April 16, 2021 - An investor in shares of Intrusion Inc. (NASDAQ: INTZ) filed a lawsuit in the U.S. District Court for the Eastern District of Texas over alleged violations of Federal Securities Laws by Intrusion Inc. in connection with certain allegedly false and misleading statements made between January 13, 2021 and April 13, 2021.
Plano, TX based Intrusion Inc. develops, markets, and supports entity identification, data mining, cybercrime, and advanced persistent threat detection products in the United States.
Intrusion Inc. reported that its annual Total Revenue declined from $13.64 million in 2019 to $6.61 million in 2020, and that its Net Income of $4.46 million in 2019 declined to a Net Loss of $6.51 million in 2020.
On April 14, 2021, a report was published alleging, among other things, that Intrusion’s product, Shield, “has no patents, certifications, or insurance, which are all essential for selling cybersecurity products” and that “Shield is based on open-source data already available to the public.” Thus, the report stated that “Shield is a repackaging of pre-existing technology rather than an innovative offering.” Moreover, the report alleged that the claims that Shield “stopp[ed] a total of 77,539,801 cyberthreats from 805,110 uniquely malicious entities . . . in the 90-day beta program” were “outlandish,” leading White Diamond to question “[h]ow have these companies been able to function so far, as they’ve been attacked many times per minute by ransomware, malware, data theft, phishing and DDoS attacks?”
Shares of Intrusion Inc. (NASDAQ: INTZ) declined from $28.77 per share on April 13, 2021, to as low as $14.16 per share on April 20, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of Intrusion Inc. (NASDAQ: INTZ) common shares between January 13, 2021 and April 13, 2021, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between January 13, 2021 and April 13, 2021, the Defendants failed to disclose to investors that Intrusion’s Shield product was merely a repackaging of existing technology in the Company’s portfolio, that Shield lacked the patents, certifications, and insurance critical to the sale of cybersecurity products, that the Company had overstated the efficacy of Shield’s purported ability to protect against cyberattacks, that, as a result of the foregoing, Intrusion’s Shield was reasonably unlikely to generate significant revenue, and that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.