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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): May 9,
2024
INTRUSION
INC.
(Exact Name of Registrant
as Specified in Its Charter)
| Delaware |
001-39608 |
75-1911917 |
(State or Other Jurisdiction
of Incorporation) |
(Commission File
Number) |
(IRS Employer
Identification No.) |
101
East Park Blvd, Suite
1200
Plano, Texas |
75074 |
| (Address of Principal Executive Offices) |
(Zip Code) |
(888) 637-7770
(Registrant’s Telephone Number,
Including Area Code)
N/A
(Former Name or Former Address, if Changed Since
Last Report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| Common Stock, $0.01 par value per share |
INTZ |
NASDAQ Capital Market |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.03 Material
Modification to Rights of Security Holders.
Series A Certificate of Designations
As previously reported,
by Intrusion Inc. (the “Company”), on Form 8-K filed with the Securities and
Exchange Commission (the “SEC”) on March 18, 2024, Intrusion Inc. (the “Company”),
filed a Certificate of Designations (the “Series A Certificate”) creating Series A preferred stock, $0.01 par value per share
(the “Series A Stock”).
On May 9, 2024, the Company
filed a Certificate of Amendment to the Series A Certificate (the “Amendment”) with the State of Delaware, Secretary of State,
Division of Corporations, adding and replacing Sections of the Series A Certificate, qualified in its entirety as set forth in the Amendment
attached hereto as Exhibit 4.1. The amended sections are as follows:
“Section
5. Preferred Return” by adding section (d) as set forth in the Amendment attached hereto as Exhibit 4., that “[I]n the
event the Corporation is unable to pay the Preferred Return in cash and no remaining shares of Series A Stock are available for issuance,
the Preferred Return will continue to accrue until such time as the Corporation can make payment.”
“Section
6. Series A Dividend” by adding section (d) as set forth in the Amendment attached hereto as Exhibit 4.1, “that “[I]n
the event the Corporation is unable to pay the Quarterly Dividend in cash and no remaining shares of Series A Stock are available for
issuance, the Quarterly Dividend will continue to accrue until such time as the Corporation can make payment.”
“Section
12. Covenants” by removing the section (a) requirement “[T]he Corporation will timely file on the applicable deadline
all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the Exchange Act, and will take all reasonable
action under its control to ensure that adequate current public information with respect to the Corporation, as required in accordance
with Rule 144 of the Securities Act, is publicly available, and will not terminate its status as an issuer required to file reports under
the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination … The Corporation
will cause the Common Stock to be listed or quoted for trading on any of NYSE, NYSE American or Nasdaq,” and by removing the section
(c) requirement that “[T]he Corporation shall ensure that trading in the Common Stock will not be suspended, halted, chilled, frozen,
reach zero bid or otherwise cease trading on the Corporation’s principal trading market.”
The foregoing description of the Amendment
is qualified in its entirety by reference to the full text of the Amendment, which is attached hereto as Exhibit 4.1 and is incorporated
herein by reference.
Item 9.01
Financial Statements and Exhibits
(d) Exhibits
SIGNATURE
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
| |
Intrusion, Inc. |
| |
|
| Dated: May 15, 2024 |
By: |
/s/ Kimberly Pinson |
| |
|
Kimberly Pinson |
| |
|
Chief Financial Officer |
Exhibit 4.1
| |
|
State of Delaware
Secretary of State
Division of Corporations
Delivered 08:30 AM 05/09/2024
FILED 08:30 AM 05/09/2024
SR 20241979061 - File Number 2538388 |
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF
SERIES A PREFERRED STOCK
OF
Intrusion Inc.
a Delaware corporation.
Pursuant to Section 242 of
the General Corporation Law of the State of Delaware, the undersigned Chief Executive Officer of Intrusion Inc. (the "Corporation"),
a corporation organized and existing under the laws of the State of Delaware, does hereby file this Certificate of Amendment to Certificate
of Designations of Preferences and Rights of Series A Preferred Stock (this "Certificate of Designations") and DOES HEREBY CERTIFY
that pursuant to the authority contained in the Corporation's Certificate of Incorporation, as follows:
FIRST: The name of the Corporation is Intrusion Inc.
