{"url_path":"/sec/intz/8-k/2026-06-30/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Definitive Agreement.**","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-06-30","source_url":"https://www.sec.gov/Archives/edgar/data/736012/0001683168-26-005193-index.html","accession_number":"0001683168-26-005193","cik":"0000736012","ticker":"INTZ","issuer_name":"INTRUSION INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/736012/0001683168-26-005193-index.html","primary_entity_key":"0000736012","primary_entity_name":"INTRUSION INC"},"word_count":795,"has_tables":true,"body_markdown":"**Item 1.01 Entry into a Material Definitive Agreement.**\n\n \n\nOn June 29, 2026, Intrusion Inc. (the “Company”)\nentered into a Membership Interest Purchase Agreement (the “Agreement”) by and among the Company, OW Cyber LLC (“Target”),\nand VigilAigent Corp. (“Seller”), the sole member of Target. Pursuant to the Agreement, the Company agreed to acquire 100%\nof the membership interests of Target from Seller over two distinct closings.\n\nPursuant to the terms of the Agreement, the acquisition\nwill be effectuated in two stages:\n\n \n\n·First Closing: Effective June 29, 2026, at the first closing (the\n“First Closing”), the Company acquired 60% of Target’s membership interests in exchange for a purchase price of $1,950,000\n(the “First Closing Purchase Price”), paid through (i) a $200,000 credit from a prior deposit, (ii) a cash payment of $160,000,\nand (iii) the issuance of $1,590,000 in unregistered shares of the Company’s common stock, par value $0.01 per share (“Common\nStock”), at a contractually defined per share price of $0.67. The First Closing Purchase Price is subject to a post-closing working\ncapital adjustment based on a target working capital of $(1,365,000).\n\n·Second Closing: Subject to specified closing conditions—including\nobtaining required Company stockholder and Nasdaq Stock Market (“Nasdaq”) or other regulatory approvals—the Company\nagreed to acquire, at the second closing (the “Second Closing”), the remaining 40% of Target’s membership interests\nfor a cash payment of $1,300,000. The obligations of the parties to consummate the Second Closing are subject to the satisfaction, or\nwaiver, on or before August 30, 2026 or such later date as may be agreed by the Seller and the Company, of the identified closing conditions.\n\n \n\nConcurrent with the First Closing, the parties\nexecuted the Limited Liability Company Operating Agreement of Target (the “Operating Agreement”), which recapitalized Target's\nequity into 100 membership units. Under the terms of the Operating Agreement, the Company was designated as the initial Manager of Target,\nvesting it with complete and exclusive discretion over Target’s day-to-day operations and business affairs. Effective as of the\nFirst Closing, Anthony Scott, the Company’s President and Chief Executive Officer, a member of the Company’s Board of Directors,\nand the beneficial owner of more than 5% of the Company’s common stock, was appointed as Target’s Chief Executive Officer\nand Secretary. To protect the Seller's position pending the Second Closing, the Operating Agreement contains an express minority protection\ncovenant mandating that the Seller will maintain an equity interest of not less than 40.0% in Target unless it explicitly consents otherwise\nin writing.\n\n \n\nPursuant to the terms of the Agreement, at the\nFirst Closing, the Company deposited 149,254 shares of the issued Common Stock (the “Retained Shares”) in escrow. These shares\nwill serve as security to satisfy any post-closing indemnification obligations of the Seller, to be released, if at all, after 12 months.\n\n \n\nFollowing the Second Closing, the Seller may receive\nup to an additional $6,900,000 in contingent consideration (the “Earn-Out Consideration”), payable via the issuance of unregistered\nshares of Common Stock (“Earn-Out Shares”) upon the achievement of the following specific financial milestones:\n\n \n\n·Milestone 1: If, as of March 31, 2027, the Target’s ARR\nRun Rate (as hereinafter defined) is equal to $6,000,000 or more and the Target’s Adjusted Operating Cash Flow (as hereinafter\ndefined) is greater than or equal to $0, the applicable portion of the Earn-Out Consideration payable with respect thereto will be $2,700,000.\n\n·Milestone 2: If, as of September 30, 2027, the ARR Run Rate is\nequal to $7,500,000 or more and the Adjusted Operating Cash Flow is greater than or equal to $750,000, the applicable portion of the\nEarn-Out Consideration payable with respect thereto will be $2,700,000.\n\n·Milestone 3: If, as of March 31, 2028, the ARR Run Rate is equal\nto $8,600,000 or more, the applicable portion of the Earn-Out Consideration payable with respect thereto will be $2,700,000.\n\n \n\nPursuant to the terms of the Agreement and applicable\nNasdaq rules, the Company may not issue shares exceeding 19.9% of its issued and outstanding Common Stock unless it obtains required stockholder\nand Nasdaq approvals. Any issued Earn-Out Shares will be subject to a six-month lock-up period, interspersed with standard leak-out provisions\npermitting limited daily sales up to 15% of the average daily trading volume. If the Second Closing occurs and Earn-Out Shares are issued,\nthe Company has agreed to use commercially reasonable efforts to register the resale of such shares upon the Seller's request.\n\n \n\nThe Agreement contains customary representations,\nwarranties, and covenants. General indemnification obligations survive for two years from the First Closing, subject to a $50,000 basket\nand a maximum liability cap of $3,000,000.\n\n \n\nThe foregoing description is qualified in its entirety by reference\nto the full text of the Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein\nby reference.\n\n \n\n \n\n \n\n 2"}