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<SEC-DOCUMENT>0000912057-02-010643.txt : 20020415
<SEC-HEADER>0000912057-02-010643.hdr.sgml : 20020415
ACCESSION NUMBER:		0000912057-02-010643
CONFORMED SUBMISSION TYPE:	10-K405
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20011231
FILED AS OF DATE:		20020320

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTRUSION INC
		CENTRAL INDEX KEY:			0000736012
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER COMMUNICATIONS EQUIPMENT [3576]
		IRS NUMBER:				751911917
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K405
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-20191
		FILM NUMBER:		02579560

	BUSINESS ADDRESS:	
		STREET 1:		1101 ARAPAHO ROAD
		CITY:			RICHARDSON
		STATE:			TX
		ZIP:			75081
		BUSINESS PHONE:		9722346400

	MAIL ADDRESS:	
		STREET 1:		1101 ARAPAHO ROAD
		CITY:			RICHARDSON
		STATE:			TX
		ZIP:			75081

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ODS NETWORKS INC
		DATE OF NAME CHANGE:	19970507

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	OPTICAL DATA SYSTEMS INC
		DATE OF NAME CHANGE:	19950517

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTRUSION COM INC
		DATE OF NAME CHANGE:	20000601
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>a2072855z10-k405.txt
<DESCRIPTION>10-K405
<TEXT>
<Page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-K

(MARK ONE)

<Table>
<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
</Table>

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
                                       OR

<Table>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
</Table>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER 0-20191
                            ------------------------

                                 INTRUSION INC.

             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
               DELAWARE                                     75-1911917
    (State or other jurisdiction of            (I.R.S. Employer Identification No.)
    incorporation or organization)
        1101 EAST ARAPAHO ROAD                                75081
           RICHARDSON, TEXAS                                (Zip Code)
    (Address of principal executive
               offices)
</Table>

       Registrant's telephone number, including area code: (972) 234-6400

          Securities registered pursuant to Section 12(b) of the Act:
                                      None

          Securities registered pursuant to Section 12(g) of the Act:
                         COMMON STOCK, $0.01 PAR VALUE
                                (Title of class)
                            ------------------------

    Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

    As of February 26, 2002, the aggregate market value of the Registrant's
voting stock held by non-affiliates of the Registrant was approximately
$19,309,282 (affiliates being, for these purposes only, directors, executive
officers and holders of more than 5% of Registrant's Common Stock). As of
February 26, 2002, 20,643,425 shares of the Registrant's Common Stock were
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

    Portions of the Registrant's definitive Proxy Statement filed in connection
with the Registrant's 2002 Annual Meeting of Stockholders are incorporated by
reference into Part III of this Form 10-K.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Page>
                                 INTRUSION INC.
                                     INDEX

<Table>
<Caption>
                                                                                      PAGE
                                                                                      ----
<S>                     <C>                                                           <C>
PART I
Item 1.                 Business....................................................       3
Item 2.                 Properties..................................................      15
Item 3.                 Legal Proceedings...........................................      15
Item 4.                 Submission of Matters to a Vote of Security Holders.........      15

PART II
Item 5.                 Market for Registrant's Common Equity and Related
                        Stockholder Matters.........................................      15
Item 6.                 Selected Financial Data.....................................      16
Item 7.                 Management's Discussion and Analysis of Financial Condition
                        And Results of Operations...................................      17
Item 7A.                Quantitative and Qualitative Disclosures About Market
                        Risk........................................................      25
Item 8.                 Financial Statements and Supplementary Data.................      25
Item 9.                 Changes in and Disagreements with Accountants on Accounting
                        and Financial Disclosure....................................      25

PART III
Item 10.                Directors and Executive Officers of the Registrant..........      26
Item 11.                Executive Compensation......................................      26
Item 12.                Security Ownership of Certain Beneficial Owners and
                        Management..................................................      26
Item 13.                Certain Relationships and Related Transactions..............      26

PART IV
Item 14.                Exhibits, Financial Statement Schedules, and Reports on Form
                        8-K.........................................................      26

Signatures..........................................................................    II-1
</Table>

                                       2
<Page>
                                     PART I

ITEM 1. BUSINESS.

    In addition to the historical information contained herein, the discussion
in this Form 10-K contains certain forward-looking statements, within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, that involve risks and uncertainties, such as
statements concerning: growth and anticipated operating results, developments in
Intrusion Inc.'s markets and strategic focus; new products and product
enhancements; potential acquisitions and the integration of acquired businesses,
products and technologies; strategic relationships and future economic and
business conditions. The cautionary statements made in this Form 10-K should be
read as being applicable to all related forward-looking statements whenever they
appear in this Form 10-K. Intrusion Inc.'s actual results could differ
materially from the results discussed in the forward-looking statements. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed under the section captioned "Factors That May Affect Future
Results of Operations" in Item 1 of this Form 10-K as well as those cautionary
statements and other factors set forth elsewhere herein.

GENERAL

    We develop, market and support a family of security software and appliances
that address vital security issues facing organizations deploying business
applications over the Internet or internally via Intranets. We currently provide
e-security solutions including intrusion detection systems, virtual private
network appliances and firewall appliances.

    We market and distribute our products through a direct sales force to
end-users, distributors and by numerous domestic and international system
integrators, service providers and value-added resellers. Our end-user customers
include high-technology, manufacturing, telecommunications, retail,
transportation, health care, insurance, entertainment, utilities and energy
companies, government agencies, financial institutions, and academic
institutions.

    Our company was organized in Texas in September 1983 and reincorporated in
Delaware in October 1995. For more than 15 years, we provided local area
networking equipment and were known as Optical Data Systems or ODS Networks. On
April 17, 2000, we announced plans to sell, or otherwise dispose of, our
networking divisions, which include our Essential Communications division and
our local area networking assets. In accordance with these plans, we have
accounted for these businesses as discontinued operations. On June 1, 2000, we
changed our name from ODS Networks, Inc. to Intrusion.com, Inc., and our NASDAQ
ticker symbol from ODSI to INTZ to reflect our focus on e-security solutions. On
November 1, 2001, we changed our name from Intrusion.com, Inc. to
Intrusion Inc.

    Our principal executive offices are located at 1101 E. Arapaho Road,
Richardson, Texas 75081, and our telephone number is (972) 234-6400. References
to "we", "us", "our" or "Intrusion Inc." refer to Intrusion Inc. and its
subsidiaries.

RECENT DEVELOPMENTS

    In March 2002 we sold our last remaining discontinued operation, Essential
Communications division, for $1 million generating a gain of $0.4 million. Terms
of the sale included transferring $0.7 million in net property, plant and
equipment, $0.1 million in current liabilities and product maintenance
obligations for which $0.4 million is recorded in deferred revenue.

                                       3
<Page>
INDUSTRY BACKGROUND

    In the last decade, network computing has evolved from local-area networks
to global systems communicating through open Internet connections. The
widespread adoption of open computing environments, such as the Internet,
enables organizations to increase revenue and reduce costs with electronic
business-to-business and business-to-consumer transactions, business process
re-engineering and secure messaging for telecommuters and widely distributed
workforces.

    Although open computing environments such as the Internet have many business
advantages, their openness and accessibility make these systems, and the
integrity of the information that is stored on them, vulnerable to internal and
external security threats. These systems can be breached by computer hackers,
curious or disgruntled employees, contractors and competitors who may compromise
or destroy sensitive information within the system or otherwise disrupt the
normal operation of the system. In addition, open computing environments such as
the Internet are complex and typically involve a variety of hardware, operating
systems and applications provided by numerous vendors. Each addition or change
to the hardware, operating system or application may introduce new
vulnerabilities and security risks to the system.

    Enterprises are therefore adopting a variety of security solutions to meet
the challenge posed by malicious intruders, curious hackers and disgruntled
employees. To be effective, an organization requires an enterprise-wide
information risk management process that can be managed centrally and
implemented on a distributed basis. Organizations seek a set of individual,
best-of-breed solutions designed to work standalone and in concert with one
another to provide an integrated view of their security status. These solutions
often include:

    - firewalls to control the flow of data between an internal network and
      outside networks or the Internet;

    - virtual private network ("VPN") systems to protect information during
      transmission and provide authentication of users;

    - security assessment systems to identify potential security risks by
      comparing security policy with actual system configuration;

    - intrusion detection systems to monitor the packet traffic on network
      segments to identify and respond to security breaches; and

    - a comprehensive reporting system to automate the analysis and correlation
      of data generated by multiple security applications.

    As e-business and open computing environments continue to expand, we
anticipate that security management will become an essential system on
organizations' networks. We believe we are poised to take advantage of this
requirement for robust security technologies.

    We focus on two areas of security, network intrusion detection systems and
security appliances to deliver security applications to end users.

NETWORK INTRUSION DETECTION SYSTEMS

    Network intrusion detection systems analyze network traffic for attacks.
They examine individual packets within the data stream to identify threats from
authorized users, back-door attacks and hackers who have thwarted the control
systems to exploit network connections and access valuable data. Network
intrusion detection systems add a new level of visibility into the nature and
characteristics of the network. They provide information about the use and usage
of the network that can be used to:

                                       4
<Page>
    - increase the value and efficacy of the control systems like firewalls and
      routers;

    - produce hard evidence for the altering of the enterprise security policy;
      and

    - provide decision support for network management.

SECURITY APPLIANCES

    As the need for network security expands, we believe there is a need to
simplify security software installation and reduce the total cost of deployment
of network security systems.

    Security appliances simplify the deployment of security systems with
preinstalled and preconfigured operating systems and application software.
Available in desktop or rack-mountable versions, these integrated appliances
extend the reach of security administrators to remote and branch offices.

    - Desktop appliances are small, low profile, task-specific devices built to
      be deployed within the workplace, and managed remotely by the enterprise
      or a managed service provider (MSP).

    - Rack-mountable appliances offer expanded input/output and
      keyboard/video/mouse capabilities. These appliances are highly accessible,
      expandable and upgradeable.

INTRUSION INC. SOLUTION AND PRODUCTS

    Intrusion's approach to the challenges of information security is to
develop, market and support a family of intrusion detection and security
appliances for deployment by enterprises, to include remote and branch offices
of enterprises, and use by security service providers. We seek to protect
information assets from attack and misuse and to safeguard data integrity.
Implementing adequate perimeter defense, monitoring network traffic, profiling
user behavior and responding rapidly to network intrusions are critical elements
for the protection of information integrity.

SECURENET PRO FAMILY OF INTRUSION DETECTION PRODUCTS

    Intrusion's SecureNet Pro-TM-, introduced in July 2000, is a network
intrusion detection system software that allows security administrators to
automatically monitor high speed network traffic, detect and respond to
suspicious activity, and respond to internal and external network abuse. The
SecureNet Pro architecture enables the recognition and response to a large
number of attack patterns on high-speed networks. Additionally, SecureNet Pro
provides for comprehensive packet analysis, resulting in fewer false positives.
When a SecureNet Pro sensor detects an attack or misuse, it transmits an alarm
to the SecureNet Pro console for administrative review. In addition, SecureNet
Pro can respond immediately to an attack or misuse by terminating a connection,
sending e-mail or pager alerts, recording the session or taking other
user-definable actions. We believe SecureNet Pro's interface, monitoring and
reporting capabilities increase the effectiveness of security professionals and
enable them to secure their networks more efficiently.

    The SecureNet Pro family of intrusion detection products includes the
following:

    - SecureNet Provider-TM- is a three-tier, Windows-based network intrusion
      detection monitoring and reporting system for enterprises and managed
      service providers. Coupled with the SecureNet Series of intrusion
      detection security appliances, SecureNet Provider enables the centralized
      monitoring and reporting for all SecureNet Pro intrusion detection system
      sensors to increase the value and accessibility of intrusion detection
      information.

    - SecureNet 5000 series of network intrusion detection security appliances
      are rack-mountable security appliance solutions featuring SecureNet Pro
      network intrusion detection software. Enterprises can configure these
      appliances as an intrusion detection security sensor, a standalone
      intrusion detection security appliance that is both sensor and console, or
      as a console to manage up to 20 SecureNet Pro sensors.

                                       5
<Page>
    - SecureNet 2000 series of desktop network intrusion detection security
      appliances simplify network intrusion detection deployment and increase
      network intelligence to extend the reach of intrusion detection to remote
      and branch offices by combining pre-installed SecureNet Pro network
      intrusion software with open Intel architecture, a hardened operating
      system based on Red Hat Linux and interfaces for either remote management
      or command line access.

    - SecureNet 7145-F is an integrated intrusion detection solution designed
      for gigabit networks. Featuring SecureNet Pro software pre-installed on a
      1U-high, rack-mountable appliance and a fiber optic gigabit interface,
      SecureNet 7145-F extends network intelligence from the enterprise border
      to gigabit backbones and data centers.

PDS FAMILY OF SECURITY APPLIANCES

    Effective deployment of a security strategy involves installation,
configuration, validation, and implementation of all systems. We believe the
optimal solution is a combined software and appliance solution that enables
increased performance, effectively leverages personnel and reduces the total
cost of ownership to the enterprise.

    As organizations expand their operations to include remote offices, regional
divisions, branch locations and telecommuters, securing the enterprise becomes
more complex. We offer cost-effective integrated security software and appliance
solutions that enable centralized management and allow businesses to more easily
secure their networks by enabling a variety of complementary security
technologies.

    The PDS Series of security appliances are Linux-based platforms with open
Intel architecture that enable a variety of security software such as intrusion
detection and virtual private network and firewall applications. These perimeter
defense systems deliver security software solutions for a networks' perimeter to
the managed service provider, large enterprise, small business, or enterprise
remote offices.

    While many security platforms can be difficult or costly to manage, a PDS
appliance delivers Web-based setup and administration with centralized policy
management by enabling the deployment of complementary technologies such as
firewall, virtual private network and network intrusion detection systems.

    We have partnered with Check Point Software Technologies to offer their
market-leading virtual private network and firewall security software integrated
on our family of Perimeter Defense System ("PDS") security appliances. These
appliances enable security administrators to more easily and cost-effectively
deploy virtual private network and firewall technology throughout the network,
into the subnets, and in branch and remote offices.

    The PDS family of security appliance products includes the following:

    - The PDS 1000 and PDS 2000 series are designed for remote and branch
      offices, and enterprise network subnet deployment. The appliances reduce
      the threat of unauthorized local access because they do not require a
      keyboard, video or mouse. Both the PDS 1000 and PDS 2000 series of
      products offer virtual private network and firewall deployment with the
      PDS Pilot appliance management software and Check Point VPN-1/FireWall-1
      SmallOffice together in an integrated appliance package. The PDS 2000
      series can also deliver Check Point's VPN-1/FireWall-1 enterprise
      software.

    - The PDS 5000 series series is designed for server room, data center or
      managed service provider deployments where network expansion may be
      required and may be configured as standalone gateways or for local/remote
      management. These appliances deliver high-end VPN/firewall security with
      hardened Red Hat Linux in a rack-mountable case.

                                       6
<Page>
THIRD-PARTY PRODUCTS

    We believe that it is beneficial to work with third parties with
complementary technologies to provide integrated solutions to our customers. As
we also compete with these technology partners in certain segments of the
market, there can be no assurance that we will have access to all of the third-
party products which may be desirable in order to offer fully integrated
solutions to our customers.

CUSTOMER SERVICES

    In addition to offering our network security products, we also offer a wide
range of services, including design and configuration, project planning and
management, training, security analysis and installation and maintenance.

PRODUCT DEVELOPMENT

    The data security industry is characterized by rapidly changing technology,
standards and customer demands. We believe that our future success depends in
large part upon the timely enhancement of existing products as well as the
development of technologically advanced new products that meet industry
standards, perform successfully and achieve market acceptance. We are currently
developing and marketing next-generation data security products. We are also
investing in the development of products that comply with emerging industry
standards and are continuously engaged in testing to ensure that our products
interoperate with other manufacturers' products which comply with industry
standards.

    During 2001, 2000 and 1999, our research and development expenditures were
$12.5 million, $13.1 million and $8.2 million, respectively. All of our
expenditures for hardware and software research and development costs have been
expensed as incurred. At December 31, 2001, we had 32 employees engaged in
research and product development.

MANUFACTURING AND SUPPLIES

    Our operational strategy relies on the outsourcing of manufacturing
components, assembly and certain other operations to reduce fixed costs and to
provide flexibility in meeting market demand.

    Our internal manufacturing operations consist primarily of replication of
software on CDs, packaging, final assembly, testing and quality control of
subassemblies and finished units. Materials used in our manufacturing processes
include semiconductors such as microprocessors, memory chips and application
specific integrated circuits ("ASICs"), printed circuit boards, power supplies
and enclosures.

INTELLECTUAL PROPERTY AND LICENSES

    Our success and our ability to compete is dependent, in part, upon our
proprietary technology. We hold one U.S. patent relating to network event
detection and using event signatures. While we have applied for certain other
patents, we currently rely on a combination of contractual rights, trade secrets
and copyright laws to establish and protect our proprietary rights in our
products. We have also entered into confidentiality agreements with our
employees and enter into non-disclosure agreements with our suppliers, resellers
and certain customers to limit access to and disclosure of proprietary
information. There can be no assurance that the steps taken by us to protect our
intellectual property will be adequate to prevent misappropriation of our
technology or that our competitors will not independently develop technologies
that are substantially equivalent or superior to our technology.

    We have entered into several software and product license agreements. These
license agreements provide us with additional software and hardware components
that add value to our security products. These license agreements do not provide
proprietary rights that are unique or exclusive to us and are generally
available to other parties on the same or similar terms and conditions, subject
to payment of applicable license fees and royalties.

                                       7
<Page>
SALES, MARKETING AND CUSTOMERS

    We market and distribute our products primarily through a direct sales force
to end users supplemented by numerous domestic and international distributors,
system integrators and value added resellers. At December 31, 2001, our sales
and marketing organization consisted of 58 individuals, including managers,
sales representatives, marketing personnel and technical support personnel.

    FIELD SALES FORCE.  Our direct sales organization focuses on major account
sales; channel partners including distributors, Value Added Resellers ("VARs")
and integrators; promotes our products to current and potential customers; and
monitors evolving customer requirements. The field sales and technical support
force provides training and technical support to our resellers and end users and
assists our customers to design secure data networking solutions.

    We currently conduct sales and marketing efforts from our principal office
in Richardson (Dallas), Texas; Washington, D.C.; and through foreign sales
offices located in the following countries: Canada, England, France, Germany,
Japan, Malaysia, and South Korea.

    DISTRIBUTORS.  We have signed distribution agreements with distributors in
the United States, Europe and Asia. In general, these relationships are
non-exclusive. Distributors typically maintain an inventory of our products.
Under these agreements, we provide certain protection to the distributors for
their inventory of our products for price reductions as well as products that
are slow-moving or have been discontinued. Recognition of sales to distributors
and related gross profits are deferred until the merchandise is resold by the
distributors. However, since we have legally sold the inventory to the
distributor and we no longer have care, custody or control over the inventory,
we recognize the trade accounts receivable and reduce inventory related to the
sale at the time of shipment to the distributor.

    RESELLERS.  Domestic and international system integrators and value added
resellers (collectively, "resellers") sell our products as stand-alone solutions
to end users and integrate our products with products sold by other vendors into
data security systems that are sold to end users. Our field sales force and
technical support organization provide support to these resellers. Our
agreements with resellers are non-exclusive, and our resellers generally sell
other products that may compete with our products. Resellers may place higher
priority on products of other suppliers who are larger than and have more name
recognition than us, and there can be no assurance that resellers will continue
to sell and support our products.

    FOREIGN SALES.  We believe that rapidly evolving international markets are
important sources of future net sales. Our export sales are currently being made
through a direct sales force supplemented by international resellers in Europe,
Asia, Latin America and Canada. Export sales accounted for approximately 36.4%,
19.2% and 14.0% of net sales in 2001, 2000 and 1999, respectively. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in this report for a geographic breakdown of our product
revenue in 2001, 2000 and 1999. Sales to foreign customers and resellers
generally have been made in United States dollars.

    MARKETING.  We have implemented several methods to market our products,
including regular participation in trade shows and seminars, advertisement in
trade journals, telemarketing, distribution of sales literature and product
specifications and ongoing communication with our resellers and installed base
of end-user customers.

    CUSTOMERS.  Our end-user customers include manufacturing, high-technology,
telecommunications, retail, transportation, health care, insurance,
entertainment, utilities and energy companies, government agencies, financial
institutions and academic institutions. Sales to certain customers and groups of

                                       8
<Page>
customers can be impacted by seasonal capital expenditure approval cycles, and
sales to customers within certain geographic regions can be subject to seasonal
fluctuations in demand.

    Although we sell our products to many customers, direct sales to five such
resellers and end-user customers, iGov.com, TRW Systems & Information Technology
("TRW"), AT&T Corp. ("AT&T"), Federal Data Corporation ("Federal Data") and
Comstor, Inc. ("Comstor") have each accounted for 10% or more of our net sales
in at least one of the past three fiscal years as indicated in the following
schedule.

<Table>
<Caption>
                                                                    PERCENTAGE OF
                                                                      NET SALES
                                                            ------------------------------
CUSTOMER                                                      2001       2000       1999
- --------                                                    --------   --------   --------
<S>                                                         <C>        <C>        <C>
iGov.com..................................................    5.4%       14.2%      21.3%
TRW.......................................................    7.9        24.1        7.4
AT&T......................................................    0.6         0.2       10.9
Federal Data..............................................    0.8         1.9       16.0
Comstor...................................................    0.0         0.0       12.1
</Table>

    A large portion of the products sold to iGov.com, TRW and Federal Data
during the periods shown were integrated with other products or services and
sold to U.S. government customers by those system integrators. No other customer
accounted for 10% or more of our net sales in 2001, 2000 or 1999, respectively.
The loss of any of these customers could have a material adverse effect our
business and our operating results if not replaced.

    BACKLOG.  We believe that only a small portion of our order backlog is
non-cancelable and that the dollar amount associated with the non-cancelable
portion is immaterial. We purchase inventory based upon our forecast of customer
demand and maintain inventories of sub-assemblies and finished products in
advance of receiving firm orders from customers. Orders are generally fulfilled
within two to eight weeks following receipt of an order. Due to the generally
short cycle between order and shipment and occasional customer-initiated changes
in delivery schedules or cancellation of orders that are made without
significant penalty, we do not believe that our backlog as of any particular
date is indicative of future net sales.

    CUSTOMER SUPPORT, SERVICE AND WARRANTY.  We service, repair and provide
technical support for our products. Our field sales and technical support force
work closely with resellers and end-user customers on-site and by telephone to
assist with pre- and post-sales support services such as network security
design, system installation and technical consulting. By working closely with
our customers, our employees increase their understanding of end-user
requirements and provide input to the product development process.

