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Subsequent Events.

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events.

13.

Subsequent Events.

On March 10, 2022, Intrusion Inc. entered into an unsecured loan agreement with Streeterville Capital, LLC whereby the Company can draw up to $10,000,000 in two separate tranches of $5,000,000 through our issuance of two separate promissory notes with an initial interest rate of 7%, subject to some increases in the case of, among other things, an event of default. Upon closing, we received funds from the first tranche on pursuant to a promissory note executed contemporaneously with the execution of the loan agreement. We will have the ability to draw the remaining funds in the second tranche provided we have met certain conditions under a second promissory note within 180 days of the execution of the loan agreement. Each notes has (or will have) an 18 month maturity, may be prepaid subject to varying prepayment premiums, and may be redeemed at any time after six months into the term of such note in amounts up to $500,000 per calendar month upon the noteholder’s election. The Company has the option, in its sole discretion, to satisfy any redemption demands in cash, shares of its common stock that will be issued in an amount equal to the dollar amount of the redemption demand divided by the number that represents 85% of the lowest daily volume weighted average price of the common stock over a ten-day trailing period. The loan agreement and accompanying notes are subject to standard and customary events of default, including, without limitation, the Company’s continued listing on the Nasdaq or New York Stock Exchange. One of the prerequisites for our drawing on the second tranche is the approval by our stockholders of the issuance of stock to satisfy any redemption demand, even if the shares issued in connection with all such redemptions exceeds 20% of our issued and outstanding shares of common stock. While the notes remain outstanding, we will be subject to certain conditions and restrictions, including, without limitation the following: the noteholder’s right to consent to any future variable rate transactions (excluding ATMs, equity offerings, or private placements without market adjustable features) and any debt (excluding bank loans, lines of credit, mortgagees, leases, or asset backed loans); the noteholder’s right to participate in any debt or equity financings, excluding (ATMS, loans, lines of credit, mortgagees, leases, or asset backed loans); a prohibition on the Company’s’ ability to extend or enter into any agreement restricting our ability to issue common stock under the notes; as well as a prohibition on our ability to permit any other lender to participate alongside the noteholder via any debt financing structures.

Under our at-the-market offering, since January 1, 2022, we have received proceeds of approximately $1,000,000 net of fees from the sale of our common stock related to this program. Since the inception of the program in 2021, we have received proceeds of approximately $6,600,000 net of fees from the sale of our common stock related to this program.