INTERLINK ELECTRONICS INC 10-Q

Item 1. Financial Statements INTERLINK ELECTRONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2025 2024 ​ (in thousands, except par value) ASSETS ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 2,987 $ 2,950 Accounts receivable, net ​ ​ 1,352 ​ ​ 1,612 Inventories ​ ​ 1,798 ​ ​ 2,009 Prepaid expenses and other current assets ​ ​ 269 ​ ​ 328 Total current assets ​ ​ 6,406 ​ ​ 6,899 Property, plant and equipment, net ​ ​ 501 ​ ​ 411 Intangible assets, net ​ ​ 1,507 ​ ​ 1,874 Goodwill ​ ​ 2,576 ​ ​ 2,658 Right-of-use assets ​ ​ 845 ​ ​ 1,064 Deferred tax assets ​ ​ 160 ​ ​ 82 Other assets ​ ​ 86 ​ ​ 128 Total assets $ 12,081 $ 13,116 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ Accounts payable $ 727 $ 573 Accrued liabilities ​ ​ 300 ​ ​ 377 Lease liabilities, current ​ ​ 338 ​ ​ 352 Accrued income taxes ​ ​ 161 ​ ​ 88 Total current liabilities ​ ​ 1,526 ​ ​ 1,390 ​ ​ ​ ​ ​ ​ ​ Long-term liabilities ​ ​ ​ ​ ​ ​ Lease liabilities, long term ​ ​ 567 ​ ​ 777 Deferred tax liabilities ​ ​ 356 ​ ​ 456 Total long-term liabilities ​ ​ 923 ​ ​ 1,233 Total liabilities ​ ​ 2,449 ​ ​ 2,623 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 10) ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.01 par value: 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) ​ ​ 2 ​ ​ 2 Common stock, $ 0.001 par value: 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 ​ ​ 15 ​ ​ 15 Additional paid-in-capital ​ ​ 62,451 ​ ​ 62,308 Accumulated other comprehensive income ​ ​ 352 ​ ​ 15 Accumulated deficit ​ ​ ( 53,188 ) ​ ​ ( 51,847 ) Total stockholders’ equity ​ ​ 9,632 ​ ​ 10,493 Total liabilities and stockholders’ equity $ 12,081 $ 13,116 ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ 3 Table of Contents INTERLINK ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2025 2024 2025 2024 ​ (in thousands, except per share data) Revenue $ 2,959 ​ $ 2,671 ​ $ 9,037 ​ $ 8,693 Cost of revenue ​ ​ 1,721 ​ ​ 1,566 ​ ​ 5,312 ​ ​ 5,030 Gross profit ​ ​ 1,238 ​ ​ 1,105 ​ ​ 3,725 ​ ​ 3,663 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Engineering, research and development ​ ​ 354 ​ ​ 486 ​ ​ 1,151 ​ ​ 1,572 Selling, general and administrative ​ ​ 1,197 ​ ​ 1,095 ​ ​ 3,670 ​ ​ 3,631 Total operating expenses ​ ​ 1,551 ​ ​ 1,581 ​ ​ 4,821 ​ ​ 5,203 (Loss) from operations ​ ​ ( 313 ) ​ ​ ( 476 ) ​ ​ ( 1,096 ) ​ ​ ( 1,540 ) Other income (expense), net ​ ​ 3 ​ ​ ( 19 ) ​ ​ 33 ​ ​ 29 (Loss) before income taxes ​ ​ ( 310 ) ​ ​ ( 495 ) ​ ​ ( 1,063 ) ​ ​ ( 1,511 ) Income tax expense (benefit) ​ ​ 26 ​ ​ 28 ​ ​ ( 22 ) ​ ​ 60 Net (loss) ​ $ ( 336 ) ​ $ ( 523 ) ​ $ ( 1,041 ) ​ $ ( 1,571 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) applicable to common stockholders $ ( 436 ) ​ $ ( 623 ) ​ $ ( 1,341 ) ​ $ ( 1,871 ) Earnings (loss) per common share – basic and diluted ​ $ ( 0.03 ) ​ $ ( 0.04 ) ​ $ ( 0.09 ) ​ $ ( 0.13 ) Weighted average common shares outstanding – basic and diluted ​ ​ 14,813 ​ ​ 14,793 ​ ​ 14,802 ​ ​ 14,792 ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ ​ 4 Table of Contents INTERLINK ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, Nine Months Ended September 30, ​ 2025 2024 2025 2024 ​ ​ (in thousands) Net (loss) ​ $ ( 336 ) ​ $ ( 523 ) ​ $ ( 1,041 ) ​ $ ( 1,571 ) Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ ( 100 ) ​ ​ 398 ​ ​ 337 ​ ​ 282 Comprehensive (loss) ​ $ ( 436 ) ​ $ ( 125 ) ​ $ ( 704 ) ​ $ ( 1,289 ) ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ ​ 5 Table of Contents INTERLINK ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Preferred Stock ​ Common Stock ​ Paid-in- ​ Comprehensive ​ Accumulated ​ Stockholders’ Three Months Ended September 30, 2025 Shares Amount Shares Amount Capital Income (Loss) Deficit Equity (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2025 200 ​ $ 2 ​ 14,796 ​ $ 15 ​ $ 62,322 ​ $ 452 ​ $ ( 52,752 ) ​ $ 10,039 Net (loss) — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 336 ) ​ ​ ( 336 ) Issuance of common stock ​ — ​ ​ — ​ 30 ​ ​ — ​ ​ 107 ​ ​ — ​ ​ — ​ ​ 107 Stock-based compensation expense — ​ ​ — ​ 3 ​ ​ — ​ ​ 22 ​ ​ — ​ ​ — ​ ​ 22 Preferred stock dividends — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 100 ) ​ ​ ( 100 ) Foreign currency translation adjustment — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 100 ) ​ ​ — ​ ​ ( 100 ) Balance at September 30, 2025 200 ​ $ 2 ​ 14,829 ​ $ 15 ​ $ 62,451 ​ $ 352 ​ $ ( 53,188 ) ​ $ 9,632 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Preferred Stock ​ Common Stock ​ Paid-in- ​ Comprehensive ​ Accumulated ​ Stockholders’ Nine Months Ended September 30, 2025 Shares Amount Shares Amount Capital Income (Loss) Deficit Equity (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2024 200 ​ $ 2 ​ 14,796 ​ $ 15 ​ $ 62,308 ​ $ 15 ​ $ ( 51,847 ) ​ $ 10,493 Net (loss) ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,041 ) ​ ​ ( 1,041 ) Issuance of common stock ​ — ​ ​ — ​ 30 ​ ​ — ​ ​ 107 ​ ​ — ​ ​ — ​ ​ 107 Stock-based compensation expense — ​ ​ — ​ 3 ​ ​ — ​ ​ 36 ​ ​ — ​ ​ — ​ ​ 36 Preferred stock dividends ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 300 ) ​ ​ ( 300 ) Foreign currency translation adjustment — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 337 ​ ​ — ​ ​ 337 Balance at September 30, 2025 200 ​ $ 2 ​ 14,829 ​ $ 15 ​ $ 62,451 ​ $ 352 ​ $ ( 53,188 ) ​ $ 9,632 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Preferred Stock ​ Common Stock ​ Paid-in- ​ Comprehensive ​ Accumulated ​ Stockholders’ Three Months Ended September 30, 2024 Shares Amount Shares Amount Capital Income (Loss) Deficit Equity (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2024 ​ 200 ​ $ 2 ​ 14,790 ​ $ 15 ​ $ 62,279 ​ $ 84 ​ $ ( 50,711 ) ​ $ 11,669 Net (loss) ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 523 ) ​ ​ ( 523 ) Stock-based compensation expense ​ — ​ ​ — ​ 4 ​ ​ — ​ ​ 22 ​ ​ — ​ ​ — ​ ​ 22 Preferred stock dividends ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 100 ) ​ ​ ( 100 ) Foreign currency translation adjustment ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 398 ​ ​ — ​ ​ 398 Balance at September 30, 2024 ​ 200 ​ $ 2 ​ 14,794 ​ $ 15 ​ $ 62,301 ​ $ 482 ​ $ ( 51,334 ) ​ $ 11,466 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Preferred Stock ​ Common Stock ​ Paid-in- ​ Comprehensive ​ Accumulated ​ Stockholders’ Nine Months Ended September 30, 2024 Shares Amount Shares Amount Capital Income (Loss) Deficit Equity (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2023 200 ​ $ 2 ​ 14,790 ​ $ 15 ​ $ 62,274 ​ $ 200 ​ $ ( 49,463 ) ​ $ 13,028 Net (loss) — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,571 ) ​ ​ ( 1,571 ) Stock-based compensation expense — ​ ​ — ​ 4 ​ ​ — ​ ​ 27 ​ ​ — ​ ​ — ​ ​ 27 Preferred stock dividends — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 300 ) ​ ​ ( 300 ) Foreign currency translation adjustment ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 282 ​ ​ — ​ ​ 282 Balance at September 30, 2024 200 ​ $ 2 ​ 14,794 ​ $ 15 ​ $ 62,301 ​ $ 482 ​ $ ( 51,334 ) ​ $ 11,466 ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ ​ 6 Table of Contents INTERLINK ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ 2025 2024 ​ ​ (in thousands) Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net (loss) $ ( 1,041 ) $ ( 1,571 ) Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 684 ​ ​ 686 Stock-based compensation expense ​ ​ 36 ​ ​ 27 Adjustment to reconcile operating lease expense to cash paid ​ ​ ( 4 ) ​ ​ 48 Deferred income taxes ​ ​ ( 205 ) ​ ​ ( 123 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 318 ​ ​ 1,013 Inventories ​ ​ 251 ​ ​ 19 Prepaid expenses and other assets ​ ​ 108 ​ ​ 115 Accounts payable ​ ​ 115 ​ ​ ( 99 ) Accrued liabilities ​ ​ ( 83 ) ​ ​ ( 61 ) Accrued income taxes ​ ​ 65 ​ ​ ( 198 ) Net cash provided by (used in) operating activities ​ ​ 244 ​ ​ ( 144 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Purchases of property, plant and equipment ​ ​ ( 37 ) ​ ​ ( 107 ) Net cash (used in) investing activities ​ ​ ( 37 ) ​ ​ ( 107 ) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Payment of dividends on preferred stock ​ ​ ( 300 ) ​ ​ ( 300 ) Proceeds from issuance of common stock (net of offering costs of $ 81 ) ​ ​ 107 ​ ​ — Net cash (used in) financing activities ​ ​ ( 193 ) ​ ​ ( 300 ) ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash ​ ​ 23 ​ ​ 57 Net increase (decrease) in cash and cash equivalents ​ ​ 37 ​ ​ ( 494 ) Cash and cash equivalents, beginning of period ​ ​ 2,950 ​ ​ 4,304 Cash and cash equivalents, end of period $ 2,987 $ 3,810 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ Income taxes paid $ 122 $ 367 Interest paid ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Lease liabilities arising from obtaining right-of-use assets ​ $ 31 ​ $ 1,186 ​ See accompanying notes to these unaudited condensed consolidated financial statements. ​ ​ 7 Table of Contents INTERLINK ELECTRONICS, INC. ​ Notes to Condensed Consolidated Financial Statements (unaudited) Note 1 – The Company and its Significant Accounting Policies Description of Business Interlink Electronics, Inc. (“we”, “us”, “our”, “Interlink” or the “Company”) is a leading provider of sensors and printed electronics used extensively in Human-Machine Interface (“HMI”) devices and Internet-of-Things (“IoT”) solutions. Our broad product and technology portfolio encompasses force, piezo-electric, rugged HMI, wearable sensors for textiles and fabrics, gas sensors, instruments, and systems. Our customers, including global blue-chip companies, trust our products and solutions which span various markets, including medical, industrial, automotive, wearables, IoT, and other specialty markets. Our technical and engineering expertise in materials science, manufacturing, embedded electronics, firmware, and software enables us to create and deliver high-quality, cost-effective custom solutions tailored to our customers’ unique requirements. We serve our world-wide customer base from a number of locations. Our corporate headquarters are located in Fremont, California, which is also where we have our advanced and proprietary gas sensor production and product development facility. Our Global Product Development and Materials Science Center and distribution and logistics center is located in Camarillo, California. We have printed-electronics manufacturing facilities in Shenzhen, China; Irvine, Scotland; and Barnsley, England. Our engineering, research and development center is located in Singapore; our technical sales office in Japan; and our distribution and logistics center in Hong Kong. Our administrative and executive office is located in Irvine, California. Our principal executive office is located at 48389 Fremont Boulevard, Suite 110, Fremont, California 94538 and our telephone number is (510) 244-0424. 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. Fiscal Year Our fiscal year is the calendar year reporting cycle beginning January 1 and ending December 31. Basis of Presentation The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intra-entity transactions and balances have been eliminated in consolidation. The accompanying unaudited interim consolidated financial statements for the Company and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting. Accordingly, certain information and footnote disclosures normally included in annual consolidated financial statements have been condensed or omitted in accordance with Rule 10-01 of Regulation S-X. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments and the elimination of intra-entity accounts) considered necessary for a fair presentation of all periods presented. The results of the Company’s operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 27, 2025. 8 Table of Contents Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes to the consolidated financial statements. Management regularly evaluates estimates and assumptions related to revenue recognition, allowances for credit losses, warranty reserves, inventory valuation reserves, stock-based compensation, purchased intangible asset valuations and useful lives, asset retirement obligations, and deferred income tax asset valuation allowances. These estimates and assumptions are based on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The actual results we experience may differ materially and adversely from our original estimates. To the extent there are material differences between the estimates and the actual results, our future results of operations will be affected. Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, we perform the following five steps; (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) we satisfy a performance obligation. The five-step model is applied to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Delivery occurs when goods are shipped and title and risk of loss transfer to the customer, in accordance with the terms specified in the arrangement with the customer. Revenue recognition is deferred until the earnings process is complete. We (i) input orders based upon receipt of a customer purchase order, (ii) confirm pricing through the customer purchase order record, (iii) validate creditworthiness through past payment history, credit agency reports and other financial data, and (iv) recognize revenue upon shipment of goods or when risk of loss and title transfer to the buyer. All customers have warranty rights, and some customers also have explicit or implicit rights of return. We establish reserves for potential customer returns or warranty repairs based on historical experience and other factors that enable us to reasonably estimate the obligation. A portion of our product sales is made through distributors under agreements allowing for right of return. Our past history with these sell-through right of return provisions allows us to reasonably estimate the amount of inventory that could be returned pursuant to these agreements, and revenue is recognized accordingly. Revenue for engineering services contracts and grants is recognized ratably over the contract term as the related performance obligations are satisfied. Progress toward completion is measured based on the ratio of costs incurred to total estimated costs at completion. This method reflects the pattern of transfer of control, as it aligns revenue recognition with the extent of work performed. Revenue recognized at a point in time primarily relates to product sales. Revenue recognized over time primarily relates to engineering service contracts and other services agreements. The following table presents revenue recognized at a point in time and revenue recognized over time: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2025 2024 2025 2024 ​ ​ (in thousands) Revenue recognized at a point in time ​ $ 2,862 ​ $ 2,430 ​ $ 8,443 ​ $ 8,138 Revenue recognized over time ​ 97 ​ 241 ​ 594 ​ 555 Total revenue ​ $ 2,959 ​ $ 2,671 ​ $ 9,037 ​ $ 8,693 ​ 9 Table of Contents Shipping and Handling Fees and Costs Amounts billed to customers for shipping and handling fees are included in revenues. Costs incurred for shipping and handling are included in cost of revenues. Engineering, Research and Development Costs Engineering, research and development (“R&D”) costs are expensed when incurred. R&D expenses consist primarily of compensation expenses for employees engaged in research, design and development activities. R&D expenses also include depreciation and amortization, and overhead, including facilities expenses. Advertising and Marketing Costs 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 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 All stock-based payments to employees, including grants of employee stock options and employee stock purchase rights, are recognized in the financial statements based on their respective grant date (measurement date) fair values. We calculate the compensation cost of full-value awards, such as restricted stock units, based on the market value of the underlying stock at the date of the grant. We estimate the expected life of a stock award as the period of time that the award is expected to be outstanding. We are required to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods. We estimate the fair value of each option award as of the date of grant using the Black-Scholes option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and that are freely transferable. The Black-Scholes option pricing model considers, among other factors, the expected life of the award and the expected volatility of our stock price. Although the Black-Scholes option pricing model meets the accounting guidance requirements, the fair values generated by the Black-Scholes option pricing model may not be indicative of the actual fair values of our awards, as it does not consider other factors important to those stock-based payment awards, such as continued employment, periodic vesting requirements, and limited transferability. We have elected to recognize compensation expense for all stock-based awards on a straight-line basis over the requisite service period for the