What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-13 · 109 added, 84 removed, 501 unchanged (28% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

(in thousands, except par value)

23 unchanged sentences

Preferred stock, $ 0.01 par value:

1,000 shares authorized, 200 shares of Series A Convertible Preferred Stock issued and outstanding at both June 30, 2025 and December 31, 2024 ( $ 5.0 million liquidation preference)

1,000 shares authorized, 200 shares of Series A Convertible Preferred Stock issued and outstanding at both September 30, 2025 and December 31, 2024 ( $ 5.0 million liquidation preference) (Note 5)

Common stock, $ 0.001 par value:

30,000 shares authorized, 9,864 shares issued and outstanding at both June 30, 2025 and December 31, 2024

30,000 shares authorized, 14,829 shares issued and outstanding at September 30, 2025, and 14,796 shares issued and outstanding at December 31, 2024

Additional paid-in-capital

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except per share data)

4 unchanged sentences

Total operating expenses

Income (loss) from operations

(Loss) from operations

Other income (expense), net

Income (loss) before income taxes

(Loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Net income (loss) applicable to common stockholders

Net (loss) applicable to common stockholders

Earnings (loss) per common share – basic and diluted

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Net income (loss)

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

Comprehensive income (loss)

Comprehensive (loss)

See accompanying notes to these unaudited condensed consolidated financial statements.

4 unchanged sentences

Stockholders’

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Income (Loss)

(in thousands)

Balance at March 31, 2025

Balance at June 30, 2025

Issuance of common stock

Stock-based compensation expense

1 unchanged sentence

Foreign currency translation adjustment

Balance at June 30, 2025

Balance at September 30, 2025

Preferred Stock

1 unchanged sentence

Stockholders’

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Income (Loss)

1 unchanged sentence

Balance at December 31, 2024

Issuance of common stock

Stock-based compensation expense

1 unchanged sentence

Foreign currency translation adjustment

Balance at June 30, 2025

Balance at September 30, 2025

Preferred Stock

1 unchanged sentence

Stockholders’

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Income (Loss)

(in thousands)

Balance at March 31, 2024

Balance at June 30, 2024

Stock-based compensation expense

1 unchanged sentence

Foreign currency translation adjustment

Balance at June 30, 2024

Balance at September 30, 2024

Preferred Stock

1 unchanged sentence

Stockholders’

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Income (Loss)

4 unchanged sentences

Foreign currency translation adjustment

Balance at June 30, 2024

Balance at September 30, 2024

See accompanying notes to these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

Cash flows from operating activities:

Adjustments to reconcile net (loss) to net cash (used in) operating activities:

Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

8 unchanged sentences

Accrued income taxes

Net cash (used in) operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

3 unchanged sentences

Payment of dividends on preferred stock

Proceeds from issuance of common stock (net of offering costs of $ 81 )

Net cash (used in) financing activities

Effect of exchange rate changes on cash

Net (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

27 unchanged sentences

Our website address is www.interlinkelectronics.com.

October 2025 Common Stock Dividend

On September 24, 2025, the Company declared a 50 % common stock dividend with a record date of October 14, 2025, that was paid on October 28, 2025.

Settlement of fractional share interests was made by issuing one full share of common stock in lieu of a fractional share.

The stock dividend increased the number of issued and outstanding shares of common stock from 9,896,366 to 14,844,573 .

Except as otherwise noted, all references to common stock, common stock issuable upon conversion of preferred stock, and corresponding per share information throughout this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the stock dividend, which is accounted for as a stock split effected in the form of a stock dividend.

Our fiscal year is the calendar year reporting cycle beginning January 1 and ending December 31.

38 unchanged sentences

The following table presents revenue recognized at a point in time and revenue recognized over time:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

11 unchanged sentences

All of the costs related to advertising and marketing our products are expensed as incurred or at the time the marketing takes place.

Advertising and marketing costs incurred in the three months ended June 30, 2025 and 2024 were $ 3,000 and $ 4,000 , respectively.

Advertising and marketing costs incurred in the six months ended June 30, 2025 and 2024 were $ 46,000 and $ 44,000 , respectively.

Advertising and marketing costs incurred in the three months ended September 30, 2025 and 2024 were $ 3,000 and $ 4,000 , respectively.