SECOND: The Corporation's
Certificate of Designations of Preferences and Rights of Series A Preferred Stock was filed with the Secretary of State of the State of
Delaware on March 15, 2024.
THIRD: There are 9,184 shares
of the Series A Preferred Stock issued and outstanding as of the date hereof. The approval of the sole holder of all issued and outstanding
shares of Series A Preferred Stock has been received with respect to the amendment of the Certificate of Designations of Preferences and
Rights of Series A Preferred Stock as set forth herein.
FOURTH: The Certificate of
Incorporation of the Corporation authorizes the issuance by the Corporation of 80,000,000 shares of common stock, par value of $0.01 per
share ("Common Stock") and 5,000,000 shares of preferred stock, par value of $0.01 per share ("Preferred Stock"),
and further, authorize the Board of Directors of the Corporation, by resolution or resolutions, at any time and from time to time, to
divide and establish. any or all of the unissued shares of Preferred Stock not then. allocated to any series into one or more series and
to designate the rights, preferences and limitations of each series.
FIFTH: By unanimous written
consent of the Board of Directors of the Corporation dated May 7, 2024, and the unanimous consent of the sole holder of the issued and
outstanding shares of Series A Preferred Stock dated May 7, 2024, and acting in accordance with the provision of Sections 141, 228 and
242 of the Delaware General Corporation Law, the Board of Directors of the Corporation and the sole holder of the issued and outstanding
shares of Series A Preferred Stock each adopted resolutions to amend and restate the Certificate of Designations of Preferences and Rights
of Series A Preferred Stock in its entirety to provide as follows:
SERIES A PREFERRED STOCK
Section 1.Definitions.
Capitalized terms used but not otherwise defined herein shall have meanings set forth in Section 14 below.
Section 2.Powers and Rights
of Series A Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series A Preferred Stock,
par value $0.01 per share, of the Corporation (the "Series A Stock"). The number of shares, powers, terms, conditions, designations,
preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions
of the Series A Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series A Stock (this "Certificate
of Designations"). For purposes hereof, a holder of a share or shares of Series A Stock, with respect to their rights as related
to the Series A Stock, shall be referred to as a "Series A Holder."
Section 3.Number and Stated
Value. The number of authorized shares of the Series A Stock is twenty thousand (20,000) shares. Each share of Series A Stock shall
have a stated value of $1,100.00 (the "Stated Value").
Section 4.Ranking. Except
to the extent that the holders of at least a majority of the outstanding Series A Stock (the "Required Holders") expressly consent
to the creation of Parity Stock (as defined below), all shares of capital stock of the Corporation shall be junior in rank to all Series
A Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of
the Corporation (such junior stock is referred to herein collectively as "Junior Stock"). The rights of all such shares of capital
stock of the Corporation shall be qualified by the rights, powers, preferences and privileges of the Series A Stock. Without limiting
any other provision of this Certificate of Designations, without the prior express consent of the Required Holders, voting separately
as a single class, and with each share of Series A Stock having one vote on such matter, the Corporation shall not hereafter authorize
or issue any additional or other shares of capital stock that is (i) of senior rank to the Series A Stock in respect of the preferences
as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (collectively, the "Senior
Preferred Stock-), or (ii) of pari passu rank to the Series A Stock in respect of the preferences as to dividends, distributions
and payments upon the liquidation, dissolution and winding up of the Corporation (collectively, the "Parity Stock"). In the
event of the merger or consolidation of the Corporation with or into another corporation wherein the Corporation is the surviving entity,
the shares of Series A Stock shall maintain their relative rights, powers, designations, privileges and preferences provided for herein
and no such merger or consolidation shall provide for a result inconsistent therewith, subject to the other terms and conditions herein.
