PART I -- FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, financial statement components, acquisitions, earnings per share, stockholders' equity changes, customer and geographic concentrations, related party transactions, income taxes, and commitments and contingencies [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time Balance Sheets (in thousands) | ASSETS (in thousands) | September 30, 2024 | December 31, 2023 | | :-------------------- | :----------------- | :---------------- | | Cash and cash equivalents | $3,810 | $4,304 | | Accounts receivable, net | $1,174 | $2,167 | | Inventories | $2,494 | $2,476 | | Total current assets | $7,721 | $9,328 | | Total assets | $14,121 | $15,062 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | September 30, 2024 | December 31, 2023 | | :------------------------------------------------ | :----------------- | :---------------- | | Total current liabilities | $1,254 | $1,375 | | Total long-term liabilities | $1,401 | $659 | | Total liabilities | $2,655 | $2,034 | | Total stockholders' equity | $11,466 | $13,028 | | Total liabilities and stockholders' equity | $14,121 | $15,062 | - **Total assets decreased from** **$15,062 thousand** at December 31, 2023, to **$14,121 thousand** at September 30, 2024. **Total stockholders' equity also decreased from** **$13,028 thousand** to **$11,466 thousand** during the same period[5](index=5&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement reports the company's revenues, expenses, and net income or loss over specific periods Statements of Operations (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue, net | $2,671 | $3,075 | $8,693 | $10,402 |\n| Gross profit | $1,105 | $1,459 | $3,663 | $5,107 |\n| Income (loss) from operations | $(476) | $(92) | $(1,540) | $141 |\n| Net income (loss) | $(523) | $(125) | $(1,571) | $65 |\n| Earnings (loss) per common share – basic and diluted | $(0.06) | $(0.02) | $(0.19) | $(0.02) | - For the three months ended September 30, 2024, **net revenue decreased by** **13.1%** to **$2,671 thousand** from **$3,075 thousand** in the prior year. **Net loss increased significantly to** **$(523) thousand** from **$(125) thousand** YoY. For the nine months ended September 30, 2024, **net revenue decreased by** **16.4%** to **$8,693 thousand** from **$10,402 thousand** in the prior year, **resulting in a net loss of** **$(1,571) thousand** **compared to a net income of** **$65 thousand** in the prior year[6](index=6&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents net income or loss alongside other comprehensive income or loss items, such as foreign currency translation adjustments Comprehensive Income (Loss) (in thousands) | (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) | $(523) | $(125) | $(1,571) | $65 |\n| Foreign currency translation adjustments | $398 | $(194) | $282 | $1 |\n| Comprehensive income (loss) | $(125) | $(319) | $(1,289) | $66 | - **Comprehensive loss for the three months ended September 30, 2024, was** **$(125) thousand**, **an improvement from** **$(319) thousand** in the prior year, **primarily due to positive foreign currency translation adjustments**. **For the nine months, comprehensive loss was** **$(1,289) thousand**, **compared to comprehensive income of** **$66 thousand** in the prior year[7](index=7&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement details changes in the equity section of the balance sheet, including net income, dividends, and stock-based compensation Stockholders' Equity (in thousands) | (in thousands) | Balance at Dec 31, 2023 | Net (loss) | Stock-based compensation expense | Preferred stock dividends | Foreign currency translation adjustment | Balance at Sep 30, 2024 | | :------------- | :---------------------- | :--------- | :------------------------------- | :------------------------ | :-------------------------------------- | :---------------------- | | Total Stockholders' Equity | $13,028 | $(1,571) | $27 | $(300) | $282 | $11,466 | - **Total stockholders' equity decreased from** **$13,028 thousand** at December 31, 2023, to **$11,466 thousand** at September 30, 2024, **primarily due to a net loss of** **$(1,571) thousand** **and preferred stock dividends of** **$(300) thousand**, **partially offset by positive foreign currency translation adjustments of** **$282 thousand**[9](index=9&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows into operating, investing, and financing activities over specific periods Cash Flows (in thousands) | (in thousands) | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(144) | $155 |\n| Net cash (used in) investing activities | $(107) | $(4,322) |\n| Net cash (used in) financing activities | $(300) | $(650) |\n| Net (decrease) in cash and cash equivalents | $(494) | $(4,884) |\n| Cash and cash equivalents, end of period | $3,810 | $5,207 | - For the nine months ended September 30, 2024, **the company used** **$144 thousand** **in operating activities, a shift from** **$155 thousand** **provided in the prior year**. **Investing activities used** significantly less cash at **$(107) thousand** compared to **$(4,322) thousand** in the prior year, **mainly due to the absence of a major acquisition**. **Financing activities used** **$(300) thousand**, **primarily for preferred stock dividends**[11](index=11&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential details and explanations for the figures presented in the primary financial statements [Note 1 – The Company and its Significant Accounting Policies](index=9&type=section&id=Note%201%20%E2%80%93%20The%20Company%20and%20its%20Significant%20Accounting%20Policies) This note describes the company's business operations and outlines the key accounting policies used in preparing the financial statements - **Interlink Electronics, Inc. operates in two principal sensor technology divisions**: force/touch sensors and gas and environmental sensors. **The company designs, develops, manufactures, and sells proprietary force-sensing and gas-sensing technologies**, including HMI platforms for consumer electronics, automotive, industrial, and medical markets, and electrochemical gas-sensing technology for industry, community, health, and home settings[13](index=13&type=chunk) - **On March 1, 2024, the Board of Directors declared a** **50%** **common stock dividend, increasing outstanding shares from** **6,573,570** **to** **9,860,368**. **All common stock and per share information in the report has been retroactively adjusted to reflect this stock split**[15](index=15&type=chunk) - **The company recognizes revenue when customers obtain control of promised goods or services**, **typically upon shipment when title and risk of loss transfer**. **Reserves are established for potential customer returns or warranty repairs based on historical experience**[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - **Engineering, research and development (R&D) costs are expensed as incurred**, **primarily consisting of compensation for R&D employees, depreciation, amortization, and overhead**[24](index=24&type=chunk) - **The company operates in one reportable segment**: the manufacture and sale of force/touch sensors and gas sensors[33](index=33&type=chunk) [Note 2 – Details of Certain Financial Statement Components](index=15&type=section&id=Note%202%20%E2%80%93%20Details%20of%20Certain%20Financial%20Statement%20Components) This note provides a breakdown of specific asset and liability accounts, offering more granular financial information Inventories (in thousands) | Inventories (in thousands) | September 30, 2024 | December 31, 2023 | | :------------------------- | :----------------- | :---------------- |\n| Raw materials | $1,923 | $1,986 |\n| Work-in-process | $262 | $232 |\n| Finished goods | $309 | $258 |\n| Total inventories | $2,494 | $2,476 | Property, Plant and Equipment, Net (in thousands) | Property, plant and equipment, net (in thousands) | September 30, 2024 | December 31, 2023 | | :------------------------------------------------ | :----------------- | :---------------- |\n| Furniture, machinery and equipment | $2,694 | $2,009 |\n| Leasehold improvements | $451 | $412 |\n| Less: accumulated depreciation | $(2,831) | $(2,108) |\n| Total property, plant and equipment, net | $314 | $313 | Intangible Assets, Net (in thousands) | Intangible assets, net (in thousands) | September 30, 2024 | December 31, 2023 | | :------------------------------------ | :----------------- | :---------------- |\n| Patents, tradenames, and trademarks | $945 | $935 |\n| Developed technology | $562 | $543 |\n| Customer relationships | $1,512 | $1,449 |\n| Non-compete agreements | $973 | $930 |\n| Order backlog | $22 | $22 |\n| In-process research and development | $29 | $29 |\n| Less: accumulated amortization | $(1,868) | $(1,254) |\n| Total intangible assets, net | $2,175 | $2,654 | - **Goodwill increased from** **$2,461 thousand** at January 1, 2024, to **$2,565 thousand** at September 30, 2024, **primarily due to foreign currency exchange rate changes**[48](index=48&type=chunk) [Note 3 – Acquisition of Calman Technology Limited](index=17&type=section&id=Note%203%20%E2%80%93%20Acquisition%20of%20Calman%20Technology%20Limited) This note details the acquisition of Calman Technology Limited, including the purchase price and the fair value of assets acquired - **On March 17, 2023, Interlink acquired Calman Technology Limited for approximately** GB£4,127,000 (approximately **$4,912,000**), a Scotland-based designer and manufacturer of membrane keypads, graphic overlays, and printed electronics[50](index=50&type=chunk) Net Assets Acquired (in thousands) | Net assets acquired (in thousands) | Amount | | :--------------------------------- | :----- |\n| Cash | $1,577 |\n| Accounts receivable | $656 |\n| Inventories | $622 |\n| Property, plant, and equipment | $146 |\n| Developed technology | $381 |\n| Tradenames and trademarks | $214 |\n| Customer relationships | $1,260 |\n| Non-compete agreements | $843 |\n| Goodwill | $2,064 |\n| Net assets acquired | $6,450 | - **The acquisition resulted in** **$2,064 thousand** **in goodwill, primarily attributed to expected synergies and Calman's assembled workforce, which is not expected to be tax-deductible**[52](index=52&type=chunk) [Note 4 – Earnings Per Share](index=18&type=section&id=Note%204%20%E2%80%93%20Earnings%20Per%20Share) This note explains the calculation of basic and diluted earnings per share, including adjustments for stock dividends and anti-dilutive securities - **Basic and diluted earnings per share calculations retroactively reflect the** **50%** **common stock dividend declared on March 1, 2024, as if it occurred at the beginning of the earliest period presented**[56](index=56&type=chunk) - **200,000** **shares of Series A Convertible Preferred Stock (convertible into** **600,000** **common shares) and** **31,250** **restricted stock units were excluded from diluted EPS calculations for 2024 periods because their conversion or effect would be anti-dilutive due to net losses or a higher conversion price than the market price**[57](index=57&type=chunk) [Note 5 – Stockholders' Equity](index=19&type=section&id=Note%205%20%E2%80%93%20Stockholders'%20Equity) This note provides further details on changes in stockholders' equity, including stock-based compensation and share repurchase programs - **In May 2024, the company granted** **31,250** **restricted stock units to certain employees with a weighted-average grant-date fair value of** **$4.35** per share. **As of September 30, 2024, there was approximately** **$124,000** **of unrecognized compensation cost related to these units, expected to be recognized over** **4.3** years[59](index=59&type=chunk) - **The company did not repurchase any shares during the three and nine months ended September 30, 2024**. **A stock repurchase program approved in May 2023 to repurchase up to** **100,000** **shares expired in May 2024**[61](index=61&type=chunk) [Note 6 – Significant Customers, Concentrations of Credit Risk, and Geographic Information](index=19&type=section&id=Note%206%20%E2%80%93%20Significant%20Customers,%20Concentrations%20of%20Credit%20Risk,%20and%20Geographic%20Information) This note identifies major customers, assesses credit risk concentrations, and breaks down revenues by geographic region Net Revenues from Significant Customers | Net revenues from customers ≥ 10% of total net revenues | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- |\n| Customer A | * % (<10%) | 11 % | 14 % | 22 % |\n| Customer B | 10 % | 19 % | 13 % | 11 % |\n| Customer C | * % (<10%) | 11 % | * % (<10%) | * % (<10%) | Net Revenues by Geographic Area (in thousands) | Net revenues by geographic area (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- |\n| United States | $1,056 | $1,257 | $3,904 | $5,357 |\n| Asia and Middle East | $775 | $816 | $1,982 | $2,770 |\n| Europe and other | $840 | $1,002 | $2,807 | $2,275 |\n| Revenue, net | $2,671 | $3,075 | $8,693 | $10,402 | - **At September 30, 2024, two customers accounted for** **17%** and **13%** of total accounts receivable, while at December 31, 2023, two customers **accounted for** **35%** and **16%**. **The allowance for credit losses remained** **$0** **at both dates**[64](index=64&type=chunk) [Note 7 – Related Party Transactions](index=21&type=section&id=Note%207%20%E2%80%93%20Related%20Party%20Transactions) This note discloses transactions and balances with entities controlled by key management personnel, ensuring transparency - **The company has facilities and consulting agreements with Qualstar Corporation and BKF Capital Group, Inc., both related parties controlled by Steven N. Bronson (Chairman, President, and CEO of Interlink)**. **These agreements involve sharing office facilities and providing operational, sales, marketing, and administrative services**[67](index=67&type=chunk)[71](index=71&type=chunk) Transactions with Qualstar (in thousands) | Transactions with Qualstar (in thousands) | Due from Qualstar (Sep 30, 2024) | Due to Qualstar (Sep 30, 2024) | | :---------------------------------------- | :------------------------------- | :----------------------------- |\n| Balance at September 30, | $26 | $29 | Transactions with BKF Capital (in thousands) | Transactions with BKF Capital (in thousands) | Due from BKF Capital (Sep 30, 2024) | Due to BKF Capital (Sep 30, 2024) | | :------------------------------------------- | :---------------------------------- | :-------------------------------- |\n| Balance at September 30, | $0 | $0 | [Note 8 – Income Taxes](index=22&type=section&id=Note%208%20%E2%80%93%20Income%20Taxes) This note details the company's income tax expense, effective tax rate, deferred tax assets and liabilities, and valuation allowances - **Income tax expense as a percentage of pre-tax income/loss was** **5.7%** for the three months ended September 30, 2024 (vs. **89.4%** in 2023) and **4.0%** for the nine months ended September 30, 2024 (vs. **78.0%** in 2023). **The effective tax rate varies from the U.S. statutory rate of** **21%** **due to the mix of domestic and foreign pre-tax earnings/losses and the valuation allowance on domestic Net Operating Losses (NOLs)**[74](index=74&type=chunk) - **A valuation allowance on federal and state deferred tax assets was deemed necessary at September 30, 2024, and December 31, 2023, due to uncertainties in generating sufficient future taxable income to utilize existing deferred tax assets**. **No valuation allowance was necessary for foreign deferred tax assets**[76](index=76&type=chunk) - **Of the** **$3.8 million** **cash at September 30, 2024,** **$2.5 million** **was held by foreign subsidiaries**. **These funds can be repatriated without significant tax effects through methods like intercompany loan repayments or distributions of previously taxed income**[78](index=78&type=chunk) [Note 9 – Commitments and Contingencies](index=23&type=section&id=Note%209%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's lease obligations, legal proceedings, and other potential future liabilities - **The company leases facilities under non-cancellable operating leases expiring through fiscal 2029**. **The weighted average incremental borrowing rate used for ROU assets and lease liabilities was** **9.5%** for the nine months ended September 30, 2024 (vs. **5.5%** in 2023)[79](index=79&type=chunk)[80](index=80&type=chunk) Lease Liabilities (in thousands) | Lease Liabilities (in thousands) | September 30, 2024 | December 31, 2023 | | :------------------------------- | :----------------- | :---------------- |\n| Current