    We warrant all of our products against defects in materials and workmanship
for periods ranging from 90 days to 12 months. Before and after expiration of
the product warranty period, we offer both on-site and factory-based support,
parts replacement and repair services. Extended warranty services are separately
invoiced on a time and materials basis or under an annual maintenance contract.

COMPETITION

    The market for data security solutions is intensely competitive and subject
to frequent product introductions with improved price and performance
characteristics. Industry suppliers compete in areas such as conformity to
existing and emerging industry standards, interoperability with networking and
other security products, management and security capabilities, performance,
price, ease of use, scalability, reliability, flexibility, product features and
technical support. We believe that our approach

                                       9
<Page>
of combining security network design services, our products and third-party
products provides us with a competitive advantage with large organizations with
complex security requirements.

    There are numerous companies competing in various segments of the data
security markets. Our principle competitors in the network intrusion detection
market include Internet Security Systems, Inc. ("ISS"), Cisco Systems, Inc.
("Cisco"), Enterasys Networks, Inc. ("Enterasys") and NFR Security, Inc.
("NFR"). Our principle competitors in the Check Point Software
Technologies Ltd. firewall / VPN appliance market include Nokia Corporation
("Nokia"), Celestix Networks, Inc. ("Celestix"), International Business Machines
Corp. ("IBM") and Compaq Computer Corp. ("Compaq"). Several of our competitors
have substantially greater financial, technical, sales and marketing resources,
better name recognition and a larger customer base than we do. In addition, many
of our competitors offer customers a broader product line which may provide a
more comprehensive networking and security solution than we currently offer.
Even if we do introduce advanced products which meet evolving customer
requirements in a timely manner, there can be no assurance that our new products
will gain market acceptance.

    Certain companies in the data security industry have expanded their product
lines or technologies in recent years as a result of acquisitions. Further, more
companies have developed products which conform to existing and emerging
industry standards and have sought to compete on the basis of price. We
anticipate increased competition from large networking equipment vendors which
are expanding their capabilities in the data security market. In addition, we
anticipate increased competition from private "start-up" companies that have
developed or are developing advanced security products. Increased competition in
the security industry could result in significant price competition, reduced
profit margins or loss of market share, any of which could have a material
adverse effect on our business, operating results and financial condition. There
can be no assurance that we will be able to compete successfully in the future
with current or new competitors.

EMPLOYEES

    As of December 31, 2001, we employed a total of 149 persons, including 58 in
sales, marketing and technical support, 9 in manufacturing and operations, 32 in
research and product development, 15 in administration and finance, and 35 in
our discontinued networking operations.

    None of our employees are represented by a labor organization, and we are
not a party to any collective bargaining agreement. We have not experienced any
work stoppages and consider our relations with our employees to be good.

    Competition in the recruiting of personnel in the networking and data
security industry is intense. We believe that our future success will depend in
part on our continued ability to hire, motivate and retain qualified management,
sales and marketing, and technical personnel. To date, we have not experienced
significant difficulties in attracting or retaining qualified employees.

                                       10
<Page>
FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS

    In addition to the other information in this Form 10-K, the following
factors should be considered in evaluating Intrusion Inc. and our business.

    TECHNOLOGICAL CHANGES.  The market for our products is characterized by
frequent product introductions, rapidly changing technology and continued
evolution of new industry standards. The market for security products requires
our products to be compatible and interoperable with products and architectures
offered by various vendors, including other security products, networking
products, workstation and personal computer architectures and computer and
network operating systems. Our success will depend to a substantial degree upon
our ability to develop and introduce in a timely manner new products and
enhancements to our existing products that meet changing customer requirements
and evolving industry standards. The development of technologically advanced
products is a complex and uncertain process requiring high levels of innovation
as well as the accurate anticipation of technological and market trends. There
can be no assurance that we will be able to identify, develop, manufacture,
market and support new or enhanced products successfully in a timely manner.
Further, we or our competitors may introduce new products or product
enhancements that shorten the life cycle of or obsolete our existing product
lines, any of which could have a material adverse effect on our business,
operating results and financial condition.

    MARKET ACCEPTANCE.  We are pursuing a strategy to increase the percentage of
our revenue generated through indirect sales channels including distributors,
value added resellers, system integrators, original equipment manufacturers and
managed service providers. There can be no assurance that our products will gain
market acceptance in these indirect sales channels. Further, competition among
security companies to sell products through these indirect sales channels could
result in significant price competition and reduced profit margins.

    We are also pursuing a strategy to further differentiate our product line by
introducing complementary security products and incorporating new technologies
into our existing product line. There can be no assurance that we will
successfully introduce these products or that such products will gain market
acceptance. We anticipate competition from networking companies, network
security companies and others in each of our product lines. We anticipate that
profit margins will vary among our product lines and that product mix
fluctuations could have an adverse effect on our overall profit margins.

    ACQUISITIONS.  ISS, Cisco, Enterasys, NFR, Nokia, Celestix, IBM, Compaq and
other competitors have recently acquired several security companies with
complementary technologies, and we anticipate that such acquisitions will
continue in the future. These acquisitions may permit such competitors to
accelerate the development and commercialization of broader product lines and
more comprehensive solutions than we currently offer. In the past, we have
relied upon a combination of internal product development and partnerships with
other security vendors to provide competitive solutions to customers. Certain of
the recent and future acquisitions by our competitors may have the effect of
limiting our access to commercially significant technologies. Further, the
business combinations and acquisitions in the security industry are creating
companies with larger market shares, customer bases, sales forces, product
offerings and technology and marketing expertise. There can be no assurance that
we will be able to compete successfully in such an environment.

    In September 1998, we completed an acquisition of certain assets of the
Computer Misuse and Detection System ("CMDS") Division from Science Applications
International Corporation ("SAIC"), a privately held company in San Diego,
California. On September 30, 1999, we entered a technology licensing agreement
with RSA Security Inc. ("RSA") under which we are the exclusive licensee of
RSA's Kane Security products in North America and Europe. On June 30, 2000, we
acquired MimeStar, Inc. ("MimeStar"), a Virginia corporation. MimeStar developed
an advanced, network based

                                       11
<Page>
intrusion detection system called SecureNet Pro-TM-. We may, in the future,
acquire or invest in additional companies, business units, product lines, or
technologies to accelerate the development of products and sales channels
complementary to our existing products and sales channels. Acquisitions involve
numerous risks, including: difficulties in assimilation of operations,
technologies, and products of the acquired companies; risks of entering markets
in which we have no or limited direct prior experience and where competitors in
such markets have stronger market positions; the potential loss of key employees
of the acquired company; and the diversion of our attention from normal daily
operation of our business. There can be no assurance that any other acquisition
or investment will be consummated or that such acquisition or investment will be
realized.

    PRODUCT TRANSITIONS.  Once current security products have been in the market
place for a period of time and begin to be replaced by higher performance
products (whether of our design or a competitor's design), we expect the net
sales of such products to decrease. In order to achieve revenue growth in the
future, we will be required to design, develop and successfully commercialize
higher performance products in a timely manner. There can be no assurance that
we will be able to introduce new products and gain market acceptance quickly
enough to avoid adverse revenue transition patterns during current or future
product transitions. Nor can there be any assurance that we will be able to
respond effectively to technological changes or new product announcements by
competitors, which could render portions of our inventory obsolete.

    MANUFACTURING AND SUPPLIERS.  Our operational strategy relies on outsourcing
of product assembly and certain other operations. There can be no assurance that
we will effectively manage our third-party contractors or that these contractors
will meet our future requirements for timely delivery of products of sufficient
quality and quantity. Further, we intend to introduce a number of new products
and product enhancements in 2002 that will require that we rapidly achieve
volume production of those new products by coordinating our efforts with those
of our suppliers and contractors. The inability of the third-party contractors
to provide us with adequate supplies of high-quality products could cause a
delay in our ability to fulfill orders and could have an adverse effect on our
business, operating results and financial condition.

    All of the materials used in our products are purchased under contracts or
purchase orders with third parties. While we believe that many of the materials
used in the production of our products are generally readily available from a
variety of sources, certain components such as microprocessors and mother boards
are available from one or a limited number of suppliers. The lead times for
delivery of components vary significantly and can exceed twelve weeks for
certain components. If we should fail to forecast our requirements accurately
for components, we may experience excess inventory or shortages of certain
components that could have an adverse effect on our business and operating
results. Further, any interruption in the supply of any of these components, or
the inability to procure these components from alternative sources at acceptable
prices within a reasonable time, could have an adverse effect on our business
and operating results.

    INTELLECTUAL PROPERTY AND LICENSES.  There are many patents held by
companies which relate to the design and manufacture of data security systems.
Potential claims of infringement could be asserted by the holders of those
patents. We could incur substantial costs in defending our company and our
customers against any such claim regardless of the merits of such claims. In the
event of a successful claim of infringement, we may be required to obtain one or
more licenses from third parties. There can be no assurance that we could obtain
the necessary licenses on reasonable terms.

    SUFFICIENCY OF CASH FLOW.  As of December 31, 2001, we had cash, cash
equivalents and investments in the amount of approximately $20.4 million, down
from approximately $45.4 million as of December 31, 2000. Although we believe we
have sufficient cash resources to finance our operations and expected capital
expenditures for the next twelve months, the sufficiency of our cash resources
may depend to a certain extent on general economic, financial, competitive or
other factors beyond our

                                       12
<Page>
control. Moreover, despite actions to reduce our costs and improve our
profitability, we expect our operating losses and net operating cash outflows to
continue during 2002. As a result, we may not be able to achieve the revenue and
gross margin objectives necessary to achieve positive cash flow or profitability
without obtaining additional financing. We do not currently have any
arrangements for financing, and we may not be able to secure additional debt or
equity financing on terms acceptable to us, or at all, at the time when we need
such funding. If our business does not generate sufficient cash flow from
operations and sufficient future financings are not available, we may not be
able to operate or grow our business, pay our expenses when due or fund our
other liquidity needs.

    DEPENDENCE ON CHECK POINT TECHNOLOGIES.  A large percentage of our sales are
represented by our PDS family of security appliances which are integrated with
Check Point Software Technologies' market-leading virtual private network and
firewall security software. We expect the percentage of sales represented by
these products to increase in the future. Although we are a certified appliance
partner of Check Point and our PDS products have received certification from
Check Point, we have no long term agreement or exclusive relationship with Check
Point. As a result, the loss or significant change in our relationship with
Check Point, the failure of future PDS products to receive Check Point
certification, the business failure of Check Point or its acquisition by or of
one of our competitors, and the loss of market share of Check Point or market
acceptance of its products could each have a material adverse effect on our
business, financial condition and results of operations.

    THIRD-PARTY PRODUCTS.  We believe that it is beneficial to work with third
parties with complementary technologies to broaden the appeal of our security
products. These alliances allow us to provide integrated solutions to our
customers by combining our developed technology with third-party products. As we
also compete with these technology partners in certain segments of the market,
there can be no assurance that we will have access to all of the third-party
products that may be desirable or necessary in order to offer fully integrated
solutions to our customers.

    DEPENDENCE ON KEY CUSTOMERS.  A relatively small number of customers have
accounted for a significant portion of our revenue. U.S. government agencies,
large system integrators and managed service providers are expected to continue
to account for a substantial portion of our net revenue. We continuously face
competition from ISS, Cisco, Enterasys, NFR, Nokia, Celestix, IBM, Compaq and
others for U.S. government security projects and corporate security
installations. Any reduction or delay in sales of our products to these
customers could have a material adverse effect on our operating results.

    INTERNATIONAL OPERATIONS.  Our international operations may be affected by
changes in demand resulting from fluctuations in currency exchange rates and
local purchasing practices, including seasonal fluctuations in demand, as well
as by risks such as increases in duty rates, difficulties in distribution,
regulatory approvals and other constraints upon international trade. Our sales
to foreign customers are subject to export regulations. In particular, certain
sales of our data security products require clearance and export licenses from
the U.S. Department of Commerce under these regulations. Any inability to obtain
such clearances or any required foreign regulatory approvals on a timely basis
could have a material adverse effect on our operating results.

    IMPACT OF GOVERNMENT CUSTOMERS.  In 2001, 23.7% of our revenue was derived
from sales to the U.S. government, either directly by us or through system
integrators and other resellers. Sales to the government present risks in
addition to those involved in sales to commercial customers, including potential
disruptions due to appropriation and spending patterns and the government's
reservation of the right to cancel contracts and purchase orders for its
convenience.

    DISCONTINUED OPERATIONS.  In the second quarter of 2000, we discontinued our
networking operations and accordingly have shown the networking operations as
discontinued in the accompanying financial statements.

                                       13
<Page>
    During the first quarter of 2001, we closed the sale of our legacy local
area networking division generating a gain of $2.1 million which was used to
reduce the estimated net realizable value of the net assets of the remaining
discontinued operations of our Essential Communications division. During the
second quarter of 2001, in response to unfavorable market conditions and efforts
to sell Essential, we recorded additional charges to write down the net assets
of Essential to reflect its current estimated net realizable value of
$0.8 million. The $5.0 million second quarter charge included $0.8 million for
operating losses expected to be incurred between July and the end of the first
quarter of 2002 by which time we expect to have exited, disposed of or otherwise
transitioned a majority of our ownership in Essential.

    In March 2002 we sold our last remaining discontinued operation, Essential
Communications division, for $1 million generating a gain of $0.4 million. Terms
of the sale included transferring $0.7 million in net property, plant and
equipment, $0.1 million in current liabilities and product maintenance
obligations for which $0.4 million is recorded in deferred revenue.

    EFFECTS OF RECENT TERRORIST ATTACKS AND MILITARY ACTIONS.  Recent terrorist
attacks in the United States, as well as military actions or other events
occurring in response or in connection to them, including future terrorist
attacks against United States targets, actual conflicts involving the United
States or it allies or military or trade disruptions could impact our
operations, including by:

    - reducing government or corporate spending on network security products;

    - increasing the cost and difficulty in obtaining materials or shipping
      products; and

    - affecting our ability to conduct business internationally.

Should such events occur, our business, operating results and financial
condition could be materially and adversely affected.

    RESTRUCTURING AND COST REDUCTIONS.  We implemented a restructuring plan in
2001. The objective of our restructuring plan was to reduce our cost structure
to a sustainable level that is consistent with the current macroeconomic
environment. We also implemented other strategic initiatives designed to
strengthen our operations. These plans involve, among other things, reductions
in our workforce and facilities, aligning our organization around our business
objectives, realignment of our sales force and changes in our sales management.
The workforce reductions could result in temporary reduced productivity of our
remaining employees. Additionally, our customers and prospects may delay or
forgo purchasing our products due to a perceived uncertainty caused by the
restructuring and other changes. Failure to achieve the desired results of our
initiatives could seriously harm our business, results of operations and
financial condition.

    GENERAL.  Sales of our products fluctuate, from time to time, based on
numerous factors, including customers' capital spending levels and general
economic conditions. While certain industry analysts believe that there is a
significant market for data security products, there can be no assurance as to
the rate or extent of the growth of such market or the potential adoption of
alternative technologies. Future declines in data security product sales as a
result of general economic conditions, adoption of alternative technologies or
any other reason could have a material adverse effect on our business, operating
results and financial condition.

    Due to the factors noted above and in "Management's Discussion and Analysis
of Financial Condition and Results of Operations", our future earnings and
common stock price may be subject to significant volatility, particularly on a
quarterly basis. Past financial performance should not be considered a reliable
indicator of future performance and investors should not use historical trends
to anticipate results or trends in future periods. Any shortfall in revenue and
earnings from the levels anticipated by securities analysts could have an
immediate and significant effect on the trading price of our common stock in any
given period. Also, we participate in a highly dynamic industry, which often
results in volatility of our common stock price.

                                       14
<Page>
ITEM 2. PROPERTIES.

    Our headquarters is located in a modern, two-story building in Richardson,
Texas, with an aggregate of approximately 95,000 square feet of floor space.
This facility includes our corporate administration, operations, marketing,
research and development, sales and technical support personnel. We occupy this
facility under a lease, the base term of which expires in February 2005, with
two seven-year options to extend the lease term, subject to compliance with
certain conditions. We also lease a separate warehouse facility consisting of
approximately 8,000 square feet, adjacent to our headquarters, under a lease
that expires in June 2002.

    Personnel of the Essential division (part of the our discontinued
operations) are located in a 15,120 square foot leased property in Albuquerque,
New Mexico. The lease is scheduled to expire in February 2009. In March 2002, we
sold the assets of Essential Communications (see Recent Developments). A
condition of the sale was to give Essential personnel 60 days to exit the
facility. Included in the gain on the sale of Essential is a $0.3 million
reserve to terminate the lease which is the equivalent of 2 years' lease and
maintenance of the facility. Successful termination for less than $0.3 million
will result in a greater gain on disposition of Essential. Termination for more
than $0.3 million will reduce the gain on disposition of Essential.

    Much of our security software research and development staff is located in
an 11,400 square foot leased property in San Diego, California. The lease will
expire in August 2002. Research and development, sales and administrative
personnel occupy this facility.

    The lease on the sales office located in Vienna, Virginia, which occupied
9,747 square feet and had an original expiration date of April 2004, was
terminated early in November 2001 for $0.2 million.

    In addition, we lease small amounts of office space for sales and technical
support personnel domestically internationally in Canada, England, France,
Germany, Malaysia, Japan and South Korea. We believe that the existing
facilities at December 31, 2001 will be adequate to meet our requirements
through 2002. See Note 5 of Notes to Consolidated Financial Statements for
additional information regarding our obligations under leases.

ITEM 3. LEGAL PROCEEDINGS.

    We are not a party to any material litigation and are not aware of any
threatened litigation which would have a material adverse effect on our
business, operating results or financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    There were no matters submitted to a vote of our security holders during the
fourth quarter of 2001.

                                    PART II

ITEM 5. MARKET FOR INTRUSION'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

    Our common stock is traded on The Nasdaq Stock Market (National Market
System) under the symbol "INTZ". As of February 26, 2002 there were
approximately 220 registered holders of record of the common stock. The
following table sets forth, for the periods indicated, the high and low per
share intra-day sales prices for the common stock, as reported by The Nasdaq
Stock Market.

<Table>
<Caption>
                                                        2001                  2000
                                                 -------------------   -------------------
                                                   HIGH       LOW        HIGH       LOW
                                                 --------   --------   --------   --------
<S>                                              <C>        <C>        <C>        <C>
First Quarter..................................   $8.50      $3.25      $31.50     $8.69
Second Quarter.................................    4.90       2.75       24.00      7.56
Third Quarter..................................    4.14       0.90       17.25      9.00
Fourth Quarter.................................    2.15       0.62       12.25      2.88
</Table>

                                       15
<Page>
    We have not declared or paid cash dividends on our capital stock since 1995.
We currently retain any earnings for use in our business and do not anticipate
paying any cash dividends in the foreseeable future. Future dividends, if any,
will be determined by our Board of Directors.

ITEM 6. SELECTED FINANCIAL DATA.

    The following selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in Item 7 of this Form 10-K and the consolidated
financial statements and notes thereto included in Item 14 of this Form 10-K.
Continuing operations consisted of our information security business which began
operations in 1998. Discontinued operations are composed of our local area
networking divisions which were discontinued in April 2000.

<Table>
<Caption>
                                                       YEAR ENDED DECEMBER 31,
                                   ----------------------------------------------------------------
                                       2001           2000         1999         1998         1997
STATEMENT OF OPERATIONS DATA:      ------------   ------------   --------   ------------   --------
                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                <C>            <C>            <C>        <C>            <C>
Revenue..........................  $  16,685      $  23,210      $  7,963   $   1,920      $     --
Cost of Sales....................     13,490         19,009         3,877         968            --
                                   ---------      ---------      --------   ---------      --------
Gross profit.....................      3,195          4,201         4,086         952            --
Operating expenses:
  Sales and marketing............     23,550         27,740        12,236      17,806            --
  Research and development.......     12,549         13,073         8,171       2,847            --
  In-process research and
    development..................         --             --            --       1,047 (1)        --
  General and administrative.....      4,481          5,865         2,466         731            --
  Amortization of intangibles....      1,233            975           547         272            --
  Restructuring costs............      4,673 (3)         --            --          --            --
                                   ---------      ---------      --------   ---------      --------
Operating loss...................    (43,291)       (43,452)      (19,334)    (21,751)           --
Interest income, net.............      1,687          3,301         1,104       1,398            --
Other income (expense)...........        112         66,335 (2)        --      (1,122)           --
                                   ---------      ---------      --------   ---------      --------
Income (loss) before income
  taxes..........................    (41,492)        26,184       (18,230)    (21,475)           --
Income taxes provision
  (benefit)......................     (1,877)         1,999            --      (3,104)           --
                                   ---------      ---------      --------   ---------      --------
Income (loss) from continuing
  operations.....................    (39,615)        24,185       (18,230)    (18,371)           --
Income (loss) from discontinued
  operations, net of tax.........     (6,165)          (974)        6,190      (7,379)       (4,937)
                                   ---------      ---------      --------   ---------      --------
Net income (loss)................  $ (45,780)     $  23,211      $(12,040)  $ (25,750)     $ (4,937)
                                   =========      =========      ========   =========      ========
Basic earnings (loss) per share,
  continuing operations..........  $   (1.93)     $    1.23      $  (0.98)  $   (1.07)     $   0.00
                                   =========      =========      ========   =========      ========
Diluted earnings (loss) per
  share, continuing operations...  $   (1.93)     $    1.18      $  (0.98)  $   (1.07)     $   0.00
                                   =========      =========      ========   =========      ========
Basic earnings (loss) per
  share..........................  $   (2.23)     $    1.18      $  (0.65)  $   (1.50)     $  (0.30)
                                   =========      =========      ========   =========      ========
Dilutive earnings (loss) per
  share..........................  $   (2.23)     $    1.13      $  (0.65)  $   (1.50)     $  (0.30)
                                   =========      =========      ========   =========      ========
Weighted average shares
  outstanding
  --Basic........................     20,565         19,624        18,565      17,190        16,437
                                   =========      =========      ========   =========      ========
  --Diluted......................     20,565         20,478        18,565      17,190        16,437
                                   =========      =========      ========   =========      ========
</Table>

                                       16
<Page>
BALANCE SHEET DATA:

<Table>
<Caption>
                                                  2001       2000       1999       1998       1997
                                                --------   --------   --------   --------   --------
<S>                                             <C>        <C>        <C>        <C>        <C>
Working capital...............................  $25,240    $52,514    $ 66,578   $31,763    $51,847
Total assets..................................   42,295     92,414     120,502    61,710     77,178
Total liabilities.............................    8,797     13,627      38,925    12,204     10,799
Total stockholders' equity....................   33,498     78,787      81,577    49,506     66,379
</Table>

- ------------------------

(1) The write-off of acquired in-process research and development in the year
    ending December 31, 1998, is comprised of approximately $1.0 million
    resulting from the acquisition of Computer Misuse and Detection System
    assets from Science Applications International Corporation.