Section 5.Preferred Return.
| | (a) | Each
share of Series A Stock shall accrue a rate of return on the Stated Value at the rate of 10% per year, compounded annually to the extent
not paid as set forth herein, and to be determined pro rata for any factional year periods (the "Preferred Return"). The Preferred
Return shall accrue on each share of Series A Stock from the date of its issuance, and shall be payable or otherwise settled as set forth
herein. |
| | | |
| (b) | The Preferred Return shall be payable on a quarterly basis, within five Business Days following the end
of each calendar quarter, either in cash or via the issuance to the applicable Series A Holder of an additional number of shares of Series
A Stock equal to (i) the Preferred Return then accrued and unpaid, divided by (ii) the Stated Value, with the election as to payment in
cash or via the issuance of additional shares of Series A Stock to be determined in the discretion of the Corporation. |
| (c) | In the event that the Corporation elects to pay any Preferred Return via the issuance of shares of Series
A Stock, no fractional shares of Series A Stock shall be issued, and the Corporation shall pay in cash the Preferred Return that would
otherwise be payable via the issuance of a fractional share of Series A Stock. |
| (d) | In the event the Corporation is unable to pay the Preferred Return in cash and no remaining shares of
Series A Stock are available for issuance, the Preferred Return will continue to accrue until such time as the Corporation can make payment. |
Section 6.Series A Dividend.
| (a) | Commencing on the one-year anniversary of the issuance date of each share of Series A Stock, each such
share of Series A Stock shall accrue an automatic quarterly dividend, based on three quarters of 91 days each and the last quarter of
92 days (or 93 days for leap years), which shall be calculated on the Stated Value of such share of Series A Stock, and which shall be
payable in additional shares of Series A Stock, based on the Stated Value, or in cash as set forth herein (each, as applicable, the "Quarterly
Dividend"). For the period from the one-year anniversary of the issuance date of a share of Series A Stock to the two-year anniversary
of the issuance date of a share of Series A Stock, the Quarterly Dividend shall be 2.5% per quarter, and for all periods following the
two-year anniversary of the issuance date of a share of Series A Stock, the Quarterly Dividend shall be 5% per quarter. |
| (b) | The Quarterly Dividend shall be aggregated for each Series A Holder, and shall be paid to each Series
A Holder, within five Business Day following the end of each applicable Quarter, via the issuance to such Series A Holder of the whole
number of shares of Series A Stock payable with respect to such Quarterly Dividend, and payment in cash for any fractional shares of Series
A Stock that would be issuable with respect to such applicable Quarterly Dividend. |
| (c) | By way of example and not limitation, in the event that a Series A Holder acquired 500 shares of Series
A Stock and continued to hold all such shares of Series A Stock at the applicable time, the first Quarterly Dividend would be due and
payable to such Series A Holder by the fifth Business Day following the one-year and 91 day anniversary of the date of issuance of such
shares of Series A Stock to such Series A Holder, and would be an amount equal to $13,750 (500 x $1,100 x 2.5%), and would be paid via
the issuance to such Series A Holder of 12 shares of Series A Stock (having a total value, based on the Stated Value, of $13,200) and
the payment of $550 in cash. |
| (d) | In the event the Corporation is unable to pay the Quarterly Dividend in cash and no remaining shares of
Series A Stock are available for issuance, the Quarterly Dividend will continue to accrue until such time as the Corporation can make
payment. |
Section 7.Liquidation,
Dissolution or Winding Up: Certain Mergers, Consolidations and Asset Sales.