entire award. The amount of compensation expense recognized through the end of each reporting period is equal to the portion of the grant-date value of the awards that have vested, or for partially vested awards, the value of the portion of the award that is ultimately expected to vest for which the requisite services have been provided. The benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash flow. Other Income (Expense) Other income (expense) consists of interest income, foreign currency transaction gains and losses, gains and losses on marketable securities, and other non-operating gains and losses. Income Taxes We account for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not determinable beyond a “more likely than not” standard, we establish a valuation allowance. To the extent we establish a valuation allowance or increase or decrease this allowance in a period, we include an expense or benefit within the tax provision in the statement of operations. We also utilize a “more likely than not” recognition threshold and measurement analysis for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We recognize potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statements of operations as income tax expense. 10 Table of Contents We operate within multiple tax jurisdictions and are subject to audit in these jurisdictions. Our foreign subsidiaries are subject to foreign income taxes on earnings in their respective jurisdictions. Earnings of our foreign subsidiaries are included in our U.S. federal income tax return as they are earned. Foreign Currency Translation The functional currency of our Chinese subsidiary is the Chinese renminbi. The functional currency of our United Kingdom subsidiaries is the British pound sterling. The functional currency for our Hong Kong and Singapore subsidiaries is the United States dollar. Assets and liabilities are translated into United States dollars at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate prevailing during the respective periods. Comprehensive Income/Loss Comprehensive income/loss includes all components of comprehensive income/loss, including net income/loss and any changes in equity during the period from transactions and other events and circumstances generated by non-owner sources. Segment Reporting We operate as a single operating and reportable segment: the design, development, and manufacture of sensor technologies. Our chief operating decision maker is the Company’s Chief Executive Officer, who reviews its performance as a whole and allocates resources based on overall performance. Earnings Per Share Basic earnings per share is computed by dividing net income (loss) applicable to common stockholders (i.e., net income (loss) adjusted for preferred stock dividends declared or accumulated) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of diluted common shares, which includes common stock equivalents from, if applicable, and if dilutive, unexercised stock options, unvested restricted stock units, and shares issuable upon conversion of convertible preferred stock. Unexercised stock options and unvested restricted stock units are considered to be common stock equivalents if, using the treasury stock method, they are determined to be dilutive. Convertible preferred stock is considered to be common stock equivalents if, using the if-converted method, they are determined to be dilutive. 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. Leases We account for our leases under ASC 842. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or our incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use and lease liability, we have elected to combine lease and non-lease components. We exclude short-term leases having an initial term of 12 months or less from the new guidance as an accounting policy election and recognize rent expense on a straight-line basis over the lease term. 11 Table of Contents Risk and Uncertainties Our future results of operations involve a number of risks and uncertainties. Factors that could affect our business or future results and cause actual results to vary materially from historical results include, but are not limited to, the rapid change in our industry; problems with the performance, reliability or quality of our products; loss of customers; impacts of doing business internationally, including foreign currency fluctuations, changes in the trade policies of countries in which we or our customers do business (including fluctuating tariff rates), and political instability; potential shortages of the supplies we use to manufacture our products; disruptions in our manufacturing facilities; changes in environmental directives impacting our manufacturing process or product lines; the development of new proprietary technology and the enforcement of intellectual property rights by or against us; our ability to attract and retain qualified employees; and our ability to raise additional capital. Our operations and financial results may be adversely affected by outbreaks of viruses, widespread illness, infectious diseases, contagions and unforeseen epidemics (such as the COVID-19 coronavirus) in countries in which our products are manufactured and sold. We experienced delays in the receipt of certain goods and the supply of our products from international and domestic shipping origins as a result of the COVID-19 pandemic and more general global supply chain constraints in 2021, and to a lesser extent in the years following. Depending on the continued extent and duration of these and similar constraints and disruptions, our supply chain, results of operations (including sales) or future business may be materially and adversely impacted. These and other issues affecting our international suppliers or internationally manufactured merchandise could have a material adverse effect on our business, results of operations and financial condition. Fair Value Measurements We determine fair value measurements based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, we follow the following fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) our own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs): Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets; Level 2: Other inputs observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborate inputs; and Level 3: Unobservable inputs for which there is little or no market data and which requires the owner of the assets or liabilities to develop its own assumptions about how market participants would price these assets or liabilities. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. Recently Issued Accounting Pronouncements We reviewed all recently issued accounting pronouncements and concluded they are not applicable or not expected to be material to our financial statements. Subsequent Events We have evaluated subsequent events through November 12, 2025, being the date these condensed consolidated financial statements were issued. ​ 12 Table of Contents 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, ​ December 31, ​ 2025 2024 Inventories (in thousands) Raw materials $ 1,374 $ 1,608 Work-in-process ​ ​ 190 ​ ​ 179 Finished goods ​ ​ 234 ​ ​ 222 Total inventories $ 1,798 $ 2,009 ​ Property, plant and equipment, net, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2025 2024 Property, plant and equipment, net ​ (in thousands) Furniture, machinery and equipment ​ $ 2,212 ​ $ 1,972 Leasehold improvements ​ 522 ​ 500 ​ ​ 2,734 ​ 2,472 Less: accumulated depreciation ​ ( 2,233 ) ​ ( 2,061 ) Total property, plant and equipment, net ​ $ 501 ​ $ 411 ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ Amortization ​ September 30, ​ December 31, ​ Period 2025 2024 Intangible assets, net ​ ​ ​ (in thousands) Patents, tradenames, and trademarks ​ 5 years ​ $ 947 ​ $ 931 Developed technology ​ 3.5 years ​ ​ 652 ​ ​ 536 Customer relationships ​ 6 years ​ ​ 1,519 ​ ​ 1,427 Non-compete agreements ​ 4 years ​ ​ 977 ​ ​ 916 Order backlog ​ 0.5 years ​ ​ — ​ ​ 22 In-process research and development ​ Indefinite ​ ​ — ​ ​ 29 ​ ​ ​ ​ ​ 4,095 ​ ​ 3,861 Less: accumulated amortization ​ ​ ​ ( 2,588 ) ​ ( 1,987 ) Total intangible assets, net ​ ​ ​ $ 1,507 ​ $ 1,874 ​ 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, (in thousands) 2025 (remainder of year) ​ $ 180 2026 ​ 594 2027 ​ 374 2028 ​ 289 2029 ​ 70 ​ ​ $ 1,507 ​ 13 Table of Contents The changes in the carrying amount of goodwill for the periods ended September 30, 2025 and 2024 are as follows: ​ ​ ​ ​ ​ ​ (in thousands) Balance as of January 1, 2025 ​ $ 2,658 Adjustment to goodwill, acquisition price allocation of Conductive Transfers ​ ​ ( 232 ) Adjustment to goodwill, foreign currency exchange rate changes ​ 150 Balance as of September 30, 2025 ​ $ 2,576 ​ ​ ​ ​ ​ ​ (in thousands) Balance as of January 1, 2024 $ 2,461 Adjustment to goodwill, foreign currency exchange rate changes ​ ​ 104 Balance as of September 30, 2024 $ 2,565 ​ Accrued liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2025 2024 Accrued liabilities ​ (in thousands) Accrued wages and benefits ​ $ 154 ​ $ 194 Accrued vacation ​ 115 ​ 146 Other accrued liabilities ​ 31 ​ 37 Total accrued liabilities ​ $ 300 ​ $ 377 ​ ​ Note 3 – Acquisition of Conductive Transfers On December 20, 2024, we acquired substantially all of the operating assets of Conductive Transfers Limited and its affiliate Global Print Solutions Limited (collectively, “Conductive Transfers”), England-based designers and manufacturers of wearables and smart textiles, conductive ink, and other printed electronics. This acquisition was effected pursuant to an Asset Sale Agreement (the “Asset Purchase Agreement”) by and among the Company’s wholly owned United Kingdom subsidiary, Conductive Transfers International Limited, and Conductive Transfers. Under the terms of the Asset Purchase Agreement, the purchase price was GB£ 250,000 (approximately $ 314,000 ) which was paid to the sellers in cash on the acquisition date. The following table summarizes the fair values of the assets acquired at the acquisition date (in thousands). ​ ​ ​ ​ ​ Inventories $ 21 Property and equipment ​ 238 Net identifiable tangible assets acquired ​ 259 Developed technology ​ 55 Net assets acquired ​ $ 314 ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pro Forma Pro Forma ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2025 2024 2025 2024 ​ ​ (in thousands) Revenue ​ $ 2,959 ​ $ 2,824 ​ $ 9,037 ​ $ 9,318 Net (loss) ​ $ ( 336 ) ​ $ ( 562 ) ​ $ ( 1,041 ) ​ $ ( 1,580 ) ​ ​ Note 4 – Earnings Per Share Basic earnings per share is computed by dividing net income/loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. 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. 