(2) Other income for the year ending December 31, 2000 is comprised primarily of
    a $66.4 million pre-tax gain realized on the sale of Alteon
    WebSystems, Inc. common stock.

(3) Restructuring costs for the year ending December 31, 2001 include the
    impairment of certain intangible assets associated with obsolete product
    lines and severance and lease termination costs for restructuring
    activities.

    See "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Notes to the Consolidated Financial Statements.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE LITIGATION REFORM ACT OF 1995

    This Annual Report, other than historical information, may include
forward-looking statements, including statements with respect to financial
results, product introductions, market demand, sales channels, industry trends,
sufficiency of cash resources and certain other matters. These statements are
made under the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 and involve risks and uncertainties which could cause actual
results to differ materially from those in the forward-looking statements,
including those discussed in the section entitled "Factors That May Affect
Future Results of Operations" in Item 1 and elsewhere in this Annual Report on
Form 10-K and other filings with the Securities and Exchange Commission.

OVERVIEW

    We develop, market and support a family of security software and appliances
that address vital security issues facing organizations deploying business
applications over the Internet or internally via Intranets. We currently provide
e-security solutions including intrusion detection systems, virtual private
network appliances and firewall appliances. On June 1, 2000, we changed our name
from ODS Networks, Inc. to Intrusion.com Inc. and our NASDAQ ticker symbol from
ODSI to INTZ to reflect our focus on e-security solutions. On November 1, 2001,
we changed our name from Intrusion.com, Inc. to Intrusion Inc. During the second
quarter of 2000, we announced our plan to sell, or otherwise dispose of, our
networking divisions which includes our Essential Communications division and
our local area networking assets and began accounting for these networking
divisions as discontinued operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

    Management's discussion and analysis of financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,

                                       17
<Page>
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates, including those
related to product returns, bad debts, inventories, intangible assets, income
taxes, warranty obligations, restructuring, maintenance contracts and
contingencies. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.

    We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements.

REVENUE RECOGNITION

    We generally recognize product revenue upon shipment of product. We accrue
for estimated warranty costs, sales returns and other allowances at the time of
shipment based on our experience. Revenue from maintenance contracts is deferred
and recognized over the contractual period the services are performed. To date,
warranty costs and sales returns have not been material. There is a risk that
technical issues on new products could result in unexpected warranty costs and
returns.

    We recognize software revenue from the licensing of our software products in
accordance with Statement of Position ("SOP") No. 97-2 "Software Revenue
Recognition" and SOP 98-9 "Modification of 97-2, Software Revenue Recognition,
with respect to certain transactions" whereby revenue from the licensing of our
products is not recognized until all four of the following have been met:
i) execution of a written purchase order, license agreement or contract;
ii) shipment of the product has occurred; iii) the license fee is fixed and
determinable; and iv) collectibility is probable. The Company defers and
recognizes maintenance and support revenue over the term of the contract period,
which is generally one year.

    We have signed distribution agreements with distributors in the United
States, Europe and Asia. In general, these relationships are non-exclusive.
Distributors typically maintain an inventory of our products. Under these
agreements, Intrusion Inc. provides certain protection to the distributors for
their inventory of Intrusion Inc. products for price reductions as well as
products that are slow-moving or have been discontinued by the Company.
Recognition of sales to distributors and related gross profits are deferred
until the merchandise is resold by the distributors. However, since we have
legally sold the inventory to the distributor and we no longer have care,
custody or control over the inventory, we recognize the trade accounts
receivable and reduce inventory related to the sale at the time of shipment to
the distributor. Revenue, offset by deferred cost of sales, is included in
deferred revenue in the accompanying financial statements.

ALLOWANCE FOR DOUBTFUL ACCOUNTS AND RETURNS

    We maintain allowances for doubtful accounts for estimated losses resulting
from the inability of our customers to make required payments. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required.

INVENTORY

    We write down our inventory for estimated obsolescence or unmarketable
inventory equal to the difference between the cost of inventory and the
estimated market value based upon assumptions about future demand and market
conditions. If actual market conditions are less favorable than those projected
by management, additional inventory write-downs may be required.

                                       18
<Page>
DISCONTINUED OPERATIONS

    In the second quarter of 2000, we discontinued our networking operations and
accordingly have shown the networking operations as discontinued in the
accompanying financial statements.

    During the first quarter of 2001, we closed the sale of our legacy local
area networking division generating a gain of $2.1 million which was used to
reduce the estimated net realizable value of the net assets of our remaining
discontinued operations, Essential. During the second quarter of 2001, in
response to unfavorable market conditions and efforts to sell Essential, we
recorded additional charges to write down the net assets of Essential to reflect
its current estimated net realizable value of $0.8 million. The $5.0 million
second quarter charge included $0.8 million for operating losses expected to be
incurred between July and the end of the first quarter of 2002 by which time we
expect to have exited, disposed of or otherwise transitioned a majority of our
ownership in Essential.

    In March 2002 we sold our last remaining discontinued operation, Essential
Communications division, for $1 million generating a gain of $0.4 million. Terms
of the sale included transferring $0.7 million in net property, plant and
equipment, $0.1 million in current liabilities and product maintenance
obligations for which $0.4 million is recorded in deferred revenue.

    A condition of the sale was to give Essential Communications personnel
60 days to exit Essential Communications' lease facility, the obligation for
which we retained as part of the sale. Included in the gain on the sale of
Essential Communications is management's estimate of $0.3 million to terminate
this lease agreement, which is equivalent to 2 years' lease and maintenance of
the facility. Successful termination for less than $0.3 million will result in a
greater gain on sale. Termination for more than $0.3 million will reduce the
gain on sale. The contractual term of the lease runs through February 2009 and
remaining contractual lease payments total $1.2 million at December 31, 2001.

                                       19
<Page>
RESULTS OF OPERATIONS

    The following tables set forth, for the periods indicated, certain financial
data as a percentage of net sales.

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net sales...................................................    100.0%     100.0%     100.0%
Cost of Sales...............................................     80.9       81.9       48.7
                                                               ------     ------     ------
Gross profit................................................     19.1       18.1       51.3
Operating expenses:
  Sales and marketing.......................................    141.1      119.5      153.7
  Research and development..................................     75.2       56.3      102.6
  General and administrative................................     26.9       25.3       31.0
  Amortization of intangibles...............................      7.4        4.2        6.9
  Restructuring and Other Charges...........................     28.0         --         --
                                                               ------     ------     ------
Operating loss..............................................   (259.5)    (187.2)    (242.9)
Interest income, net........................................     10.1       14.2       13.9
Other income (expense)......................................      0.7      285.8        0.0
                                                               ------     ------     ------
Income (loss) before income taxes...........................   (248.7)     112.8     (229.0)
Income taxes provision (benefit)............................    (11.2)       8.6        0.0
                                                               ------     ------     ------
Income (loss) from continuing operations....................   (237.4)     104.2     (229.0)
Income (loss) from discontinued operations, net of tax......    (36.9)      (4.2)      77.7
                                                               ------     ------     ------
Net income (loss)...........................................   (274.4)     100.0     (151.3)
                                                               ======     ======     ======
</Table>

<Table>
<Caption>
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Domestic sales..............................................     63.6%      80.8%      86.0%
Export sales to:
  Europe....................................................     25.4        7.6        8.3
  Canada....................................................      4.0        2.7        0.1
  Asia......................................................      6.3        7.4        5.6
  Latin America.............................................      0.7        1.5        0.0
                                                               ------     ------     ------
Net sales...................................................    100.0%     100.0%     100.0%
                                                               ======     ======     ======
</Table>

2001 COMPARED WITH 2000

NET SALES

    Net sales decreased 28.1% to $16.7 million in 2001 from $23.2 million in
2000. The decrease in net sales is primarily due to the fact that the decline in
our maturing SecureCom product line was greater than the growth in our more
recently introduced product lines, SecureNet Pro and our PDS appliances. In
addition, the economic decline in technology spending for large enterprise and
federal customers during 2001 contributed to the decrease in our net sales for
the period.

    Export sales in 2001 increased to $6.1 million, or 36.4% of net sales,
compared to $4.5 million, or 19.2% of net sales in 2000 primarily due to greater
international acceptance of our security products.

    Sales to iGov.com in 2001 and 2000 were 5.4% and 14.2%, respectively of net
sales. Sales to TRW in 2001 and 2000 were 7.9% and 24.1%, respectively of net
sales. In addition, a portion of our sales to iGov.com, TRW and other
corporations were resold by those organizations to various agencies of the U.S.
government.

                                       20
<Page>
GROSS PROFIT

    Gross profit decreased 23.9% to $3.2 million in 2001 from $4.2 million in
2000. As a percentage of net sales, gross profit increased to 19.1% for 2001
from 18.1% in 2000. This increase is primarily associated to a decrease in our
operations infrastructure spending, which includes operations management, supply
chain management, purchasing, quality, order entry, planning and other related
functions.

    Cost of Sales in 2001 includes a $1.3 million second quarter write-off of
SecureCom inventory as demand has shifted to our new intrusion detection and
security appliance product lines. Absent this write-off, gross profit would have
been $4.5 million or 27.2% as a percentage of net sales.

    Gross profit as a percentage of net sales is impacted by several factors,
including shifts in product mix, changes in channels of distribution, sales
volume, fluctuations in manufacturing costs, pricing strategies, and
fluctuations in sales of integrated third-party products.

SALES AND MARKETING

    Sales and marketing expenses decreased 15.1% to $23.6 million in 2001 from
$27.7 million in 2000 as we restructured our sales force, including headcount
reductions, to accommodate the decline in information technology spending. As a
percentage of net sales, sales and marketing expenses increased to 141.1% in
2001 from 119.5% in 2000. We expect sales and marketing expenses to decrease in
2002 compared to 2001 as we recognize the full benefit from restructuring
actions taken throughout 2001. We also expect sales and marketing expenses, as a
percentage of net sales, to decrease in 2002 compared to 2001.

RESEARCH AND DEVELOPMENT

    Research and development expenses decreased 4.0% to $12.5 million, or 75.2%
of net sales, in 2001 compared to $13.1 million, or 56.3% of net sales, in 2000
as we reduced headcount in our engineering department to accommodate the decline
in information technology spending and eliminated engineering efforts with
regards to our SecureCom product family. Our research and development costs are
expensed in the period in which they are incurred. We expect research and
development expenses to decrease in 2002 compared to 2001 as we recognize the
full benefit from restructuring actions taken throughout 2001. The Company
expects research and development, as a percentage of net sales, to decrease in
2002 compared to 2001.

GENERAL AND ADMINISTRATIVE

    General and administrative expenses, excluding amortization expenses,
decreased 23.6% to $4.5 million in 2001 from $5.9 million in 2000 as we reduced
headcount in our support functions to reduce costs. As a percentage of net
sales, general and administrative expenses increased to 26.9% in 2001 from 25.3%
in 2000. We expect general and administration expenses to decrease in 2002
compared to 2001 as we recognize the full benefit of restructuring actions taken
throughout 2001.

AMORTIZATION OF INTANGIBLES

    Amortization of intangibles increased 26.5% to $1.2 million in 2001 from
approximately $1.0 million in 2000, due to the acquisition of MimeStar in
June 2000. Amortization expense in 2001 reflects a full year amortization of
MimeStar intangibles. Absent any acquisitions or impairment of MimeStar
intangibles, we expect amortization of intangibles to be $0.8 million in 2002.

                                       21
<Page>
RESTRUCTURING CHARGES

    Demand continued to shift to our new intrusion detection and security
appliance product lines during 2001, and as such, we streamlined operations and
activities that are not aligned with these core markets and strategies. This
shift in demand resulted in a charge of $3.1 million to recognize the impairment
of intangible assets (primarily developed technology) related to our
SecurityAnalyst and SecureEnterprise product lines. We also recorded
restructuring charges of $1.3 million for severance as a result of reductions in
force affecting 150 employees and $0.2 million for early termination of excess
lease space. Substantially all severance obligations and the lease termination
payment were paid prior to December 31, 2001.

    Pursuant to these restructuring actions, we reduced operating expenses,
excluding restructuring charges and amortization, 48.4% from $14.1 million in
the first quarter of 2001 to $7.3 million in the fourth quarter of 2001.
Comparing first quarter 2001 to fourth quarter 2001 operating expense
categories, sales and marketing reduced 44.7% from $8.0 million to
$4.4 million, research and development reduced 51.5% from $4.3 million to
$2.1 million and general and administrative reduced 57% from $1.8 million to
$0.8 million, respectively. We expect operating expenses, excluding amortization
and any additional restructuring charges, to be less than $7.0 million in the
first quarter of 2002.

INTEREST INCOME, NET

    Net interest income decreased 48.9% to $1.7 million in 2001 from
$3.3 million in 2000 primarily due to a decrease in average cash and
interest-bearing investment balances. As a percentage of net sales, net interest
income was 10.1% and 14.2% in 2001 and 2000, respectively. We expect net
interest income to decrease in 2002 compared to 2001 as we expect our average
cash and interest-bearing investment balances to decline for 2002 when compared
to 2001. Net interest income will vary in the future based on our cash flow and
rate of return on investments.

INCOME TAXES

    Our effective income tax rate was a benefit of 4.8% in 2001 compared to an
income tax rate of 7.6% in 2000. We were able to carryback our 2001 net
operating loss to 2000 and expect to recover $2.8 million of income taxes, which
we expect to receive by June 30, 2002. We also incurred a $475 thousand foreign
tax expense related to the sale of the LAN business. These two items were the
primary contributors to a $1.8 million tax benefit for 2001. See Note 8 of the
Notes to Consolidated Financial Statements.

2000 COMPARED WITH 1999

NET SALES

    Net sales increased 191.5% to $23.2 million in 2000 from $8.0 million in
1999. Our increased revenue was attributed to several factors including:
increased sales in our SecureCom product line, SecurityAnalyst availability for
all of 2000 compared to only the fourth quarter of 1999, and new product
introductions of SecureNet Pro and PDS 2100.

    Export sales in 2000 increased to $4.5 million, or 19.2% of net sales,
compared to $1.1 million, or 14.0% of net sales in 1999 primarily due to greater
international acceptance of our security products.

    Sales to iGov.com in 2000 and 1999 were 14.2% and 21.3%, respectively of net
sales. Sales to TRW in 2000 and 1999 were 24.1% and 7.4%, respectively of net
sales. Sales to AT&T in 2000 and 1999 were 0.2% and 10.9%, respectively of net
sales. Sales to Federal Data in 2000 and 1999 were 1.9% and 16.0%, respectively
of net sales. Sales to Comstor in 2000 and 1999 were 0.0% and 12.1%,
respectively of net sales. In addition, a portion of our sales to iGov.com, TRW,
Federal Data and other corporations were resold by those organizations to
various agencies of the U.S. government.

                                       22
<Page>
GROSS PROFIT

    Gross profit increased 2.8% to $4.2 million in 2000 from $4.1 million in
1999. As a percentage of net sales, gross profit decreased to 18.1% for 2000
from 51.3% in 1999. This decrease is primarily associated to an increase in our
operations infrastructure, which includes operations management, supply chain
management, purchasing, quality, order entry, planning and other related
functions as well as certain period costs associated with starting up new
products and processes.

    Gross profit as a percentage of net sales is impacted by several factors,
including shifts in product mix, changes in channels of distribution, sales
volume, fluctuations in manufacturing costs, pricing strategies, and
fluctuations in sales of integrated third-party products.

SALES AND MARKETING

    Sales and marketing expenses increased 126.7% to $27.7 million in 2000 from
$12.2 million in 1999 as we expanded our sales and marketing programs and staff
to support more products and new channels. As a percentage of net sales, sales
and marketing expenses decreased to 119.5% in 2000 from 153.7% in 1999.

RESEARCH AND DEVELOPMENT

    Research and development expenses increased 60.0% to $13.1 million, or 56.3%
of net sales, in 2000 compared to $8.2 million, or 102.6% of net sales, in 1999.
Much of this increase was to support product development of new products
including SecureNet Pro, SecurityAnalyst and the PDS 2100. Our research and
development costs are expensed in the period in which they are incurred.

GENERAL AND ADMINISTRATIVE

    General and administrative expenses, excluding amortization expenses,
increased 137.8% to $5.9 million in 2000 from $2.5 million in 1999 primarily due
to the shift of general and administrative personnel from our discontinued
operations to our continuing operations. As a percentage of net sales, general
and administrative expenses decreased to 25.3% in 2000 from 31.0% in 1999.

AMORTIZATION OF INTANGIBLES

    Amortization of intangibles increased 78.2% to approximately $1.0 million in
2000 from approximately $0.5 million in 1999, due to the acquisition of MimeStar
in June 2000.

INTEREST INCOME, NET

    Net interest income increased 199.0% to $3.3 million in 2000 from
$1.1 million in 1999 primarily due to an increase in average cash and
interest-bearing investment balances related to our sale of Alteon WebSystems'
common stock, generating gross proceeds of $67.1 million in the first quarter of
2000. As a percentage of net sales, net interest income was 14.2% and 13.9% in
2000 and 1999, respectively.

INCOME TAXES

    Our effective income tax rate was 7.6% in 2000 compared to an income tax
rate of 0% in 1999. We fully utilized our net operating loss carryback in 1998.
We did not record an income tax benefit in 1999 related to the net operating
losses that can be carried forward to offset taxable income in future years. Due
to our sale of Alteon WebSystems' common stock in 2000, we recognized the tax
benefit of the 1999 net operating loss carryforward in 2000. See Note 8 of the
Notes to Consolidated Financial Statements.

                                       23
<Page>
LIQUIDITY AND CAPITAL RESOURCES

    Our principal sources of liquidity at December 31, 2001 were $15.8 million
of cash and cash equivalents and $4.7 million of short-term investments. As of
December 31, 2001, we do not hold investments with a stated maturity beyond one
year. Working capital at December 31, 2001 was $25.2 million compared to
$52.5 million as of December 31, 2000.

    Net cash used in continuing operations in 2001 was $28.9 million, primarily
due to an operating loss for the year, an increase in income taxes receivable
and a decrease in accounts payable and accrued expenses, partially offset by
depreciation and amortization, and a decrease in accounts receivable and
inventories. Future fluctuations in accounts receivable, inventory balances and
accounts payable will be dependent upon several factors, including but not
limited to quarterly sales, timely collection of accounts receivable, and the
accuracy of our forecasts of product demand and component requirements.

    During 2001, our cash, cash equivalents and investments declined
$25.0 million from $45.4 million on December 31, 2000 to $20.4 million on
December 31, 2001. During 2001 we implemented various cost reduction programs
reducing operating expenses, excluding these restructuring and cost reductions,
from $14.4 million in the first quarter of 2001 to $7.7 million in the fourth
quarter of 2001. Based on our current expectations, the Company will incur
operating losses and further usage of cash resources during 2002, although at a
reduced rate when compared to 2001.

    Net cash provided by investing activities of continuing operations in 2001
was $19.7 million, which consisted of the net proceeds of $20.4 million from
maturities and purchases of available for sale securities and the purchase of
property and equipment of $0.7 million.

    Net cash provided by financing activities of continuing operations in 2001
was $0.4 million as a result of the issuance of common stock upon the exercise
of employee stock options.

    Net cash provided by discontinued operations in 2001 was $4.1 million, which
consisted primarily of the net proceeds of the sale of our legacy local area
networking business partially offset by losses incurred in the discontinued
operations.

    At December 31, 2001, we did not have any material commitments for capital
expenditures. During 2001, we funded our operations through the use of available
cash, cash equivalents and investments.

    Although we believe we have sufficient cash resources to finance our
operations and expected capital expenditures for the next twelve months, the
sufficiency of our cash resources may depend to a certain extent on general
economic, financial, competitive or other factors beyond our control. Moreover,
despite actions to reduce our costs and improve our profitability, we expect our
operating losses and net operating cash outflows to continue during 2002. As a
result, we may not be able to achieve the revenue and gross margin objectives
necessary to achieve positive cash flow or profitability without obtaining
additional financing. We do not currently have any arrangements for financing,
and we may not be able to secure additional debt or equity financing on terms
acceptable to us, or at all, at the time when we need such funding. If our
business does not generate sufficient cash flow from operations and sufficient
future financings are not available, we may not be able to operate or grow our
business, pay our expenses when due or fund our other liquidity needs.

    We intend to explore the possible acquisitions of businesses, products and
technologies that are complementary to our existing business. We are continuing
to identify and prioritize additional security technologies which we may wish to
develop, either internally or through the licensing or acquisition of

                                       24
<Page>
products from third parties. While we engage from time to time in discussions
with respect to potential acquisitions, there can be no assurances that any such
acquisitions will be made or that we will be able to successfully integrate any
acquired business. In order to finance such acquisitions, it may be necessary
for us to raise additional funds through public or private financings. Any
equity or debt financings, if available at all, may be on terms which are not
favorable to us and, in the case of equity financings, may result in dilution to
our stockholders.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    Foreign Exchange. Our revenue originating outside the U.S. in 2001, 2000 and
1999 was 36.4%, 19.2% and 14.0% of total revenues, respectively. Revenues
generated from the European region in 2001, 2000 and 1999 were 25.4%, 7.6% and
8.3% of total revenues, respectively. Revenues generated from the Asia region in
2001, 2000 and 1999 were 6.3% 7.4% and 5.6% of total revenues, respectively.
International sales are generated primarily from our foreign sales subsidiaries
in the local countries and are typically denominated in U.S. dollars. These
subsidiaries incur most of their expenses in the local currency.

    Our international business is subject to risks typical of an international
business, including, but not limited to: differing economic conditions, changes
in political climate, differing tax structures, import and export regulations,
other regulations and restrictions, and foreign exchange rate volatility.
Accordingly, our results could be materially adversely impacted by changes in
these or other factors. The effect of foreign exchange rate fluctuations on our
business in 2001, 2000 and 1999 was not material.

    Interest Rates. We invest our cash in a variety of financial instruments,
including bank time deposits, fixed rate obligations of corporations,
municipalities, and state and national governmental entities and agencies. These
investments are denominated in U.S. dollars. Cash balances in foreign currencies
overseas are operating balances and are invested in short-term time deposits of
the local operating bank.

    Interest income on our investments is carried in "Interest income, net". We
account for our investment instruments in accordance with Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" ("SFAS 115"). All of the cash equivalents and short-term
investments are treated as available-for-sale under SFAS 115.

    Investments in fixed rate interest earning instruments carry a degree of
interest rate risk. Fixed rate securities may have their fair market value
adversely impacted due to a rise in interest rates. Due in part to these
factors, our future investment income may fall short of expectations due to
changes in interest rates or we may suffer losses in principal if forced to sell
securities which have seen a decline in market value due to changes in interest
rates. Our investment securities are held for purposes other than trading. The
weighted-average interest rate on investment securities at December 31, 2001 was
5.4%. The fair value of investments held at December 31, 2001 approximated
amortized cost.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

    The information required by this item is included in Part IV Item 14(a)(1
and 2).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.