| (a) | Preferential Payments to Holders of Series A Stock. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event (as defined below), each share of Series A Stock
shall be entitled to be paid out of the assets of the Corporation available for distribution to its shareholders before any payment shall
be made to the holders of common stock, $0.01 par value per share, of the Corporation (the "Common Stock") equal to by reason
of their ownership thereof, an amount per share of Series A Stock equal to the Stated Value at such time plus any accrued but unpaid Preferred
Return plus any accrued and unpaid Quarterly Dividend (as applicable, the "Series A Preferred Liquidation Amount"). If upon
any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available
for distribution to its shareholders shall be insufficient to pay the Series A Preferred Liquidation Amount, the Series A Holders with
respect to their shares of Series A Stock shall share ratably in any distribution of the assets available for distribution in proportion
to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts
payable on or with respect to such shares were paid in full. Following the payment of the Series A Preferred Liquidation Amount, if there
are any remaining assets of the Corporation available for distribution to its shareholders, the Series A Stock shall not participate in
such distributions. |
| (b) | Deemed Liquidation Event Definition. Each of the following events shall be considered a "Deemed
Liquidation Event": (i) a merger or consolidation in which the Corporation is a Constituent Party and in which the shareholders of
the Corporation immediately prior to such merger or consolidation do not continue to hold a majority of the voting power of the Corporation
or any successor entity following such merger or consolidation; or (ii) the sale, lease, transfer, exclusive license or other disposition,
in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially
all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation
or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries
taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition
is to a wholly owned subsidiary of the Corporation. |
| (c) | Effecting a Deemed Liquidation Event. The Corporation shall not have the power to effect a Deemed
Liquidation Event unless the agreement or plan of merger or consolidation for such transaction (the "Merger Agreement") provides
that the consideration payable to the Series A Stock shall be allocated in accordance with Section 7(a). |
| (d) | Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the Series A Holders
upon any such merger, consolidation, sale, transfer, exclusive license, other disposition or redemption shall be the cash or the value
of the property, rights or securities paid or distributed to such Series A Holders by the Corporation or the acquiring person, firm or
other entity. The value of such property, right or securities shall be determined in good faith by the Board of Directors of the Corporation. |
| (e) | Allocation of Escrow and Contingent Consideration. In the event of a Deemed Liquidation Event,
if any portion of the consideration payable to the Series A Holders of the Corporation is payable only upon satisfaction of contingencies
(the "Additional Consideration"), the Merger Agreement or other agreement related
to such event shall provide that (a) the portion of such consideration that is not Additional Consideration (such portion, the "Initial
Consideration") shall be allocated among the Series A Holders in accordance with Section 7(a) as if the Initial Consideration were
the only consideration payable in connection with such Deemed Liquidation Event; and (b) any Additional Consideration which becomes payable
to the Series A Holders upon satisfaction of such contingencies shall be allocated among the Series A Holders in accordance with Section
7(a) after taking into account the previous payment of the Initial Consideration as part of the same transaction. |
Section 8.No Conversions.
The Series A Stock shall not be convertible into shares of Common Stock or into any other class or series of stock of the Corporation.
Section 9.Corporation Optional Redemption.
| (a) | Subject to the terms and conditions herein, at any time the Corporation may elect, in the sole discretion
of the Board of Directors of the Corporation, to redeem all or any portion of the Series A Stock then issued and outstanding from all
of the Series A Holders (a "Corporation Optional Redemption") by paying to the applicable Series A Holders an amount in cash
equal to the Series A Preferred Liquidation Amount then applicable to such shares of Series A Stock being redeemed in the Corporation
Optional Conversion (the "Redemption Price"). |
| (b) | The Corporation shall provide written notice of any Corporation Optional Redemption to the applicable
Series A Holder(s) within 5 Business Days following the determination of the Board of Directors of the Corporation to consummate the applicable
Corporation Optional Redemption, and thereafter such Corporation Optional Redemption shall be completed within five days following the
delivery of such notice, and at such time the Corporation shall deliver to the applicable Series A Holder(s) the Redemption Price in valid
funds. Each applicable Series A Holder agrees to execute and deliver to the Corporation such instruments and documents, and to take such
actions, as reasonably required to consummate the Corporation Optional Redemption. |
Section 10.Dividends and Distributions.
The Series A Stock shall not participate in any dividends, distributions or payments to the holders of the Common Stock.
Section 11.Vote; Amendment.
| (a) | Other than as set forth in Section 11(b), the Series A Stock shall not have any voting rights and shall
not vote on any matter submitted to the holders of the Common Stock, or any class thereof, for a vote. |
| (b) | The Corporation may not, and shall not, amend or repeal this Certificate of Designations without the prior
written consent of Series A Holders holding a majority of the Series A Stock then issued and outstanding, in which vote each share of
Series A Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in
writing without a meeting or at an annual or a special meeting of such Series A Holders, and any such act or transaction entered into
without such vote or consent shall be null and void al) initio, and of no force or effect. |
Section 12.Covenants.