14 Table of Contents 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. The following table sets forth the computation of basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2025 2024 2025 2024 ​ ​ (in thousands, except per share data) Net (loss) $ ( 336 ) ​ $ ( 523 ) ​ $ ( 1,041 ) ​ $ ( 1,571 ) Less: Preferred stock dividends ​ ​ ( 100 ) ​ ​ ( 100 ) ​ ​ ( 300 ) ​ ​ ( 300 ) Net (loss) applicable to common stockholders ​ $ ( 436 ) ​ $ ( 623 ) ​ $ ( 1,341 ) ​ $ ( 1,871 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding – basic ​ ​ 14,813 ​ ​ 14,793 ​ ​ 14,802 ​ ​ 14,792 Dilutive potential common shares from convertible preferred stock and restricted stock units ​ ​ — ​ ​ — ​ ​ — ​ ​ — Weighted average common shares outstanding – diluted ​ ​ 14,813 ​ ​ 14,793 ​ ​ 14,802 ​ ​ 14,792 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share, basic $ ( 0.03 ) ​ $ ( 0.04 ) ​ $ ( 0.09 ) ​ $ ( 0.13 ) Earnings (loss) per common share, diluted ​ $ ( 0.03 ) ​ $ ( 0.04 ) ​ $ ( 0.09 ) ​ $ ( 0.13 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares issuable upon conversion of Series A Convertible Preferred Stock excluded from calculation because their conversion would be anti-dilutive ​ ​ 900 ​ ​ 900 ​ ​ 900 ​ ​ 900 Shares subject to restricted stock units excluded from calculation because their effect would be anti-dilutive ​ ​ 47 ​ ​ 47 ​ ​ 47 ​ ​ 47 ​ 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 – 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. ​ 15 Table of Contents 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. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ ​ ​ Grant-Date ​ ​ ​ ​ Fair Value Nonvested Restricted Stock Units ​ Shares ​ (per share) Nonvested at January 1, 2025 46,875 ​ $ 2.90 Granted — ​ — Vested — ​ — Forfeited — ​ — Nonvested at September 30, 2025 46,875 ​ $ 2.90 ​ 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. ​ Note 7 – Significant Customers, Concentrations of Credit Risk, and Geographic Information We manage and operate our business through one operating segment. Revenues from customers equal to or greater than 10% of total revenues are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2025 2024 2025 2024 Customer A 21 % 10 % 20 % 13 % Customer B 11 % * % 11 % 14 % * Less than 10% of total revenues Revenues by geographic area are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2025 2024 2025 2024 ​ (in thousands) United States ​ $ 1,086 ​ $ 1,056 ​ $ 3,916 ​ $ 3,904 Asia and Middle East ​ 658 ​ ​ 775 ​ ​ 1,451 ​ ​ 1,982 Europe and other ​ 1,215 ​ ​ 840 ​ ​ 3,670 ​ ​ 2,807 Revenue ​ $ 2,959 ​ $ 2,671 ​ $ 9,037 ​ $ 8,693 ​ Revenues by geographic area are based on the country of shipment destination. The geographic location of distributors and third-party manufacturing service providers may be different from the geographic location of the purchasers and/or ultimate end users. We provide credit only to creditworthy third parties who are subject to our credit verification procedures. Accounts receivable balances are monitored on an ongoing basis, and accounts deemed to have credit risk are fully reserved. 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 $ 49,000 and $ 34,000 at September 30, 2025 and December 31, 2024, respectively. 16 Table of Contents Our long-lived assets were geographically located as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ 2025 2024 ​ (in thousands) United States ​ $ 1,189 ​ $ 1,440 Europe ​ ​ 4,154 ​ ​ 4,446 Asia ​ 332 ​ ​ 331 Total long-lived assets ​ $ 5,675 ​ $ 6,217 ​ ​ Note 8 – Related Party Transactions Qualstar Corporation (OTCMKTS:QBAK) Qualstar Corporation (OTCMKTS:QBAK) (“Qualstar”) is a related party. Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer, is also the President, Chief Executive Officer and a director of Qualstar. Ryan J. Hoffman, our Chief Financial Officer, is also the Acting Chief Financial Officer of Qualstar. Mr. Bronson, together with BKF Capital Group, Inc. (OTCMKTS:BKFG) which he controls, has a controlling interest in both Interlink and Qualstar. We have a mutual facilities sharing agreement with Qualstar under which we allow Qualstar to use a portion of our Irvine, California and Bellevue, Washington office facilities and Qualstar allows us to use of a portion of its Camarillo, California office and warehouse facility, in each case splitting substantially all rent and lease-related costs on an apportioned basis according to the approximate relative usage levels by each entity. In addition, we have a mutual consulting agreement with Qualstar under which certain of our respective employees and/or independent contractors provide certain operational, sales, marketing, general and administrative services to the other entity. Interlink and Qualstar also agree to reimburse, or be reimbursed by, one another for expenses paid by one company on behalf of the other. Transactions with Qualstar and its subsidiaries are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ 2025 ​ 2024 ​ Due from Due to Due from Due to ​ ​ Qualstar ​ Qualstar ​ Qualstar ​ Qualstar ​ (in thousands) Balance at July 1, ​ $ 17 ​ $ 18 ​ $ 16 ​ $ 11 Billed (or accrued) to Qualstar by Interlink ​ ​ 110 ​ ​ — ​ ​ 142 ​ ​ — Paid by Qualstar to Interlink ​ ​ ( 110 ) ​ ​ — ​ ​ ( 132 ) ​ ​ — Billed (or accrued) to Interlink by Qualstar ​ ​ — ​ ​ 50 ​ ​ — ​ ​ 45 Paid by Interlink to Qualstar ​ ​ — ​ ​ ( 33 ) ​ ​ — ​ ​ ( 27 ) Balance at September 30, ​ $ 17 ​ $ 35 ​ $ 26 ​ $ 29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended September 30, ​ 2025 ​ 2024 ​ Due from Due to Due from Due to ​ ​ Qualstar ​ Qualstar ​ Qualstar ​ Qualstar ​ (in thousands) Balance at January 1, ​ $ 8 ​ $ 12 ​ $ 1 ​ $ 32 Billed (or accrued) to Qualstar by Interlink ​ ​ 363 ​ ​ — ​ ​ 322 ​ ​ — Paid by Qualstar to Interlink ​ ​ ( 354 ) ​ ​ — ​ ​ ( 297 ) ​ ​ — Billed (or accrued) to Interlink by Qualstar ​ ​ — ​ ​ 144 ​ ​ — ​ ​ 118 Paid by Interlink to Qualstar ​ ​ — ​ ​ ( 121 ) ​ ​ — ​ ​ ( 121 ) Balance at September 30, ​ $ 17 ​ $ 35 ​ $ 26 ​ $ 29 ​ 17 Table of Contents BKF Capital Group, Inc. (OTCMKTS:BKFG) BKF Capital Group, Inc. (OTCMKTS:BKFG) (“BKF Capital”) is a related party. Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer, is also the Chief Executive Officer and Chairman of BKF Capital. Ryan J. Hoffman, our Chief Financial Officer, is also the Chief Financial Officer of BKF Capital. Mr. Bronson, together with BKF Capital, has a controlling interest in Interlink. We have a facilities agreement with BKF Capital to allow BKF Capital to use a portion of our Irvine, California office facility, for which we have agreed to split substantially all rent and lease-related costs on an apportioned basis according to the approximate relative usage levels by each entity. In 2021, we entered into a M&A advisory consulting services agreement with Bronson Financial LLC (“BF”), a wholly owned subsidiary of BKF Capital, pursuant to which BF provided M&A advisory consulting services to us. This agreement was terminated in April 2024. Interlink and BKF Capital also agree to reimburse, or be reimbursed by, one another for expenses paid by one company on behalf of the other. Transactions with BKF Capital and its subsidiaries are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ ​ 2025 ​ 2024 ​ Due from Due to Due from Due to ​ ​ BKF Capital ​ BKF Capital ​ BKF Capital ​ BKF Capital ​ ​ (in thousands) Balance at July 1, ​ $ — ​ $ — ​ $ 1 ​ $ — Billed (or accrued) to BKF Capital by Interlink ​ ​ 2 ​ ​ — ​ ​ 1 ​ ​ — Paid by BKF Capital to Interlink ​ ​ ( 1 ) ​ ​ — ​ ​ ( 2 ) ​ ​ — Billed (or accrued) to Interlink by BKF Capital ​ ​ — ​ ​ — ​ ​ — ​ ​ — Paid by Interlink to BKF Capital ​ ​ — ​ ​ — ​ ​ — ​ ​ — Balance at September 30, ​ $ 1 ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended September 30, ​ ​ 2025 ​ 2024 ​ Due from Due to Due from Due to ​ ​ BKF Capital ​ BKF Capital ​ BKF Capital ​ BKF Capital ​ ​ (in thousands) Balance at January 1, ​ $ — ​ $ — ​ $ 2 ​ $ — Billed (or accrued) to BKF Capital by Interlink ​ ​ 5 ​ ​ — ​ ​ 6 ​ ​ — Paid by BKF Capital to Interlink ​ ​ ( 4 ) ​ ​ — ​ ​ ( 8 ) ​ ​ — Billed (or accrued) to Interlink by BKF Capital ​ ​ — ​ ​ — ​ ​ — ​ ​ 75 Paid by Interlink to BKF Capital ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 75 ) Balance at September 30, ​ $ 1 ​ $ — ​ $ — ​ $ — ​ ​ Note 9 – Income Taxes 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”). Accordingly, our effective tax rate typically will vary from the U.S. statutory tax rate of 21 % from quarter to quarter. 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 September 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. 18 Table of Contents The Internal Revenue Code includes a provision, referred to as Global Intangible Low-Taxed Income (“GILTI”), which provides for a 10.5 % tax on certain income of controlled foreign corporations. 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 $ 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. Certain methods of distribution may require us to incur U.S. or foreign taxes to repatriate these funds. ​ Note 10 – Commitments and Contingencies Lease Agreements We lease facilities under non-cancellable operating leases. Our current leases expire at various dates through 2029 and frequently include renewal provisions for varying periods of time, provisions for taxes, insurance and maintenance costs, and provisions for minimum rent increases. Minimum leases payments, including scheduled rent increases are recognized as rent expenses on a straight-line basis over the term of the lease. 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 nine months ended September 30, 2025 and 2024 was 9.5 %. ROU assets for operating leases are periodically reduced by impairment losses. 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. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss. In May 2024, we entered into a lease agreement for a 5,183 square-foot manufacturing facility and administrative offices located in Fremont, California. The lease term is five years and three months , with monthly base rent of approximately $ 11,000 , subject to annual increases of 3.5 %. In addition to base rent, we are responsible for our proportionate share of common area operating expenses. We previously leased a 10,635 square - foot manufacturing facility located in Newark, California, which had a monthly rent of approximately $ 19,000 . We vacated the Newark facility in December 2024. In June 2023, we entered into a lease agreement for a 1,560 square - foot office space in Irvine, California for approximately $ 4,000 per month for a term commencing June 2023 and ending May 2024. The term of this lease has been extended through December 31, 2025 for the same rental amount. Our Irvine, California office is used for executive offices, sales, finance and administration. In April 2024, we entered into a lease agreement for a 2,480 square - foot office space in Bellevue, Washington, at a monthly rent of approximately $ 9,000 . This lease term begins in July 2024 and ends in October 2027. In March 2025, we entered into a sublease agreement with a third party for the same office space at a monthly rate of approximately $ 10,000 . In accordance with the terms of our lease agreement, a portion of the premium of the sublease rent over our base rent is shared with the landlord. The sublease term began in March 2025 and also ends in October 2027. We lease a 14,476 square-foot manufacturing facility and administrative office in Shenzhen, China. In May 2024, we renewed this lease for the period June 2024 through May 2026 for approximately $ 8,000 per month. In May 2024, we also leased an additional 7,287 square-foot facility in Shenzhen, China for a two - year term for approximately $ 3,000 per month. In June 2025, we modified the lease on this additional facility, reducing the footprint to 1,292 square - feet, reducing the monthly rent to approximately $ 1,000 , and extending the term to June 2027. We lease an approximately 9,800 square-foot manufacturing facility and administrative offices in Irvine, Scotland for approximately $ 5,000 per month. This lease term ends February 2028. 