What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-12 · 123 added, 196 removed, 414 unchanged (44% 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 September 30, 2025 and December 31, 2024 ( $ 5.0 million liquidation preference) (Note 5)

1,000 shares authorized, no shares issued or outstanding at March 31, 2026 and December 31, 2025

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

30,000 shares authorized, 15,750 shares issued and outstanding at both March 31, 2026 and December 31, 2025

Additional paid-in-capital

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share data)

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

8 unchanged sentences

Stockholders’

Three Months Ended September 30, 2025

Income (Loss)

(in thousands)

Balance at June 30, 2025

Issuance of common stock

Stock-based compensation expense

Preferred stock dividends

Foreign currency translation adjustment

Balance at September 30, 2025

Preferred Stock

Comprehensive

Stockholders’

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Income (Loss)

1 unchanged sentence

Balance at December 31, 2025

Issuance of common stock

Stock-based compensation expense

Preferred stock dividends

Foreign currency translation adjustment

Balance at September 30, 2025

Preferred Stock

Comprehensive

Stockholders’

Three Months Ended September 30, 2024

Income (Loss)

(in thousands)

Balance at June 30, 2024

Stock-based compensation expense

Preferred stock dividends

Foreign currency translation adjustment

Balance at September 30, 2024

Balance at March 31, 2026

Preferred Stock

1 unchanged sentence

Stockholders’

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Income (Loss)

4 unchanged sentences

Foreign currency translation adjustment

Balance at September 30, 2024

Balance at March 31, 2025

See accompanying notes to these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

Cash flows from operating activities:

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

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

Depreciation and amortization

8 unchanged sentences

Accrued income taxes

Net cash provided by (used in) operating activities

Net cash (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 increase (decrease) in cash and cash equivalents

Net (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

3 unchanged sentences

Interest paid

Supplemental disclosure of non-cash investing and financing activities:

Lease liabilities arising from obtaining right-of-use assets

See accompanying notes to these unaudited condensed consolidated financial statements.

4 unchanged sentences

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.

(“Interlink,” “we,” “us,” “our,” or the “Company”) is a leading global provider of advanced sensing technologies and printed electronics solutions that enable Human-Machine Interface (“HMI”) devices and Internet-of-Things (“IoT”) applications.

Our broad product and technology portfolio spans force and touch sensors, piezoelectric sensors, rugged HMI devices, wearable and textile-based sensors and electrochemical gas and environmental sensors, along with instruments and fully integrated systems based on our sensor technologies.

We serve global blue-chip customers and innovative emerging companies across diverse end-use markets, including medical, industrial, automotive, consumer electronics, wearables, environmental monitoring, and specialty applications.

Our technical and engineering expertise in materials science, printed electronics manufacturing, embedded electronics, and related firmware, software, and system integration allows us to deliver high-performance, cost-effective standard and custom solutions tailored to our customers’ unique requirements.

We were incorporated in California in 1985, re-incorporated in Delaware in 1996, and changed our domicile to Nevada in 2012.

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.

We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports available free of charge on our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.

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.

On September 24, 2025, the Company declared a 50 % common stock dividend (the “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.

The Stock Dividend increased the number of issued and outstanding shares of common stock at that time 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 was 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.

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.

Our consolidated financial statements include the accounts of Interlink Electronics, Inc.

and our subsidiaries in China, Hong Kong, and the United Kingdom.

All significant intercompany 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.

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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.

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 when goods are shipped and title and risk of loss transfer to the customer.

All customers have warranty rights, and some customers also have explicit or implicit rights of return.

8 unchanged sentences

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,

Three Months Ended March 31,

(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 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 .

Advertising and marketing costs incurred in the three months ended March 31, 2026 and 2025 were $ 35,000 and $ 43,000 , respectively.

Stock-Based Compensation

20 unchanged sentences

Earnings of our foreign subsidiaries are included in our U.S.

federal income tax return as they are earned.

federal income tax return in the periods they are earned.

Foreign Currency Translation

The functional currency of our Chinese subsidiary is the Chinese renminbi.

The functional currency of our Chinese subsidiary is the Chinese Yuan 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.

and the functional currency of our Hong Kong subsidiary 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.

12 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.

For all years presented, all share and per share data have been retroactively adjusted for the effect of the 50 % Stock Dividend paid in October 2025, which was accounted for as a stock split effected in the form of a stock dividend.

We account for our leases under ASC 842.

29 unchanged sentences

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.

We reviewed all recently issued accounting pronouncements and, other than as described below, concluded they are not applicable or not expected to be material to our financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.

The Company will adopt ASU 2023-09 in its fourth quarter of 2026 using a prospective transition method.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU No.

2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date , which clarified the effective date of ASU 2024-03.

ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization,

as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions.

ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses.

The Company will adopt ASU 2024-03 in its fourth quarter of 2027 using a prospective transition method.