Until such time as no shares of Series A Stock remain outstanding, the Corporation will at all times comply with the following covenants:
| (a) | The Corporation will not have
the right to repay any outstanding indebtedness owed to any Series A Holder or its Affiliates. |
| (b) | The Corporation will not increase
the authorized shares of Common Stock or Preferred Stock without the prior written consent
of the Required Holders, which consent may be granted or withheld in the Required Holders'
sole and absolute discretion. |
| (c) | The Corporation will not make
any Restricted Issuance without the Required Holders' prior written consent, which consent
may be granted or withheld in the Required Holders' sole and absolute discretion. |
| (d) | The Corporation shall not enter
into any agreement or otherwise agree to any covenant, condition, or obligation that locks
up, restricts in any way or otherwise prohibits the Corporation (a) from entering into a
variable rate transaction with any Series A Holder or any Affiliate of any Series A Holder,
or (b) from issuing Common Stock, Preferred Stock, warrants, convertible notes, other debt
securities, or any other of the Corporation's securities to any Series A Holder or any Affiliate
of any Series A Holder without the Required Holders' prior written consent, which consent
may be granted or withheld in the Required Holders' sole and absolute discretion. |
| | | |
| | (e) | The Corporation
will not pledge or grant a security interest in any of its assets without the Required Holders' prior written consent, which consent
may be granted or withheld in the Required Holders' sole and absolute discretion, other than those security interests in effect for the
benefit of the Series A Holders. |
| | | |
| | (f) | The Corporation
will not dispose of any assets or operations that are material to the Corporation's operations without the Required Holders' prior written
consent, which consent may be granted or withheld in the Required Holders' sole and absolute discretion. |
| (g) | Except in connection with satisfaction
of a Nasdaq deficiency notice, the Corporation will not, and will not enter into any agreement
or commitment to, undertake or complete any reverse split of the Common Stock or any class
of Preferred Stock without the Required Holders' prior written consent, which consent may
be granted on withheld in the Required Holders' sole and absolute discretion. |
| (h) | The Corporation will not create,
authorize, or issue any class of Preferred Stock (including additional issuances of Series
A Stock, other than as set forth herein) without the Required Holders' prior written consent,
which consent may be granted or withheld in the Required Holders' sole and absolute discretion. |
| (i) | The Corporation will not enter
increase the number of shares of Common Stock registered for sale pursuant to the form 424B
Filed Pursuant to Rule 424(b)(5) with respect to Registration No. 333-258491 (the "ATM")
or issue or sell, pursuant to the ATM, any shares of Common Stock in excess of the number
of shares of Common Stock available for issuance pursuant to the ATM as of the Effective
Date, in each case without the Required Holders' prior written consent, which consent may
be granted on withheld in the Required Holders' sole and absolute discretion. |
| (j) | The Corporation will not consummate
a Fundamental Transaction or enter into an agreement to consummate a Fundamental Transaction
without the Required Holders' prior written consent, which consent may be granted on withheld
in the Required Holders' sole and absolute discretion. |
Section 13.Covenant Default.
