Revenue and Profit - Revenue for Q1 2023 was $1.3 million, down from $1.8 million in Q1 2022, primarily due to the loss of a government contract that accounted for 35.8% of revenues in Q1 2022[86] - Gross profit increased to $1.0 million or 76.1% of revenues in Q1 2023, compared to $0.9 million or 50.8% in Q1 2022, attributed to the loss of a low-margin government contract[88] - INTRUSION Shield revenues were $0.3 million in Q1 2023, up from $0.2 million in Q1 2022, indicating growth in the commercial product line[86] - Revenues from U.S. government entities accounted for 48.4% of total revenues in Q1 2023, down from 72.2% in Q1 2022, reflecting a shift towards commercial sales[87] Expenses - Operating expenses totaled $5.0 million in Q1 2023, a slight increase from $4.9 million in Q1 2022, with significant shifts in resource allocation towards sales and marketing[89] - Sales and marketing expenses rose to $1.7 million in Q1 2023 from $1.2 million in Q1 2022, reflecting a strategic shift to support indirect sales efforts[91] - Research and development expenses increased to $1.8 million in Q1 2023, with $0.3 million capitalized for internal use software development[92] - Interest expense surged to $0.7 million in Q1 2023 from $0.1 million in Q1 2022, primarily due to new promissory notes[94] Cash Flow and Liquidity - As of March 31, 2023, cash and cash equivalents were $0.4 million, down from $3.0 million at the end of 2022, with a working capital deficit of $12.6 million[97] - For the quarter ended March 31, 2023, net cash used in operating activities was $2.3 million, compared to $3.5 million for the same period in 2022[106][108] - Net cash used in investing activities for the three months ended March 31, 2023, was $0.3 million, primarily for the capitalization of internally developed software[109] - Net cash provided by financing activities for the quarter ended March 31, 2023, was $0.0 million, a significant decrease from $5.6 million in the same period of 2022[110] - The company received $21 thousand in net proceeds from sales of common stock under the at-the-market program for the quarter ended March 31, 2023[104] Debt and Obligations - As of March 31, 2023, the total outstanding amount payable to Streeterville, including principal, accrued interest, and fees, was $10.2 million[102] - Streeterville made three separate redemption requests totaling $1.5 million through December 2022, all satisfied in cash[102] - The company amended note agreements with Streeterville, waiving redemption rights through March 31, 2023, for a fee of 3.75% of the outstanding note balance[102] - The company is in discussions with Streeterville to amend existing note agreements, but no assurance of improved liquidity has been provided[103] Net Loss - The net loss for the quarter ended March 31, 2023, was $4.7 million, with adjustments for non-cash items of $1.2 million[107] Cost Reduction - Cost reduction measures implemented in late March 2023 are expected to save approximately $1.5 million per quarter going forward[90] Public Float - The public float as of May 11, 2023, was calculated at $23.4 million, which restricts the company's ability to conduct primary offerings under Form S-3[105]
Intrusion(INTZ) - 2023 Q1 - Quarterly Report