell pursuant to the ATM program to $15 million. For the six months ended June 30, 2024, we received $3.3 million, net of fees for sales of common stock were made pursuant to the program. As of June 30, 2024, the remaining aggregate offering price of shares of common stock that we can sell pursuant to the ATM program based on gross proceeds was $6.7 million.

Current wording

B. Riley Securities, Inc. acts as sales agent under the Company’s at-the-market program, which allowed us to potentially sell up to $50.0 million of its common stock using the shelf registration statement on Form S-3 filed on August 5, 2021. On April 11, 2023, Instruction I.B.6 of Form S-3 and in agreement with the terms of the sales agreement, the company revised the aggregate offering price of shares of common stock that we can sell pursuant to the ATM program to $15 million. During the nine months ended September 30, 2024, we received $4.8 million, net of fees for sales of common stock were made pursuant to the program. As of September 30, 2024, the remaining aggregate offering price of shares of common stock that we can sell pursuant to the ATM program based on gross proceeds was $5.2 million.

Previous wording

In March 2024, we entered into an agreement with Streeterville to exchange $0.2 million in principal for 52.2 thousand shares of common stock. Also in March 2024, we exchanged $9.3 million in Streeterville debt for 9,275 shares of our newly created Series A Preferred. The issuance of both common and preferred shares was made pursuant to the exemption from the registration requirements afforded by the Securities Act, as amended. The designations for the Series A Preferred preclude the Company from repaying any indebtedness for so long as any Series A Preferred shares are outstanding. The Series A Preferred shares have a stated value of $1,100 per share and are subject to preferences and designations as more fully described in our Amended and Restated Articles of Incorporation filed on March 15, 2024. Following the exchanges noted herein, the remaining balance on Note One was $0.5 million at June 30, 2024. The maturity date for Note One is September 2024 which conflicts with the Series A Preferred designation prohibiting repayment of any indebtedness. We are in discussions with Streeterville to modify the terms of the Note One agreement.

Current wording

In March 2024, we entered into an agreement with Streeterville to exchange $0.2 million in principal for 52.2 thousand shares of common stock. Also in March 2024, we exchanged $9.3 million in Streeterville debt for 9,275 shares of our newly created Series A Preferred. The issuance of both common and preferred shares was made pursuant to the exemption from the registration requirements afforded by the Securities Act, as amended. The designations for the Series A Preferred preclude the Company from repaying any indebtedness for so long as any Series A Preferred shares are outstanding. The Series A Preferred shares have a stated value of $1,100 per share and are subject to preferences and designations as more fully described in our Amended and Restated Articles of Incorporation filed on March 15, 2024. Following the exchanges noted herein, the remaining balance on Note One was $0.5 million on September 30, 2024. The maturity date for Note One is September 2024 which conflicts with the Series A Preferred designation prohibiting repayment of any indebtedness. We are in discussions with Streeterville to modify the terms of the Note One agreement.

Previous wording

During the March 2024 quarter we entered into two separate note purchase agreements with our Chief Executive Officer, Anthony Scott. On January 2, 2024, Scott purchased a note payable in the principal amount of $1.1 million in exchange for $1.0 million in cash. The note called for weekly payments of $40,000 until maturity on June 15, 2024. Interest accrued on the balance of the note at 7% per annum compounding daily. During the March quarter we made $200 thousand in principal payments. On March 20, 2024, Scott purchased a second note payable in the principal amount of $343 thousand in exchange for $340 thousand in cash. The note was non-interest bearing and matured on April 19, 2024. On April 2 nd, we reduced the principal balance due under the note by $101 thousand which reflected the amount due from Scott for the exercise of common stock purchase warrants. On April 19, 2024, Scott entered into a private placement subscription agreement to convert the aggregate remaining outstanding balance of $1.1 million for both notes in exchange for common stock and common stock purchase warrants.

