INTZ · Intrusion Inc.

Intrusion Inc. has entered into a significant financing arrangement with Streeterville Capital, LLC, characterized by a Secured Promissory Note with an original principal amount of $3,230,000. The Company received net cash proceeds of $3,000,000, reflecting an original issue discount (OID) of $210,000 and $20,000 in transaction expenses. This structure implies an effective discount of roughly 7.1% on the principal at inception, excluding the impact of the monitoring fee. The Note carries a 7% annual interest rate, compounded daily, and matures 24 months from the issuance date of April 6, 2026. A notable feature is the monitoring fee provision that automatically increases the Outstanding Balance by approximately 17.65% after 90 days, which significantly impacts the effective cost of capital for the Company. The debt is secured by a first-priority security interest in all of the Company's assets and intellectual property, providing the Investor with substantial protection. The agreement includes restrictive covenants such as requirements for timely SEC reporting, maintenance of exchange listing, and limitations on future variable-rate financings without investor consent. Additionally, the Investor secured a 10% participation right in future debt or equity financings and monthly redemption rights of up to $250,000 beginning six months after issuance, which could influence the Company's future capital raising activities and cash flow management.