INTRUSION INC
For the period ended Sep 30, 2025. Filed Nov 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 12, 2025
INTZ$0.65+4.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001683168-25-005985
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001683168-25-008171
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 43 previous paragraphs and 45 current paragraphs.
25 unchanged; 17 reworded; 3 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
**Sales and Marketing.**Sales and marketing expenses totaled $1.3 million and $3.7 million for three and nine months ended September 30, 2025, respectively. Both 2024 periods includes approximately $0.1 million in one-time negotiated contract savings. When adjusted for the one-time savings, Sales and marketing expenses for the three and nine months ended September 30, 2025 remained flat. The current year spend included increased participation in trade shows and increased spend to create more brand awareness and concise product messaging which was offset by increased allocations out of operating expenses to cost of sales for resources dedicated to additional consulting work during the quarter.
Current report
As of September 30, 2025, we had cash and cash equivalents of $2.5 million and short-term investments in U.S. treasuries of $2.0 million resulting in $4.5 million available to fund operations compared to $4.9 million as of December 31, 2024. Net working capital at September 30, 2025, totaled $5.1 million compared to $1.9 million at December 31, 2024. On October 1, 2025, we received $3.0 million in cash related to the Department of Defense contract extension.
Current report
We generated a net loss of $6.2 million and $5.8 million for the nine months ended September 30, 2025, and 2024, respectively. If our operations do not generate positive cash flow in the upcoming year, or if we are not able to obtain additional debt or equity financing on terms and conditions acceptable to us, we may be unable to implement our business plan, fund our liquidity needs or even continue our operations.
Removed paragraphs (1)
Previous report
**Sales and Marketing.**Sales and marketing expenses totaled $1.2 million and $2.4 million for three and six months ended June 30, 2025, respectively. The 2024 period includes approximately $0.1 million in one-time negotiated contract savings. We anticipate increasing our spend to create more brand awareness, concise product messaging and drive increased sales through the remainder of 2025.
Reworded paragraphs (17)
Previous wording
Revenue. Revenue for the three and six months ended June 30, 2025, was $1.9 million and $3.6 million, respectively, compared to $1.5 million and $2.6 million for the same periods in 2024. Consulting revenue totaled $1.4 million and $2.7 million for the three and six months ended June 30, 2025, up from $1.2 million and $1.9 million for the corresponding periods in 2024. The increase in consulting revenue in 2025 primarily reflects work performed under a Department of Defense contract awarded in the second half of 2024. In contrast, consulting revenue for the six months ended June 30, 2024, was negatively impacted by a continuing resolution and delays in the approval of the federal budget. The budget was not passed until March 22, 2024, which affected the timing of contract renewals and task orders and led to lower consulting revenues in the first half of 2024. INTRUSIONShield revenue was $0.5 million and $0.9 million for the three and six months ended June 30, 2025, compared to $0.3 million and $0.7 million for the same periods in 2024. On March 31, 2024, we lost a major INTRUSIONShield customer who used a highly customized product configuration. This customer accounted for 78% of INTRUSIONShieldrevenues; this loss has been fully offset by new customers inclusive of the Department of Defense contract awarded in late 2024.
Current wording
Revenue. Revenue for the three and nine months ended September 30, 2025, was $2.0 million and $5.6 million, respectively, compared to $1.5 million and $4.1 million for the same periods in 2024. Consulting revenue totaled $1.5 million and $4.2 million for the three and nine months ended September 30, 2025, up from $1.1 million and $2.9 million for the corresponding periods in 2024. The increase in consulting revenue in 2025 primarily reflects work performed under a Department of Defense contract awarded in the second half of 2024. In contrast, consulting revenue for the nine months ended September 30, 2024, was negatively impacted by a continuing resolution and delays in the approval of the federal budget. The budget was not passed until March 22, 2024, which affected the timing of contract renewals and task orders and led to lower consulting revenues in the first half of 2024. INTRUSIONShield revenue was $0.5 million and $1.4 million for the three and nine months ended September 30, 2025, compared to $0.4 million and $1.2 million for the same periods in 2024. On March 31, 2024, we lost a major INTRUSIONShield customer who used a highly customized product configuration. This customer accounted for 78% of INTRUSIONShieldrevenues; this loss has been fully offset by new customers inclusive of the Department of Defense contract awarded in late 2024.
Previous wording
**Concentration of Revenues.**For the three and six months ended June 30, 2025, revenues from sales to various U.S. government entities totaled $1.8 million and $3.4 million, comprising 95.5% and 93.7% of total revenues, respectively. This compares to $1.3 million and $2.0 million, or 89.0% and 75.7% of total revenues, for the same periods in 2024. The shift in revenue mix was primarily due to the loss of a significant Shield customer, as previously noted, and the addition of a Department of Defense contract in the second half of 2024.