lease liabilities | $351 | $126 |\n| Long-term lease liabilities | $870 | $33 |\n| Right-of-use assets | $1,155 | $143 | - **Operating lease costs for the nine months ended September 30, 2024, totaled approximately** **$466,000**, with **$241,000** **in cost of revenue and** **$225,000** **in operating expenses**[90](index=90&type=chunk) - **The company is not party to any legal proceedings as of September 30, 2024**. **Warranty reserves are established for future product warranty costs, which have historically not been material**[92](index=92&type=chunk)[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key business activities, product offerings, and strategic initiatives. It includes a detailed comparison of financial performance for the three and nine months ended September 30, 2024, versus 2023, covering revenue, gross profit, operating expenses, and net income/loss. The discussion also addresses critical accounting policies, liquidity, capital resources, and cash flow analysis [Overview](index=26&type=section&id=Overview) This overview summarizes the company's business, including its sensor technology divisions, global customer base, and strategic investments in technology platforms - **Interlink Electronics, Inc. is a global sensor and printed electronics company with two main divisions**: force/touch sensors (including FSR® technology, membrane keypads, graphic overlays) and gas and environmental sensors (acquired through SPEC/KWJ)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - **The company serves a diverse global customer base, including Fortune Global 500 companies, across consumer electronics, automotive, industrial automation, medical, defense, and environmental monitoring markets**. **Manufacturing occurs in Shenzhen, China; Silicon Valley, California; and Irvine, Scotland**[105](index=105&type=chunk)[106](index=106&type=chunk) - **Interlink has invested in expanding its technology platforms through internal development and strategic acquisitions, establishing a Global Product Development and Materials Science Center in Camarillo, California, and advanced facilities in Silicon Valley and Scotland**[107](index=107&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that there have been no material changes to the critical accounting policies and estimates previously disclosed - **There have been no material changes to the critical accounting policies and estimates described in the Annual Report on Form 10-K filed on March 25, 2024**[109](index=109&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=28&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) This section states that recently issued accounting pronouncements are not expected to materially impact the financial statements - **All recently issued accounting pronouncements were reviewed and concluded to be either not applicable or not expected to be material to the financial statements**[110](index=110&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing revenues, gross profit, and operating expenses for the reported periods [Comparison of Three Months Ended September 30, 2024 and 2023](index=29&type=section&id=Comparison%20of%20Three%20Months%20Ended%20September%2030,%202024%20and%202023) This comparison highlights the financial performance for the three months ended September 30, 2024, versus the prior year Three Months Ended September 30, 2024 and 2023 (in thousands, except percentages) | (in thousands, except percentages) | Three Months Ended Sep 30, 2024 | % of Revenue | Three Months Ended Sep 30, 2023 | % of Revenue | Change | % Change | | :--------------------------------- | :------------------------------ | :----------- | :------------------------------ | :----------- | :----- | :------- |\n| Revenue, net | $2,671 | 100.0% | $3,075 | 100.0% | $(404) | (13.1)% |\n| Cost of revenue | $1,566 | 58.6% | $1,616 | 52.6% | $(50) | (3.1)% |\n| Gross profit | $1,105 | 41.4% | $1,459 | 47.4% | $(354) | (24.3)% |\n| Engineering, research and development | $486 | 18.2% | $588 | 19.1% | $(102) | (17.3)% |\n| Selling, general and administrative | $1,095 | 41.0% | $963 | 31.3% | $132 | 13.7% |\n| Income (loss) from operations | $(476) | (17.8)% | $(92) | (3.0)% | $(384) | (417.4)% |\n| Net income (loss) | $(523) | (19.6)% | $(125) | (4.1)% | $(398) | (318.4)% | - **Revenue decreased by** **13.1%** **YoY, primarily due to lower demand from larger force-sensor customers in medical and industrial markets and delays in fulfilling orders from a large membrane printed electronics customer**[114](index=114&type=chunk)[115](index=115&type=chunk) - **Gross profit and gross margin percentage declined due to lower revenues and changes in product and customer mix**. **Selling, general and administrative expenses increased by** **13.7%** **due to higher intangible asset amortization from the Calman acquisition, partially offset by lower compensation and professional services expenses**[116](index=116&type=chunk)[118](index=118&type=chunk) [Comparison of Nine Months Ended September 30, 2024 and 2023](index=31&type=section&id=Comparison%20of%20Nine%20Months%20Ended%20September%2030,%202024%20and%202023) This comparison details the financial performance for the nine months ended September 30, 2024, versus the prior year Nine Months Ended September 30, 2024 and 2023 (in thousands, except percentages) | (in thousands, except percentages) | Nine Months Ended Sep 30, 2024 | % of Revenue | Nine Months Ended Sep 30, 2023 | % of Revenue | Change | % Change | | :--------------------------------- | :----------------------------- | :----------- | :----------------------------- | :----------- | :----- | :------- |\n| Revenue, net | $8,693 | 100.0% | $10,402 | 100.0% | $(1,709) | (16.4)% |\n| Cost of revenue | $5,030 | 57.9% | $5,295 | 50.9% | $(265) | (5.0)% |\n| Gross profit | $3,663 | 42.1% | $5,107 | 49.1% | $(1,444) | (28.3)% |\n| Engineering, research and development | $1,572 | 18.1% | $1,765 | 17.0% | $(193) | (10.9)% |\n| Selling, general and administrative | $3,631 | 41.8% | $3,201 | 30.8% | $430 | 13.4% |\n| Income (loss) from operations | $(1,540) | (17.7)% | $141 | 1.4% | $(1,681) | (1192.2)%|\n| Net income (loss) | $(1,571) | (18.1)% | $65 | 0.6% | $(1,636) | (2516.9)%| - **Revenue decreased by** **16.4%** **for the nine months ended September 30, 2024, compared to the prior year, primarily due to lower demand from force-sensor customers in medical, industrial, and consumer markets, and fulfillment delays from a membrane printed electronics customer**. **Standard product sales, however, increased**[123](index=123&type=chunk) - **Gross profit and gross margin percentage decreased due to lower revenues and changes in product and customer mix**. **Selling, general and administrative costs increased by** **13.4%** **due to higher intangible asset amortization from the Calman acquisition, partially offset by lower compensation and professional services expenses**[124](index=124&type=chunk)[126](index=126&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations, including cash position, working capital, and financing arrangements - **As of September 30, 2024, the company had** **$3.8 million** **in cash and cash equivalents,** **$6.5 million** **in working capital, and no indebtedness**. **$2.5 million** **of the cash was held by foreign subsidiaries, which can be repatriated without significant tax effects**[129](index=129&type=chunk) - **The company has** **200,000** **shares of** **8.0%** **Series A Convertible Preferred Stock outstanding, with an aggregate liquidation preference of** **$5.0 million**. **Monthly cumulative cash dividends of** **$0.16667** **per share are paid, and the company expects to continue these payments**[130](index=130&type=chunk) - **Management believes existing cash and cash equivalents will be sufficient for current operations**. **However, if additional cash is needed, the company may seek equity, equity-linked, or debt financing, which could dilute existing stockholders or impose restrictive covenants**[131](index=131&type=chunk) [Cash Flow Analysis](index=33&type=section&id=Cash%20Flow%20Analysis) This section analyzes the company's cash inflows and outflows from operating, investing, and financing activities for the reported