    Not applicable.

                                       25
<Page>
                                    PART III

    Certain information required by Part III is omitted from this Form 10-K
because we will file a definitive Proxy Statement for our 2002 annual meeting of
stockholders pursuant to Regulation 14A (the "Proxy Statement") no later than
120 days after the end of the fiscal year covered by this Form 10-K, and certain
information to be included therein is incorporated herein by reference.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF INTRUSION INC..

    The information regarding Directors and Executive Officers of
Intrusion Inc. appearing under the captions "Election of Directors", "Compliance
with Section 16 Reporting Requirements" and "Executive Officers" contained in
the Proxy Statement is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

    The information set forth under the caption "Executive Compensation"
contained in the Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

    The information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" contained in the Proxy Statement is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    The information set forth under "Certain Transactions with Management"
contained in the Proxy Statement is incorporated herein by reference.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

    (a) 1. CONSOLIDATED FINANCIAL STATEMENTS.

    The following consolidated financial statements of Intrusion Inc. and
subsidiaries, are submitted as a separate section of this report (See F-pages,
and are incorporated by reference in Item 8:

<Table>
<Caption>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
Report of Independent Auditors..............................    F-1
Consolidated Balance Sheets at December 31, 2001 and 2000...    F-2
Consolidated Statements of Operations for the years ended
  December 31, 2001, 2000 and 1999..........................    F-3
Consolidated Statements of Stockholders' Equity for the
  years ended December 31, 2001, 2000 and 1999..............    F-4
Consolidated Statements of Cash Flows for the years ended
  December 31, 2001, 2000 and 1999..........................    F-5
Notes to Consolidated Financial Statements..................    F-6
</Table>

    2.  FINANCIAL STATEMENT SCHEDULES.

<Table>
<Caption>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
Schedule II--Valuation and Qualifying Accounts..............    S-1
</Table>

    All other schedules are omitted because they are either not required or not
applicable or the required information is shown in the Consolidated Financial
Statements or Notes thereto.

                                       26
<Page>
    (b) REPORTS ON FORM 8-K.

    On November 5, 2001 we filed a Current Report on Form 8-K (Item 5) dated
November 1, 2001 in order to report the Company's name change from
Intrusion.com, Inc. to Intrusion Inc. effective November 1, 2001.

    (c) EXHIBITS

    The following Exhibits are filed herewith pursuant to Item 601 of
Regulation S-K or incorporated herein by reference to previous filings as noted:

<Table>
<Caption>
       EXHIBIT
       NUMBER                              DESCRIPTION OF EXHIBIT
- ---------------------   ------------------------------------------------------------
<S>                     <C>
 2.1       (6)          Certificate of Ownership and Merger Merging Intrusion.com,
                        Inc. into Intrusion Inc.
 3.1       (6)          Amended and Restated Certificate of Incorporation of the
                        Registrant.
 3.2       (5)          Bylaws of the Registrant.
 4.1       (5)          Specimen Common Stock Certificate.
10.1       (1)          Lease Agreement, dated September 12, 1989, between G.D.A.F.
                        Associates and the Registrant for the Registrant's
                        headquarters.
10.2       (1)          1983 Incentive Stock Option Plan of the Registrant, as
                        amended.
10.3       (1)          1987 Incentive Stock Option Plan of the Registrant, as
                        amended.
10.4       (1)          Form of Indemnification Agreement.
10.5       (6)          1995 Stock Option Plan of the Registrant as amended April
                        26, 2001.
10.6       (2)          1995 Non-Employee Directors Stock Option Plan of the
                        Registrant.
10.7       (3)          Supplemental Lease Agreement, dated March 7, 1995, between
                        G.D.A.F. Assoc., subsequently assigned to CIIF Assoc. II
                        Limited Partnership, Landlord, and the Registrant, as
                        Tenant, relative to the Registrant's headquarters.
10.8       (4)          Registration Rights Agreement, dated as of September 25,
                        1998, by and between the Registrant and Science Applications
                        International Corporation.
10.9       (4)          Stockholder and Voting Agreement, dated as of September 25,
                        1998, by and among Science Applications International
                        Corporation, the Registrant and certain stockholders of the
                        Registrant.
10.10      (4)          Strategic Alliance Agreement, dated as of September 25,
                        1998, by and between Science Applications International
                        Corporation and the Registrant.
10.11      (4)          Software Royalty, Grant Back and Improvements License
                        Agreement, dated as of September 25, 1998, by and between
                        Science Applications International Corporation and the
                        Registrant.
10.12      (4)          PartnersPlus Agreement, dated September 25, 1998, by and
                        between the Registrant and Science Applications
                        International Corporation.
10.13      (5)          Amended and Restated 401(k) Savings Plan of the Registrant.
10.14      (5)          1997 Employee Stock Purchase Plan of the Registrant, as
                        amended January 17, 2001.
10.15      (6)          Resignation Agreement and General Release dated November 28,
                        2001 with Timothy W. Kinnear.
21         (6)          List of Subsidiaries of the Registrant.
23         (6)          Consent of Independent Auditors.
</Table>

- ------------------------

(1) Filed as an Exhibit in the Registrant's Registration Statement on Form S-1,
    as amended (File No. 33-6899) which was declared effective on May 21, 1992,
    by the Securities and Exchange Commission, which Exhibit is incorporated
    herein by reference.

(2) Filed as an Exhibit to the Registrant's Definitive Proxy Statement on
    Schedule 14A in connection with the solicitation of proxies for its 1995
    Annual Meeting of Stockholders, which Exhibit is incorporated herein by
    reference.

                                       27
<Page>
(3) Filed as an Exhibit in the Registrant's Annual Report on Form 10-K, for the
    fiscal year ended December 31, 1995, which Exhibit is incorporated herein by
    reference.

(4) Filed as an Exhibit in the Registrant's Current Report on Form 8-K (Item 5),
    dated October 13, 1998, which Exhibit is incorporated herein by reference.

(5) Filed as an Exhibit in the Registrants' Annual Report on Form 10-K, for the
    fiscal year ended December 31, 2000, which Exhibit is incorporated herein by
    reference.

(6) Filed herewith.

                                       28
<Page>
                           ANNUAL REPORT ON FORM 10-K
                                 ITEM 14(A)(1)
                              FINANCIAL STATEMENTS
                          YEAR ENDED DECEMBER 31, 2001
                                 INTRUSION INC.
                               RICHARDSON, TEXAS

<Page>
                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders,

Intrusion Inc.

    We have audited the accompanying consolidated balance sheets of
Intrusion Inc., and subsidiaries (the "Company") as of December 31, 2001 and
2000, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period ended
December 31, 2001. Our audits also included the financial statement schedule
included in the Index at Item 14(a). These financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of
Intrusion Inc., and its subsidiaries at December 31, 2001 and 2000, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

                                          [LOGO]

Dallas, Texas
January 17, 2002

                                      F-1
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                    (IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS)

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
ASSETS
Current Assets:
  Cash and cash equivalents.................................  $ 15,783   $20,345
  Short-term investments....................................     4,652    17,506
  Accounts receivable, net of allowance for doubtful
    accounts And returns of $797 in 2001 and $919 in 2000...     5,206     6,887
  Income taxes receivable...................................     2,779     1,743
  Inventories...............................................     5,016     8,359
  Deferred taxes--current...................................        --     3,764
  Other current assets......................................       601     1,714
  Net current assets of discontinued operations.............        --     3,958
                                                              --------   -------
Total current assets........................................    34,037    64,276
Property and Equipment
  Machinery and equipment...................................    11,484    13,223
  Furniture and fixtures....................................     1,433     1,573
  Leasehold improvements....................................       962     1,125
                                                              --------   -------
                                                                13,879    15,921
  Accumulated depreciation..................................   (10,276)   (8,787)
                                                              --------   -------
                                                                 3,603     7,134
Long-term investments.......................................        --     7,575
Goodwill and intangible assets, net.........................     3,807     7,634
Other assets................................................       107       361
Net non-current assets from discontinued operations.........       741     5,434
                                                              --------   -------
TOTAL ASSETS................................................  $ 42,295   $92,414
                                                              ========   =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued expenses.....................  $  6,000   $ 9,908
  Deferred revenue..........................................     1,658     1,316
  Current liabilities--discontinued operations..............     1,139       562
                                                              --------   -------
Total current liabilities...................................     8,797    11,786
Deferred taxes--noncurrent..................................        --     1,841
                                                              --------   -------
TOTAL LIABILITIES...........................................  $  8,797   $13,627
                                                              ========   =======
Commitments and contingencies...............................        --        --
Stockholders' Equity:
  Preferred stock, $.01 par value: Authorized shares--5,000
    No shares issued and outstanding........................        --        --
  Common stock, $.01 par value: Authorized shares--80,000
    Issued shares--20,649 in 2001 and 20,525 in 2000
    Outstanding shares--20,609 in 2001 and 20,485 in 2000...       206       205
  Additional paid-in-capital................................    47,320    46,916
  Common stock held in Treasury, at cost--40 shares.........      (362)     (362)
  Retained earnings (accumulated deficit)...................   (13,327)   32,453
  Accumulated other comprehensive loss......................      (339)     (425)
                                                              --------   -------
Total stockholders' equity..................................    33,498    78,787
                                                              --------   -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................  $ 42,295   $92,414
                                                              ========   =======
</Table>

                            See accompanying notes.

                                      F-2
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net sales...................................................  $ 16,685   $23,210    $  7,963
Cost of sales...............................................    13,490    19,009       3,877
                                                              --------   -------    --------
Gross profit................................................     3,195     4,201       4,086
Operating expenses:
  Sales and marketing.......................................    23,550    27,740      12,236
  Research and development..................................    12,549    13,073       8,171
  General and administrative................................     4,481     5,865       2,466
  Amortization of intangibles...............................     1,233       975         547
  Restructuring costs.......................................     4,673        --          --
                                                              --------   -------    --------
Operating loss..............................................   (43,291)  (43,452)    (19,334)
Interest income, net........................................     1,687     3,301       1,104
Other income (expense)......................................       112    66,335          --
                                                              --------   -------    --------
Income (loss) from continuing operations before income
  Taxes.....................................................   (41,492)   26,184     (18,230)
Income taxes provision (benefit)............................    (1,877)    1,999          --
                                                              --------   -------    --------
Income (loss) from continuing operations....................   (39,615)   24,185     (18,230)
Income (loss) from discontinued operations, net of tax......    (6,165)     (974)      6,190
                                                              --------   -------    --------
Net income (loss)...........................................  $(45,780)  $23,211    $(12,040)
                                                              ========   =======    ========
Basic earnings (loss) per share, continuing operations......  $  (1.93)  $  1.23    $  (0.98)
                                                              ========   =======    ========
Diluted earnings (loss) per share, continuing Operations....  $  (1.93)  $  1.18    $  (0.98)
                                                              ========   =======    ========
Basic earnings (loss) per share.............................  $  (2.23)  $  1.18    $  (0.65)
                                                              ========   =======    ========
Diluted earnings (loss) per share...........................  $  (2.23)  $  1.13    $  (0.65)
                                                              ========   =======    ========
Weighted average shares outstanding
  --Basic...................................................    20,565    19,624      18,565
                                                              ========   =======    ========
  --Diluted.................................................    20,565    20,478      18,565
                                                              ========   =======    ========
</Table>

                            See accompanying notes.

                                      F-3
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
NUMBER OF SHARES--ISSUED
  Balance, beginning of year................................    20,525     18,623     18,513
  Issuance of common stock under warrants, stock option and
    purchase Plans..........................................       124      1,902        110
                                                              --------   --------   --------
  Balance, end of year......................................    20,649     20,525     18,623
                                                              --------   --------   --------
NUMBER OF SHARES--OUTSTANDING
  Balance, beginning of year................................    20,485     18,583     18,513
  Issuance of common stock under warrants, stock option and
    purchase Plans..........................................       124      1,902        110
  Repurchase of common stock into treasury..................        --         --        (40)
                                                              --------   --------   --------
  Balance, end of year......................................    20,609     20,485     18,583
                                                              --------   --------   --------
COMMON STOCK
  Balance, beginning of year................................  $    205   $    186   $    185
  Issuance of common stock under warrants, stock option and
    purchase Plans..........................................         1         19          1
                                                              --------   --------   --------
  Balance, end of year......................................  $    206   $    205   $    186
                                                              --------   --------   --------
ADDITIONAL PAID-IN CAPITAL
  Balance, beginning of year................................  $ 46,916   $ 29,996   $ 29,551
  Issuance of common stock under warrants, stock option and
    purchase Plans..........................................       396     15,312        378
  Issuance of common stock for MimeStar acquisition.........        --      1,000         --
  Tax benefit derived from exercise of employee stock
    options.................................................         8        608         67
                                                              --------   --------   --------
  Balance, end of year......................................  $ 47,320   $ 46,916   $ 29,996
                                                              --------   --------   --------
TREASURY SHARES
  Balance, beginning of year................................  $   (362)  $   (362)  $     --
  Purchase of treasury shares...............................        --         --       (362)
                                                              --------   --------   --------
  Balance, end of year......................................  $   (362)  $   (362)  $   (362)
                                                              --------   --------   --------
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
  Balance, beginning of year................................  $   (425)  $ 43,692   $   (323)
  Foreign currency translation adjustment (a)...............        86        (34)       (68)
  Unrealized gain from securities available for sale (b)....        --    (44,083)    44,083
                                                              --------   --------   --------
  Balance, end of year......................................  $   (339)  $   (425)  $ 43,692
                                                              --------   --------   --------
NOTE RECEIVABLE FROM STOCKHOLDER
  Balance, beginning of year................................  $     --   $ (1,177)  $ (1,189)
  Repayments on stockholder loan............................        --      1,177         12
                                                              --------   --------   --------
  Balance, end of year......................................  $     --   $     --   $ (1,177)
                                                              --------   --------   --------
RETAINED EARNINGS (ACCUMULATED DEFICIT)
  Balance, beginning of year................................  $ 32,453   $  9,242   $ 21,282
  Net income (loss) (c).....................................   (45,780)    23,211    (12,040)
                                                              --------   --------   --------
  Balance, end of year......................................  $(13,327)  $ 32,453   $  9,242
                                                              --------   --------   --------
TOTAL STOCKHOLDERS' EQUITY..................................  $ 33,498   $ 78,787   $ 81,577
                                                              ========   ========   ========
TOTAL COMPREHENSIVE INCOME (LOSS) (A+B+C)...................  $(45,694)  $(20,906)  $ 31,975
                                                              ========   ========   ========
</Table>

                            See accompanying notes.

                                      F-4
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Operating Activities:
  Income (loss) from continuing operations..................  $(39,615)  $ 24,185   $(18,230)
  Adjustments to reconcile income (loss) from continuing
    operations to net cash used in operating activities:
    Sale of property and equipment..........................        --         --         (7)
    Gain on sale of available for sale security.............        --    (66,355)        --
    Depreciation and amortization...........................     4,369      4,555      3,840
    Impairment of intangible assets.........................     3,109         --         --
    Deferred income tax (benefit) expense...................     1,923     (4,219)       763
    Provision for doubtful accounts and returns.............        --         --         85
    Changes in operating assets and liabilities:
      Accounts receivable...................................     1,681     (1,483)       776
      Income tax receivable.................................    (1,036)    (1,571)     4,749
      Inventories...........................................     3,343     (1,625)    (1,430)
      Other assets..........................................       851          2     (1,135)
      Accounts payable and accrued expenses.................    (3,905)    (2,118)     4,201
      Deferred revenue......................................       374       (161)    (1,084)
                                                              --------   --------   --------
Net cash used in operating activities of continuing
  operations................................................   (28,906)   (48,790)    (7,472)
Investing Activities:
  Purchase of MimeStar, Inc.................................        --     (4,000)        --
  Proceeds from sale of property and equipment..............        --         --      2,611
  Proceeds from sale of available for sale security.........        --     67,055         --
  Purchases of available for sale investments...............   (14,369)   (57,504)   (16,372)
  Maturities of available for sale investments..............    34,798     41,273     12,282
  Purchases of property and equipment.......................      (680)    (6,412)    (1,446)
                                                              --------   --------   --------
Net cash provided by (used in) investing activities of
  continuing operations.....................................    19,749     40,412     (2,925)
Financing Activities:
  Note receivable secured by company's common stock.........        --      1,177         12
  Exercise of warrants and employee stock options...........       405     15,939        445
  Purchase of treasury stock................................        --         --       (362)
  Other.....................................................        (3)        13         (9)
                                                              --------   --------   --------
Net cash provided by financing activities of continuing
  operations................................................       402     17,129         86
                                                              --------   --------   --------
Net cash provided by (used in) discontinued operations......     4,107       (974)     6,190
Effect of foreign currency translation adjustment on cash
  and cash Equivalents......................................        86        (34)       (68)
Net increase (decrease) in cash and cash equivalents........    (4,562)     7,743     (4,189)
Cash and cash equivalents at beginning of period............    20,345     12,602     16,791
                                                              --------   --------   --------
Cash and cash equivalents at end of period..................  $ 15,783   $ 20,345   $ 12,602
                                                              ========   ========   ========
</Table>

                            See accompanying notes.

                                      F-5
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

    We develop, market and support a family of security software and appliances
that address vital security issues facing organizations deploying business
applications over the Internet or internally via Intranets. We currently provide
e-security solutions including intrusion detection systems, security assessment
systems, virtual private network appliances and firewall appliances.

    We market and distribute our products through a direct sales force to
end-users, distributors and by numerous domestic and international system
integrators, service providers and value-added resellers. Our end-user customers
include manufacturing, high-technology, telecommunications, retail,
transportation, health care, insurance, entertainment, utilities and energy
companies, government agencies, financial institutions, and academic
institutions.

    We organized in Texas in September 1983 and reincorporated in Delaware in
October 1995. For more than 15 years, we provided local area networking
equipment and were known as Optical Data Systems or ODS Networks. On April 17,
2000, we announced plans to sell, or otherwise dispose of, our networking
divisions, which include our Essential Communications division and our local
area networking assets. In accordance with these plans, we have accounted for
these businesses as discontinued operations. On June 1, 2000, we changed our
name from ODS Networks, Inc. to Intrusion.com, Inc., and our NASDAQ ticker
symbol from ODSI to INTZ to reflect our focus on e-security solutions. On
November 1, 2001, we changed our name from Intrusion.com, Inc. to
Intrusion Inc.

    Our principal executive offices are located at 1101 E. Arapaho Road,
Richardson, Texas 75081, and our telephone number is (972) 234-6400. References
to "we", "us", "our" or "Intrusion Inc." refer to Intrusion Inc. and its
subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the accounts of
Intrusion Inc. and its wholly-owned subsidiaries. Intercompany balances and
transactions have been eliminated in consolidation.

CASH EQUIVALENTS

    Cash and all highly liquid investments purchased with an original or with a
remaining maturity of less than three months as of the balance sheet date are
considered to be cash equivalents.

SHORT-TERM INVESTMENTS

    Short-term investments consist of U.S. government obligations and corporate
securities with maximum maturities of one year. Short-term investments are
classified as available for sale. These investments are valued at market value,
which approximates amortized cost. The difference between fair market value and
amortized cost is not material.

RISK CONCENTRATION

    Financial instruments which potentially subject the Company to
concentrations of credit risk are primarily cash and cash-equivalents,
investments and accounts receivable. The Company places its investments in U.S.
government obligations, corporate securities and money market funds.
Substantially

                                      F-6
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
all of the Company's cash, cash equivalents and investments are maintained with
two major U.S. financial institutions.

    We sell our products to customers in diversified industries worldwide,
primarily in North America, Europe, Asia and Latin America. Fluctuations in
currency exchange rates and adverse economic developments in foreign countries
could adversely effect the Company's operating results. We perform ongoing
credit evaluations of our customers' financial condition and generally require
no collateral. We maintain reserves for potential credit losses and such losses,
in the aggregate, have not exceeded management expectations.

    While we believe that many of the materials used in the production of our
products are generally readily available from a variety of sources, certain
components are available from one or a limited number of suppliers. The
inability of any supplier or manufacturer to fulfill supply requirements of the
Company could impact future results.

INVENTORIES

    Inventories are stated at the lower of cost or market. Cost is computed
using standard cost, which approximates actual cost on a first-in, first-out
basis. Management estimates the allowance required to state inventory at the
lower of cost or market. There is a risk that we will forecast demand for our
products and market conditions incorrectly and produce excess inventories.
Therefore, there can be no assurance that we will not produce excess inventory
and incur inventory lower of cost or market charges in the future.

PROPERTY AND EQUIPMENT

    Property and equipment is stated at cost and depreciated on a straight-line
basis over the estimated useful lives of the assets. Such lives vary from 3 to
20 years. Leasehold improvements are amortized over the shorter of their useful
lives or the terms of the leases. Repair and maintenance costs are expensed as
incurred.

LONG-TERM INVESTMENTS

    Long-term investments consist of U.S. government and corporate obligations
with maturities over one year with a maximum range of up to two years. Long-term
investments are classified as available for sale. These investments are valued
at market value, which approximates amortized cost. The difference between fair
value and amortized cost is not material.

GOODWILL AND OTHER INTANGIBLE ASSETS

    Goodwill represents the excess of purchase price and related direct costs
over the value assigned to the net tangible and specifically identifiable
intangible assets of businesses acquired. Goodwill is being amortized using the
straight-line method over 7 years. Intangibles generally relate to software and
developed technology acquired in a purchase business combination or acquisition
of assets. Intangibles are being amortized over their useful lives, ranging from
3 to 7 years. Annual amortization expense related to goodwill and other
intangible assets for the years ended December 31, 2001 and 2000 was
$1.2 million and $1.0 million, respectively.

                                      F-7
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    We assess whether our goodwill and other intangible assets are impaired
based on the evaluation of undiscounted projected cash flows through the
remaining amortization period. If an impairment exists, the amount of such
impairment is calculated based on the estimated fair value of the asset.

FOREIGN CURRENCY TRANSLATION

    Our international subsidiaries use their local currencies as their
functional currencies. Assets and liabilities are translated at the exchange
rate in effect at the balance sheet date, and income and expense accounts at
average exchange rates during the year. Resulting translation adjustments are
recorded directly to accumulated other comprehensive loss.

ACCOUNTING FOR STOCK OPTIONS

    We have elected to continue to follow APB Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES, (APB 25) and related interpretations in accounting
for our employee stock options. Under APB 25, if the exercise price of an
employee's stock option equals or exceeds the market price of the underlying
stock on the date of grant, no compensation expense is recognized. The Financial
Accounting Standards Board (FASB) has issued SFAS No. 123, ACCOUNTING FOR
STOCK-BASED COMPENSATION, which provides for either recognition or disclosure of
a hypothetical charge for stock options. We did not recognize any charge in our
income statement, but we have provided the required disclosure in Note 9.