19 Table of Contents 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. This lease term ends April 2027. We lease a 500 square-foot sales office in Tokyo, Japan for approximately $ 1,000 per month. This lease term ends November 2026. We previously leased a 275 square - foot engineering and administrative office in Singapore for approximately $ 1,000 per month through June 2025. 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 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 September 30, 2025 is 1.8 years; and as of December 31, 2024 was 2.2 years. Future minimum lease payments under non-cancellable operating leases that have remaining non-cancellable lease terms in excess of one year are as follows: ​ ​ ​ ​ ​ Years ending December 31, (in thousands) 2025 (remainder of year) ​ $ 110 2026 ​ 383 2027 ​ ​ 299 2028 ​ ​ 158 2029 ​ ​ 88 Total undiscounted future non-cancelable minimum lease payments ​ 1,038 Less: imputed interest ​ ​ ( 133 ) Present value of lease liabilities ​ $ 905 ​ 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 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. Litigation 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. Related legal defense costs are expensed as incurred. 20 Table of Contents Warranties We establish reserves for future product warranty costs that are expected to be incurred pursuant to specific warranty provisions with our customers. We generally warrant our products against defects for one year from date of shipment, with certain exceptions in which the warranty period can extend to more than one year based on contractual agreements. Our warranty reserves are established at the time of sale and updated throughout the warranty period based upon numerous factors including historical warranty return rates and expenses over various warranty periods. Historically, our warranty returns have not been material. Intellectual Property Indemnities We indemnify certain customers and our contract manufacturers against liability arising from third-party claims of intellectual property rights infringement related to our products. These indemnities appear in development and supply agreements with our customers as well as manufacturing service agreements with our contract manufacturers, are not limited in amount or duration and generally survive the expiration of the contract. Given that the amount of any potential liabilities related to such indemnities cannot be determined until an infringement claim has been made, we are unable to determine the maximum amount of losses that we could incur related to such indemnifications. Director and Officer Indemnities and Contractual Guarantees Pursuant to our bylaws, we will indemnify our directors and executive officers to the fullest extent permitted by Nevada law, without limitation as to amount or duration, in the event of any actual or threatened lawsuit or proceeding. Certain costs incurred in connection with such indemnifications may be recovered under certain circumstances under various insurance policies. Given that the amount of any potential liabilities related to such indemnities cannot be determined until a lawsuit or proceeding has been threatened or filed, we are unable to determine the maximum amount of losses that we could incur relating to such indemnities. We have entered into an employment agreement with Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer. This agreement contains certain severance and change in control obligations. Under the agreement, if Mr. Bronson’s employment is terminated due to his death or disability (as such terms are defined in the agreement), Mr. Bronson or his beneficiaries will be entitled to receive: (i) his base compensation to the end of the monthly pay period immediately following the date of termination; (ii) accrued bonus payments; and (iii) immediate and full vesting of all unvested equity and/or options issued by the Company. If Mr. Bronson’s employment is terminated by him for good reason (as such term is defined in the agreement), or by us without cause, then Mr. Bronson will be entitled to receive: (i) his base compensation to the date of termination; (ii) a severance payment equal to twelve months of his base compensation; (iii) any earned bonus compensation; (iv) employee benefits for twelve months following the date of termination; (v) any vested company match 401(k) or other retirement contribution; and (vi) immediate and full vesting of all unvested equity and/or options issued by the Company. In the event of a change in control of the Company (as such term is defined in the agreement), Mr. Bronson is entitled to receive: (i) a change in control payment in an amount equal to twelve months of his base compensation, payable as of the date the change in control occurs; and (ii) immediate and full vesting of all unvested equity and/or options issued by the Company. Guarantees and Indemnities In the normal course of business, we are occasionally required to undertake indemnification for which we may be required to make future payments under specific circumstances. We review our exposure under such obligations no less than annually, or more frequently as required. The amount of any potential liabilities related to such obligations cannot be accurately determined until a formal claim is filed. Historically, any such amounts that become payable have not had a material negative effect on our business, financial condition or results of operations. We maintain general and product liability insurance which may provide a source of recovery to us in the event of an indemnification claim. ​ ​ 21 Table of Contents