periods Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------------------------- | :----------------------------- | :----------------------------- |\n| Net cash provided by (used in) operating activities | $(144) | $155 |\n| Net cash (used in) investing activities | $(107) | $(4,322) |\n| Net cash (used in) financing activities | $(300) | $(650) | - **Operating activities used** **$144,000** **cash in the nine months ended September 30, 2024, primarily due to a net loss of** **$1,571,000**, **partially offset by non-cash charges and cash provided by changes in operating assets and liabilities**[132](index=132&type=chunk) - **Investing activities used** **$107,000** **for property, plant, and equipment purchases in 2024, significantly less than the** **$4.3 million** **used in 2023, which included the Calman acquisition**. **Financing activities used** **$300,000**, **primarily for preferred stock dividends**[134](index=134&type=chunk)[135](index=135&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms that the company does not have any off-balance sheet arrangements - **The company does not have any off-balance sheet arrangements**[137](index=137&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is marked as 'Not Applicable,' indicating that the company does not have material quantitative or qualitative disclosures regarding market risk for the reported period - **This section is marked as 'Not Applicable'**[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures, confirming their effectiveness at a reasonable assurance level as of September 30, 2024. It also states that there were no material changes in internal controls over financial reporting during the quarter and acknowledges the inherent limitations of any control system [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms that management, with CEO and CFO participation, concluded the disclosure controls and procedures were effective at a reasonable assurance level - **Management, with CEO and CFO participation, concluded that disclosure controls and procedures were designed at a reasonable assurance level and were effective as of September 30, 2024**[138](index=138&type=chunk) [Changes in Internal Controls over Financial Reporting](index=34&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) This section states that no material changes occurred in internal controls over financial reporting during the quarter - **There was no change in internal control over financial reporting during the quarter ended September 30, 2024, that materially affected, or is reasonably likely to materially affect, internal control over financial reporting**[139](index=139&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=34&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section acknowledges the inherent limitations of any control system, emphasizing that reasonable assurance, not absolute, is provided - **Management acknowledges that control systems, no matter how well designed, can only provide reasonable, not absolute, assurance and are subject to inherent limitations such as human diligence, judgment lapses, and breakdowns**[141](index=141&type=chunk) PART II -- OTHER INFORMATION This section provides additional information not covered in the financial statements, including risk factors, exhibits, and signatures [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the company's Annual Report on Form 10-K filed on March 25, 2024, and states that there have been no material changes to these risk factors during the nine months ended September 30, 2024 - **No material changes to risk factors were identified during the nine months ended September 30, 2024, as compared to those in the Annual Report on Form 10-K filed on March 25, 2024**[142](index=142&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section confirms that there are no insider trading arrangements to report - **There are no insider trading arrangements to report**[143](index=143&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including certifications, XBRL documents, and various corporate governance documents incorporated by reference - **The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1) and various XBRL taxonomy extension documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)**[145](index=145&type=chunk) - **Other exhibits include Articles of Incorporation, Certificate of Designations of Series A Preferred Stock, Bylaws, and their amendments, along with the form of common stock**[146](index=146&type=chunk) [Signatures](index=37&type=section&id=Signatures) This section contains the required signatures, confirming the due authorization and filing of the report by Interlink Electronics, Inc - **The report was signed on November 7, 2024, by Ryan J. Hoffman, Chief Financial Officer (Principal Financial and Accounting Officer) of Interlink Electronics, Inc.**[148](index=148&type=chunk)

IRVINE, Calif., Nov. 7, 2024 /PRNewswire/ -- Interlink Electronics, Inc. (Nasdaq: LINK), a world-leading provider of sensors and printed electronic solutions that support a wide range of applications including Human-Machine Interface devices and Internet-of-Things solutions, today announced its financial results for the three- and nine-month periods ended September 30, 2024.Revenue for the quarter was approximately $2.7 million, down 13% from the prior-year quarter due to lower shipments of our traditional ...

Market Opportunity - The potential market for real-world asset (RWA) tokenization could reach $16 trillion by 2030 according to the Boston Consulting Group, while Coinbase estimates it could be in the "hundreds of trillions of dollars" [4] - If Chainlink captures just 10% of a $10 trillion market opportunity, it could equate to a market value of $1 trillion, similar to Bitcoin's current valuation [5] Chainlink's Role - Chainlink is positioned to play a significant role in the RWA tokenization trend, having previously led the decentralized finance (DeFi) movement [5][6] - The founder of Chainlink, Sergey Nazarov, believes that tokenized assets could surpass the value of the entire cryptocurrency market [6] Challenges and Solutions - Chainlink aims to address major challenges in RWA tokenization, including cross-chain connectivity, through its Cross-Chain Interoperability Protocol (CCIP) [8][7] - The company has partnered with real-world financial institutions to implement its solutions, enhancing its value proposition in the market [8] Competitive Landscape - Currently, Chainlink is the only RWA token with a market cap exceeding $1 billion, amidst a landscape of various cryptocurrencies claiming to be RWA tokens [10]

Core Viewpoint - Chainlink has the potential to significantly increase in value by tapping into the emerging trillion-dollar market of real-world asset tokenization, despite its current struggles in the cryptocurrency market [1][12]. Company Analysis - Chainlink is currently down 30% for the year, having fallen from a price of $15 in July to $9 in August, and is trading 80% below its all-time high of $52 from May 2021 [3][4]. - The decline in Chainlink's value is attributed to broader market trends, including a backlash against decentralized finance (DeFi) following the 2022 crypto market crash, which has affected many DeFi projects [5][6]. - Chainlink's core functionality as a data oracle for smart contracts makes it vulnerable to the fluctuations in the DeFi sector [6]. Market Opportunity - Real-world asset tokenization is identified as a significant financial trend, with estimates suggesting it could represent a market opportunity of $16 trillion by 2030 according to the Boston Consulting Group, or $2 trillion according to McKinsey & Co. [9][10]. - Chainlink is positioned to play a crucial role in this market, having established itself as a thought leader and partnered with notable financial institutions for proof-of-concept projects [11]. Investment Thesis - If Chainlink captures just 1% of a $1 trillion market opportunity, it could equate to $10 billion, indicating a potential increase in value by 250% from its current market cap of $6.5 billion [12]. - The trend of asset tokenization is expected to evolve over the coming years, with initial focus likely on financial products that are most suitable for digital token conversion [13].