NET INCOME PER SHARE

    We report two separate earnings per share numbers, basic EPS and diluted EPS
with additional disclosure made between continuing and discontinued operations.
Diluted EPS includes the dilutive impact of employee stock options and warrants.

REVENUE RECOGNITION

    We generally recognize product revenue upon shipment of product. We accrue
for estimated warranty costs, sales returns and other allowances at the time of
shipment based on our experience. Revenue from maintenance contracts is deferred
and recognized over the contractual period the services are performed. To date,
warranty costs and sales returns have not been material. There is a risk that
technical issues on new products could result in unexpected warranty costs and
returns.

    We recognize software revenue from the licensing of our software products in
accordance with Statement of Position ("SOP") No. 97-2 "Software Revenue
Recognition" and SOP 98-9 "Modification of 97-2, Software Revenue Recognition,
with respect to certain transactions" whereby revenue from the licensing of our
products is not recognized until all four of the following have been met:
i) execution of a written purchase order, license agreement or contract;
ii) shipment of the product has occurred; iii) the license fee is fixed and
determinable; and iv) collectibility is probable. The Company defers and
recognizes maintenance and support revenue over the term of the contract period,
which is generally one year.

    We have signed distribution agreements with distributors in the United
States, Europe and Asia. In general, these relationships are non-exclusive.
Distributors typically maintain an inventory of our products. Under these
agreements, Intrusion Inc. provides certain protection to the distributors for

                                      F-8
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
their inventory of Intrusion Inc. products for price reductions as well as
products that are slow-moving or have been discontinued by the Company.
Recognition of sales to distributors and related gross profits are deferred
until the merchandise is resold by the distributors. However, since we have
legally sold the inventory to the distributor and we no longer have care,
custody or control over the inventory, we recognize the trade accounts
receivable and reduce inventory related to the sale at the time of shipment to
the distributor. Revenue, offset by deferred cost of sales, is included in
deferred revenue in the accompanying financial statements.

ADVERTISING COSTS

    Advertising expense is charged to operations in the period in which such
costs are incurred. Total advertising included in sales and marketing expenses
was $0.5 million, $1.3 million and $0.1 million for the years ended
December 31, 2001, 2000 and 1999, respectively.

RESEARCH AND DEVELOPMENT COSTS

    We incur research and development costs that relate primarily to the
development of new security software, appliances and integrated solutions, and
major enhancements to existing services and products. Research development costs
are comprised primarily of salaries and related benefits expenses, contract
labor and prototype and other related expenses.

    Software development costs are included in research and development and are
expensed as incurred. Statement of Financial Accounting Standards No. 86,
ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED OR OTHERWISE
MARKETED, requires that software development costs incurred subsequent to
reaching technological feasibility be capitalized, if material. If the process
of developing a new product or major enhancement does not include a detailed
program design, technological feasibility is determined only after completion of
a working model. To date, the period between achieving technological feasibility
and the general availability of such software has been short, and the software
development costs qualifying for capitalization have been insignificant.

RESTRUCTURING CHARGES

    Demand continued to shift to our new intrusion detection and security
appliance product lines during 2001, and as such, we streamlined operations and
activities that are not aligned with these core markets and strategies. This
shift in demand resulted in a charge of $3.1 million to recognize the impairment
of intangible assets (primarily developed technology) related to our
SecurityAnalyst and SecureEnterprise product lines. We also recorded
restructuring charges of $1.3 million for severance as a result of reductions in
force affecting 150 employees and $0.2 million for early termination of excess
lease space. Substantially all severance obligations and the lease termination
payment were paid prior to December 31, 2001.

USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Estimates are used for, but not limited
to, the accounting for doubtful

                                      F-9
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
accounts, sales discounts, sales returns, distribution revenue, warranty costs,
inventory obsolescence, depreciation and taxes. Actual results could differ from
these estimates.

INCOME TAXES

    The income tax provision is based on pretax financial accounting income or
loss. We account for income taxes pursuant to SFAS No. 109, ACCOUNTING FOR
INCOME TAXES, which uses the liability method to calculate deferred income
taxes. Deferred tax assets and liabilities are recognized for the expected tax
consequences of temporary differences between the tax basis of assets and
liabilities and their reported amounts. The realization of deferred tax assets
is based on historical tax positions and expectations about future taxable
income. The liability method also requires the recognition of future tax
benefits such as net operating loss carryforwards, to the extent that
realization of such benefits is more likely than not.

RECLASSIFICATION

    Certain amounts in prior year financial statements have been reclassified to
conform with current year presentation.

NEW ACCOUNTING STANDARDS

    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities". SFAS 133 requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at fair
value. Gains or losses resulting from changes in the values of those derivatives
would be accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. SFAS 133, as amended by SFAS 138, is effective
for fiscal years beginning after June 15, 2000. The adoption of SFAS 133 as of
January 1, 2001 did not have a material impact on the financial position or
results of operations of the Company because we do not have any derivatives or
hedges.

    In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible
Assets, effective for fiscal years beginning after December 15, 2001. Under the
new rules, goodwill and intangible assets deemed to have indefinite lives will
no longer be amortized but will be subject to annual impairment tests in
accordance with the statements. Other intangible assets will continue to be
amortized over their useful lives. The company is currently reviewing the impact
of SFAS No. 142 and will be performing a fair-value analysis at a later date in
connection with the adoption of SFAS No. 142 during 2002. We do not expect the
adoption of SFAS No. 142 to have a material impact on our financial position or
results of operations as we have only $0.4 million of goodwill at December 31,
2001.

    In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and supersedes
SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposes Of, and the account and reporting provisions of
APB Opinion No. 30, Reporting the Results of Operations, for a disposal of a
segment of a business. SFAS 144 is effective for fiscal years beginning after
December 15, 2001. We do not expect that adoption of SFAS No. 144 will have a
significant impact on our financial position or results of operations.

                                      F-10
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. BUSINESS COMBINATIONS AND ACQUISITION OF ASSETS

    On September 25, 1998, we completed an acquisition of certain assets from
Science Applications International Corporation ("SAIC"), a privately-held
company in San Diego, California. We acquired certain assets of the Computer
Misuse and Detection System ("CMDS") Division of SAIC and certain other
information security products under development. In exchange for the CMDS
assets, the information security products under development and $1.5 million
dollars in cash, we issued to SAIC 1.6 million shares of the Company's common
stock and warrants to purchase an additional 1.5 million shares of its common
stock. Two separate warrants each grant SAIC the right to purchase 750,000
shares of Intrusion Inc. common stock. The first warrant had an exercise price
of $8.00 per share and a term of 18 months and was exercised on March 23, 2000.
The second warrant had an exercise price of $10.50 per share and a term of
24 months and was exercised on September 22, 2000. Our acquisition has been
accounted for as a purchase of software, in-process research and development and
certain other assets. The transaction value of approximately $6.9 million less
the $1.5 million cash received was allocated to the net assets acquired based on
their estimated fair market value. Assets acquired included approximately
$1.1 million of in-process research and development, $0.1 million of other
intangible assets and approximately $4.2 million of purchased software to be
amortized over seven years on a straight-line basis. In June 2001, we recorded a
restructuring charge of $2.6 million to recognize the impairment of the
remaining net book value of this intangible asset. See "Restructuring Charges"
in Note 2.

    On September 30, 1999, we entered a technology licensing agreement with RSA
Security Inc. ("RSA") under which we are the exclusive licensee of RSA's Kane
Security Products in North America and Europe. The Kane Security Products
include the Kane SecurityAnalyst, a security assessment tool, and the Kane
Security Monitor, a host based intrusion detection tool. We are responsible for
marketing, sales, support, maintenance and development for Kane Security
software. In June 2001, we recorded a restructuring charge of $0.4 million to
recognize the impairment of the remaining net book value of this intangible
asset. See "Restructuring Charges" in Note 2.

    On June 30, 2000, we acquired MimeStar, Inc. ("MimeStar"), a Virginia
corporation. MimeStar developed an advanced, network based intrusion detection
system called SecureNet Pro-TM-. The acquisition, accounted for using the
purchase method, was affected by the merger of a wholly owned subsidiary of the
Company ("Merger Sub") with and into MimeStar, pursuant to an Agreement and Plan
of Merger, by and among the Company, MimeStar, the Merger Sub and the sole
stockholder of MimeStar (the "Merger"). Pursuant to the Merger, the stockholder
of MimeStar received $3 million in cash with an additional $1 million in cash
and 95,969 shares of the Company's common stock (which was valued at
approximately $1 million on the date of the Merger) placed in escrow, payable to
the stockholder of MimeStar within one year subject to indemnification and other
conditions. Transaction costs for this acquisition totaled approximately
$100,000. The acquisition costs of $5.1 million were capitalized as purchased
software, goodwill and other intangibles.

                                      F-11
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. BALANCE SHEET DETAIL (IN THOUSANDS)

INVENTORIES

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Raw materials...............................................  $   661    $ 1,550
Work in process.............................................       --      1,350
Finished products...........................................    4,002      4,231
Demonstration systems.......................................      353      1,228
                                                              -------    -------
Net inventory--continuing operations........................  $ 5,016    $ 8,359
                                                              =======    =======
Net inventory--discontinued operations......................  $    --    $ 3,958
                                                              =======    =======
</Table>

INTANGIBLE ASSETS, NET

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
CMDS purchased software.....................................  $    --    $ 4,136
CMDS intangible asset.......................................       --        135
MimeStar goodwill...........................................      450        450
MimeStar purchased software.................................    3,610      3,610
MimeStar intangible asset...................................    1,040      1,040
                                                              -------    -------
Gross intangibles--continuing operations....................    5,100      9,371
Accumulated amortization....................................   (1,293)    (1,737)
                                                              -------    -------
Net intangibles--continuing operations......................  $ 3,807    $ 7,634
                                                              -------    -------
Net intangibles--discontinued operations....................  $    --    $ 3,935
                                                              =======    =======
</Table>

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Trade accounts payable......................................  $ 3,027    $ 5,892
Accrued sales commissions...................................      202        547
Accrued payroll.............................................      444        437
Accrued incentive bonus.....................................       25        100
Accrued vacation............................................      580        920
Accrued property taxes......................................      230         51
Accrued warranty expense....................................      200        475
Other (individually less than 5% of current liabilities)....    1,292      1,486
                                                              -------    -------
                                                              $ 6,000    $ 9,908
                                                              =======    =======
</Table>

                                      F-12
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. COMMITMENTS AND CONTINGENCIES

LEASES

    We lease office space for our corporate headquarters in Richardson, Texas
under an operating lease, the base term of which expires in February 2005, with
two seven-year options to extend the term of the lease, subject to compliance
with certain conditions. We also lease a separate warehouse facility adjacent to
our headquarters under a lease which expires in June 2002. We lease office space
in Albuquerque, New Mexico for Essential (discontinued operations) under an
operating lease that expires in February 2009. We lease office space in San
Diego, California for a portion of our security software research and
development staff under an operating lease that expires in August 2002. In
addition, we lease office space for our U.S. and international sales and
engineering offices. Total rental expense of $1.9 million, $1.9 million and
$1.8 million was charged to operations during 2001, 2000, and 1999,
respectively.

    Future minimum lease payments consisted of the following on December 31,
2001 (in thousands):

<Table>
<Caption>
                                                              CONTINUING   DISCONTINUED
                                                              OPERATIONS    OPERATIONS
                                                              ----------   ------------
<S>                                                           <C>          <C>
2002........................................................    $1,251        $  169
2003........................................................       974           169
2004........................................................       924           169
2005........................................................       159           169
2006........................................................        --           169
Thereafter..................................................        --           360
                                                                ------        ------
                                                                $3,308        $1,205
                                                                ======        ======
</Table>

6. DISCONTINUED OPERATIONS

    In the second quarter of 2000, we discontinued our networking operations and
accordingly have shown the networking operations as discontinued in the
accompanying financial statements.

    During the first quarter of 2001, we closed the sale of our legacy local
area networking division generating a gain of $2.1 million which was used to
reduce the estimated net realizable value of the net assets of our remaining
discontinued operations, Essential. During the second quarter of 2001, in
response to unfavorable market conditions and efforts to sell Essential, we
recorded additional charges to write down the net assets of Essential to reflect
its current estimated net realizable value of $0.8 million. The $5.0 million
second quarter charge included $0.8 million for operating losses expected to be
incurred between July and the end of the first quarter of 2002 by which time we
expect to have exited, disposed of or otherwise transitioned a majority of our
ownership in Essential.

    In March 2002 we sold our last remaining discontinued operation, Essential
Communications division, for $1 million generating a gain of $0.4 million. Terms
of the sale included transferring $0.7 million in net property, plant and
equipment, $0.1 million in current liabilities and product maintenance
obligations for which $0.4 million is recorded in deferred revenue.

    A condition of the sale was to give Essential Communications personnel
60 days to exit Essential Communications' lease facility, the obligation for
which we retained as part of the sale. Included in the gain on the sale of
Essential Communications is management's estimate of $0.3 million to terminate

                                      F-13
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. DISCONTINUED OPERATIONS (CONTINUED)
this lease agreement, which is equivalent to 2 years' lease and maintenance of
the facility. Successful termination for less than $0.3 million will result in a
greater gain on sale. Termination for more than $0.3 million will reduce the
gain on sale. The contractual term of the lease runs through February 2009 and
remaining contractual lease payments total $1.2 million at December 31, 2001.

    The following represents a summary of assets and liabilities classified as
discontinued operations (in thousands):

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
Discontinued assets and liabilities consist of:               --------   --------
<S>                                                           <C>        <C>
Inventories, net............................................   $   --     $3,958
Property and equipment, net.................................      741      1,499
Intangible assets, net......................................       --      3,935
                                                               ------     ------
  Total discontinued assets.................................   $  741     $9,392
                                                               ======     ======
Deferred revenue............................................      594     $  562
Accrued operating losses....................................   $  545         --
                                                               ------     ------
  Total discontinued liabilities............................   $1,139     $  562
                                                               ======     ======
</Table>

    The following represents a summary of net income (loss) from discontinued
operations (in thousands):

<Table>
<Caption>
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net Sales...................................................  $ 4,693    $16,856    $49,988
Cost of sales...............................................    2,970     10,693     28,227
                                                              -------    -------    -------
Gross profit................................................    1,723      6,163     21,761
Operating expenses..........................................    4,774      7,446     15,578
                                                              -------    -------    -------
Operating profit (loss).....................................   (3,051)    (1,283)     6,183
Net realizable value adjustment.............................   (3,024)         1          7
                                                              -------    -------    -------
Income (loss) before income taxes...........................   (6,076)    (1,282)     6,190
Income tax expense (benefit)................................       89       (308)        --
                                                              -------    -------    -------
Income (loss) from discontinued operations..................  $(6,165)   $  (974)   $ 6,190
                                                              =======    =======    =======
</Table>

    The net realizable value adjustment was recorded in the second quarter of
2001 and was in response to unfavorable market conditions and efforts to sell
Essential. The adjustment reduced the carrying value of Essential to
$0.8 million.

                                      F-14
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. EMPLOYEE BENEFIT PLANS

EMPLOYEE STOCK PURCHASE PLAN

    On April 24, 1997, we adopted an Employee Stock Purchase Plan (the "Purchase
Plan") under which 0.5 million shares of common stock have been reserved for
issuance. Eligible employees may designate not more than 10% of their
compensation to be deducted each pay period for the purchase of common stock
under the Purchase Plan. The Purchase Plan was amended January 17, 2001 to
increase the maximum number of shares that can be purchased per participant from
500 shares to 1,000 shares per offering. Each participant may purchase up to
2,000 shares in any one calendar year. On January 31 and July 31 of each
calendar year, shares of common stock are purchased with the employees' payroll
deductions over the immediately preceding six months at a price per share of 85%
of the lesser of the market price of the common stock on the purchase date or
the market price on the first day of the six-month period. The Purchase Plan
will terminate no later than April 24, 2007. A total of 138,750 shares have been
issued under the Purchase Plan as of December 31, 2001. Subsequent to
December 31, 2001, 34,624 shares of stock were issued under the Purchase Plan
for an aggregate purchase price of approximately $50,550 related to the purchase
period which commenced on August 1, 2001 and ended on January 31, 2002.

EMPLOYEE 401(K) PLAN

    We have adopted a plan known as the Intrusion Inc. 401(k) Savings Plan (the
"Plan") to provide retirement and incidental benefits for our employees. The
Plan covers substantially all employees who meet minimum age and service
requirements. As allowed under Section 401(k) of the Internal Revenue Code, the
Plan provides tax deferred salary deductions for eligible employees.

    The Plan was amended on January 10, 2002 to allow employees to contribute
from 1% to 25% of their annual compensation to the Plan, limited to a maximum
amount as set by the Internal Revenue Service. This limit was increased from
19%. A feature was also added to the Plan to allow participants who are over the
age of 50 to contribute an additional amount of their salary per year, as
defined annually by the Internal Revenue Service. The Company matches employee
contributions at the rate of $0.25 per each $1.00 of contribution on the first
4% of deferred compensation. Company matching contributions to the Plan were
approximately $110,000, $120,000, and $112,000 in 2001, 2000 and 1999,
respectively.

                                      F-15
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. INCOME TAXES

    Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of December 31, 2001 and
2000 are as follows (in thousands):

<Table>
<Caption>
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Deferred tax assets:
  Foreign subsidiaries net operating loss carryforward......  $    374   $   341
  U.S. net operating loss carryforward......................    14,385     1,592
  Minimum tax credit carryforward...........................       607        --
  Book over tax depreciation................................       273       273
  Intangibles...............................................       262       595
  Equity investments........................................       458       458
  Vacation accrual..........................................       261       386
  Allowance for doubtful accounts and returns...............       434       413
  Warranty accrual..........................................        73       174
  Inventory.................................................     2,924     2,615
  Other.....................................................       451       176
                                                              --------   -------
    Deferred tax assets.....................................    20,502     7,023
  Valuation allowance for deferred tax assets...............   (20,502)   (1,932)
                                                              --------   -------
    Deferred tax assets, net of allowance...................        --     5,091
                                                              --------   -------
Deferred tax liabilities:
  Intangibles...............................................        --       668
  Unrealized gain on securities held for sale...............        --        --
  Other.....................................................        --     2,500
                                                              --------   -------
    Total deferred tax liabilities..........................        --     3,168
                                                              --------   -------
Net deferred tax assets (liabilities).......................  $     --   $ 1,923
                                                              ========   =======
Current deferred assets (liabilities).......................  $     --   $ 3,764
Noncurrent deferred assets (liabilities)....................  $     --   $(1,841)
                                                              --------   -------
Net deferred tax assets (liabilities).......................  $     --   $ 1,923
                                                              ========   =======
</Table>

    Deferred tax assets are required to be reduced by a valuation allowance if
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Realization of the future benefits related to the deferred
tax assets is dependent on many factors, including our ability to generate
taxable income within the near to medium term. Management has considered these
factors in determining the valuation allowance in 2001.

                                      F-16
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. INCOME TAXES (CONTINUED)
    Significant components of the provision for income taxes for the years ended
2001, 2000 and 1999 are as follows (in thousands):

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2001       2000       1999
                                                              --------   --------   ---------
<S>                                                           <C>        <C>        <C>
Income tax provision
  Federal:
    Current.................................................  $(4,050)   $ 4,864    $      --
    Deferred................................................    3,063     (5,270)          --
  State:
    Current.................................................     (136)       236           --
    Deferred................................................   (1,140)     1,861           --
  Foreign:
    Current.................................................      475         --           --
                                                              -------    -------    ---------
                                                              $(1,788)   $ 1,691    $      --
                                                              =======    =======    =========
</Table>

    Income tax expense (benefit) is included in the consolidated financial
statements for the years ended 2001, 2000 and 1999 as follows (in thousands):

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2001       2000       1999
                                                              --------   --------   ---------
<S>                                                           <C>        <C>        <C>
Continuing Operations.......................................  $(1,877)    $1,999    $      --
Discontinued Operations.....................................       89       (308)          --
                                                              -------     ------    ---------
                                                              $(1,788)    $1,691    $      --
                                                              =======     ======    =========
</Table>

    The differences between the provision for income taxes and income taxes
computed using the federal statutory rate for the years ended 2001, 2000, and
1999 are as follows (in thousands):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                           ------------------------------
                                                             2001       2000       1999
                                                           --------   --------   --------
<S>                                                        <C>        <C>        <C>
Reconciliation of income tax provision to statutory rate:
  Income tax expense (benefit) at statutory rate.........  $(16,649)  $ 8,716    $(4,131)
  State income taxes, net of federal income tax
    benefit..............................................      (829)    1,393         --
  Change in valuation allowance..........................    18,570    (9,326)     4,075
  Goodwill amortization..................................       578       164        193
  Tax credit carryforwards...............................      (607)     (361)        --
  Other..................................................    (2,851)    1,105       (137)
                                                           --------   -------    -------
                                                           $ (1,788)  $ 1,691    $    --
                                                           ========   =======    =======
</Table>

    At December 31, 2001, we had federal net operating loss carryforwards of
$36.5 million for income tax purposes that begin to expire in 2008. Of this
amount $2.6 million are subject to the ownership change limitations under
Internal Revenue Code Section 382. We also have $71.1 million of state net
operating loss carryforwards. Net operating loss carryforwards of the foreign
subsidiaries of $0.7 million

                                      F-17
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. INCOME TAXES (CONTINUED)
at December 31, 2001 are available indefinitely for offset only against taxable
income generated by the foreign subsidiaries.

    We made income tax payments of $6.2 million and $0.1 million during 2000 and
1999, respectively. We made no federal tax payments during 2001, but received
$3.2 million in tax refunds in 2001, and expect to receive a federal income tax
refund in 2002 of $2.8 million for income taxes paid in 2000.

9. STOCK, STOCK OPTIONS AND WARRANTS

    On September 25, 1998, in connection with our acquisition of certain assets
from Science Applications International Corporation ("SAIC"), we issued to SAIC
1.6 million shares of Intrusion Inc.'s common stock and warrants to purchase an
additional 1.5 million shares of its common stock. Two separate warrants each
granted SAIC the right to purchase 750,000 shares of its common stock. The first
warrant had an exercise price of $8.00 per share and a term of 18 months. The
second warrant had an exercise price of $10.50 per share and a term of
24 months. On March 23, 2000, SAIC exercised the first warrant for 750,000 at an
exercise price of $8.00 per share. On September 22, 2000, SAIC exercised the
remaining 750,000 shares at an exercise price of $10.50 per share.

    On May 7, 1998, in connection with our acquisition of Essential, we issued
approximately 306,000 shares of the Company's common stock for all outstanding
shares of Essential capital stock, and we issued approximately 104,000 stock
options in exchange for all unexpired and unexercised options to acquire
Essential capital stock. At December 31, 2001, there are 26,344 options
outstanding from the Essential assumed options.