Advertising and marketing costs incurred in the nine months ended September 30, 2025 and 2024 were each $ 48,000 .

Stock-Based Compensation

39 unchanged sentences

Under the two-class method of determining earnings for each class of stock, we consider the dividend rights and participating rights in undistributed earnings for each class of stock.

On September 24, 2025, the Company declared a 50 % common stock dividend that was paid on October 28, 2025.

For all periods presented, all share and per share data have been retroactively adjusted for the effect of the 50 % common stock dividend, which is accounted for as a stock split effected in the form of a stock dividend.

We account for our leases under ASC 842.

31 unchanged sentences

Subsequent Events

We have evaluated subsequent events through August 13, 2025, being the date these condensed consolidated financial statements were issued.

We have evaluated subsequent events through November 12, 2025, being the date these condensed consolidated financial statements were issued.

Note 2 – Details of Certain Financial Statement Components

Inventories, stated at the lower of cost or net realizable value, consisted of the following:

September 30,

(in thousands)

4 unchanged sentences

Property, plant and equipment, net, consisted of the following:

September 30,

Property, plant and equipment, net

4 unchanged sentences

Total property, plant and equipment, net

Depreciation expense totaled $ 48,000 and $ 37,000 for the three months ended June 30, 2025 and 2024, respectively.

Depreciation expense totaled $ 95,000 and $ 77,000 for the six months ended June 30, 2025 and 2024, respectively.

Depreciation expense totaled $ 48,000 and $ 36,000 for the three months ended September 30, 2025 and 2024, respectively.

Depreciation expense totaled $ 143,000 and $ 112,000 for the nine months ended September 30, 2025 and 2024, respectively.

Intangible assets, net, consisted of the following:

September 30,

Intangible assets, net

8 unchanged sentences

Total intangible assets, net

Amortization expense totaled $ 184,000 and $ 189,000 for the three months ended June 30, 2025 and 2024, respectively.

Amortization expense totaled $ 356,000 and $ 378,000 for the six months ended June 30, 2025 and 2024, respectively.

Amortization expense totaled $ 183,000 and $ 189,000 for the three months ended September 30, 2025 and 2024, respectively.

Amortization expense totaled $ 539,000 and $ 571,000 for the nine months ended September 30, 2025 and 2024, respectively.

Years ending December 31,

1 unchanged sentence

2025 (remainder of year)

The changes in the carrying amount of goodwill for the periods ended June 30, 2025 and 2024 are as follows:

The changes in the carrying amount of goodwill for the periods ended September 30, 2025 and 2024 are as follows:

(in thousands)

2 unchanged sentences

Adjustment to goodwill, foreign currency exchange rate changes

Balance as of June 30, 2025

Balance as of September 30, 2025

(in thousands)

1 unchanged sentence

Adjustment to goodwill, foreign currency exchange rate changes

Balance as of June 30, 2024

Balance as of September 30, 2024

Accrued liabilities consisted of the following:

September 30,

Accrued liabilities

13 unchanged sentences

Net assets acquired

The following represents pro forma consolidated statement of operations information as if Conductive Transfers had been included in our consolidated results for the three - and six - month periods ended June 30, 2025 and 2024 (unaudited):

Three Months Ended June 30,

Six Months Ended June 30,

The following represents pro forma consolidated statement of operations information as if Conductive Transfers had been included in our consolidated results for the three - and nine - month periods ended September 30, 2025 and 2024 (unaudited):

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Net income (loss)

Note 4 – Earnings Per Share

1 unchanged sentence

Diluted earnings per share is computed by dividing net income/loss by the weighted average number of common shares outstanding during the period, plus the dilutive effect of any dilutive securities.

On September 24, 2025, the Company declared a 50 % common stock dividend that was paid on October 28, 2025.

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands, except per share data)

Net income (loss)

Preferred stock dividends

Net income (loss) applicable to common stockholders

Net (loss) applicable to common stockholders

Weighted average common shares outstanding – basic

5 unchanged sentences

Shares subject to restricted stock units excluded from calculation because their effect would be anti-dilutive

200,000 shares of Series A Convertible Preferred Stock convertible into 600,000 shares of common stock were outstanding but were not included in the computation of diluted earnings (loss) per share because the effect of their conversion would be anti-dilutive due to the net losses and/or due to the $ 8.33 conversion price being higher than the average market price of the common stock.