Current wording

During the quarter ended March 31, 2024, we entered into two separate note purchase agreements with our Chief Executive Officer, Anthony Scott. On January 2, 2024, Scott purchased a note payable in the principal amount of $1.1 million in exchange for $1.0 million in cash. The note called for weekly payments of $40,000 until maturity on June 15, 2024. Interest accrued on the balance of the note at 7% per annum compounding daily. During the quarter ended March 31, 2024, we made $200 thousand in principal payments. On March 20, 2024, Scott purchased a second note payable in the principal amount of $343 thousand in exchange for $340 thousand in cash. The note was non-interest bearing and matured on April 19, 2024. On April 2, 2024, we reduced the principal balance due under the note by $101 thousand which reflected the amount due from Scott for the exercise of common stock purchase warrants. On April 19, 2024, Scott entered into a private placement subscription agreement to convert the aggregate remaining outstanding balance of $1.1 million for both notes in exchange for common stock and common stock purchase warrants.

Previous wording

Our cash flows for the six months ended June 30, 2024, and 2023 were:

Current wording

Our cash flows for the nine months ended September 30, 2024, and 2023 were:

Previous wording

Net cash used in operations for the six months ended June 30, 2024, was ($4.0) million primarily resulting from 1) a net loss of ($3.8) million offset partially offset by adjustments for non-cash items of $0.4 million which are mostly comprised of depreciation, stock-based compensation and non-cash interest related to the Streeterville notes, and 2) changes in working capital of ($0.7) million which consisted principally of increased accounts receivable and decreased vendor payables.

Current wording

Net cash used in operations for the nine months ended September 30, 2024, was ($6.1) million primarily resulting from 1) a net loss of ($5.8) million offset by adjustments for non-cash items of $1.0 million which are mostly comprised of depreciation, stock-based compensation and non-cash interest related to the Streeterville notes, and 2) changes in working capital of ($1.3) million resulting principally from increased accounts receivable.

Previous wording

Net cash used in operations for the six months ended June 30, 2023, was ($3.3) million due primarily to a net loss of ($7.9) million partially offset by 1) adjustments for non-cash items of $2.2 million which are mostly comprised of depreciation, stock-based compensation and interest related to Streeterville notes, and 2) changes in working capital of $2.4 million consisting principally of the cash receipt of amounts due relating to Employee Retention Credit and amounts received as prepayment for a one year customer contract.

Current wording

Net cash used in operations for the nine months ended September 30, 2023, was ($4.8) million due primarily to a net loss of ($11.1) million partially offset by 1) adjustments for non-cash items of $3.5 million which are mostly comprised of depreciation, stock-based compensation and interest related to Streeterville notes, and 2) $2.8 million provided from working capital principally related to Employee Retention Credit and increased accounts payable of $1.0 million.

Previous wording

For the six months ended June 30, 2024, net cash used in investing activities was $0.7 million, which was comprised of capitalization of internally developed software and hardware purchases. Net cash used by investing activities, for the six months ended June 30, 2023, was $0.7 million principally for capitalization of internally developed software.

Current wording

For the nine months ended September 30, 2024, net cash used in investing activities was ($1.1) million, which was comprised of capitalization of internally developed software and hardware purchases. Net cash used by investing activities, for the nine months ended September 30, 2023, was ($1.0) million principally for capitalization of internally developed software.

Previous wording

For six months ended June 30, 2024, net cash provided by financing activities totaled $6.1 million which resulted from $6.5 million in net proceeds from the sale of common stock through the use our ATM program, private placement offering, and the exercise of warrants partially offset by finance lease payments. Net proceeds from financing activities of $1.3 million for six months ended June 30, 2023, resulted principally from sales of common stock using our ATM program.

Current wording

For the nine months ended September 30, 2024, net cash provided by financing activities totaled $8.1 million which resulted from $8.0 million in net proceeds from the sale of common stock through the use our ATM program, private placement offering, and the exercise of warrants partially offset by finance lease payments. Net proceeds from financing activities of $3.0 million for nine months ended September 30, 2023, resulted principally from sales of common stock using our ATM program.