    At December 31, 2001, we had four stock-based compensation plans, which are
described below. These plans were developed to retain and attract key employees
and directors.

    We established an Incentive Stock Option Plan in 1983, which provides for
the issuance of options to key employees of the Company to purchase common stock
of the Company. The 1983 Incentive Stock Option Plan was terminated on
November 10, 1993.

    In 1987, an additional Incentive Stock Option Plan was established with
similar provisions to allow for further issuance of options. The 1987 Incentive
Stock Option Plan was terminated on January 26, 1997. The 1983 and 1987 plans
each provided for the issuance of up to 1.2 million shares of common stock upon
exercise of options granted pursuant to the plans.

    In 1995, we adopted the 1995 Stock Option Plan (the "1995 Plan") which
provides for the issuance of up to 1.6 million shares of common stock upon
exercise of options granted pursuant to the 1995 Plan. On April 19, 2000, the
stockholders approved a 850,000 share increase and on April 26, 2001, the
stockholders approved an additional 850,000 share increase to the 1995 Plan.
Therefore, the overall shares available for issuance pursuant to the plan was
increased to 3,300,000 shares. The 1995 Plan provides for the issuance of both
non-qualified and incentive stock options to employees, officers, and
employee-directors of the Company.

    In 1995, we adopted the 1995 Non-Employee Director Stock Option Plan (the
"1995 Non-Employee Director Plan") which provides for the issuance of up to
160,000 shares of common stock upon exercise of options granted pursuant to the
1995 Non-Employee Director Plan. The Plan provides for the issuance of
non-qualified stock options to non-employee directors. No shares have been
issued upon exercise of options granted under the 1995 Non-Employee Director
Plan. Options to

                                      F-18
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK, STOCK OPTIONS AND WARRANTS (CONTINUED)
purchase a total of 100,000 shares of Common Stock are outstanding and options
for 60,000 shares remain available for issuance. Since inception, 120,000 shares
have been granted to directors pursuant to the 1995 Non-Employee Director Plan.
No shares were granted to directors in 2001.

    Common shares reserved for future issuance under all of the stock option
plans and employee stock purchase plans total approximately 3.6 million shares
at December 31, 2001.

    The Compensation Committee of the Board of Directors determines the term of
each option, option exercise price within limits set forth in the plans, number
of shares for which each option is granted and the rate at which each option is
exercisable (generally ratably over three or five years from grant date).
However, the exercise price of any incentive stock option may not be less than
the fair market value of the shares on the date granted (or less than 110% of
the fair market value in the case of optionees holding more than 10% of the
voting stock of the Company), and the term cannot exceed ten years (five years
for incentive stock options granted to holders of more than 10% of the Company's
voting stock).

    A summary of the Company's stock option activity and related information for
the years ended December 31, 2001, 2000 and 1999, is as follows:

<Table>
<Caption>
                                             2001                            2000                            1999
                                 -----------------------------   -----------------------------   -----------------------------
                                                      WEIGHTED                        WEIGHTED                        WEIGHTED
                                                      AVERAGE                         AVERAGE                         AVERAGE
                                 NUMBER OF OPTIONS    EXERCISE   NUMBER OF OPTIONS    EXERCISE   NUMBER OF OPTIONS    EXERCISE
                                   (IN THOUSANDS)      PRICE       (IN THOUSANDS)      PRICE       (IN THOUSANDS)      PRICE
                                 ------------------   --------   ------------------   --------   ------------------   --------
<S>                              <C>                  <C>        <C>                  <C>        <C>                  <C>
Outstanding at beginning of
  year.........................         1,589          $10.03          1,454           $ 7.83          1,683           $7.53
Granted........................         1,578            4.05          1,087            11.60            479            4.95
Exercised......................           (55)           2.75           (275)            4.47            (91)           3.26
Cancelled......................        (1,123)           7.85           (677)           10.10           (617)           6.77
                                       ------                          -----                           -----
Outstanding at end of Year.....         1,989            6.71          1,589            10.03          1,454            7.83
                                       ======                          =====                           =====
Options exercisable at End of
  year.........................           622                            454                             551
</Table>

    Information related to stock options outstanding at December 31, 2001, is
summarized below:

<Table>
<Caption>
                                                           OPTIONS OUTSTANDING                   OPTIONS EXERCISABLE
                                               --------------------------------------------   -------------------------
                                                                    WEIGHTED       WEIGHTED                    WEIGHTED
                                               OUTSTANDING AT       AVERAGE        AVERAGE    EXERCISABLE AT   AVERAGE
                                                12/31/01 (IN       REMAINING       EXERCISE    12/31/01 (IN    EXERCISE
RANGE OF EXERCISE PRICES                         THOUSANDS)     CONTRACTUAL LIFE    PRICE       THOUSANDS)      PRICE
- ------------------------                       --------------   ----------------   --------   --------------   --------
<S>                                            <C>              <C>                <C>        <C>              <C>
$1.05--$4.50                                         859          8.91 years        $ 2.75         180          $ 2.78
5.00--9.94                                           692          8.16 years          6.34         216            7.32
11.44--23.25                                         438          6.50 years         15.06         226           16.33
                                                   -----                                           ---
                                                   1,989          8.12 years          6.71         622            9.28
                                                   =====                                           ===
</Table>

    SFAS No. 123, ACCOUNTING FOR STOCK BASED COMPENSATION, requires the
disclosure of pro forma net income and earnings per share information computed
as if the Company had accounted for its employee stock options granted
subsequent to December 31, 1994, under the fair value method set

                                      F-19
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK, STOCK OPTIONS AND WARRANTS (CONTINUED)
forth in SFAS 123. The fair value for these options was estimated using a
Black-Scholes option pricing model with the following weighted-average
assumptions:

<Table>
<Caption>
                                                                  EMPLOYEE STOCK OPTIONS
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Expected dividend yield.....................................     0.0%       0.0%       0.0%
Risk-free interest rate.....................................     4.3%       6.7%       5.5%
Expected volatility.........................................   130.0%     120.0%      70.0%
Expected life (in years)....................................     3.0        2.0        2.0
</Table>

    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options. In addition, because
SFAS 123 is applicable only to options granted subsequent to December 31, 1994,
the pro forma information does not reflect the pro forma effect of all previous
stock option grants of the Company, and thus the pro forma information is not
necessarily indicative of future amounts until SFAS 123 is applied to all
outstanding stock options.

    Information relating to the fair value of option grants made during 2001,
2000 and 1999 is as follows:

<Table>
<Caption>
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Options granted (all with exercise price equal to fair value
  of common stock):
  Number of options (in thousands)..........................    1,578      1,087       479
  Weighted average exercise price per share.................   $ 4.05     $11.60     $4.95
  Weighted average fair value of stock options grants per
    Black-Sholes option valuation model.....................   $ 3.02     $ 8.40     $2.44
</Table>

    For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. For purposes
of pro forma disclosure, the Company assumed that it would not receive a tax
deduction or tax benefit for financial reporting purposes related to incentive
stock options. In management's opinion, the pro forma disclosure is not
necessarily indicative of the net financial effect, assuming the Company was
required to expense the fair value of employee stock options, because an
incentive stock option often generates a tax deduction for the Company whereby
the stock option holder does not comply with the holding period requirements
under applicable tax laws. The Company's pro forma information follows (in
thousands, except earnings per share information):

<Table>
<Caption>
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Pro forma net income (loss).................................  $(47,677)  $20,511    $(12,884)
Pro forma earnings (loss) per share.........................  $  (2.32)  $  1.00    $  (0.69)
</Table>

                                      F-20
<Page>
                        INTRUSION INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EARNINGS PER SHARE

<Table>
<Caption>
                                                               FOR THE YEAR ENDED DECEMBER 31,
                                                              ---------------------------------
                                                                2001        2000        1999
                                                              ---------   ---------   ---------
<S>                                                           <C>         <C>         <C>
Numerator:
Net income (loss)...........................................  $(45,780)    $23,211    $(12,040)
                                                              --------     -------    --------
Numerator for basic and diluted earnings per share..........  $(45,780)    $23,211    $(12,040)
Income (loss) from continuing operations....................  $(39,615)    $24,185    $(18,230)
                                                              --------     -------    --------
Numerator for basic and diluted earnings per share,
  continuing operations.....................................  $(39,615)    $24,185    $(18,230)
Denominator:
Denominator for basic earnings per share--weighted average
  common shares outstanding.................................    20,565      19,624      18,565
Effect of dilutive securities:
  Stock options and warrants................................        --         854          --
                                                              --------     -------    --------
Denominator for diluted earnings per share--adjusted
  weighted average common shares outstanding................    20,565      20,478      18,565
                                                              ========     =======    ========
Basic earnings (loss) per share, continuing Operations......  $  (1.93)    $  1.23    $  (0.98)
                                                              ========     =======    ========
Diluted earnings (loss) per share, continuing Operations....  $  (1.93)    $  1.18    $  (0.98)
                                                              ========     =======    ========
Basic earnings (loss) per share.............................  $  (2.23)    $  1.18    $  (0.65)
                                                              ========     =======    ========
Diluted earnings (loss) per share...........................  $  (2.23)    $  1.13    $  (0.65)
                                                              ========     =======    ========
</Table>

    Total stock options and warrants outstanding in 2001, 2000 and 1999 that are
not included in the diluted earnings per share computation due to the
antidilutive effect are 2.0 million, 378 thousand and 3 million, respectively.
Such options are excluded due to us incurring a net loss per share in that year
or due to exercise prices exceeding the average market value of our common stock
in the applicable period.

11. OTHER INCOME

    On March 2, 2000, we sold our investment of 770,745 shares of Alteon
WebSytems, Inc. common stock for $87.00 per share, net of applicable expenses,
generating cash of approximately $67.1 million. The disposition of this stock
generated a pre-tax gain of approximately $66.4 million which was recognized as
other income.

12. MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION

    The Company's continuing operations are concentrated in one segment--the
design, development, marketing and support of data security via a suite of
security software and appliances. Sales to customers exceeding 10% of total
sales were as follows: 2001--none; 2000--$3.3 million to iGov.com and
$5.6 million to TRW; 1999--$1.7 million to iGov.com, $0.9 million to AT&T,
$1.3 million to Federal Data and $1.0 million to Comstor.

                                      F-21
<Page>
12. MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (CONTINUED)
    Export sales, primarily to Europe, Asia, Latin America and Canada, were
$6.1 million in 2001, $4.5 million in 2000 and $1.1 million in 1999. No
significant long-lived assets were deployed outside of the United States.

13. SUBSEQUENT EVENTS

    In March 2002 we sold our last remaining discontinued operation, Essential
Communications division, for $1 million generating a gain of $0.4 million. Terms
of the sale included transferring $0.7 million in net property, plant and
equipment, $0.1 million in current liabilities and product maintenance
obligations for which $0.4 million is recorded in deferred revenue.

                          SUPPLEMENTAL FINANCIAL DATA

SUMMARIZED QUARTERLY DATA (UNAUDITED)

<Table>
<Caption>
                                                                       2001
                                               ----------------------------------------------------
                                                  Q1      Q2(2)(3)      Q3       Q4(3)      TOTAL
                                               --------   --------   --------   --------   --------
                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                            <C>        <C>        <C>        <C>        <C>
Continuing Operations:
Revenue......................................  $  5,318   $  4,451   $ 3,612    $ 3,304    $ 16,685
Gross profit.................................       819         54     1,258      1,064       3,195
Net loss.....................................   (11,833)   (14,027)   (6,889)    (6,866)    (39,615)
Net loss per share--Basic....................     (0.58)     (0.68)    (0.33)     (0.33)      (1.93)
Net loss per share--Diluted..................     (0.58)     (0.68)    (0.33)     (0.33)      (1.93)
Discontinued Operations:
Loss, net of tax.............................      (772)    (5,393)       --         --      (6,165)
Net loss per share--Basic....................     (0.04)     (0.27)    (0.00)     (0.00)      (0.30)
Net loss per share--Diluted..................     (0.04)     (0.27)    (0.00)     (0.00)      (0.30)
</Table>

<Table>
<Caption>
                                                                       2000
                                               ----------------------------------------------------
                                                Q1(1)        Q2         Q3         Q4       TOTAL
                                               --------   --------   --------   --------   --------
<S>                                            <C>        <C>        <C>        <C>        <C>
Continuing Operations:
Revenue......................................  $  6,997   $  5,123   $ 6,456    $ 4,634    $ 23,210
Gross profit.................................     1,965        773     1,410         53       4,201
Net income (loss)............................    46,379     (7,027)   (7,066)    (8,101)     24,185
Net income (loss) per share--Basic...........      2.48      (0.36)    (0.36)     (0.40)       1.23
Net income (loss) per share--Diluted.........      2.28      (0.36)    (0.36)     (0.40)       1.18
Discontinued Operations:
Income (loss), net of tax....................      (240)       154      (486)      (402)       (974)
Net income (loss) per share--Basic...........     (0.01)      0.01     (0.02)     (0.02)      (0.05)
Net income (loss) per share--Diluted.........     (0.01)      0.01     (0.02)     (0.02)      (0.05)
</Table>

- ------------------------

(1) The results for the first quarter of 2000 include a $66.4 million pre-tax
    gain realized on the sale of Alteon WebSystems, Inc. common stock.

                                      F-22
<Page>
(2) Loss, net of tax, for Discontinued Operations includes a second quarter 2001
    charge of $5.0 million to write down the net assets of Essential to reflect
    its net realizable value of $0.8 million in response to unfavorable market
    conditions and efforts to sell Essential. See Note 6.

(3) Net loss from Continuing Operations includes a second quarter 2001 charge of
    $3.1 million to recognize the impairment of certain intangible assets and
    $0.8 million for severance as a result of reductions in workforce. In the
    fourth quarter of 2001 we recorded a charge of $0.5 million for severance as
    a result of reductions in workforce and $0.2 million for early termination
    of excess lease space. See Note 2.

                                      F-23
<Page>
                                  SCHEDULE II
                        INTRUSION INC. AND SUBSIDIARIES
                       VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                  BALANCE AT   CHARGED TO                  BALANCE AT
                                                   BEG. OF     COSTS AND     ADDITIONS       END OF
                                                    PERIOD      EXPENSE     (DEDUCTIONS)     PERIOD
                                                  ----------   ----------   ------------   ----------
<S>                                               <C>          <C>          <C>            <C>
Year ended December 31, 1999
Deducted from asset accounts:
  Allowance for doubtful accounts and returns...    $  880         $85        $  206 (2)     $1,171
Year ended December 31, 2000
Deducted from asset accounts:
  Allowance for doubtful accounts and returns...    $1,171         $--        $ (252)(1)     $  919
Year ended December 31, 2001
Deducted from asset accounts:
  Allowance for doubtful accounts and returns...    $  919         $--        $ (122)(1)     $  797
</Table>

- ------------------------

(1) Uncollectible accounts written off.

(2) Unapplied cash, net of write-offs.

                                      S-1
<Page>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

<Table>
<S>                                                    <C>  <C>
Dated: March 20, 2002                                  INTRUSION INC.
                                                       (Registrant)

                                                       By:              /s/ G. WARD PAXTON
                                                            -----------------------------------------
                                                                          G. Ward Paxton
                                                             CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE
                                                              OFFICER (PRINCIPAL EXECUTIVE OFFICER)
</Table>

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<Table>
<Caption>
                      SIGNATURE                                   TITLE                    DATE
                      ---------                                   -----                    ----
<C>                                                    <S>                          <C>
                 /s/ G. WARD PAXTON                    Chairman, President, Chief
     -------------------------------------------         Executive Officer, and       March 20, 2002
                   G. Ward Paxton                        Director

                   /s/ T. JOE HEAD
     -------------------------------------------       Vice Chairman of the Board     March 20, 2002
                     T. Joe Head                         and Director

                                                       Vice President, Chief
                  /s/ JAY R. WIDDIG                      Financial Officer,
     -------------------------------------------         Treasurer and Secretary      March 20, 2002
                    Jay R. Widdig                        (Principal Financial and
                                                         Accounting Officer)

                  /s/ J. FRED BUCY
     -------------------------------------------       Director                       March 20, 2002
                    J. Fred Bucy

                  /s/ GRANT A. DOVE
     -------------------------------------------       Director                       March 20, 2002
                    Grant A. Dove

               /s/ DONALD M. JOHNSTON
     -------------------------------------------       Director                       March 20, 2002
                 Donald M. Johnston
</Table>

                                      II-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>3
<FILENAME>a2072855zex-2_1.txt
<DESCRIPTION>EXHIBIT 2.1
<TEXT>
<Page>


                                   EXHIBIT 2.1

                       CERTIFICATE OF OWNERSHIP AND MERGER

                                     MERGING

                                 INTRUSION INC.

                                      INTO

                               INTRUSION.COM, INC.


                  Intrusion.com, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "CORPORATION"), under and in
accordance with Section 253 of the General Corporation Law of the State of
Delaware (the "DGCL"), does hereby certify:

                  FIRST: That the Corporation was incorporated pursuant to the
DGCL on August 30, 1995 under the name of "Optical Data Systems, Inc."

                  SECOND: That the Corporation owns 100% of the outstanding
shares of each class of capital stock of Intrusion, Inc., which was incorporated
pursuant to the DGCL on October 22, 2001 ("SUBSIDIARY").

                  THIRD: That the Board of Directors of the Corporation (the
"BOARD") has, pursuant to resolutions duly adopted at a meeting of the Board
dated October 17 , 2001 and filed with the minutes of the Board, authorized and
approved the merger of Subsidiary with and into the Corporation (the "MERGER").
Such resolutions have not been modified or rescinded and are in full force and
effect on the date hereof. A true and correct copy of such resolutions are
attached hereto as EXHIBIT A.

                  FIFTH: That the Corporation shall be the surviving corporation
in the Merger (the "SURVIVING CORPORATION").

                  SIXTH: That the Merger shall be effective on November 1, 2001
at 8:00 a.m., Eastern Standard Time.

                  SEVENTH: That the Certificate of Incorporation of the
Corporation, as amended and in effect on the date hereof, shall be the
Certificate of Incorporation of the Surviving Corporation; provided, however,
that at the effective time of the Merger, Article One of the Certificate of
Incorporation of the Surviving Corporation shall be amended in its entirety to
read as follows: "The name of the corporation is Intrusion Inc."

<Page>


                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Ownership and Merger on behalf of the Corporation on October 23,
2001.



                                           INTRUSION.COM, INC.



                                           /s/ Timothy W. Kinnear
                                           -------------------------------------
                                           Timothy W. Kinnear
                                           President and Chief Executive Officer






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>4
<FILENAME>a2072855zex-3_1.txt
<DESCRIPTION>EXHIBIT 3.1
<TEXT>
<Page>

                                   EXHIBIT 3.1

                              AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                                 INTRUSION INC.
                                FORMERLY KNOWN AS
                               INTRUSION.COM, INC.


                                   ARTICLE ONE

                                      NAME
                                      ----

                  The name of the corporation is Intrusion. Inc. (the
"Corporation").

                                   ARTICLE TWO

                               PERIOD OF DURATION
                               ------------------

                  The period of duration of the Corporation is perpetual or
until dissolved or merged or consolidated in some lawful manner.

                                  ARTICLE THREE

                               PURPOSE AND POWERS
                               ------------------

                  Section 1. PURPOSE. The purpose for which the corporation is
organized is to engage in any lawful acts or activities for which corporations
may be organized under the General Corporation Law of the State of Delaware (the
"DGCL").

                  Section 2. POWERS. Subject to any specific written limitations
or restrictions imposed by the DGCL, by other law, or by this Certificate of
Incorporation, and solely in furtherance thereof, but not in addition to the
purposes set forth in Section 1 of this Article, the Corporation shall have and
exercise all of the powers specified in the DGCL, which powers are not
inconsistent with this Certificate of Incorporation.

                                  ARTICLE FOUR

                  CAPITALIZATION, PREEMPTIVE RIGHTS AND VOTING
                  --------------------------------------------

                  Section 1. AUTHORIZED SHARES. The Corporation shall have
authority to issue two classes of shares to be designated respectively, "Common
Stock" and "Preferred Stock." The total number of shares of capital stock which
the Corporation shall have authority to issue is EIGHTY-FIVE MILLION
(85,000,000), of which EIGHTY MILLION (80,000,000) shall be Common Stock and
FIVE MILLION (5,000,000) shall be Preferred Stock. Each share of Common Stock
shall have a par value of ONE CENT ($.01), and each share of Preferred Stock
shall have a par value of ONE CENT ($.01).

<Page>

                  The Preferred Stock authorized by this Certificate of
Incorporation may be issued from time to time in one or more series, at the
discretion of the Board of Directors without Stockholder approval, with each
such series to consist of such number of shares and to have such voting powers
(whether full or limited, or no voting powers) and such designations, powers,
preferences and relative, participating, optional, redemption, conversion,
exchange or other special rights, and such qualifications, limitations or
restrictions thereof, as shall be stated in the resolution or resolutions
providing for the issuance of such series adopted by the Board of Directors
prior to the issuance thereof. The Board of Directors is hereby expressly vested
with the authority, to the fullest extent now or hereafter provided by law, to
adopt any such resolution or resolutions. Each share of any series of Preferred
Stock shall be identical with all other shares of such series, except as to the
date from which dividends, if any, shall accrue.

                  Section 2. PREEMPTIVE RIGHTS. No holder of shares of capital
stock of the Corporation shall, as such holder, have any right to purchase or
subscribe for any capital stock of any class which the Corporation may issue or
sell, whether or not exchangeable for any capital stock of the Corporation of
any class or classes, whether issued out of unissued shares authorized by this
Certificate of Incorporation as originally filed or by any amendment thereof, or
out of shares of capital stock of the Corporation acquired by it after the issue
thereof; nor shall any holder of shares of capital stock of the Corporation, as
such holder, have any right to purchase, acquire or subscribe for any securities
which the Corporation may issue or sell whether or not convertible into or
exchangeable for shares of capital stock of the Corporation of any class or
classes, and whether or not any such securities have attached or appurtenant
thereto warrants, options or other instruments which entitle the holders thereof
to purchase, acquire or subscribe for shares of capital stock of any class or
classes.

                  Section 3. VOTING. In the exercise of voting privileges, each
holder of shares of the Common Stock of the Corporation shall be entitled to one
(1) vote for each share held in his name on the books of the Corporation, and
each holder of any series of Preferred Stock of the Corporation shall have such
voting rights, if any, as shall be specified for such series. In all elections
of Directors of the Corporation, cumulative voting is expressly prohibited. As
such, each holder of shares of capital stock of the Corporation entitled to vote
at the election of Directors shall have the right to vote, in person or by
proxy, all or any portion of such shares for or against each individual Director
to be elected and shall not be entitled to vote for or against any one Director
more than the aggregate number of shares held by such holder which are entitled
to vote on the election of Directors. With respect to any action to be taken by
the Stockholders of the Corporation as to any matter other than the election of
Directors, the affirmative vote of the holders of a majority of the shares of
the capital stock of the Corporation entitled to vote thereon and represented in
person or by proxy at a meeting of the Stockholders at which a quorum is present
shall be sufficient to authorize, affirm, ratify or consent to such action.