Subsequent Events

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

We have evaluated subsequent events through May 14, 2026, 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,

The following tables provide details of selected balance sheet items:

Accounts receivable, net

(in thousands)

Accounts receivable, gross

Allowance for expected credit losses

Accounts receivable, net

Allowance for expected credit losses

(in thousands)

Balance, beginning of period

Provisions for expected credit losses, net of recoveries

Foreign currency exchange rate changes

Balance, end of period

(in thousands)

Raw materials

2 unchanged sentences

Total inventories

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 $ 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,

Depreciation expense totaled $ 47,000 for each of the three months ended March 31, 2026 and 2025.

March 31, 2026

December 31, 2025

Intangible assets, net

4 unchanged sentences

Non-compete agreements

Order backlog

In-process research and development

accumulated amortization

Total intangible assets, net

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.

Amortization expense totaled $ 172,000 for each of the three months ended March 31, 2026 and 2025.

Future remaining amortization expense is as follows:

Years ending December 31,

1 unchanged sentence

2026 (remainder of year)

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

The changes in the carrying amount of goodwill for the periods ended March 31, 2026 and 2025 are as follows:

(in thousands)

Balance as of January 1, 2026

Adjustment to goodwill, acquisition price allocation of Conductive Transfers

Adjustment to goodwill, foreign currency exchange rate changes

Balance as of September 30, 2025

Balance as of March 31, 2026

(in thousands)

Balance as of January 1, 2025

Adjustment to goodwill, acquisition price allocation of Conductive Transfers

Adjustment to goodwill, foreign currency exchange rate changes

Balance as of September 30, 2024

Balance as of March 31, 2025

Accrued liabilities consisted of the following:

September 30,

Accrued liabilities

4 unchanged sentences

Total accrued liabilities

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).

Property and equipment

Net identifiable tangible assets acquired

Developed technology

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 nine - month periods ended September 30, 2025 and 2024 (unaudited):

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Note 3 – 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, at an offering price of $ 25.00 per share, for gross proceeds of $ 5.0 million.

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 converted all 200,000 shares of Series A Convertible Preferred Stock into 900,000 shares of Common Stock as permitted by the certificate of designations of the preferred stock.

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.

For all periods presented, all share and per share data have been retroactively adjusted for the effect of the 50 % Stock Dividend paid in October 2025, which was 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,

(in thousands, except per share data)

8 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 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.

For the three months ended March 31, 2025, 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;

the 900,000 shares of common stock that were issued on conversion of the Series A Convertible Preferred Stock in October 2025 are included in the computation of basic and diluted shares outstanding for the three months ended March 31, 2026.

For the three months ended March 31, 2026 and 2025, 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 – Stock - Based Compensation and Restricted Stock Units

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.

2 unchanged sentences

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:

During each of the three-month periods ended March 31, 2026 and 2025, the Company recorded $ 7,000 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 three-month period ended March 31, 2026, is as follows:

Nonvested Restricted Stock Units

Nonvested at January 1, 2026

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.

Nonvested at March 31, 2026

As of March 31, 2026, there was approximately $ 81,000 of total unrecognized compensation cost related to nonvested restricted stock units.

That cost is expected to be recognized over a weighted-average period of 2.9 years.

2 unchanged sentences

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,

Three Months Ended March 31,

* Less than 10% of total revenues

Revenues by geographic area are as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(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 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.

At March 31, 2026, one customer accounted for 23 % of total accounts receivable.

At December 31, 2025, the same customer accounted for 23 % of total accounts receivable.

Our long-lived assets were geographically located as follows:

September 30,

(in thousands)

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Qualstar Corporation (OTCMKTS:QBAK) (“Qualstar”) is a related party.

Bronson, our Chairman of the Board, President and Chief Executive Officer, is also the President, Chief Executive Officer and a director of Qualstar.

Hoffman, our Chief Financial Officer, is also the Acting Chief Financial Officer of Qualstar.

Bronson, our Chairman of the Board, President and CEO, is also the President, CEO and a director of Qualstar.

Hoffman, our CFO, is also the CFO of Qualstar.

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.

which he controls, has a controlling interest in both Interlink and Qualstar.

We have a mutual facilities sharing agreement with Qualstar under which Qualstar allows us to use of a portion of its Camarillo, California office and warehouse facility, and we previously allowed Qualstar to use (while we occupied such facilities) a portion of our former office facilities in Irvine, California and Bellevue, Washington, 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.

1 unchanged sentence

Transactions with Qualstar and its subsidiaries are as follows:

Three months ended September 30,

(in thousands)

Balance at July 1,

Billed (or accrued) to Qualstar by Interlink

Paid by Qualstar to Interlink

Billed (or accrued) to Interlink by Qualstar

Paid by Interlink to Qualstar

Balance at September 30,

Nine months ended September 30,

Three months ended March 31,

(in thousands)

4 unchanged sentences

Paid by Interlink to Qualstar

Balance at September 30,

Balance at March 31,

BKF Capital Group, Inc.