| |
(a) |
Event of Default. The Required
Holders may elect to declare an -Event of Default" if any of the following conditions or events shall occur and be continuing: |
| (i) | The Corporation fails to fully comply with any covenant, obligation or agreement of the Corporation in
this Certificate of Designations (other than payment or issuance defaults which are addressed in subparagraph (ii) below), and such failure,
if reasonably possible of cure, is not cured within five (5) Business Days following notice to cure from the Required Holders; |
| (ii) | The Corporation fails to pay any amount due and payable to the Series A Holders pursuant to and as required
by this Certificate of Designations, or fails to issue any additional shares of Series A Stock or Common Stock to the Series A Holders
pursuant to and as required by this Certificate of Designations, and such failure, if reasonably possible of cure, is not cured within
five (5) Business Days following notice of notice to cure from the Required Holders; |
| (iii) | The Corporation shall (1) apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator; (2) make a general assignment for the benefit of the Corporation's creditors; or (3) commence
a voluntary case under the U.S. Bankruptcy Code as now and hereafter in effect. or any successor statute; or |
| (iv) | a proceeding or case shall be commenced, without the application or consent of the Corporation, in any
court of competent jurisdiction, seeking (1) liquidation, reorganization or other relief with respect to it or its assets or the composition
or readjustment of its debts, or (2) the appointment of a trustee, receiver, custodian, liquidator or the like of any substantial part
of its assets, and, in each case, such proceedings or case shall continue undismissed, or an order, judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days, if in the United States, or 90 days,
if outside of the United States; or an order for relief against the Corporation shall be entered in an involuntary case under any bankruptcy,
insolvency, composition, readjustment of debt, liquidation of assets or similar Law of any jurisdiction. |
| |
(b) |
Consequences of Events of Default. If an Event of Default has occurred (i) the Required Holders may, upon the determination of
the Required Holders, by notice to the Corporation, force the Corporation to redeem all of the issued and outstanding shares of Series
A Stock then held by the Series A Holders for a price equal to (1) the Stated Value (as defined in this Certificate of Designations) of
all such shares of Series A Stock; plus (2) any accrued and unpaid Preferred Return (as defined in this Certificate of Designations) with
respect to all such shares of Series A Stock, with such Preferred Return to be paid in cash and not via the issuance of additional shares
of Series A Stock; plus (3) any accrued and unpaid Quarterly Dividend (as defined in this Certificate of Designations) with respect to
all such shares of Series A Stock, provided that such Quarterly Dividend shall be paid in cash in an amount equal to the number of shares
of Series A Stock otherwise issuable for the Quarterly Dividend multiplied by the Stated Value; plus (4) any and all other amounts
due and payable to the Series A Holders pursuant to this Certificate of Designations; (ii) the Series A Holders shall have the right to
pursue any other remedies that the Required Holders may have under applicable law and/or in equity; and (iii) the Series A Holders shall
have the right to seek and receive injunctive relief from a court or an arbitrator prohibiting the Corporation from issuing any of its
Common Stock or Preferred Stock to any party unless the all shares of Series A Stock owned by the Series A Holders are redeemed in full
simultaneously with such issuance. |
| |
(c) |
Expenses.
In the event that any Series A Holder incurs expenses in the enforcement of its rights hereunder, including but not limited to reasonable
attorneys' fees, then the Corporation shall immediately reimburse such Series A Holder the reasonable costs thereof. |
Section 14.Definitions.
In addition to the terms defined elsewhere in this Certificate of Designations, the following terms, as used herein, have the following
meanings:
| (a) | "Affiliate" means, with respect to a specified Person, any other Person that directly or ndirectly
Controls, is Controlled by or is under common Control with, the specified Person. |
| (b) | "Business Day" means any day other than Saturday, Sunday or other day on which commercial banks
in New York City are authorized or required by law to remain closed. |
| (c) | "Constituent Party" means an entity that is required to consent or authorize the execution of
a transaction. |
| (d) | "Control- means (a) the possession. directly or indirectly, of the power to vote 10% or
more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being a director,
officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person. |
| (e) | "Equity Securities" means Common Stock of the Corporation, Preferred Stock of the Corporation
and any option, warrant, or right to subscribe for, acquire or purchase Common Stock or Preferred Stock. |
| | | |
| | (f) | "Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulation promulgated thereunder. |
| | | |
| | (g) | "Fundamental
Transaction" means: (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation
of the Corporation with or into another Person other than any subsidiary or any Affiliate of the Corporation, whereby the stockholders
of the Corporation immediately prior to such merger or consolidation do not own, directly or indirectly, at least 50% of the voting power
of the surviving entity immediately after such merger or consolidation, (ii) the Corporation, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another
Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities,
cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or
indirectly, in one or more related transactions effects any reclassification. reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities. cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a
stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off,
merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of
the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party
to. or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination). |
| (h) | "Issuance Date" means
the date that the applicable shares of Series A Stock are issued to a Series A Holder. |
| (i) | "Liabilities" means
liabilities, obligations or responsibilities of any nature whatsoever, whether direct or
indirect, matured or un-matured. fixed or unfixed, known or unknown, asserted or unasserted.