200,000 shares of Series A Convertible Preferred Stock convertible into 900,000 shares of common stock were outstanding but were not included in the computation of diluted earnings (loss) per share because the effect of their conversion would be anti-dilutive due to the net losses.

46,875 restricted stock units (relating to the same number of shares of common stock) were outstanding but were not included in the computation of diluted earnings (loss) per share for those periods because their effect would be anti-dilutive due to the net loss applicable to common stockholders.

Note 5 – Restricted Stock Units

During the three- and six-month periods ended June 30, 2025, the Company recorded $ 7,000 and $ 14,000 of stock - based compensation expense, all of which was for restricted stock units.

Note 5 – Series A Convertible Preferred Stock

In October and November 2021, the Company sold to investors, in a private placement exempt from registration under the Securities Act of 1933, as amended, an aggregate of 200,000 shares of its 8.0 % Series A Convertible Preferred Stock, par value $ 0.01 per share.

The shares were issued at an offering price of $ 25.00 per share for gross proceeds of $ 5.0 million, and after payment of placement agent cash fees and expenses of the offering, the Company received net proceeds of approximately $ 4.6 million.

On October 15, 2025, with the closing price of the Company’s common stock having equaled or exceeded $ 6.67 ( 120 % of the initial conversion price of $ 5.56 , as adjusted for stock splits since the issuance) for at least 20 out of the prior 30 consecutive trading days, the Company announced the conversion all 200,000 shares of Series A Convertible Preferred Stock into 900,000 shares of common stock pursuant to the provision in the certificate of designations of the preferred stock permitting the Company to convert the shares in such circumstances.

Note 6 – Stock Compensation and Restricted Stock Units

The stock-based compensation expense recorded in the nine-month periods ended September 30, 2025 and 2024 is comprised of $ 15,000 in each of 2025 and 2024 for shares of common stock issued to members of the Board of Directors as partial compensation for their service as a director, and $ 21,000 in 2025 and $ 12,000 in 2024 for the restricted stock units described below.

In May 2024, the Compensation Committee of the Company’s Board of Directors approved the Company’s grant of 46,875 restricted stock units to certain employees under the Interlink Electronics, Inc.

2016 Omnibus Incentive Plan.

A summary of the status of the Company’s nonvested restricted stock units as of and for the six - month period ended June 30, 2025, is as follows:

These restricted stock unit grants had a grant-date fair value of approximately $ 136,000 and vest over a five-year service period.

The related compensation expense is recognized ratably over the vesting period.

sDuring each of the three-month periods ended September 30, 2025 and 2024, the Company recorded $ 7,000 of stock-based compensation expense for these restricted stock units;

and during the nine-month periods ended September 30, 2025 and 2024, the Company recorded $ 21,000 and $ 12,000 , respectively, of stock-based compensation expense for these restricted stock units.

A summary of the status of the Company’s nonvested restricted stock units as of and for the nine-month period ended September 30, 2025, is as follows:

Nonvested Restricted Stock Units

Nonvested at January 1, 2025

Nonvested at June 30, 2025

As of June 30, 2025, there was approximately $ 102,000 of total unrecognized compensation cost related to nonvested restricted stock units.

Nonvested at September 30, 2025

As of September 30, 2025, there was approximately $ 95,000 of total unrecognized compensation cost related to nonvested restricted stock units.

That cost is expected to be recognized over a weighted-average period of 3.4 years.

2 unchanged sentences

Revenues from customers equal to or greater than 10% of total revenues are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

* Less than 10% of total revenues

Revenues by geographic area are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

6 unchanged sentences

Accounts receivable balances are monitored on an ongoing basis, and accounts deemed to have credit risk are fully reserved.

At June 30, 2025, three customers accounted for 22 %, 21 %, and 10 % of total accounts receivable.

At September 30, 2025, one customer accounted for 33 % of total accounts receivable.

At December 31, 2024, one customer accounted for 41 % of total accounts receivable.

Our allowance for credit losses was approximately $ 46,000 and $ 34,000 at June 30, 2025 and December 31, 2024, respectively.