Current wording
**Concentration of Revenues.**For the three and nine months ended September 30, 2025, revenues from sales to various U.S. government entities totaled $1.9 million and $5.3 million, comprising 96.7% and 94.7% of total revenues, respectively. This compares to $1.3 million and $3.3 million, or 85.9% and 79.5% of total revenues, for the same periods in 2024. The shift in revenue mix was primarily due to the loss of a significant Shield customer, as previously noted, and the addition of a Department of Defense contract in the second half of 2024.
Previous wording
**Gross Profit.**Gross profit was $1.4 and $2.8 million or 76.4% and 76.0% of revenues for the three and six month periods ended June 30, 2025, compared to $1.1 and $2.0 million or 76.0% and 77.8% of revenues for the three and six months ended June 30, 2024. The gross profit margin will vary depending on product mix. INTRUSION Shield revenues represent between 25% and 28% of revenues for the six month periods ended June 30, 2025, and 2024.
Current wording
**Gross Profit.**Gross profit was $1.5 and $4.3 million or 76.6% and 76.2% of revenues for the three and nine month periods ended September 30, 2025, compared to $1.2 and $3.2 million or 77.1% and 77.5% of revenues for the three and nine months ended September 30, 2024. The gross profit margin will vary depending on product mix. INTRUSIONShield revenues represented 25% of revenues for the nine month period ended September 30, 2025 and 30% for the nine month period ended September 30, 2024
Previous wording
**Operating Expenses.**Operating expenses totaled $3.5 million and $7.0 million for the three- and six-month periods ended June 30, 2025, compared to $3.1 million and $6.5 million for the same periods in 2024. The 2024 figures include one-time negotiated contract savings of $0.1 million for the three-month period and $0.4 million for the six-month period.
Current wording
**Operating Expenses.**Operating expenses totaled $3.6 million and $10.6 million for the three and nine month periods ended September 30, 2025, compared to $3.2 million and $9.7 million for the same periods in 2024. The 2024 figures include one-time negotiated contract savings of $0.1 million for the three month period and $0.5 million for the nine month period.
Previous wording
Adjusting for these one-time savings, operating expenses for the three months ended June 30, 2025, increased by $0.3 million, primarily due to higher share-based compensation from equity grants made in the first quarter, timing of merit increases, and the addition of a Sales Engineer and Software Engineer. These increases were partially offset by lower legal fees following the resolution of prior-year litigation matters and increased allocations from operating expenses to cost of sales for resources dedicated to additional consulting work during the quarter.
Current wording
Adjusting for these one-time savings, operating expenses for the three months ended September 30, 2025, increased by $0.3 million, primarily due to higher share-based compensation from equity grants made in the first quarter, timing of merit increases, and increased spend on sales and marketing.
Previous wording
For the six months ended June 30, 2025, operating expenses, when adjusted for one-time savings, were $0.1 million higher than the comparable period in 2024.
Current wording
For the nine months ended September 30, 2025, operating expenses, when adjusted for one-time savings, were $0.4 million higher than the comparable period in 2024.
Previous wording
**Research and Development.**Research and development expenses totaled $1.3 million and $2.6 million for the three and six months ended June 30, 2025, representing an increase of $0.3 million and $0.5 million when compared to the same periods in the prior year. The increase is primarily due to increased depreciation of $0.1 million on infrastructure hardware purchases and internally developed software as we continue to invest in adding new features and functionality to the INTRUSIONShieldand higher expense due to the 2024 period including one-time negotiated savings of $0.1 million. 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 $1.3 million and $3.9 million for the three and nine months ended September 30, 2025, representing an increase of $0.2 million and $0.7 million when compared to the same periods in the prior year. The increase was primarily due to increased depreciation of $0.1 million on infrastructure hardware purchases and internally developed software and the addition of a Sales Engineer and Software Engineer. 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 $2.0 million for the three and six months ended June 30, 2025, compared to $1.0 and $2.1 million for the three and six months ended June 30, 2024. The reduction is primarily due to decreased legal expenses as a result of the prior year’s litigation matters being fully resolved and one-time negotiated savings included in the 2024 period.
Current wording
**General and Administrative.**General and administrative expenses totaled $1.0 and $3.1 million for the three and nine months ended September 30, 2025, compared to $0.8 and $3.0 million for the three and nine months ended September 30, 2024. The increase is primarily due to one-time negotiated savings of $0.1 million included in the 2024 period.
Previous wording
**Interest Expense.**Interest expense for the three and six month periods ended June 30, 2025, was $21 and $50 thousand, respectively, consisting principally of imputed interest on finance leases and the stated interest related to the Streeterville note that was fully retired in the first quarter of 2025. Interest expense for the 2024 periods totaled $34 and $262 thousand and consisted principally of the stated interest related to the Streeterville notes, interest associated with the notes payable issued to Anthony Scott, the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, and finance leases.
Current wording
**Interest Expense.**Interest expense for the three and nine month periods ended September 30, 2025, was $17 and $67 thousand, respectively, consisting principally of imputed interest on finance leases and the stated interest related to the Streeterville note that was fully retired in the first quarter of 2025. Interest expense for the 2024 periods totaled $12 and $274 thousand and consisted principally of the stated interest related to the Streeterville notes, interest associated with the notes payable issued to Anthony Scott, the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, and finance leases.
Previous wording
**Other Income (Expense), Net.**Other income and expense were nominal amounts for both the three and six months ended June 30, 2025, and 2024.
Current wording
**Other Income (Expense), Net.**Other income and expense in the 2025 periods consist principally of interest income on cash and short-term investments. Other income and expense for both the three and nine months ended September 30, 2024, were nominal.
Previous wording
Net Loss. Net loss for the three and six month periods ended June 30, 2025, was ($2.0) million and ($4.1) million, respectively compared to ($2.1) million and ($3.8) million for the same periods in the prior year. The increase in net loss for six months ended June 30, 2025, was a result of a net interest credit of $1.0 million recorded in the 2024 period as discussed above.
Current wording
Net Loss. Net loss for the three and nine month periods ended September 30, 2025, was ($2.1) million and ($6.2) million, respectively compared to ($2.1) million and ($5.8) million for the same periods in the prior year. The increase in net loss for nine months ended September 30, 2025, was primarily a result of a net interest credit of $1.0 million recorded in the 2024 period as discussed above.
Previous wording
As of June 30, 2025, we had cash and cash equivalents of $4.7 million, representing a decrease of ($0.2) million from $4.9 million as of December 31, 2024, and net working capital of $7.2 million compared to $1.9 million as of December 31, 2024. Our principal sources of cash for funding operations for the six months ended June 30, 2025 was receipt of $1.5 million in proceeds from the sale of common stock pursuant to the SEPA, recorded as stock subscription receivable at December 31, 2024, and net proceeds of $7.0 million from a registered direct offering that closed on January 6, 2025. Our principal source for funding operations in the June 2024 period was through 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.
Current wording
Our principal sources of cash for funding operations for the nine months ended September 30, 2025 were receipt of $1.5 million in proceeds from the sale of common stock pursuant to the SEPA, recorded as stock subscription receivable at December 31, 2024, and net proceeds of $7.0 million from a registered direct offering that closed on January 6, 2025. Our principal source for funding operations in the September 2024 period was through 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.
Previous wording
Our cash flows for the six months ended June 30, 2025, and 2024 were (in thousands):
Current wording
Our cash flows for the nine months ended September 30, 2025, and 2024 were (in thousands):
Previous wording
Net cash used in operations for the six months ended June 30, 2025, was ($3.3) million due primarily to a net loss of ($4.1) million partially offset by 1) adjustments for non-cash items of $1.5 million which were mostly comprised of depreciation and stock-based compensation, and 2) changes in working capital of ($0.7) million.
Current wording
Net cash used in operations for the nine months ended September 30, 2025, was ($6.2) million due primarily to a net loss of ($6.2) million partially offset by 1) adjustments for non-cash items of $2.4 million which were mostly comprised of depreciation and stock-based compensation, and 2) changes in working capital of ($2.4) million driven largely by an increase in contract billings.
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
For the six months ended June 30, 2025, net cash used in investing activities was ($5.2) million, which included short-term investments in highly liquid, investment-grade fixed income securities of ($3.7) million and capitalization of internally developed software and hardware purchases of ($1.4) million. Net cash used by investing activities for the six months ended June 30, 2024, was ($0.7) million for capitalization of internally developed software and hardware purchases.
Current wording
For the nine months ended September 30, 2025, net cash used in investing activities was ($4.2) million, which included short-term investments in highly liquid, investment-grade fixed income securities of ($2.0) million and capitalization of internally developed software and hardware purchases of ($2.2) million. Net cash used in investing activities for the nine months ended September 30, 2024, was ($1.1) million for capitalization of internally developed software and hardware purchases.
Previous wording
For the six months ended June 30, 2025, net cash provided by financing activities was $8.2 million which resulted from the receipt of proceeds from the sale of common stock pursuant to the SEPA of $1.5 million, previously recorded as stock subscription receivable at December 31, 2024, and net proceeds of $7.0 million from a registered direct offering that closed on January 6, 2025, partially offset by payments on financing leases of ($0.2) million. Net proceeds from financing activities for the June 2024 period 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, a private placement offering, and the exercise of warrants partially offset by finance lease payments.
Current wording
For the nine months ended September 30, 2025, net cash provided by financing activities was $8.1 million which resulted from the receipt of proceeds from the sale of common stock pursuant to the SEPA of $1.5 million, previously recorded as stock subscription receivable at December 31, 2024, and net proceeds of $7.0 million from a registered direct offering that closed on January 6, 2025, partially offset by payments on financing leases of ($0.4) million. Net proceeds from financing activities for the September 2024 period 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, a private placement offering, and the exercise of warrants partially offset by finance lease payments.