Intrusion (INTZ) risk factors, FY2025 10-K

Risks Related to our Financial Position and Liquidity

1. 01The Company’s ability to implement its current business plan is dependent on our ability to raise additional funds through additional public or private financings, which raises substantial doubt that the Company may not be able to continue as a going concernNew
2. 02We are subject to certain regulatory limitations that may affect our ability to consummate future financings57% rewritten
3. 03We must increase revenue levels in order to finance our current operations and to implement our business strategies39% rewritten

Business and Operational Risks

1. 04Most of our current revenues are generated from one family of solutions with a limited number of customers, and the decrease of revenue from sales of this family of solutions could materially harm our business and prospects47% rewritten
2. 05We may not be successful in our efforts to broaden the marketing and sale of the INTRUSION Shield
3. 06The current geo-political climate may add uncertainty in the dealings of our customers and could cause them to delay indefinitely certain cybersecurity initiatives or to determine not to introduce or implement any new or innovative cyber-solution products into their information networks
4. 07A large percentage of our current revenues are received from U.S. government entities, and the loss of these customers or our failure to widen the scope of our customer base to include general commercial enterprises could negatively affect our revenues
5. 08A decline in federal, state, or local government spending would likely negatively affect our product revenues and earnings
6. 09We are highly dependent on sales of our current solutions through indirect channels, the loss of which would materially adversely affect our operations
7. 10Our business depends on the continued service of our key management and technical personnel
8. 11We could experience damage to our reputation in the cybersecurity industry in the event that our INTRUSION Shield solution fails to meet our customers’ needs or to achieve market acceptance
9. 12If we fail to respond to rapid technological changes in the network security industry, we may lose customers, or our solutions may become obsolete
10. 13We must expend time and resources addressing potential cybersecurity risks, and any breach of our information security safeguards could have a material adverse effect on the Company
11. 14A breach of network security could harm public perception of our cybersecurity solutions, which could cause us to lose revenues
12. 15If our solutions do not interoperate with our customers’ networks, installations will be delayed or cancelled and could harm our business
13. 16We face intense competition from both start-up and established companies that may have significant advantages over us and our solutions
14. 17If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may decline
15. 18Scarcity of products and materials in the supply chain could hinder or prevent the deployment of our INTRUSION Shield for our customers who elect to use the wired version of our solution
16. 19We incur significantly increased costs because of operating as a public company, and our management is required to devote substantial time to compliance matters and initiatives
17. 20We experience volatility in the market for our common stock, particularly with respect to swings in the market price as well as volatility in the trading of our common stock35% rewritten
18. 21Shares eligible for future sale may adversely affect the market
19. 22You may experience dilution as a result of future equity offeringsNew
20. 23We have never paid dividends on our common stock and have no plans to do so in the future
21. 24We are a “smaller reporting company,” and reduced disclosure requirements may make our common stock less attractiveNew

Risks Related to our Intellectual Property

1. 25We must adequately protect our intellectual property to prevent loss of valuable proprietary information
2. 26We may incur substantial expenses defending ourselves against claims of infringement
3. 27Our solutions are highly technical and if they contain undetected errors, our business could be adversely affected, and we might have to defend lawsuits or pay damages in connection with any alleged or actual failure of our solutions and services