Product Launch - FUJIFILM North America Corporation, Imaging Division, launched the FUJIFILM INSTAX MINI LINK 3™ Smartphone printer, which works with the INSTAX MINI LINK App to offer augmented reality and collage options for image customization [1] - The Mini Link 3 is designed to enhance creativity and allow users to customize images in imaginative ways, making it more than just a photo printer [2] Key Features - INSTAX AiR Studio™: Users can add 3D AR effects to images before printing, with options for background templates, decorative imagery, and animated effects [3] - Up to 20 INSTAX AiR Studio image creations can be saved within the App for later printing or sharing [4] - Click to Collage: Users can capture a series of six images at three-second intervals and print them as a collage, with the option to share the animation on social media [5] - Triple LED Lighting: Bright pastel LEDs on the front panel indicate printing status and battery level, a first in the INSTAX LINK Series [6] - Lightweight Portability and Speed: The Mini Link 3 is compact, lightweight, and can print an image in about 15 seconds, with the ability to print approximately 100 INSTAX MINI instant photos per charge [7] - Customization Options: The App offers design frames, image color modes (INSTAX-Rich and INSTAX-Natural), artistic filters, and adjustments for brightness, contrast, and saturation [8] Product Availability and Pricing - Mini Link 3 will be available in Rose Pink, Clay White, and Sage Green, with a manufacturer's suggested retail price of $99.95 USD and $129.99 CAD, expected in late August [9] - A new INSTAX MINI Sprinkles instant film variety, featuring a colorful border design, will also be available in late August at $15.75 USD and $14.99 CAD for a 10-pack [10] Company Overview - FUJIFILM North America Corporation operates six divisions, including the Imaging Division, which provides consumer and commercial photographic products and services, including the INSTAX line of instant cameras, smartphone printers, and accessories [12] - FUJIFILM Holdings Corporation, headquartered in Tokyo, operates globally across healthcare, electronics, business innovation, and imaging, with a goal to achieve a global revenue of 4 trillion yen (29 billion USD) by FY2030 [14] Additional Information - For more details about the Mini Link 3 and INSTAX MINI Sprinkles film, visit the official website [11] - FUJIFILM's commitment to sustainability is outlined in its Sustainable Value Plan 2030 [15]

YOKNEAM ILLIT, ISRAEL, July 16, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (NASDAQ:WLDS, WLDSW))), a technology growth company specializing in artificial intelligence ("AI")-powered touchless sensing wearables, announced the launch of their latest breakthrough in neural gesture-control technology: the Mudra LINK. This AI-powered neural wristband for any Bluetoothenabled device promises to redefine how users interact with their digital devices, offering unparalleled ...

IRVINE, Calif., June 18, 2024 /PRNewswire/ -- Interlink Electronics, Inc. (NASDAQ: LINK), a world-leading provider of sensors and printed electronic solutions that support a wide range of applications, including HumanMachine Interface ("HMI"), environmental sensing, and Internet-of-Things ("IoT") devices, is thrilled to introduce a significant addition to its broad portfolio of electrochemical gas sensors and systems. These new sensors, specifically designed for use in Outdoor Air Quality (OAQ) monitoring s ...

Financial Performance - Revenue for Q1 2024 was approximately $3.1 million, a decrease of 5% from $3.3 million in Q1 2023[3] - Gross profit margin fell to 40.1% in Q1 2024 from 48.4% in Q1 2023, primarily due to changes in product mix and lower revenue[8] - Net loss for the quarter was $741,000, compared to a loss of $191,000 in the same quarter last year, attributed to lower gross profit and increased operating costs[8] Cash and Liabilities - The company ended the quarter with $4.4 million in cash and cash equivalents, up from $4.3 million at the end of 2023[8] - Total liabilities increased to $2.4 million as of March 31, 2024, compared to $2.0 million at the end of 2023[14] - Stockholders' equity decreased to $12.1 million from $13.0 million at the end of 2023, reflecting the net loss for the quarter[14] Operating Expenses - Operating expenses increased to $2.0 million in Q1 2024 from $1.8 million in Q1 2023, driven by higher selling, general, and administrative costs[16] Market Outlook - The company does not expect a significant rebound in order flow from larger force-sensor customers for the remainder of the year[6] - New customer traction for force-sensor and gas-sensor products is anticipated to positively impact revenues in 2025 and beyond[6] Product Development - The acquisition of Calman Technology Limited contributed to sales of new membrane keypads and printed electronics[3]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20--%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2024 [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section provides the unaudited condensed consolidated financial statements and related notes for the quarter ended March 31, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity as of March 31, 2024, and December 31, 2023 | ASSETS (in thousands) | March 31, 2024 | December 31, 2023 | | :---------------------- | :------------- | :---------------- | | Cash and cash equivalents | $4,367 | $4,304 | | Accounts receivable, net | $1,772 | $2,167 | | Inventories | $2,570 | $2,476 | | Total current assets | $9,077 | $9,328 | | Total assets | $14,498 | $15,062 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :------------- | :---------------- | | Accounts payable | $965 | $464 | | Total current liabilities | $1,835 | $1,375 | | Total liabilities | $2,418 | $2,034 | | Total stockholders' equity | $12,080 | $13,028 | | Total liabilities and stockholders' equity | $14,498 | $15,062 | - Total assets **decreased from $15.062 million** at December 31, 2023, to **$14.498 million** at March 31, 2024, while total stockholders' equity also **decreased from $13.028 million to $12.080 million** over the same period[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance, including revenues, expenses, and net loss for the three months ended March 31, 2024, and 2023 | (in thousands, except per share data) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenue, net | $3,124 | $3,278 | | Cost of revenue | $1,871 | $1,691 | | Gross profit | $1,253 | $1,587 | | Total operating expenses | $2,004 | $1,760 | | Loss from operations | $(751) | $(173) | | Net loss | $(741) | $(191) | | Net loss applicable to common stockholders | $(841) | $(291) | | Earnings (loss) per common share – basic and diluted | $(0.09) | $(0.03) | - Net revenue **decreased by 4.7% from $3.278 million** in Q1 2023 to **$3.124 million** in Q1 2024, resulting in a significantly higher net loss of **$0.741 million** in Q1 2024 compared to **$0.191 million** in Q1 2023, and a basic and diluted loss per common share of **$(0.09)** in Q1 2024, up from **$(0.03)** in Q1 2023[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the company's comprehensive income or loss, including net loss and other comprehensive income items, for the three months ended March 31, 2024, and 2023 | (in thousands) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(741) | $(191) | | Foreign currency translation adjustments | $(107) | $182 | | Comprehensive loss | $(848) | $(9) | - Comprehensive loss significantly **increased to $(0.848) million** in Q1 2024 from **$(0.009) million** in Q1 2023, primarily due to a larger net loss and negative foreign currency translation adjustments[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in stockholders' equity, including net loss, dividends, and foreign currency adjustments, for the three months ended March 31, 2024 | (in thousands) | Balance at Dec 31, 2023 | Net loss | Preferred stock dividends | Foreign currency translation adjustment | Balance at Mar 31, 2024 | | :------------- | :---------------------- | :------- | :------------------------ | :-------------------------------------- | :---------------------- | | Total Stockholders' Equity | $13,028 | $(741) | $(100) | $(107) | $12,080 | - Total stockholders' equity **decreased