Tego Cyber Discloses 8.9% Stake in Intrusion
The holder of 2,373,134 shares wants Intrusion to begin an orderly CEO succession process and add independent directors to its board, the filing says.
Tego Cyber, Inc. reported holding 8.9% of Intrusion Inc's common stock and said it will seek board talks on replacing the chief executive and reshaping the board, according to a Schedule 13D filed Nov. 12.
The filing says Tego Cyber intends to ask the board to decline a new employment agreement with the current CEO on terms that continue the status quo and to initiate an orderly CEO succession process. The CEO's employment agreement is set to expire Nov. 15, according to the filing.
Tego Cyber also wants Intrusion to "Reconstitute the Board to add directors with demonstrated public-company operating, financial, and capital markets experience who are independent of the current management team," the filing says. It also seeks immediate cuts in operating expenses and an independent review of historical gross margin presentation and expense classifications.
The filing says Intrusion has reported continuing losses and a going-concern warning. It criticizes an August warrant inducement in which existing warrants were exercised at a temporarily reduced price of $0.795 a share and new warrants were issued at $0.67, which the filing says increases potential dilution.
Tego Cyber received the Intrusion shares as partial consideration for selling a 60% membership interest in OW Cyber LLC to Intrusion under an agreement dated June 29, the filing says. It sent a letter to Intrusion's board on or about Nov. 9 and says it may communicate with other shareholders or nominate directors.