Our allowance for credit losses was approximately $ 49,000 and $ 34,000 at September 30, 2025 and December 31, 2024, respectively.

Our long-lived assets were geographically located as follows:

September 30,

(in thousands)

12 unchanged sentences

Transactions with Qualstar and its subsidiaries are as follows:

Three Months Ended June 30,

Three months ended September 30,

(in thousands)

Balance at April 1,

Balance at July 1,

Billed (or accrued) to Qualstar by Interlink

2 unchanged sentences

Paid by Interlink to Qualstar

Balance at June 30,

Six Months Ended June 30,

Balance at September 30,

Nine months ended September 30,

(in thousands)

4 unchanged sentences

Paid by Interlink to Qualstar

Balance at June 30,

Balance at September 30,

BKF Capital Group, Inc.

10 unchanged sentences

Transactions with BKF Capital and its subsidiaries are as follows:

Three Months Ended June 30,

Three months ended September 30,

(in thousands)

Balance at April 1,

Balance at July 1,

Billed (or accrued) to BKF Capital by Interlink

2 unchanged sentences

Paid by Interlink to BKF Capital

Balance at June 30,

Six Months Ended June 30,

Balance at September 30,

Nine months ended September 30,

(in thousands)

4 unchanged sentences

Paid by Interlink to BKF Capital

Balance at June 30,

Balance at September 30,

Note 9 – Income Taxes

Income taxes were 9.9 % of pre-tax income for the three months ended June 30, 2025 versus 3.4 % of pre - tax loss for the same quarter in the prior year.

Income taxes were 6.4 % of pre - tax loss for the six months ended June 30, 2025 versus 3.1 % for the first half of the prior year.

Income taxes were 8.4 % of pre-tax loss for the three months ended September 30, 2025 versus 5.7 % of pre - tax loss for the same quarter in the prior year.

Income taxes were 2.1 % of pre - tax loss for the nine months ended September 30, 2025 versus 4.0 % for the nine months ended September 30, 2024.

Our income tax expense is impacted by the mix of domestic and foreign pre-tax earnings and losses, permanent differences between book income/loss and taxable income/loss, and our ability to utilize net operating loss carryforwards (“NOLs”).

1 unchanged sentence

statutory tax rate of 21 % from quarter to quarter.

The effective tax rates for the three- and six-month periods ended June 30, 2025 and 2024 were impacted by the amount of our foreign pre-tax income/loss and the tax expense/benefit thereon while not realizing a benefit on our domestic pre-tax loss and certain foreign losses due to the valuation allowances thereon.

The effective tax rates for the three- and nine-month periods ended September 30, 2025 and 2024 were impacted by the amount of our foreign pre-tax income/loss and the tax expense/benefit thereon while not realizing a benefit on our domestic pre-tax loss and certain foreign losses due to the valuation allowances thereon.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets.

We analyzed our need to record a valuation allowance against our otherwise recognizable net deferred tax assets in the federal, state and foreign jurisdictions, and we determined that a valuation allowance on federal, state, and certain foreign deferred tax assets was necessary at both June 30, 2025 and December 31, 2024.

The amount of deferred tax assets considered realizable could be adjusted in future periods if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future profitability.

1 unchanged sentence

We have elected to account for GILTI as a period cost if and when incurred, rather than recognizing deferred taxes for basis differences expected to reverse.

Of our $ 2.3 million of cash at June 30, 2025, $ 1.5 million was held by our foreign subsidiaries.

Of our $ 3.0 million of cash at September 30, 2025, $ 1.8 million was held by our foreign subsidiaries.

If these funds are needed for our operations in the U.S.

or for acquisitions, we have several methods to repatriate the funds without significant tax effects, including repayment of intercompany loans or distributions of previously taxed income.

Other distributions may require us to incur U.S.

Certain methods of distribution may require us to incur U.S.

or foreign taxes to repatriate these funds.

5 unchanged sentences

The rate implicit in each lease is not readily determinable, and we therefore use our incremental borrowing rate to determine the present value of the lease payments.

The weighted average incremental borrowing rate used to determine the initial value of right-of-use (“ROU”) assets and lease liabilities capitalized during the each of the six months ended June 30, 2025 and 2024 was 9.5 %.

