8-K: Intrusion Inc. Exchanges Preferred Stock for Common Shares

Intrusion Inc. has entered into an exchange agreement to convert 90 shares of Series B Preferred Stock into 198,396 shares of common stock, valued at $99,000.

Summary

• Intrusion Inc. executed an Exchange Agreement on November 5, 2026, with Streeterville Capital, LLC.
• The agreement involves the exchange of 90 shares of Series B Preferred Stock for 198,396 shares of the Company's common stock.
• The fair value of this exchange is reported as $99,000.
• This transaction is being conducted under the exemption provided by Section 3(a)(9) of the Securities Act of 1933.
• The holding period for the exchanged common shares will include the holding period of the original note and preferred shares, dating back to April 6, 2026.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a neutral to slightly negative development, as it involves an exchange of preferred stock for common stock, potentially diluting existing shareholders without a clear indication of new capital infusion for operational growth.

Positives

• The exchange is structured to comply with Section 3(a)(9) of the Securities Act, indicating a potentially streamlined regulatory process.
• The holding period for the common stock includes prior holdings, which may facilitate future resales for the investor under Rule 144.

Negatives

• The transaction represents an exchange of preferred stock for common stock, which could lead to dilution for existing common shareholders.
• The fair value of the exchange ($99,000) is relatively small compared to the original principal amount of the note ($3,230,000), suggesting a partial settlement or restructuring.
• No new capital is being raised in this specific transaction; it's an exchange of existing obligations.

Risks

• Potential dilution of common stock value for existing shareholders due to the issuance of new shares.
• The transaction is part of a larger financial arrangement involving a secured promissory note, the full terms and implications of which are not detailed in this specific filing.
• Reliance on exemptions from registration requirements (Section 3(a)(9)) means the securities are not subject to the same level of scrutiny as registered offerings.

Future Outlook

The filing does not contain specific forward-looking statements or guidance regarding future financial performance. It primarily details a past transaction.

Management Comments

• The issuance of the Exchange Shares is pursuant to the exemption from the registration requirements afforded by Section 3(a)(9) of the Securities Act of 1933, as amended.
• The holding period of the Exchange Shares will include the Investor's holding period of the Preferred Shares and the Original Note from April 6, 2026, for purposes of Rule 144.

Industry Context

StockSavvy.ai notes that exchanges of preferred equity for common stock, especially under Section 3(a)(9) exemptions, are common in capital-constrained environments or as part of debt restructuring. This can be a tool for companies to manage their balance sheets without immediate cash outlay, but it often comes with potential dilution concerns for existing shareholders.

Related Party Transactions

• The filing details an exchange between Intrusion, Inc. (Company) and Streeterville Capital, LLC (Investor), which is a privately negotiated agreement.

Stakeholder Impact

• Common shareholders may experience dilution in ownership percentage and potentially in share value due to the issuance of new common stock.
• Streeterville Capital, LLC, as the investor, will convert its preferred stock holding into common stock, altering its equity position.

Next Steps

• The Exchange Shares will be delivered to Investor via DWAC to their designated brokerage account.
• The Preferred Shares will be cancelled upon issuance of the Exchange Shares, fulfilling obligations under the Preferred Shares.

Key Dates

Keywords

Equity Exchange, Preferred Stock, Common Stock, Securities Act, Rule 144, Streeterville Capital, Debt Restructuring, Capital Markets