from $13.028 million** at December 31, 2023, to **$12.080 million** at March 31, 2024, primarily due to a net loss of **$0.741 million**, preferred stock dividends of **$0.100 million**, and negative foreign currency translation adjustments of **$0.107 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2024, and 2023 | (in thousands) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $222 | $(620) | | Net cash (used in) investing activities | $(18) | $(2,750) | | Net cash (used in) financing activities | $(100) | $(100) | | Net increase (decrease) in cash and cash equivalents | $63 | $(3,401) | | Cash and cash equivalents, end of period | $4,367 | $6,690 | - Operating activities **provided $0.222 million** in cash in Q1 2024, a significant improvement from a cash usage of **$0.620 million** in Q1 2023, primarily due to changes in operating assets and liabilities offsetting the net loss[18](index=18&type=chunk) - Investing activities used substantially **less cash in Q1 2024 ($0.018 million)** compared to Q1 2023 (**$2.75 million**), primarily due to the Calman acquisition in the prior year[18](index=18&type=chunk) - Financing activities consistently **used $0.100 million** for preferred stock dividends in both periods[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 – The Company and its Significant Accounting Policies](index=8&type=section&id=Note%201%20%E2%80%93%20The%20Company%20and%20its%20Significant%20Accounting%20Policies) This note describes Interlink Electronics, Inc.'s business operations and outlines its key accounting policies - **Interlink Electronics, Inc.** operates in two principal sensor technology divisions: force/touch sensors and gas/environmental sensors, designing, developing, manufacturing, and selling proprietary sensor-based products and custom solutions globally[21](index=21&type=chunk) - On March 1, 2024, the Board of Directors declared a **50% common stock dividend**, increasing outstanding shares from **6,573,570 to 9,860,368**, retroactively adjusted in the financial statements[23](index=23&type=chunk) - The company recognizes revenue when customers obtain control of promised goods or services, typically upon shipment, and establishes reserves for potential returns or warranty repairs based on historical experience[29](index=29&type=chunk)[30](index=30&type=chunk) - Engineering, research and development costs are expensed as incurred, primarily consisting of compensation, depreciation, amortization, and overhead[33](index=33&type=chunk) - The company operates in **one reportable segment**: the manufacture and sale of force/touch sensors and gas sensors[45](index=45&type=chunk) - The company accounts for leases under ASC 842, recording right-of-use assets and lease liabilities for operating and financing leases, excluding short-term leases[48](index=48&type=chunk)[49](index=49&type=chunk) - Future results are subject to risks including industry changes, product performance, customer loss, international business impacts (e.g., foreign currency, trade policies), supply chain disruptions, and intellectual property enforcement[50](index=50&type=chunk)[51](index=51&type=chunk) [Note 2 – Details of Certain Financial Statement Components](index=15&type=section&id=Note%202%20%E2%80%93%20Details%20of%20Certain%20Financial%20Statement%20Components) This note provides a detailed breakdown of specific balance sheet accounts, including inventories, property, plant and equipment, intangible assets, and goodwill Inventories (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :-------------- | :------------- | :---------------- | | Raw materials | $2,049 | $1,986 | | Work-in-process | $225 | $232 | | Finished goods | $296 | $258 | | Total inventories | $2,570 | $2,476 | Property, plant and equipment, net (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :---------------------------- | :------------- | :---------------- | | Furniture, machinery and equipment | $2,014 | $2,009 | | Leasehold improvements | $406 | $412 | | Less: accumulated depreciation | $(2,131) | $(2,108) | | Total property, plant and equipment, net | $289 | $313 | Intangible assets, net (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :---------------------------- | :------------- | :---------------- | | Patents, tradenames, and trademarks | $932 | $935 | | Developed technology | $538 | $543 | | Customer relationships | $1,433 | $1,449 | | Non-compete agreements | $920 | $930 | | Order backlog | $22 | $22 | | In-process research and development | $29 | $29 | | Less: accumulated amortization | $(1,437) | $(1,254) | | Total intangible assets, net | $2,437 | $2,654 | - Amortization expense for intangible assets significantly **increased to $0.189 million** for Q1 2024, compared to **$0.012 million** for Q1 2023[57](index=57&type=chunk) Goodwill (in thousands) | Period | Amount | | :-------------------------- | :----- | | Balance as of January 1, 2024 | $2,461 | | Adjustment to goodwill, foreign currency exchange rate changes | $(26) | | Balance as of March 31, 2024 | $2,435 | [Note 3 – Acquisition of Calman Technology Limited](index=17&type=section&id=Note%203%20%E2%80%93%20Acquisition%20of%20Calman%20Technology%20Limited) This note details the acquisition of Calman Technology Limited, including the purchase price, assets acquired, and pro forma financial impacts - On March 17, 2023, Interlink acquired Calman Technology Limited for approximately **$4.912 million** (GB£4,127,000), a Scotland-based designer and manufacturer of membrane keypads, graphic overlays, and printed electronics[58](index=58&type=chunk) Fair Values of Assets Acquired and Liabilities Assumed (in thousands) | Category | Amount | | :---------------------------- | :----- | | Cash | $1,577 | | Accounts receivable | $656 | | Inventories | $622 | | Net identifiable tangible assets acquired | $2,398 | | Developed technology | $381 | | Customer relationships | $1,260 | | Goodwill | $2,064 | | Net assets acquired | $6,450 | - The acquisition resulted in **$2.064 million** in goodwill, primarily attributed to expected synergies and Calman's assembled workforce, which is not expected to be tax-deductible[60](index=60&type=chunk) Pro Forma Consolidated Statement of Operations (in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------- | :-------------------------------- | :-------------------------------- | | Revenue | $3,124 | $4,039 | | Net income (loss) | $(741) | $296 | [Note 4 – Earnings Per Share](index=18&type=section&id=Note%204%20%E2%80%93%20Earnings%20Per%20Share) This note explains the calculation of basic and diluted earnings per share, including the impact of the common stock dividend - The **50% common stock dividend** declared on March 1, 2024, has been retroactively applied to weighted average common shares outstanding and earnings per share calculations for all periods presented[63](index=63&type=chunk) Earnings Per Share Computation (in thousands, except per share data) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss applicable to common stockholders | $(841) | $(291) | | Weighted average common shares outstanding – basic | 9,860 | 9,915 | | Earnings (loss) per common share, basic | $(0.09) | $(0.03) | | Earnings (loss) per common share, diluted | $(0.09) | $(0.03) | - **600,000 shares** issuable upon conversion of Series A Convertible Preferred Stock were excluded from diluted EPS calculation as their effect would be anti-dilutive due to net losses and a conversion price higher than the average market price[64](index=64&type=chunk) [Note 5 – Significant Customers, Concentrations of Credit Risk, and Geographic Information](index=18&type=section&id=Note%205%20%E2%80%93%20Significant%20Customers,%20Concentrations%20of%20Credit%20Risk,%20and%20Geographic%20Information) This note identifies significant customers, discusses credit risk concentrations, and provides revenue and asset breakdowns by geographic area Net Revenues from Significant Customers | Customer | Three months ended March 31, 2024 (% of total net revenues) | Three months ended March 31, 2023 (% of total net revenues) | | :---------- | :---------------------------------------------------------- | :---------------------------------------------------------- | | Customer A | 16 % | 32 % | | Customer B | 17 % | < 10 % | Net Revenues by Geographic Area (in thousands) | Geographic Area | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :---------------- | :-------------------------------- | :-------------------------------- | | United States | $1,445 | $2,153 | | Asia and Middle East | $729 | $826 | | Europe and other | $950 | $299 | | Revenue, net | $3,124 | $3,278 | - Revenue from Customer A **decreased significantly from 32% to 16%** of total net revenues, while Customer B became a significant customer in Q1 2024, accounting for **17%**[66](index=66&type=chunk) - Geographically, U.S. revenues decreased, while European revenues significantly **increased from $0.299 million** in Q1 2023 to **$0.950 million** in Q1 2024[67](index=67&type=chunk) Long-Lived Assets by Geographic Location (in thousands) | Geographic Area | March 31, 2024 | December 31, 2023 | | :-------------- | :------------- | :---------------- | | United States | $674 | $733 | | Europe | $4,565 | $4,784 | | Asia | $182 | $217 | | Total long-lived assets | $5,421 | $5,734 | [Note 6 – Related Party Transactions](index=20&type=section&id=Note%206%20%E2%80%93%20Related%20Party%20Transactions) This note discloses transactions and balances with related parties, including Qualstar Corporation and BKF Capital Group - **Interlink** has ongoing facilities and consulting agreements with **Qualstar Corporation** and **BKF Capital Group**, both related parties controlled by **Steven N. Bronson**, Interlink's Chairman, President, and CEO[70](index=70&type=chunk)[71](index=71&type=chunk) Transactions with Qualstar Corporation (in thousands) | Category | Due from Qualstar (Mar 31, 2024) | Due to Qualstar (Mar 31, 2024) | | :---------------------------- | :------------------------------- | :----------------------------- | | Balance at January 1 | $2 | $32 | | Billed (or accrued) to Qualstar by Interlink | $76 | — | | Paid by Qualstar to Interlink | $(65) | — | | Billed (or accrued) to Interlink by Qualstar | — | $37 | | Paid by Interlink to Qualstar | — | $(44) | | Balance at March 31 | $13 | $25 | Transactions with BKF Capital Group (in thousands) | Category | Due from BKF Capital (Mar 31, 2024) | Due to BKF Capital (Mar 31, 2024) | | :---------------------------- | :---------------------------------- | :-------------------------------- | | Balance at January 1 | $2 | — | | Billed (or accrued) to BKF Capital by Interlink | $2 | — | | Paid by BKF Capital to Interlink | $(3) | — | | Billed (or accrued) to Interlink by BKF Capital | — | $56 | | Paid by Interlink to BKF Capital | — | $(56) | | Balance at March 31 | $1 | — | [Note 7 – Income Taxes](index=21&type=section&id=Note%207%20%E2%80%93%20Income%20Taxes) This note details the company's income tax expense, effective tax rate, and factors influencing tax positions, including NOLs and foreign cash holdings - Income tax expense as a percentage of pre-tax loss significantly **decreased to 3.1%** for Q1 2024, compared to **75.2%** for Q1 2023[72](index=72&type=chunk) - The effective tax rate is impacted by the mix of domestic and foreign pre-tax earnings and the inability to realize benefits on domestic pre-tax losses due to a valuation allowance on domestic Net Operating Losses (NOLs)[72](index=72&type=chunk)[74](index=74&type=chunk) - An ownership change in **2010** under **IRC Section 382** limits the rate at which NOLs and other deferred tax assets can offset future taxable income[73](index=73&type=chunk) - The company has elected to account for **Global Intangible Low-Taxed Income (GILTI)** as a period cost when incurred[75](index=75&type=chunk) - Of the **$4.4 million** cash at March 31, 2024, **$2.7 million** was held by foreign subsidiaries, with an intent to permanently reinvest these funds outside the U.S.[76](index=76&type=chunk) [Note 8 – Commitments and Contingencies](index=23&type=section&id=Note%208%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's lease obligations, legal proceedings, warranty policies, and indemnification agreements - The company leases various facilities globally, with current leases expiring through fiscal **2025**, and has recently entered into a new **five-year and three-month lease** for a facility in Fremont, California, commencing **May 1, 2024**[77](index=77&type=chunk)[83](index=83&type=chunk) Lease Liabilities (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :------------------- | :------------- | :---------------- | | Current lease liabilities | $112 | $126 | | Long-term lease liabilities | $2 | $33 | | Right-of-use assets | $99 | $143 | Future Minimum Lease Payments (in thousands) | Years ending December 31, | Amount | | :------------------------ | :----- | | 2024 (remainder of year) | $85 | | 2025 | $33 | | Total undiscounted future non-cancelable minimum lease payments | $118 | | Present value of lease liabilities | $114 | - Operating lease costs for Q1 2024 totaled **$0.124 million**, with **$0.067 million** included in cost of revenue and **$0.057 million** in operating expenses[88](index=88&type=chunk) - The company is not party to any legal proceedings as of **March 31, 2024**, and historically, warranty returns have not been material[90](index=90&type=chunk)[91](index=91&type=chunk) - The company indemnifies customers and contract manufacturers against intellectual property infringement claims and has severance and change-in-control obligations for its CEO, **Steven N. Bronson**[92](index=92&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section offers management's analysis of the company's financial condition and operational results for the three months ended March 31, 2024 [Overview](index=27&type=section&id=Overview) This section provides a general description of Interlink Electronics, Inc.'s business, products, markets, and strategic initiatives - **Interlink Electronics, Inc.** is a global sensor and printed electronics company with two main divisions: force/touch sensors (including **FSR® technology**, membrane keypads, graphic overlays) and gas/environmental sensors[100](index=100&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - The company declared a **50% common stock dividend** on March 1, 2024, retroactively adjusting all share and per share data[101](index=101&type=chunk) - Interlink serves a diverse global customer base across consumer electronics, automotive, industrial automation, medical, defense, and environmental monitoring markets, with manufacturing facilities in **China, Silicon Valley, and Irvine, Scotland**[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - The company has invested in expanding its technology platforms through internal development and by establishing a **Global Product Development and Materials Science Center** in **Camarillo, California**, aiming for growth and closer alignment with top-tier customers[107](index=107&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the significant accounting policies and estimates that require management's judgment and can materially affect financial reporting - The company's financial statements are prepared in accordance with **GAAP**, requiring management to make estimates and assumptions that affect reported amounts[108](index=108&type=chunk) - There have been no material changes to the critical accounting policies and estimates described in the Annual Report on **Form 10-K** filed on **March 25, 2024**[109](index=109&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=29&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) This section addresses the impact of new accounting pronouncements on the company's financial statements - All recently issued accounting pronouncements have been reviewed and are not applicable or not expected to be material to the financial statements[110](index=110&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section analyzes the company's operational performance, including revenue, gross profit, and expenses, for the reported periods [Comparison of Three Months Ended March 31, 2024 and 2023](index=30&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031,%202024%20and%202023) This section provides a detailed comparative analysis of the company's financial results for the three months ended March 31, 2024, versus the same period in 2023 Condensed Consolidated Statements of Operations Data (in thousands, except percentages) | Category | 2024 Amount | 2024 % | 2023 Amount | 2023 % | | :---------------------------- | :---------- | :----- | :---------- | :----- | | Revenue, net | $3,124 | 100.0% | $3,278 | 100.0% | | Cost of revenue | $1,871 | 59.9% | $1,691 | 51.6% | | Gross profit | $1,253 | 40.1% | $1,587 | 48.4% | | Engineering, research and development | $576 | 18.4% | $527 | 16.1% | | Selling, general and administrative | $1,428 | 45.7% | $1,233 | 37.6% | | Total operating expenses | $2,004 | 64.1% | $1,760 | 53.7% | | Loss from operations | $(751) | (24.0)%| $(173) | (5.3)% | | Net loss | $(741) | (23.7)%| $(191) | (5.8)% | Revenue, net, by Market (in thousands, except percentages) | Market | 2024 Amount | 2024 % of Revenue | 2023 Amount | 2023 % of Revenue | $ Change | % Change | | :-------- | :---------- | :---------------- | :---------- | :---------------- | :------- | :------- | | Industrial | $677 | 21.7% | $1,027 | 31.3% | $(350) | (34.1)% | | Medical | $1,185 | 37.9% | $1,351 | 41.2% | $(166) | (12.3)% | | Consumer | $132 | 4.2% | $228 | 7.0% | $(96) | (42.1)% | | Standard | $1,130 | 36.2% | $672 | 20.5% | $458 | 68.2% | | Revenue, net | $3,124 | 100.0% | $3,278 | 100.0% | $(154) | (4.7)% | - Overall net revenue **decreased by 4.7%** YoY, driven by lower demand from industrial, medical, and consumer markets, partially offset by a **68.2% increase** in standard product sales[114](index=114&type=chunk)[116](index=116&type=chunk) - Gross profit **decreased by 21.0%** and gross margin percentage **declined from 48.4% to 40.1%** YoY, primarily due to changes in product and customer mix and lower revenues[117](index=117&type=chunk) - Engineering, research and development expenses **increased by 9.3%** YoY due to higher employee and consultation compensation costs and increased intangible asset amortization[118](index=118&type=chunk) - Selling, general and administrative expenses **increased by 15.8%** YoY, mainly due to increased intangible asset amortization from the Calman acquisition and inclusion of Calman's operating costs, despite lower compensation expenses[119](index=119&type=chunk) - Other income (expense), net, **decreased by 50.0%** YoY, primarily due to lower interest income and a shift from foreign currency transaction losses to gains[120](index=120&type=chunk)[121](index=121&type=chunk) - Income tax expense as a percentage of pre-tax loss was **3.1%** for Q1 2024, significantly lower than **75.2%** in Q1 2023, influenced by the mix of domestic and foreign pre-tax earnings and valuation allowance on domestic NOLs[122](index=122&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations, including cash position and financing arrangements - As of March 31, 2024, the company had **$4.4 million** in cash and cash equivalents, **$7.2 million** in working capital, and no indebtedness[124](index=124&type=chunk) - Approximately **$2.7 million** of the cash balance is held by foreign subsidiaries, intended for permanent reinvestment outside the U.S.[124](index=124&type=chunk) - The company has **200,000 shares** of **8.0% Series A Convertible Preferred Stock** outstanding, with an aggregate liquidation preference of **$5.0 million**, paying monthly cumulative cash dividends[125](index=125&type=chunk) - Management believes existing cash and cash equivalents are sufficient for current operations but may seek additional capital through equity, equity-linked, or debt financing if circumstances change, which could dilute existing stockholders or impose restrictive covenants[126](index=126&type=chunk) [Cash Flow Analysis](index=34&type=section&id=Cash%20Flow%20Analysis) This section analyzes the company's cash flows from operating, investing, and financing activities, highlighting significant changes between periods Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $222 | $(620) | | Net cash (used in) investing activities | $(18) | $(2,750) | | Net cash (used in) financing activities | $(100) | $(100) | - Operating activities **provided $0.222 million** in cash in Q1 2024, a significant improvement from using **$0.620 million** in Q1 2023, primarily due to changes in operating assets and liabilities offsetting the net loss[128](index=128&type=chunk) - Investing activities **used $0.018 million** in Q1 2024, a substantial decrease from **$2.75 million** used in Q1 2023, which included the Calman acquisition[130](index=130&type=chunk) - Financing activities consistently **used $0.100 million** in both periods for preferred stock dividend payments[131](index=131&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements that could materially affect the company's financial position - The company does not have any off-balance sheet arrangements[132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the company for the reported period - The company has no applicable quantitative and qualitative disclosures about market risk[133](index=133&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and internal control over financial reporting. Management, including the CEO and CFO, concluded that disclosure controls were effective as of March 31, 2024, and reported no material changes in internal controls over financial reporting during the period [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section describes management's evaluation and conclusion regarding the effectiveness of the company's disclosure controls and procedures - As of **March 31, 2024**, management, with CEO and CFO participation, concluded that the company's disclosure controls and procedures were designed at a reasonable assurance level and were effective[136](index=136&type=chunk) [Changes in Internal Controls over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting during the period - There were no changes in internal control over financial reporting during the period ended **March 31, 2024**, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[137](index=137&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=36&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section acknowledges the inherent limitations of any control system, emphasizing that absolute assurance cannot be provided - Management acknowledges that no control system can prevent or detect all errors and fraud, providing only reasonable, not absolute, assurance due to human diligence, judgment lapses, and changing conditions[139](index=139&type=chunk) [PART II – OTHER INFORMATION](index=37&type=section&id=PART%20II%20--%20OTHER%20INFORMATION) This section includes additional information not covered in the financial statements, such as risk factors, other disclosures, and exhibits [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the company's Annual Report on Form 10-K, stating that no material changes have occurred during the three months ended March 31, 2024 - There have been no material changes to the risk factors previously disclosed in Item 1A of the Annual Report on **Form 10-K** filed on **March 25, 2024**[142](index=142&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) This section confirms that there are no insider trading arrangements to report for the period - No insider trading arrangements are reported[143](index=143&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents, certifications, and XBRL-related files - The report includes various exhibits such as Articles of Incorporation, Certificate of Designations of Series A Preferred Stock, Bylaws, a new Lease agreement, and certifications from the Principal Executive Officer and Principal Financial Officer[145](index=145&type=chunk) [Signatures](index=40&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q, duly authorized by the registrant - The report is signed by **Ryan J. Hoffman**, Chief Financial Officer (Principal Financial and Accounting Officer), on behalf of Interlink Electronics, Inc. on **May 9, 2024**[148](index=148&type=chunk)

Exhibit 99.1 Interlink Electronics Reports Fourth Quarter and Fiscal Year 2023 Results Consolidated Financial Highlights (Amounts in thousands except per share data and percentages) | | | | | Three Months Ended December 31, | | | | | | Year Ended December 31, | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Consolidated Financial Results | 2023 | | 2022 | | $ ∆ | | % ∆ | 2023 | | 2022 | $ ∆ | % ∆ | | Revenue | $ 3,538 | | $ 1,611 | | $ 1,927 | | 119.6% | $13,940 | | $ ...