Intrusion Inc. (NASDAQ:INTZ) , today announced that it has closed a $1.2 million private placement of its newly created Series 3 - 5% Convertible Preferred Stock and warrants.
In the private placement, the company sold 564,607 shares of preferred stock at a price of $2.18 per share, which convert into 564,607 shares of common stock at an initial conversion price of $2.18 per share, and warrants to purchase 282,306 shares of common stock at an exercise price of $2.58 per share. The conversion price of the preferred stock was based on the Company's Common Stock at 85% of the average of the closing bid price per share for the five business days ended on November 30, 2005 and the exercise price of the warrants was based on 100% of the closing bid price per share on November 30, 2005. The warrants are exercisable for a five year period starting on June 2, 2006.
G. Ward Paxton, the company's Chairman, President and Chief Executive Officer, and James F. Gero, an outside director to the company, invested an aggregate of $180,000 in the private placement. The remaining purchasers were institutional investors and individual accredited investors.
Stonegate Securities, Inc. served as financial advisor to the company in connection with the private placement and received a warrant to purchase 27,531 shares of common stock at a price of $2.58 per share, as part of its compensation.
The company intends to file a Form 8-K with the Securities and Exchange Commission on December 6, 2005 that will provide a description of the private placement and copies of the definitive agreements.