The weighted average incremental borrowing rate used to determine the initial value of right-of-use (“ROU”) assets and lease liabilities capitalized during the each of the nine months ended September 30, 2025 and 2024 was 9.5 %.

ROU assets for operating leases are periodically reduced by impairment losses.

As of June 30, 2025, we have not recognized any impairment losses for our ROU assets.

As of September 30, 2025, we have not recognized any impairment losses for our ROU assets.

We monitor for events or changes in circumstances that require a reassessment of our leases.

20 unchanged sentences

This lease term ends February 2028.

We use a 10,786 square - foot manufacturing facility and administrative offices in Barnsley, England subject to a temporary premise license agreement for the period from January 2025 to September 2025 for approximately $ 11,000 per month.

For the period from January 2025 to September 2025, we used a 10,786 square-foot manufacturing facility and administrative offices in Barnsley, England subject to a temporary premise license agreement with payments of approximately $ 11,000 per month.

We are in the process of relocating this facility.

We lease a 3,000 square-foot logistics and distribution facility in Hong Kong for approximately $ 2,000 per month.

3 unchanged sentences

We previously leased a 275 square - foot engineering and administrative office in Singapore for approximately $ 1,000 per month through June 2025.

As of June 30, 2025, we had current and long-term lease liabilities of $ 353,000 and $ 641,000 , respectively, and right-of-use assets of $ 931,000 .

As of September 30, 2025, we had current and long-term lease liabilities of $ 338,000 and $ 567,000 , respectively, and right-of-use assets of $ 845,000 .

As of December 31, 2024, we had current and long-term lease liabilities of $ 352,000 and $ 777,000 , respectively, and right-of-use assets of $ 1,064,000 .

Future imputed interest as of June 30, 2025 totaled $ 156,000 (weighted average discount rate of 9.1 )%;

Future imputed interest as of September 30, 2025 totaled $ 133,000 (weighted average discount rate of 9.1 )%;

and future imputed interest as of December 31, 2024 totaled $ 199,000 (weighted average discount rate of 8.9 )%.

The weighted average remaining lease term of the Company’s leases as of June 30, 2025 is 2.0 years;

The weighted average remaining lease term of the Company’s leases as of September 30, 2025 is 1.8 years;

and as of December 31, 2024 was 2.2 years.

6 unchanged sentences

Present value of lease liabilities

During the three months ended June 30, 2025, we incurred approximately $ 136,000 in operating lease costs, of which $ 76,000 is included in cost of revenue and $ 60,000 is included in operating expenses in our condensed consolidated statements of operations.

During the three months ended June 30, 2024, we incurred approximately $ 156,000 in operating lease costs, of which $ 86,000 are included in cost of revenue and $ 71,000 are included in operating expenses in our condensed consolidated statements of operations.

During the six months ended June 30, 2025, we incurred approximately $ 269,000 in operating lease costs.

During the three months ended September 30, 2025, we incurred approximately $ 110,000 in operating lease costs, of which $ 63,000 is included in cost of revenue and $ 47,000 is included in operating expenses in our condensed consolidated statements of operations.

During the three months ended September 30, 2024, we incurred approximately $ 186,000 in operating lease costs, of which $ 91,000 are included in cost of revenue and $ 95,000 are included in operating expenses in our condensed consolidated statements of operations.

During the nine months ended September 30, 2025, we incurred approximately $ 380,000 in operating lease costs.

Operating lease costs of $ 213,000 is included in cost of revenue, and $ 167,000 is included in operating expenses in our condensed consolidated statements of operations.

During the six months ended June 30, 2024, we incurred approximately $ 280,000 in operating lease costs.

During the nine months ended September 30, 2024, we incurred approximately $ 466,000 in operating lease costs.

Operating lease costs of $ 241,000 are included in cost of revenue, and $ 225,000 are included in operating expenses in our condensed consolidated statements of operations.

We are not party to any legal proceedings as of June 30, 2025.

We are not party to any legal proceedings as of September 30, 2025.

We are occasionally involved in legal proceedings in the ordinary course of business, including actions against us which assert or may assert claims or seek to impose fines and penalties in substantial amounts.

40 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements