Intrusion Files For $10 Million IPO

Summary

• Intrusion has filed to raise $10 million in an IPO.
• The firm provides government agencies and enterprises with cybersecurity information.
• INTZ is seeking to expand its product line and broaden its customer base with the IPO's proceeds.
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Quick Take

Intrusion (OTCQB:INTZ) has filed to raise $10 million in a Nasdaq IPO of its common stock, according to an S-1 registration statement.

The firm provides cybersecurity products and services to U.S. government agencies and enterprises.

INTZ is a tiny firm that appears to have been negatively impacted by the Covid-19 pandemic but seeks to broaden its customer base with a new intrusion detection product.

I’ll provide an update when we learn more about the IPO from management.

Company and Technology

Richardson, Texas-based Intrusion was founded to develop a database of global IP addresses and related information for monitoring cyber threat sources.

Management is headed by president and Chief Executive Officer Mr. Jack Blount, who has been with the firm since May 2020 and was previously CIO in the U.S. federal government and founder of a strategic consultancy for various organizations.

The company’s primary offerings include:

• TraceCop - IP database

• Savant - Network data mining

• Shield - Intrusion detection (in development)

Intrusion has received at least $58 million from investors including ARS Investment Partners, Patsy Paxton, Michael Paxton, Julie Paxton Puckett and Mark Paxton. The Paxtons collectively own 50.2% of company stock pre-IPO.

Customer Acquisition

The firm markets its products through an in-house direct sales force and through value-added reseller organizations.

Intrusion counts as customers a variety of 'U.S. Federal government entities, state and local government entities, large and diverse conglomerates, manufacturing entities, and other customers.'

Sales & Marketing expenses as a percentage of total revenue have fluctuated as revenues have varied, as the figures below indicate:

Sales & Marketing	Expenses vs. Revenue
Period	Percentage
Six Mos. Ended June 30, 2020	28.8%
2019	9.5%
2018	15.6%

Click to enlarge

Source: Company registration statement

The Sales & Marketing efficiency rate, defined as how many dollars of additional new revenue are generated

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.