                  Section 4. NO STOCKHOLDER ACTION BY CONSENT. Any action
required by the DGCL to be taken by the Stockholders shall be taken only at a
duly called annual or special meeting of the Stockholders at which a quorum is
present, and may not be taken without a meeting, without prior notice, and
without a vote, by a consent or consents in writing setting forth the action so
taken signed by the holder or holders of a majority of the outstanding shares of
the capital stock of the Corporation entitled to vote thereon.

<Page>

                                  ARTICLE FIVE

                           REGISTERED OFFICE AND AGENT
                           ---------------------------

                  Section 1. REGISTERED OFFICE. The street address of the
registered office of the Corporation is 1209 Orange Street, Wilmington, New
Castle County, Delaware.

                  Section 2. REGISTERED AGENT. The name of the initial
registered agent of the Corporation at such address is The Corporation Trust
Company.

                                   ARTICLE SIX

                                    DIRECTORS
                                    ---------

                  Section 1. BOARD OF DIRECTORS. The business and affairs of the
Corporation shall be managed by or be under the direction of the Board of
Directors which shall consist of not less than one Director, the exact number of
which shall be determined in accordance with the Bylaws of the Corporation. The
number of Directors of the Corporation may from time to time be changed in
accordance with the Bylaws of the Corporation and the DGCL. A Director shall
hold office until the next annual meeting of the Stockholders of the Corporation
and until his successor shall be elected and shall qualify, subject, however, to
prior death, resignation, retirement, disqualification or removal from office.
Any Director elected to fill a vacancy not resulting from an increase in the
number of Directors shall have the same remaining term as that of his
predecessor. A Director elected by the Board of Directors to fill a newly
created Directorship resulting from an increase in the number of Directors shall
hold office until the next annual meeting of the Stockholders of the Corporation
and until his successor shall be elected and shall qualify.

                  Notwithstanding the foregoing, whenever the holders of any one
or more classes or series of Preferred Stock issued by the Corporation shall
have the right, voting separately by class or series, to elect Directors at an
annual or special meeting of Stockholders, the election, term of office, filling
of vacancies and other features of such Directorships shall be governed by the
terms of the Certificate of Designations applicable thereto, and such Directors
so elected shall not be divided into classes unless expressly provided by such
terms. Further, any such Directors elected by one or more classes or series of
Preferred Stock may be removed at any time, with or without cause (except as
other provided in Section 4 of this Article below), by, and only by, the
affirmative vote of the holders of record of a majority of the outstanding
shares of such class or series given at a special meeting if such Stockholders
called for such purpose.

                  Section 2. LIMITATION ON LIABILITY OF DIRECTORS. Pursuant to
Section 102(b)(7) of the DGCL, a Director of the Corporation shall not be
personally liable to the Corporation or its Stockholders for monetary damages
for breach of fiduciary duty as a Director, except for liability (1) for any
breach of the Director's duty of loyalty to the Corporation or its Stockholders;
(2) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (3) under Section 174 of the DGCL; or
(4) for any transaction from which the Director derived an improper personal
benefit. If the DGCL or other applicable provision of Delaware law hereafter is
amended to authorize further elimination or limitation of the liability of
Directors, then the liability of a Director of this Corporation, in addition to
the limitation on

<Page>

personal liability provided herein, shall be limited to the fullest extent
permitted by the DGCL or other applicable provision of Delaware law as
amended. Any repeal or modification of this Section 2 by the Stockholders of
this Corporation shall be prospective only and shall not adversely affect any
limitation on the personal liability of a Director of the Corporation existing
at the time of such repeal or modification.

                  Section 3. ELECTION AND REMOVAL OF DIRECTORS. Election of
Directors need not be by written ballot. Any Director or the entire Board of
Directors may be removed, with or without cause, by the holders of a majority of
the shares then entitled to vote at an election of Directors, except as
otherwise provided by law and except if the directors of the Corporation are
ever divided into two or three classes, any Director may be removed only for
cause by the holders of a majority of the shares then entitled to vote at an
election for such class of Directors.

                                  ARTICLE SEVEN

                      SPECIAL POWERS OF BOARD OF DIRECTORS
                      ------------------------------------

                  In furtherance and not in limitation of the powers conferred
under the DGCL, the Board of Directors is expressly authorized:

         1.       To adopt, amend or repeal the Bylaws of the Corporation;

         2.       To authorize and cause to be executed mortgages and liens
upon the real and personal property of the Corporation;

         3.       To set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose, and to
abolish any such reserve in the manner in which it was created;

         4.       By a majority of the whole board, to designate one or more
committees, each committee to consist of one or more of the Directors of the
Corporation; the board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee; any such committee, to the extent provided in
the resolution or in the Bylaws of the Corporation, shall have and may
exercise any or all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, except to the extent that the
DGCL requires a particular matter to be authorized by the Board of Directors,
and may authorize the seal of the Corporation to be affixed to all papers
which may require it; provided, however, the Bylaws may provide that in the
absence or disqualification of any member of the committee or committees, the
member or members thereof present at any meeting and not disqualified form
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member; and

         5.       When and as authorized by the affirmative vote of the
holders of a majority of the stock issued and outstanding having voting power
given at a Stockholders meeting duly called upon such notice as is required by
statute, to sell, lease or exchange all or substantially all of the property
and assets of the Corporation, including its goodwill and its corporate
franchises, upon such terms and conditions and for such consideration, which
may consist in whole or in part of

<Page>

money or property, including shares of stock in, and/or other securities of,
any other corporation or corporations, as the Board of Directors shall deem
expedient and in the best interests of the Corporation.

                                  ARTICLE EIGHT

                           ADDITIONAL POWERS IN BYLAWS
                           ---------------------------

                  The Corporation may in its Bylaws confer powers and
authorities upon the Board of Directors in addition to the foregoing and those
expressly conferred upon them by the DGCL.

                                  ARTICLE NINE

               TRANSACTIONS WITH INTERESTED DIRECTORS AND OFFICERS
               ---------------------------------------------------

                  No contract or transaction between the Corporation and one or
more of its Directors or Officers, or between the Corporation and any other
corporation, partnership, association or other organization in which one or more
of the Directors or Officers of the Corporation are directors, officers or
partners, or have a financial interest, shall be void or voidable solely by
reason of such relationship, or solely because the Director or Officer is
present at or participates in the meeting of the Board of Directors of the
Corporation or committee thereof that authorizes the contract or transaction, or
solely because his or their votes are counted for such purposes, if any one of
the following conditions are met:

         1.       The material facts concerning the relationship or interest
of the Director or Officer and the material facts concerning the contract or
transaction are disclosed or are known to the Board of Directors of the
Corporation or the committee thereof that considers the contract or
transaction, and the Board of Directors of the Corporation or committee
thereof in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested Directors, even though the
disinterested Directors be less than a quorum; or

         2.       The material facts concerning the relationship or interest
of the Director or Officer and the material facts concerning the contract or
transaction are disclosed or are known to the Stockholders of the Corporation
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by the Stockholders of the Corporation at any annual or
special meeting of Stockholders called for that purpose; or

         3.       The contract or transaction is fair to the Corporation at
the time it is authorized, approved or ratified by the Board of Directors of
the Corporation, a committee thereof, or the Stockholders of the Corporation.

                  Common or interested Directors may be counted in determining
the presence of a quorum at a meeting or the Board of Directors of the
Corporation or of a committee thereof that authorizes such contract or
transaction.

<Page>

                                   ARTICLE TEN

                                 INDEMNIFICATION
                                 ---------------

                  Section 1. MANDATORY INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. Each person who was or is made a party or is threatened to be made a
party to or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such action, suit or proceeding, and any inquiry or
investigation that could lead to such an action, suit, or proceeding (the
"Proceeding"), by reason of the fact that he is or was an Officer or a Director
of the Corporation, or who, while a Director or Officer of the Corporation, is
or was serving at the request of the Corporation as a Director, Officer,
partner, venturer, proprietor, trustee, employee, agent, or similar functionary
of another corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise, shall be indemnified and held
harmless by the Corporation to the fullest extent permitted by the DGCL against
all judgments, penalties (including excise and similar taxes), fines,
settlements, and reasonable expenses (including attorneys' fees) actually
incurred by such person in connection with such Proceeding. Such right shall be
a contract right and shall include the right to require advancement by the
Corporation of reasonable expenses (including attorneys' fees) incurred in
defending any such Proceeding in advance of its final disposition; provided,
however, that the payment of such expenses in advance of the final disposition
of such Proceeding shall be made by the Corporation only upon delivery to the
Corporation of a written affirmation by such person of his good faith belief
that he has met the standard of conduct necessary for indemnification under the
DGCL and a written undertaking, by or on behalf of such person, to repay all
amounts so advanced if it should be ultimately determined that such person has
not satisfied such requirements.

                  Section 2. NATURE OF INDEMNIFICATION. The indemnification and
advancement of expenses provided for herein shall not be deemed exclusive of any
rights permitted by law to which a person seeking indemnification may be
entitled under any Bylaw, agreement, vote of Stockholders or otherwise, and
shall continue as to a person who has ceased to be a Director or Officer of the
Corporation and shall inure to the benefit of the heirs, executors and
administrators of such a person.

                  Section 3. INSURANCE. The Corporation shall have power to
purchase and maintain insurance or another arrangement on behalf of any person
who is or was a Director, Officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a Director, Officer,
partner, venturer, proprietor, trustee, employee, agent, or similar functionary
of another corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article or the DGCL.

<Page>

                                 ARTICLE ELEVEN

                           ARRANGEMENT WITH CREDITORS
                           --------------------------

                  Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its Stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or Stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code, or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the Stockholders or class of Stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the Stockholders or class of Stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
Stockholders or class of Stockholders, of this Corporation, as the case may be,
and also on this Corporation.

                                 ARTICLE TWELVE

                               AMENDMENT OF BYLAWS
                               -------------------

                  The Board of Directors of the Corporation shall have the power
to adopt, alter, amend or repeal the Bylaws of the Corporation. Notwithstanding
the preceding, the Stockholders of the Corporation shall also have the power to
adopt, alter, amend or repeal the Bylaws of the Corporation.

                                ARTICLE THIRTEEN

                                   AMENDMENTS
                                   ----------

                  The Corporation reserves the right to amend, alter, change or
repeal any provision continued in this Certificate of Incorporation or in its
Bylaws in the manner now or hereafter prescribed by the DGCL or this Certificate
of Incorporation, and all rights conferred on Stockholders herein are granted
subject to this reservation.

                                ARTICLE FOURTEEN

                                    CAPTIONS
                                    --------

                  The captions used in this Certificate of Incorporation are for
convenience only and shall not be construed in interpreting the provisions
hereof.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>5
<FILENAME>a2072855zex-10_5.txt
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
<Page>

                                  EXHIBIT 10.5



                             1995 STOCK OPTION PLAN
                                       OF
                                 INTRUSION INC.
                            AS AMENDED APRIL 26, 2001


                                    SECTION 1
                            ESTABLISHMENT AND PURPOSE
                            -------------------------

     This Plan is established (i) to offer selected Employees of the Company or
its Subsidiaries an equity ownership interest in the financial success of the
Company, (ii) to provide the Company an opportunity to attract and retain the
best available personnel for positions of substantial responsibility, and (iii)
to encourage equity participation in the Company by selected Employees. This
Plan provides for the grant by the Company of Options to purchase Shares.
Options granted under this Plan may include nonstatutory options as well as ISOs
intended to qualify under section 422 of the Code.

                                    SECTION 2
                                   DEFINITIONS
                                   -----------

      The following definitions shall be applicable to the terms used in this
Plan:

      (a) "BOARD OF DIRECTORS" shall mean the board of directors of the Company,
as duly elected from time to time.

      (b) "CHANGE IN CONTROL" shall mean to have occurred at such time as either
(i) any "person," as such term is used in section 14(d) of the Exchange Act,
other than the Company, a wholly-owned Subsidiary of the Company or any employee
benefit plan of the Company, or its Subsidiaries, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act (or any successor
rule)), directly or indirectly, of fifty percent (50%) or more of the combined
voting power of the Company's Stock, or (ii) individuals who constitute the
Board of the Directors on the effective date (as provided in SECTION 11 hereof)
of this Plan (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to
the date hereof whose election or nomination for election by the Company's
shareholders was approved by a vote of at least three quarters of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director without objection to such nomination) shall be, for purposes of this
clause (ii) considered as though such person was a member of the Incumbent
Board.

      (c) "CODE" shall mean the Internal Revenue Code of 1986, as amended, and
as interpreted by the rules and regulations promulgated thereunder.

      (d) "COMMITTEE" shall mean a committee appointed by the Board of Directors
in accordance with Section 3 of this Plan to implement, interpret and administer
the Plan.

      (e)  "COMPANY" shall mean Intrusion Inc., a Delaware corporation.

      (f) "DATE OR GRANT" shall mean the date on which the Committee grants an
Option to an Optionee.

      (g) "DISINTERESTED DIRECTOR" shall mean a member of the Board of Directors
who is not, during the one year prior to service as an administrator under this
Plan (as described in SECTION 3 of this Plan) granted an Option pursuant to the
terms of this Plan (or any other plan of the Company or any of its Subsidiaries)
except (i) participation in a formula plan meeting the conditions of Rule
16b-3(c)(2)(ii) under the Exchange Act, (ii) participation in an ongoing
securities acquisition plan meeting the conditions in Rule 16b-3(d)(2)(i) under
the Exchange Act, (iii) an election to receive an annual retainer fee in either
cash or an equivalent amount of securities of the Company, or partly in cash and
partly in securities, or (iv) that participation in this Plan shall not
disqualify a director for the purpose of administering another plan that does
not permit participation by the Board of Directors;

                                       1

<Page>

provided, that the scope of the exceptions in this paragraph shall automatically
be reduced or expanded to the extent that Rule 16b-3 under the Exchange Act is
amended to reduce or expand the scope of the exceptions thereunder.

      (h) "EMPLOYEE" shall mean each individual who performs services for the
Company or its Subsidiaries, provided the relationship between such individual
and the Company or its Subsidiaries is the legal relationship of employer and
employee. This definition of "Employee" is subject to the definition set forth
in section 3401(c) of the Code.

      (i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and as interpreted by the rules and regulations promulgated thereunder.

       (j) "EXERCISE PRICE" shall mean the amount for which one or more Shares
may be purchased upon exercise of an Option, as specified by the Committee in
the applicable Stock Option Agreement. In no event shall the Exercise Price be
less than the par value per Share.

       (k) "FAIR MARKET VALUE" shall mean (1) if the Stock of the Company is
listed upon an established stock exchange or exchanges, the highest closing
price of the Stock on such stock exchange or exchanges on the day in question
or, if no sale of the Stock of the Company shall have been made on any stock
exchange on such day, on the next preceding day on which there was a sale of the
Stock, (2) if the Stock of the Company is not listed upon an established stock
exchange, the mean between dealer "bid" and "ask" prices of the Stock in the New
York over-the-counter market on the day in question, as reported by the National
Association of Securities Dealers, Inc., and (3) if there is no public market
for the Stock of the Company, such amount as the Board of Directors and the
Committee, in their sole discretion, after taking all relevant facts into
consideration, shall determine.

      (l) "ISO" shall mean a stock option which meets the requirements of
section 422(b) of the Code.

      (m) "NONSTATUTORY OPTION" shall mean any Option granted by the Committee
that does not meet the requirements of sections 421 through 424 of the Code, as
amended.

      (n) "OPTION" shall mean either an ISO or Nonstatutory Option, as the
context requires.

      (o) "OPTIONEE" shall mean an individual who has been granted an Option.

      (p) "PERMANENT AND TOTAL DISABILITY" shall mean that an individual is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. An individual shall not be considered to
suffer from Permanent and Total Disability unless such individual furnishes
proof of the existence thereof in such form and manner, and at such times, as
the Committee may reasonably require.

      (q) "PLAN" shall mean this 1995 Stock Option Plan of Intrusion Inc., as
amended from time to time.

      (r) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and as interpreted by the rules and regulations promulgated thereunder.

      (s) "SHARE" shall mean one share of Stock, as adjusted in accordance
with SECTION 8 of this Plan (if applicable).

      (t) "STOCK" shall mean the common stock, $.01 par value, of the Company.

      (u) "STOCK OPTION AGREEMENT" shall mean the agreement executed between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to the granting of an Option.

      (v) "SUBSIDIARY" shall mean any corporation as to which fifty percent
(50%) or more of the outstanding voting stock or shares shall now or hereafter
be owned or controlled, directly by a person, any Subsidiary of such person, or
any Subsidiary of such Subsidiary.


                                       2

<Page>

      (w) "TEN-PERCENT STOCKHOLDER" shall mean a person who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company or any Subsidiary at the date of grant of an Option, taking
into account the attribution rules set forth in section 424 of the Code, as
amended. For purposes of this definition, the term "outstanding stock" shall
include all stock actually issued and outstanding immediately after the grant of
an Option to an Optionee. The term "outstanding stock" shall not include
reacquired shares or shares authorized for issuance under outstanding Options
held by the Optionee or by any other person.

     Whenever appropriate, words used in the Plan in the singular may mean the
plural, the plural may mean the singular, and the masculine may mean the
feminine.



                                    SECTION 3
                                 ADMINISTRATION
                                 --------------

      (a) GENERAL ADMINISTRATION. This Plan shall be administered by the
Committee, which shall consist of at least two persons, each of whom shall be a
Disinterested Director who meets the requirements of an "outside director," as
defined in Prop. Treas. Reg. Section 1.162-27(e)(3); provided, however, that a
director who is a Disinterested Director will be treated as meeting the
requirements of an "outside director" until the first meeting of stockholders at
which directors are to be elected that occurs after January 1, 1996. The members
of the Committee shall be appointed by the Board of Directors for such terms as
the Board of Directors may determine. The Board of Directors may from time to
time remove members from, or add members to, the Committee. Vacancies on the
Committee, however caused, may be filled by the Board of Directors.

      (b) COMMITTEE PROCEDURES. The Board of Directors shall designate one of
the members of the Committee as chairman. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts reduced
to or approved in writing by a majority of all Committee members, shall be valid
acts of the Committee. A majority of the Committee shall constitute a quorum.

      (c) AUTHORITY OF COMMITTEE. This Plan shall be administered by, or under
the direction of, the Committee constituted in such a manner as to comply at all
times with Rule 16b-3 (or any successor rule) under the Exchange Act. The
Committee shall administer this Plan so as to comply at all times with the
Exchange Act and, subject to the Code, shall otherwise have absolute and final
authority to interpret this Plan and to make all determinations specified in or
permitted by this Plan or deemed necessary or desirable for its administration
or for the conduct of the Committee's business, including without limitation the
authority to take the following actions:

               (i) To interpret this Plan and to apply its provisions;

              (ii) To adopt, amend or rescind rules, procedures and forms
      relating to this Plan;

             (iii) To authorize any person to execute, on behalf of the Company,
      any instrument required to carry out the purposes of this Plan;

              (iv) To determine when Options are to be granted under this Plan;

               (v) To select the Optionees;

              (vi) To determine the number of Shares to be made subject to each
      Option;

             (vii) To prescribe the terms, conditions and restrictions of each
      Option, including without limitation the Exercise Price and the
      determination whether an Option is to be classified as an ISO or a
      Nonstatutory Option;

            (viii) To amend any outstanding Stock Option Agreement, subject to
      applicable legal restrictions and, where appropriate, the consent of the
      Optionee who entered into such agreement;


                                       3

<Page>
              (ix) To establish procedures so that an Optionee may obtain a loan
     through a registered broker- dealer under the rules and regulations of the
     Federal Reserve Board, for the purpose of exercising an Option;

               (x) To establish procedures for an Optionee (1) to have withheld
     from the total number of Shares to be acquired upon the exercise of an
     Option that number of Shares having a Fair Market Value, which, together
     with such cash as shall be paid in respect of fractional shares, shall
     equal the Exercise Price, and (2) to exercise a portion of an Option by
     delivering that number of Shares already owned by an Optionee having a Fair
     Market Value which shall equal the partial Exercise Price and to deliver
     the Shares thus acquired by such Optionee in payment of Shares to be
     received pursuant to the exercise of additional portions of the Option, the
     effect of which shall be that an Optionee can in sequence utilize such
     newly acquired shares in payment of the Exercise Price of the entire
     Option, together with such cash as shall be paid in respect of fractional
     shares;

              (xi) To establish procedures whereby a number of Shares may be
     withheld from the total number of Shares to be issued upon exercise of an
     Option, to meet the obligation of withholding for federal and state income
     and other taxes, if any, incurred by the Optionee upon such exercise; and

             (xii) To take any other actions deemed necessary or advisable for
      the administration of this Plan.

     All interpretations and determinations of the Committee made with respect
to the granting of Options shall be final, conclusive, and binding on all
interested parties. The Committee may make grants of Options on an individual or
group basis. No member of the Committee shall be liable for any action that is
taken or is omitted to be taken if such action or omission is taken in good
faith with respect to this Plan or grant of any Option.



                                    SECTION 4
                                   ELIGIBILITY
                                   -----------

     The Committee shall select certain Employees of the Company or its
Subsidiaries to participate in this Plan; provided, however, that any
Disinterested Directors who are serving as administrators of this Plan shall not
be eligible for any Options nor shall any other person be eligible for any
Options if the granting of a Option to such person would destroy the
satisfaction by this Plan of the general exemptive conditions of Rule 16b-3
under the Exchange Act.



                                    SECTION 5
                             SHARES SUBJECT TO PLAN
                             ----------------------

      (a) BASIC LIMITATION. Shares offered under this Plan may be authorized but
unissued Shares or Shares that have been reacquired by the Company. The
aggregate number of Shares that are reserved and available for issuance under
this Plan shall be three million, three hundred thousand (3,300,000) Shares,
subject to adjustment pursuant to SECTION 8 of this Plan. The Committee shall
not issue more Shares than are available for issuance under this Plan. The
number of Shares that are subject to unexercised Options at any time under this
Plan shall not exceed the number of Shares that remain available for issuance
under this Plan. The Company, during the term of this Plan, shall at all times
reserve and keep available sufficient Shares to satisfy the requirements of this
Plan.

      (b) INDIVIDUAL LIMITATION. Notwithstanding anything herein to the
contrary, no Employee may be granted an Option, which in combination with
other Options to such Employee under the Plan (regardless of whether such
other Options have been exercised or cancelled), aggregates more then 50,000
Shares in any one.year period.

