Interlink Electronics(LINK) - 2025 Q1 - Quarterly Report

PART I -- FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) The unaudited Q1 2025 financial statements reflect decreased assets and equity, a revenue decline, increased net loss, and negative operating cash flow Condensed Consolidated Balance Sheets Total assets decreased to $12.47 million by March 31, 2025, from $13.12 million at year-end 2024, driven by reduced cash and equity Balance Sheet Highlights | Balance Sheet Highlights | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $2,585 | $2,950 | | Total current assets | $6,394 | $6,899 | | Total assets | $12,472 | $13,116 | | Total current liabilities | $1,592 | $1,390 | | Total liabilities | $2,707 | $2,623 | | Total stockholders' equity | $9,765 | $10,493 | Condensed Consolidated Statements of Operations Q1 2025 revenue decreased to $2.66 million from $3.12 million YoY, resulting in a net loss of $805 thousand Income Statement Highlights | Income Statement Highlights | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $2,664 | $3,124 | | Gross Profit | $949 | $1,253 | | (Loss) from operations | $(849) | $(751) | | Net (loss) | $(805) | $(741) | | Net (loss) applicable to common stockholders | $(905) | $(841) | | Earnings (loss) per common share – basic and diluted | $(0.09) | $(0.09) | Condensed Consolidated Statements of Cash Flows Q1 2025 saw $271 thousand net cash used in operations, a shift from prior year, leading to a $365 thousand decrease in cash Cash Flow Summary | Cash Flow Summary | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(271) | $222 | | Net cash (used in) investing activities | $(29) | $(18) | | Net cash (used in) financing activities | $(100) | $(100) | | Net increase (decrease) in cash and cash equivalents | $(365) | $63 | | Cash and cash equivalents, end of period | $2,584 | $4,367 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, single segment operations, the Conductive Transfers acquisition, geographic revenue shifts, and customer concentration - The company operates as a single reportable segment focused on the design, development, and manufacture of sensor technologies[43] - On December 20, 2024, the company acquired the operating assets of Conductive Transfers Limited for approximately $314 thousand in cash[57] Revenue by Geographic Area (Q1) | Revenue by Geographic Area (Q1) | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | United States | $1,102 | $1,445 | | Asia and Middle East | $369 | $729 | | Europe and other | $1,193 | $950 | - In Q1 2025, Customer A accounted for 22% of total revenues, up from 17% in Q1 2024. At March 31, 2025, two customers accounted for 36% and 11% of total accounts receivable[64][65] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 revenue decline due to lower demand, gross margin contraction, reduced operating expenses, and current liquidity position Results of Operations Q1 2025 revenue declined 14.7% to $2.66 million due to market drops, gross profit fell 24.3%, and operating expenses decreased Revenue by Market (Q1 2025 vs Q1 2024) | Revenue by Market (Q1 2025 vs Q1 2024) | Q1 2025 (in thousands) | Q1 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Medical | $714 | $1,185 | (39.7)% | | Industrial | $589 | $677 | (13.0)% | | Consumer | $11 | $132 | (91.7)% | | Standard | $1,350 | $1,130 | 19.5% | | Total Revenue | $2,664 | $3,124 | (14.7)% | - Gross profit and margin percentage decreased in Q1 2025 compared to Q1 2024, primarily due to lower revenues and changes in product and customer mix[107] - Engineering and R&D expenses decreased by $142 thousand (24.7%) YoY due to lower employee and consultant compensation costs[108] - Selling, general and administrative expenses decreased by $64 thousand (4.5%) YoY due to lower compensation and professional services expenses, partially offset by higher facilities costs[109] Liquidity and Capital Resources As of March 31, 2025, the company held $2.6 million in cash and $4.8 million in working capital with no debt - As of March 31, 2025, the company had cash and cash equivalents of $2.6 million, working capital of $4.8 million, and no indebtedness[114] - The company pays monthly cumulative cash dividends on its 8.0% Series A Convertible Preferred Stock, which has an aggregate liquidation preference of $5.0 million[115] Cash Flow Summary (Q1) | Cash Flow Summary (Q1) | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(271) | $222 | | Net cash (used in) investing activities | $(29) | $(18) | | Net cash (used in) financing activities | $(100) | $(100) | Item 3. Quantitative and Qualitative Disclosures about Market Risk This item is reported as not applicable for the current reporting period - The report states "Not Applicable" for this item[123] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[125] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[126] PART II -- OTHER INFORMATION Item 1A. Risk Factors No material changes to previously disclosed risk factors were reported in this period - There have been no material changes to the risk factors from those contained in the Annual Report on Form 10-K filed with the SEC on March 27, 2025[130] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q1 2025 - During the three months ended March 31, 2025, no director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[131] Item 6. Exhibits This section lists filed exhibits, including CEO/CFO certifications and XBRL data files - The report includes a list of exhibits filed, such as CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and XBRL documents (Exhibits 101 and 104)[133]