choate or inchoate, liquidated or unliquidated, secured or unsecured, absolute. contingent
or otherwise. including any direct or indirect indebtedness, guaranty. endorsement. claim,
loss, damage, deficiency. cost or expense. |
| (j) | "Person" means a natural
person, a corporation, a limited liability company, a partnership, an association, a trust
or any other entity or organization, including a government or political subdivision or any
agency or instrumentality thereof. |
| (k) | "Restricted Issuance"
means (i) the issuance, incurrence or guaranty of any debt or additional Liabilities. (ii)
the issuance of (a) any Equity Securities of the Corporation. including. without limitation
any Common Stock or any class or series of Preferred Stock; (b) any securities that are convertible
into or exchangeable for shares of Common Stock or any class or series of Preferred Stock.
other than in each of the foregoing clauses (i) and (ii), (A) for any such issuances or sales
to a Series A Holder as contemplated in this Certificate of Designations or otherwise to
a Series A Holder or any of its Affiliates; or (B) warrants, options or other securities
or agreements which are convertible into or exchangeable for shares of Common Stock or pursuant
to which shares of Common Stock may be issued, which are issued and outstanding as of date
the date of filing of this Certificate of Designations (so long as such security or agreement
is not modified or amended after the date of the filing of this Certificate of Designations)
or which may be issued pursuant to the Corporation's incentive plan as in place as of the
date of filing of this Certificate of Designations (so long as such security or agreement
is not modified or amended after the date of the filing of this Certificate of Designations).
For the avoidance of doubt, the issuance of Common Stock under, pursuant to. in exchange
for or in connection with any contract or instrument. whether convertible or not, is deemed
a Restricted Issuance for purposes hereof if the number of shares of Common Stock to be issued
is based upon or related in any way to the market price of the Common Stock, including, but
not limited to, Common Stock issued in connection with a Section 3(a)(9) exchange, a Section
3(a)(10) settlement, or any other similar settlement or exchange. other than as set forth
in the preceding sentence. For the further avoidance of doubt, the term Restricted Issuance
does not include shares of Common Stock issued pursuant to the ATM, subject to the limitations
set forth in Section 12(i). |
| | | |
| | (l) | "SEC" means the United States Securities and
Exchange Commission. |
| | | |
| | (m) | "Securities Act" means
the United States Securities Act of 1933, as amended, and the rules and regulation promulgated thereunder. |
Section 15.Miscellaneous.
| (a) | Legend. Any certificates representing the Series A Stock shall bear a restrictive legend in substantially
the following form (and a stop transfer order may be placed against transfer of such stock certificates): |
THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED
AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER
SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
| (b) | Uncertificated Shares Lost or Mutilated Series A Stock Certificate. The Series A Stock shall be
issued to each Series A Holder in uncertificated (book entry) form by the stock transfer agent of the Corporation unless a Series A Holder
requests such Series A Stock be issued to such Series A Holder in certificated fonn. If any certificate for the Series A Stock held by
the Series A Holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate,
a new certificate for the share of Series A Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss,
theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the
Corporation. |
| (c) | Interpretation. If the Corporation or any Series A Holder shall commence an action or proceeding
to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorney's fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding. |
| (d) | Waiver. Any waiver by the Corporation or the Series A Holder of a breach of any provision of this
Certificate of Designations shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach
of any other provision of this Certificate of Designations. The failure of the Corporation or the Series A Holder to insist upon strict
adherence to any term of this Certificate of Designations on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designations. Any waiver
must be in writing. |
| (e) | Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable,
the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any Person or circumstance,
it shall nevertheless remain applicable to all other Persons and circumstances. |
IN WITNESS WHEREOF,
Intrusion Inc.. a Delaware corporation, has caused this Certificate of Amendment to Certificate of Designations of Preferences and Rights
of Series A Preferred Stock to be signed by a duly authorized officer on this 8th day of May, 2024.
Intrusion Inc.
/s/ Anthony Scott
Name:
Anthony Scott
Title: Chief
Executive Officer
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