      (c) ADDITIONAL SHARES. In the event any outstanding Option for any reason
expires, is cancelled or otherwise terminates, the Shares allocable to the
unexercised portion of such Option shall again be available for issuance under
this Plan.

                                       4
<Page>

                                   SECTION 6
                         TERMS AND CONDITIONS OF OPTIONS
                         -------------------------------

       (a) TERM OF OPTION. The term of each Option shall be ten (10) years from
the Date of Grant or such shorter term as may be determined by the Committee;
provided, however, in the case of an ISO granted to a Ten-Percent Stockholder,
the term of such ISO shall be five (5) years from the Date of Grant or such
shorter time as may be determined by the Committee.

      (b) EXERCISE PRICE AND METHOD OR PAYMENT.
          (i)  EXERCISE PRICE. The Exercise Price shall be such price as is
determined by the Committee in its sole discretion and set forth in the Stock
Option Agreement; PROVIDED, HOWEVER; that the Exercise Price of an ISO shall not
be less than 100% of the Fair Market Value of the Shares subject to such option
on the Date of Grant (or 110% in the case of an Option granted to an Optionee
who is a Ten-Percent Stockholder on the Date of Grant).

          (ii) PAYMENT OF SHARES. Payment for the Shares upon exercise of an
Option shall be made in cash, by certified check, or by any other method of
payment as may be permitted under applicable law and approved by the Committee.

      (c) EXERCISE OF OPTION.
          (i) PROCEDURE FOR EXERCISE; RIGHTS OF SHAREHOLDER. Any Option granted
hereunder shall be exercisable at such times under such conditions as shall be
determined by the Committee, including without limitation, performance criteria
with respect to the Company or the Optionee, and in accordance with the terms of
this Plan; provided, however, that in no event shall an Option be exercisable in
whole or in part prior to one year from the Date of Grant or after the
expiration of ten years from the Date of Grant.

      An Option may not be exercised for a fraction of a Share.

      An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Stock
Option Agreement by the Optionee entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Committee,
consist of any form of consideration and method of payment allowable under
SECTION 6(b)(ii) of this Plan. Upon the receipt of notice of exercise and full
payment for the Shares, the Shares shall be deemed to have been issued and the
Optionee shall be entitled to receive such Shares and shall be a stockholder
with respect to such Shares, and the Shares shall be considered fully paid and
nonassessable. No adjustment will be made for a dividend or other right for
which the record date is prior to the date on which the stock certificate is
issued, except as provided in SECTION 8 of this Plan.

      Each exercise of an Option shall reduce, by an equal number, the total
 number of Shares that may thereafter be purchased under such Option.

          (ii) TERMINATION OF STATUS AS AN EMPLOYEE. Except as provided in
SUBSECTIONS 6(c)(iii) and 6(c)(iv) below, an Optionee holding an outstanding
Option who ceases to be an Employee of the Company for any reason may exercise
the Option to the extent that the Optionee was entitled to exercise it on such
date, but only until the earlier of the date (i) the Option held by the Optionee
expires, or (ii) ninety (90) days after the date such Optionee ceases to be an
Employee, unless the Committee further extends such period in its sole
discretion. To the extent that the Optionee was not entitled to exercise an
Option on such date, or if the Optionee does not exercise it within the time
specified herein, such Option shall terminate. The Committee shall have the
authority to determine the date an Optionee ceases to be an Employee, and must
provide to the Optionee such determination within fifteen (15) days. Leaves of
absence approved by the Committee which conform to the policies of the Company
shall not be considered termination of employment if the employer-employee
relationship as defined under the Code otherwise continues to exist.

          (iii) PERMANENT AND TOTAL DISABILITY. Notwithstanding the provisions
of SECTION 6(c)(ii) above, in the event an Optionee is unable to continue to
perform services for the Company or any of its Subsidiaries as a result of such
Optionee's Permanent and Total Disability (and, for ISOs, at the time such
Permanent and Total Disability begins, the Optionee was an Employee and had been
an Employee since the Date of Grant), such Optionee may


                                       5

<Page>

exercise an outstanding Option in whole or in part notwithstanding that such
Option may not be fully exercisable, but only until the earlier of the date (i)
the Option held by the Optionee expires, or (ii) twelve (12) months from the
date of termination of services due to such Permanent and Total Disability. To
the extent the Optionee does not exercise the Option within the time specified
herein, such Option shall terminate.

          (iv) DEATH OF AN OPTIONEE. Notwithstanding the provisions of SECTION
6(c)(ii) above, upon the death of an Optionee, any outstanding Option held by an
Optionee shall terminate and be of no further effect; provided, however, that if
at the time of death, the Optionee was an Employee (and, for ISOs, at the ime of
death, the Optionee was an Employee and had been an Employee since the Date of
Grant), the Option may be exercised in whole or in part by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, notwithstanding that such Option may not have been fully
exercisable on the date of the Optionee's death, but only until the earlier of
the date (i) the Option held by the Optionee expires, or (ii) twelve (12) months
from the date of the Optionee's death. To the extent the Option is not entitled
to be exercised on such date or if the Option is not exercised within the time
specified herein, such Option shall terminate.

      (d) NON-TRANSFERABILITY OF OPTIONS. Any Option granted under this Plan may
not be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and is nonassignable by operation of law or subject to execution,
attachment or similar process. Any Option granted under this Plan can only be
exercised during the Optionee's lifetime by such Optionee. Any attempted sale,
pledge, assignment, hypothecation or other transfer of the Option contrary to
the provisions hereof and the levy of any execution, attachment or similar
process upon the Option shall be null and void and without force or effect. No
transfer of the Option by will or by the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
written notice thereof and an authenticated copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions of the Option. The terms of any Option transferred by will or by the
laws of descent and distribution shall be binding upon the executors,
administrators, heirs and successors of the Optionee.

      (e) TIME OF GRANTING OPTIONS. Any Option granted hereunder shall be deemed
to be granted on the Date of Grant. Written notice of the Committee's
determination to grant an Option to an Employee, evidenced by a Stock Option
Agreement, dated as of the Date of Grant, shall be given to such Employee within
a reasonable time after the Date of Grant. Any ISO granted hereunder must be
granted within ten years from the earlier of the date this Plan in adopted or
the date this Plan in approved by the stockholders of the Company.

      (f) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Within the limitations
of this Plan, the Committee may modify, extend or renew outstanding Options or
may accept the cancellation of outstanding Options (to the extent not previously
exercised) for the granting of new Options in substitution therefor. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair the Optionee's rights or obligations
under such Option.

      (g) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise of
an Option shall be subject to such rights of repurchase and other transfer
restrictions as the Committee may determine in its sole discretion. Such
restrictions shall be set forth in the applicable Stock Option Agreement.

      (h) SPECIAL LIMITATION ON ISOS. To the extent that the aggregate Fair
Market Value (determined on the Date of Grant) of the Shares with respect to
which ISOs are exercisable for the first time by an individual during any
calendar year under this Plan, and under all other plans maintained by the
Company, exceeds $100,000, such Options shall be treated as Options that are not
ISOs.


                                       6

<Page>

                                   SECTION 7
                               ISSUANCE OF SHARES
                               ------------------

      As a condition to the issuance or transfer of any Shares issued under this
Plan, the Company may require an opinion of counsel, satisfactory to the
Company, to the effect that such transfer will not be in violation of the
Securities Act, or any other applicable securities laws, rules or regulations,
or that such Shares have been registered under federal and all applicable state
securities laws. The Company may refrain from delivering or transferring Shares
issued under this Plan until the Committee has determined that the Optionee has
tendered to the Company any and all applicable federal, state or local tax owed
by the Optionee as the result of the receipt of a Option, the exercise of an
Option or the disposition of any Shares issued under this Plan, in the event
that the Company reasonably determines that it might have a legal liability to
satisfy such tax. The Company shall not be liable to any person or entity for
damages due to any delay in the delivery or issuance of any stock certificate
evidencing any Shares for any reason whatsoever.



                                    SECTION 8
              CAPITALIZATION ADJUSTMENTS; MERGER; CHANGE IN CONTROL
              -----------------------------------------------------

      (a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Option, the aggregate number of Shares that have been authorized for
issuance under this Plan, and the Exercise Price of any outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, payment of a stock dividend with
respect to the Stock, recapitalization, combination or reclassification of the
Stock, or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company. Such adjustment shall be made
by the Committee in its sole discretion, which adjustment shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.

      (b) DISSOLUTION, LIQUIDATION, SALE OF ASSETS OR MERGER. In the event of
the proposed dissolution or liquidation of the Company, or a proposed sale of
all or substantially all of the assets of the Company, or the proposed merger of
the Company with or into another corporation, any Options shall terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Committee; provided, however, that the Committee may, in the
exercise of its sole discretion, in such instances declare that any Option shall
terminate as of a date fixed by the Committee and give each Optionee the right
to exercise the Optionee's Option as to all or any part of the Shares covered by
such Option, including Shares as to which the Option would not otherwise be
exercisable.

      (c) CHANGE IN CONTROL. Notwithstanding SECTION 8(b), in the event there
occurs a Change in Control, the Committee may at its discretion permit the
Optionees to exercise any outstanding Option held by such Optionee in whole or
in part notwithstanding that such Option may not be fully exercisable.



                                    SECTION 9
                              NO EMPLOYMENT RIGHTS
                              --------------------

     No provision of this Plan or under any Stock Option Agreement shall be
construed to give any individual any right to remain an Employee of, or provide
services to, the Company or any of its Subsidiaries or to affect the right of
the Company or any subsidiary, as applicable, to terminate any individual's
service at any time, with or without cause.



                                   SECTION 10
                              SHAREHOLDER APPROVAL
                              --------------------

      (a) IN GENERAL. If this Plan is adopted by action of the Board of
Directors prior to approval by the Company's stockholders, the Board of
Directors, to continue and implement this Plan, shall submit this Plan to the
stockholders of the Company for their approval. This Plan shall not become
effective until such approval has been obtained.


                                       7

<Page>

       (b) AMENDMENTS. With respect to any amendment to this Plan adopted by the
Committee that is required to be approved by the Company's stockholders pursuant
to the terms of SECTION 11 of this Plan, such approval shall be obtained within
twelve (12) months after the date such amendment is adopted by the Committee;
provided, that such amendment shall not become effective until such approval has
been obtained.

      (c) SOLICITATION OF APPROVAL. The approval by the Company's stockholders
of this Plan, and their approval of any subsequent amendment to this Plan
requiring their approval, shall be solicited (I) substantially in accordance
with section 14(a) of the Exchange Act, or (ii) after the Company has furnished
in writing to the stockholders entitled to vote substantially the same
information concerning this Plan as that which would be required by the rules
and regulations then in effect under section 14(a) of the Exchange Act.



                                   SECTION 11
                TERM OF PLAN; EFFECT OF AMENDMENT OR TERMINATION
                ------------------------------------------------

      (a) TERM OF PLAN. This Plan shall become effective upon its adoption by
the Board of Directors and will be subject to the approval by the stockholders
of the Company in accordance with SECTION 10 above. This Plan shall continue in
effect for a term of ten (10) years unless sooner terminated under this SECTION
11.
      (b) AMENDMENT AND TERMINATION. The Committee in its sole discretion may
terminate this Plan at any time. The Committee may amend this Plan at any time
in such respects as the Committee may deem advisable; provided, that the
following amendments shall require approval of the holders of a majority of the
outstanding Shares entitled to vote:

          (i) Any change in the aggregate number of Shares that may be issued
under this Plan, other than in connection with an adjustment under SECTION 8 of
this Plan;

          (ii) Any change in the designation of the individuals eligible to be
granted Options; or

          (iii) Any change in this Plan that would materially increase the
benefits accruing to individuals under this Plan.

      (c) EFFECT OF TERMINATION. In the event this Plan is terminated, no Shares
shall be issued under this Plan, except upon exercise of an Option granted prior
to such termination. The termination of this Plan, or any amendment hereof,
shall not affect any Shares previously issued to an Optionee or any Option
previously granted under this Plan.



                                   SECTION 12
                                  GOVERNING LAW
                                  -------------

     This plan and any and all Stock Option Agreements executed in connection
with this Plan shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to conflict of laws principles.











                                       8

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.15
<SEQUENCE>6
<FILENAME>a2072855zex-10_15.txt
<DESCRIPTION>EXHIBIT 10.15
<TEXT>
<Page>


                                  Exhibit 10.15


November 28, 2001


Mr. Timothy W. Kinnear


Re:  Resignation Agreement and General Release
     -----------------------------------------

Dear Tim:

In connection with your resignation as Chief Executive Officer and President of
Intrusion, Inc. (the "COMPANY") effective November 28, 2001 (the "TERMINATION
DATE"), the Company is offering you a severance package in exchange for your
agreement to release the Company from any and all claims (this "AGREEMENT"). The
details of the severance package and release are explained below. We encourage
you to review this document carefully and to discuss it with an attorney.

SEVERANCE.

In exchange for your execution of this Agreement, which includes your agreement
to release the Company from any and all claims, the Company agrees to provide
you with the following:


     -   Nine (9) months of salary continuation based on your current annual
         salary, less statutory deductions and withholdings, to be paid in
         accordance with the Company's normal payroll practices, for a total
         gross payment of $168,750.00, beginning on the first regular payroll
         after your execution of this Agreement (the "SEVERANCE PACKAGE").


     -   Your receipt of the Severance Package is expressly conditioned on your
         having first returned all Company property and all proprietary
         information in your possession to the Company.

By signing this Agreement, you acknowledge and agree that absent this Agreement,
you have no legal entitlement to the consideration provided herein and that the
consideration given to you represents good and sufficient value for the releases
and other agreements by you set forth in this Agreement.

STOCK EXERCISE.

Upon your Termination Date, you will cease vesting in your stock options. You
will have 90 days from your Termination Date to exercise any vested option
shares. The details of your stock options and exercise thereof will be according
to the Intrusion.com, Inc. 1995 Stock Option Plan, as amended.

<Page>


Timothy W. Kinnear                                                       Page 2
November 28, 2001


YOUR AGREEMENT.

By signing this Agreement and accepting the severance as outlined above, you
agree to waive, release, and forever discharge the Company and its parents,
successors, assigns, divisions, subsidiaries, affiliates, partners, officers,
directors, executives, investors, shareholders, managers, supervisors,
employees, agents, attorneys and representatives (the "RELEASED PARTIES") from
any and all claims, demands, and causes of action which you have or claim to
have, whether known or unknown, of whatever nature, which exists or may exist as
of the date of your execution of this Agreement. "Claims," "demands," and
"causes of action" include, but are not limited to, claims based on contract,
fraud, equity, tort, discrimination, harassment, retaliation, personal injury,
constructive discharge, emotional distress, public policy, wage and hour law,
defamation, claims for debts, accounts, attorneys' fees, compensatory damages,
punitive damages, and/or liquidated damages, claims for vesting or accelerated
vesting of options to purchase the Company's Common Stock, and any and all
claims arising under the Americans with Disabilities Act, the Family and Medical
Leave Act, or any other federal or state statute governing employment, including
but not limited to Title VII of the Civil Rights Act of 1964, the Employee
Retirement Income Security Act of 1974, the Worker Adjustment Retraining and
Notification Act, the Age Discrimination in Employment Act, the Texas Labor
Code, and the Texas Commission on Human Rights Act, as such statutes may have
been or may be amended from time to time.

You understand and agree, in compliance with any statute or ordinance which
requires a specific release of unknown claims or benefits, that this Agreement
includes a release of unknown claims, and you hereby expressly waive and
relinquish any and all claims, rights or benefits that you may have which are
unknown to you at the time of the execution of this Agreement. You understand
and agree that if, hereafter, you discover facts different from or in addition
to those which you now know or believe to be true, that the waivers and releases
of this Agreement shall be and remain effective in all respects notwithstanding
such different or additional facts or the discovery of such fact.

You represent and warrant that you do not presently have on file, and further
represent and warrant to the maximum extent allowed by law that you will not
hereafter file, any lawsuits, claims, charges, grievances or complaints against
the Company and/or the Released Parties in or with any administrative, state,
federal or governmental entity, agency, board or court, or before any other
tribunal or panel or arbitrators, public or private, based upon any actions or
omissions by the Company and/or the Released Parties occurring prior to your
execution of this Agreement. To the extent that you are still entitled to file
any administrative charge with any governmental agency, you hereby release any
personal entitlement to reinstatement, back pay, or any other types of damages
or injunctive relief in connection with any civil action brought on your behalf
after your filing of any administrative charge.

You agree that you will not make any negative or disparaging statements or
comments, either as fact or as opinion, about the Company, including but not
limited to its employees, officers,

<Page>


Timothy W. Kinnear                                                       Page 3
November 28, 2001


directors, shareholders, investors, vendors, products or services, business,
technologies, market position, performance and other similar information
concerning the Company. Nothing contained in this paragraph is intended to
prevent you from testifying truthfully in any legal proceeding.

Finally, you represent and agree that you are the sole and lawful owner of all
rights, title and interest in and to all released matters, claims and demands
arising out of or in any way related to your employment with the Company and/or
the termination thereof.

ACCEPTANCE OF AGREEMENT.

You have 14 days to consider this Agreement, and offer of severance contained
herein. You received this Agreement on November 28, 2001. You represent that if
you execute this Agreement before the 14-day consideration period has passed,
you do so voluntarily, and you knowingly and voluntarily waive your option to
use the entire 14 days to consider this Agreement. The settlement offer
contained in this Agreement will automatically expire if this Agreement, fully
executed by you, is not received by Mr. Paxton on or before December 12, 2001.

OTHER IMPORTANT TERMS.

- -    By signing this Agreement, you acknowledge that you have been paid all
     wages, vacations, and all other compensation owed to you be the Company
     through your Termination Date.

- -    Nothing in this Agreement shall constitute or be treated as an admission of
     any wrongdoing or liability on the part of the Company and/or the Released
     Parties.

- -    You acknowledge that you have been advised to consult with an attorney of
     your choosing prior to entering into this Agreement.

- -    You understand and agree that in any dispute between you and the Company
     regarding the terms of this Agreement and/or any alleged breach thereof,
     that the prevailing party shall be entitled to recover its costs and
     reasonable attorneys' fees arising out of such dispute.

- -    This Agreement is binding on your representatives, heirs, executors,
     administrators, successors and assigns.

- -    You are personally responsible for the payment of all federal, state and
     local taxes that are due, or may be due, for any payments and other
     consideration received by you under this Agreement. You agree to indemnify
     the Company and hold the Company harmless, from any and all taxes,
     penalties and/or other assessments that the Company is, or may become,
     obligated to pay on account of any payments and other consideration made to
     you under this Agreement.

<Page>


Timothy W. Kinnear                                                       Page 4
November 28, 2001


- -    The terms and existence of this Agreement are strictly confidential and may
     not be disclosed to any other person or entity, with the exception of your
     immediate family members and legal and financial advisors.

- -    This Agreement, and any agreements or documents referred to herein,
     constitute an integrated, written contract, expressing the entire agreement
     between the Company and you with respect to the subject matter hereof. In
     this regard, you represent and warrant that you are not relying on any
     promises or representations that do not appear in this Agreement. This
     Agreement can be amended or modified only by a written agreement, signed by
     you and the Company.

- -    This Agreement shall, in all respects, be interpreted, enforced and
     governed under the laws of the State of Texas applicable to contracts
     executed and performed in Texas without giving effect to conflicts of law
     principles.

- -    With respect to any suit, action, or other proceeding arising from (or
     relating to) this Agreement, the Company and you hereby irrevocably agree
     to the exclusive personal jurisdiction and venue of the United States
     District Court for the Northern District of Texas.

- -    You agree that if any provision or portion of any provision of this
     Agreement is held to be invalid or unenforceable or to be contrary to
     public policy or any law, for any reason, the remainder of the Agreement
     shall not be affected thereby.

- -    This Agreement may be executed in separate counterparts and by facsimile,
     and each such counterpart shall be deemed an original with the same effect
     as if the Company and you signed the same document.

<Page>


Timothy W. Kinnear                                                       Page 5
November 28, 2001


We wish you the best in the future. Please do not hesitate to contact G. Ward
Paxton if you have any questions or comments regarding the severance offer
contained in this letter.


INTRUSION, INC.


By:     /s/ G. Ward Paxton
   -------------------------------
Title:  President & CEO
      ----------------------------
Date:   11/29/01
      ----------------------------


TIMOTHY W. KINNEAR


By:     /s/ Timothy W. Kinnear
   -------------------------------
Date:   11-29-01
     -----------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>7
<FILENAME>a2072855zex-21.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>
<Page>


                                   EXHIBIT 21

                         INTRUSION INC. AND SUBSIDIARIES
                         SUBSIDIARIES OF THE REGISTRANT

     The following table lists the subsidiaries of the Registrant as of February
26, 2002, the state or other jurisdiction of incorporation and the names under
which such subsidiaries do business. The Registrant owns all of the outstanding
voting securities of each subsidiary.

<Table>
<Caption>
                                                                          Name under
                                         Jurisdiction of                which Subsidiary
       Name of Subsidiary                  Organization                 is doing business
- --------------------------------        -----------------        -------------------------------
<S>                                     <C>                      <C>

 Intrusion.com GmbH                          Germany                    Intruson.com GmbH

 Intrusion.com Limited                   United Kingdom               Intrusion.com Limited

 Intrusion.com Ltd.                      United Kingdom                Intrusion.com Ltd.

 Intrusion.com SARL                          France                    Intrusion.com SARL

 Intrusion.com Sdn. Bhd.                    Malaysia                 Intrusion.com Sdn. Bhd.

</Table>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>8
<FILENAME>a2072855zex-23.txt
<DESCRIPTION>EXHIBIT 23
<TEXT>
<Page>

                                   EXHIBIT 23



                         CONSENT OF INDEPENDENT AUDITORS

         We consent to the incorporation by reference in the Registration
Statement (Form S-8, No. 33-58570) pertaining to the 1983 Incentive Stock
Option Plan of Intrusion Inc. and the 1987 Incentive Stock Option Plan of
Intrusion Inc., the Registration Statement (Form S-8, No. 333-60928) pertaining
to the 1995 Stock Option Plan of Intrusion Inc., as amended, the Registration
Statement (Form S-8, No. 33-34484) pertaining to the 1995 Non-employee Director
Stock Option Plan of Intrusion Inc., the Registration Statement (Form S-8, No.
33-42927) pertaining to the 1997 Employee Stock Purchase Plan of Intrusion
Inc., the Registration Statement (Form S-8, No. 33-80898) pertaining to the
401(k) Savings Plan of Intrusion Inc. and the Registration Statement (Form S-8,
No. 333-53813) pertaining to the Essential Communication Corporation 1996 Stock
Option Plan of our report dated January 17, 2002, with respect to the
consolidated financial statements and schedule of Intrusion Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 2001.


                                              ERNST & YOUNG LLP



Dallas, Texas
March 15, 2002

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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