INTZ

Intrusion ($INTZ) CEO Sells 18,254 Shares for $32,584 in August—Revenue Up 31% But Confidence Question Emerges

01/12/2026 13:05

Intrusion ($INTZ) shares experienced extreme volatility in late 2024, spiking from $0.36 on December 23 to $5.68 within a week before crashing back to $1.22. This wild price action exposes the fundamental fragility of this $24.83 million market cap cybersecurity micro-cap. More concerning: CEO Anthony Scott sold 18,254 shares at $1.79 in August 2025, pocketing approximately $32,584. While executed within the company's approved trading window and thus legal, this discretionary sale signals management's willingness to cash out at current price levels. Intrusion, founded in 1983, provides network security solutions to U.S. government agencies (including the Department of Defense) and mid-to-large enterprises. Core products include Shield (zero-trust SaaS platform) and TraceCop (forensic investigation tool). With just 45 employees, the company competes against industry giants Cisco and Palo Alto Networks. Q3 2025 revenue reached $1.97 million, up 31% year-over-year, marking the sixth consecutive quarter of sequential growth. Full-year 2024 revenue was $5.77 million, up 2.85% from 2023. Yet beneath this growth narrative lies a severe profitability crisis. The company posted a Q3 2025 net loss of $2.09 million, or $0.10 per share. Full-year 2024 net loss totaled $7.79 million. Profit margin stands at negative 112.36%, meaning the company loses $1.12 for every dollar of revenue. Return on assets is -48.72%, return on equity is -132.37%. Levered free cash flow is negative $7.27 million, indicating persistent cash burn. Cash on hand is only $4.53 million. To stay afloat, Intrusion raised $14.5 million between late 2024 and early 2025 through multiple channels: a SEPA agreement with Streeterville (up to $10 million selldown rights), ATM program ($5 million), and a January 2025 registered direct offering ($7.5 million). From an investor perspective, the most troubling signal is CEO Scott's discretionary sale. While Scott purchased 250 shares each in June and December 2024 through the Employee Stock Purchase Plan (ESPP)—tiny amounts totaling $233.75 and $229.50—the August 2025 sale of 18,254 shares represents a substantial portion of his holdings. Though executed within company policy's designated trading windows, the fact remains that management chose this moment to realize gains. Director Anthony Levecchio also sold 200 shares in December 2025. Crucially, most insider purchases were automatic ESPP buys, while sales were discretionary decisions, suggesting limited insider confidence. Still, some positive factors exist. The company secured a $3 million Department of Defense contract extension and expansion in July 2025. In October 2025, it launched Shield Cloud on AWS Marketplace, establishing a foothold in cloud-native security. Gross profit margin remains strong at 75-77%, indicating the product has competitive merit. Debt declined dramatically from $10.8 million in 2023 to $0.5 million in 2024, and stockholders' equity improved from negative $9.6 million to positive $6.3 million. Analysts remain optimistic: Ascendiant Capital raised its price target to $12.50 from $12.00 in December 2025, maintaining a 'Buy' rating. The consensus target from two analysts is $7.25, implying 487% upside. Yet the gap between this optimism and market reality is vast. The stock has plunged 99.67% over five years, 46.30% over six months, and 14.83% over one month. Average daily volume is 164,303 shares—low liquidity. Beta is -2.02, indicating inverse market correlation and highly speculative characteristics. Additional capital raises are inevitable before profitability is achieved, diluting existing shareholders. The company filed a $100 million mixed shelf offering in January 2025, telegraphing substantial future dilution risk. The investment case hinges on clear factors. Revenue growth of 31% is positive, but the company has not demonstrated the ability to convert this into profit. The CEO's large sale suggests even management lacks conviction about near-term appreciation. Given the cash burn rate, additional capital raises are likely needed by mid-2026. Differentiated competitive advantages versus Cisco and Palo Alto remain unclear. While the analyst price target of $12.50 is 10x current levels, concrete catalysts capable of reversing a five-year 99% decline are not evident. Near-term, the AWS Marketplace launch and expanded DOD contracts could sustain revenue growth. 2026 revenue is projected at $9.3 million, implying 27% growth versus 2025. However, the path to profitability remains opaque. Management targets cash flow breakeven by 2026, but historical performance makes this target questionable. Long-term, structural growth in cybersecurity markets is favorable, but whether Intrusion can capture meaningful share is uncertain. Product concentration risk is high—heavy reliance on Shield means a single large contract loss could rapidly deteriorate finances. In conclusion, Intrusion is an extremely speculative position. Revenue growth and government contracts are positive, but persistent losses, CEO selling, cash burn, and dilution risk overwhelm these factors. This stock is appropriate only for high-risk-tolerance investors willing to risk total loss on a small position. Conservative investors should wait until the company demonstrates at least 2-3 consecutive quarters of operating profit and can self-fund cash flow without additional capital raises. The current moment represents a 'wait-and-see' phase where turnaround success remains unproven.