Intrusion Inc.

Please stand by, we're about to begin. Good afternoon, ladies and gentlemen, and welcome to the Intrusion Q2 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, press star one again. And now at this time, I'd like to turn the call over to Mr. Sam Cohen with Alpha Investor Relations. Please go ahead, sir.

Thank you and welcome. Joining me today are Tony Scott, Chief Executive Officer, and Kimberly Pinson, Chief Financial Officer. The call is being webcast and will be archived on the Investor Relations section of our website. Before I turn the call over to Tony, I'd like to remind everyone that statements made during this conference call relating to the company's expected future performance future business prospects, future events, or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Please refer to our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's conference call. Any forward-looking statements that we make on this call are based upon information that we believe as of today and we undertake no obligation to update these statements as a result of new information or future events. In addition to U.S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles. During the call, we may use non-GAAP measures if we believe it is useful to investors or we believe it will help investors better understand our performance or business trends. With that, let me now turn the call over to Tony for a few opening remarks.

Thank you, Sam. Good afternoon and thank you all for joining us today. I'm encouraged by our progress along our strategic, operational, and financial objectives. Before I dive into some of our strategic updates, I would like to take a moment to welcome Kim Pinson, our newly appointed CFO, to her first quarterly earnings call with Intrusion. As you read in our press release, Kim brings extensive financial and technological experience to intrusion. We are excited to have Kim at this pivotal time for intrusion, and she is already playing an integral role in ensuring our long-term success. Over the year, I've outlined and provided updates on our strategic priorities to reposition the company for long-term growth. These initiatives include expanding and strengthening our product offerings, realigning our sales and marketing resources, and focusing on a channel-enabled sales model, strengthening our strategic partnerships, and improving our financial discipline. Starting with our currently shipping commercial products, the newest version of Intrusion Shield continues to gain traction, representing a more significant portion of our total revenue. We welcomed several new customers this past quarter, and the feedback we are getting from our customers is very encouraging in terms of both the effectiveness of our solution and the overall value it brings to our customers. We've made several enhancements to this hardware-based solution, including the ability to handle higher network throughput and improvements in overall performance and reporting. Our new product development efforts remain on track as we are progressing on schedule with the planned rollout of our two new innovative Shield branded products. First, let me talk about our new Shield cloud product. We reached full demo capabilities in late Q2, and we are now finalizing our product launch activities, and the full general availability release of the product is on schedule for this current quarter. When released, this will allow cloud workloads to be protected by our intrusion shield technology without the requirement for dedicated hardware. Next, let me talk about our intrusion shield endpoint solution. We also achieved demo capabilities during the second quarter as well, and this product supports Windows, iOS, macOS, and Android clients. We have two customers who are using beta versions of this product, and the feedback has also been extremely positive. Again, we expect GA in the current quarter. Finally, we continue to invest in our existing Shield appliance solution. Development of and enhancements to this product are continuing with new functionality and the ability to address increasingly higher network bandwidth over time. I'm pleased to announce an agreement with Supermicro as our primary global supplier of hardware. This important partnership with Supermicro supports Intrusion's growth in several ways. First, Supermicro helps us improve the performance of our existing technology through its excellent engineering capabilities. Second, it serves as a reliable hardware partner with the ability to get us products promptly as we strive to satisfy global customer demand. Third, Supermicro has a global presence with operations in over 100 countries, which will accelerate our hardware deployment and provide international technical support to our global customers at a local level. In summary, I'm very encouraged that the release of these new products in Q3 will pave the way for Intrusion Shield in all forms to become a significant source of revenue growth in the future. On the sales and marketing front, we've transitioned to a distribution and partnership model, clarified our value proposition, and enhanced our channel support and training. The results of these efforts are showing in our qualified pipeline, and we're continuing to expand our customer base domestically and internationally as evidenced by some of our recent partnerships. This quarter, we announced publicly a partnership with Intercore Technologies, a US-based MSSP that deals directly with leading resorts and vacation destinations. We immediately realized the benefits of this reseller agreement through a multi-year deal with a large hospitality company. Our Shield product is ideally suited to provide a critical, cost-effective solution that addresses the complex and evolving cybersecurity threats that resorts face. In addition, we signed an agreement with One Smart Laboratory, an MSSP that sells into an extensive, diversified global healthcare network. They work with over 1,000 labs that can utilize our software to add a needed layer of protection to their decentralized networks. One smart laboratory acted swiftly to formalize our relationship, which has already resulted in the installation of Intrusion Shield into several labs with more time. Finally, we also signed an agreement with InfiniVan, a fully licensed broadband-centered telecommunications company in the Philippines focused on the enterprise market with hundreds of thousands of customers in its distribution network. This opens a whole new market for us to sell Shield products through InfiniiVan's expansive network. We have positive momentum resulting from these new partnerships, which expand our reach across the US and now internationally, and provide intrusion Shield protection to a greater number of customers. Our discussions have continued with a couple of major technology partners on the strategic partnerships front, but I do not have anything definitive to announce at this time. I remain optimistic that we will have something to announce on this front in Q3. In addition, I also want to share the news that we have revamped our messaging around Shield and will launch a new company website, product branding, and a new company logo as a part of this makeover effort. You'll see and hear more about this as we launch later this month. As we continue to invest in the development of SHIELD, we do so with a commitment to maintaining financial stability and discipline. In June, we closed on the second round of financing from Streeterville Capital with the sale of approximately $5 million in unsecured notes. These capital raises will further strengthen our balance sheet and overall financial flexibility to meet our operational and strategic needs. And as a reminder, we intend to raise an additional 15 to 20 million in the second half of this year. The proceeds of our fundraising will enable us to invest in the capabilities of our new Shield products and ensure that we're well positioned to address the most pressing cybersecurity challenges of the future. We have outlined and started to execute along our multi-year product roadmap in support of that growing future demand with several planned near-term releases. Before wrapping up, let me also address our legacy consulting business. As we discussed last quarter, the continuing resolution, or CR as it's commonly known, ended late in the first quarter of this year, creating a tailwind for this piece of the business. We were pleased to see this segment grow year over year. We could have delivered greater growth had certain additional opportunities not slipped into the third quarter. However, we do expect to recognize those orders in the current third quarter. Now, while the CR can be a lingering reality of conducting federal government business, We continue to make prudent investments and are exploring opportunities on the civilian side of the federal government to market Intrusion Shield to our longstanding customer base and expand our efforts to include more traditional administrative and civilian government entities. In conclusion, as we continue to get early and insightful feedback from our beta users, we're converting leads into customers building further relationships with channel partners, and preparing for the upcoming launch of our new products. The cybersecurity landscape remains dynamic, with zero-day and ransomware protection being top of mind for executives of large enterprises. We are hearing from CIOs that they're allocating more of their IT budgets to cybersecurity spending on future-focused protections that align with new and emerging threat protection that our intrusion products offer. We remain encouraged by how the demand backdrop for our solutions continues to grow, specifically in the market subsegments we serve. With over 25 years of IP reputational behavior, which includes a database of over 8.5 billion domain names and IP addresses, our products are tested, proven to provide a critical layer of protection to organizations' zero-trust architecture. Overall, I'm proud of how our team executed during the quarter. We are building momentum as we near the general availability of our new and innovative products, and we continue to realize the benefits of our revamped strategic channel relationships. We are happy with the positive trajectory and our new business wins. paired with strong sales pipeline as more companies look to leverage our advanced threat hunting capabilities. With that, I'd now like to turn the call over to Kim for a detailed review of our second quarter financials. Kimberly?