2 unchanged sentences

(OTCMKTS:BKFG) (“BKF Capital”) is a related party.

Bronson, our Chairman of the Board, President and Chief Executive Officer, is also the Chief Executive Officer and Chairman of BKF Capital.

Hoffman, our Chief Financial Officer, is also the Chief Financial Officer of BKF Capital.

Bronson, our Chairman of the Board, President and CEO, is also the CEO and Chairman of the Board of BKF Capital.

Hoffman, our CFO, is also the CFO of BKF Capital.

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.

We previously had a facilities agreement with BKF Capital to allow BKF Capital to use a portion of our office facility in Irvine, California, for which we had agreed to split substantially all rent and lease-related costs on an apportioned basis according to the approximate relative usage levels by each entity.

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,

(in thousands)

Balance at July 1,

Billed (or accrued) to BKF Capital by Interlink

Paid by BKF Capital to Interlink

Billed (or accrued) to Interlink by BKF Capital

Paid by Interlink to BKF Capital

Balance at September 30,

Nine months ended September 30,

(in thousands)

Balance at January 1,

Billed (or accrued) to BKF Capital by Interlink

Paid by BKF Capital to Interlink

Billed (or accrued) to Interlink by BKF Capital

Paid by Interlink to BKF Capital

Balance at September 30,

Transactions with BKF Capital and its subsidiaries were not material during the periods ended March 31, 2026 and 2025.

Ridgefield Acquisition Corp (OTCMKTS:RDGA)

Ridgefield Acquisition Corp (OTCMKTS:RDGA) (“Ridgefield”) is a related party.

Bronson, our Chairman of the Board, President and CEO, is also the CEO and Chairman of the Board of Ridgefield as well as Ridgefield’s largest shareholder.

Hoffman, our CFO, is also the CFO of Ridgefield.

Interlink and Ridgefield agree to reimburse, or be reimbursed by, one another for expenses paid by one company on behalf of the other.

Transactions with Ridgefield were not material during the periods ended March 31, 2026 and 2025.

Note 8 – 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”).

Income taxes represented 13.3 % of pre-tax loss for the three months ended March 31, 2026, compared to 4.6 % of pre-tax loss for the same period in the prior year.

Our income taxes are 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.

The effective tax rates for the three-month periods ended March 31, 2026 and 2025 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 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.

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

Of our $ 2.1 million of cash, $ 1.4 million was held by our foreign subsidiaries.

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

8 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 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.

No new right-of-use (“ROU”) assets were capitalized during the three months ended March 31, 2026 or 2025.

ROU assets for operating leases are periodically assessed for impairment.

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.

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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 June 2023, we entered into a lease agreement for a 1,560 square-foot administrative office in Irvine, California for approximately $ 4,000 per month for a term commencing June 2023 and ending May 2024.

In March 2024 we extended the term of this lease through May 2025, and in March 2025 we again extended the term through December 31, 2025.

We vacated this facility in December 2025.

In April 2024, we entered into a lease agreement for a 2,480 square - foot administrative office in Bellevue, Washington, at a monthly rent of approximately $ 9,000 .

This lease term began 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 .

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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 May 2024, we also leased an additional 7,287 square-foot manufacturing facility in Shenzhen, China for the same two - year period 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.

We lease a 9,800 square-foot manufacturing facility and administrative offices in Irvine, Scotland for approximately $ 5,000 per month.

This lease term ends February 2028.

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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 )%;

As of March 31, 2026, we had ROU assets of $ 669,000 and current and long-term lease liabilities of $ 304,000 and $ 419,000 , respectively.

As of December 31, 2025, we had ROU assets of $ 760,000 and current and long-term lease liabilities of $ 324,000 and $ 493,000 , respectively.

Future imputed interest as of March 31, 2026 totaled $ 95,000 (weighted average discount rate of 9.1 %);

and future imputed interest as of December 31, 2025 totaled $ 113,000 (weighted average discount rate of 9.1 %).

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

The weighted average remaining lease term of the Company’s leases as of March 31, 2026 is 1.3 years;

and as of December 31, 2025 was 1.5 years.

6 unchanged sentences

Present value of lease liabilities

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.

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

During the three months ended March 31, 2026, we incurred approximately $ 107,000 in operating lease costs, of which $ 61,000 is included in cost of revenue and $ 46,000 is included in operating expenses in our condensed consolidated statements of operations.

During the three months ended March 31, 2025, we incurred approximately $ 133,000 in operating lease costs, of which $ 73,000 are included in cost of revenue and $ 60,000 are included in operating expenses in our condensed consolidated statements of operations.

We are not currently party to any legal proceedings.

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.

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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