INTERLINK ELECTRONICS INC

Previous wording

Force/Touch Sensors. We design, develop, manufacture and sell a range of force-sensing technologies that incorporate our proprietary materials technology, firmware and software into a portfolio of standard products and custom solutions. These include sensor components, subassemblies, modules and products that support effective, efficient cursor control and novel three-dimensional user inputs. Our HMI technology platforms are deployed in a wide range of markets, including consumer electronics, automotive, industrial and medical. The application of our HMI technology platforms includes vehicle entry, vehicle multi-media control interface, rugged touch controls, presence detection, collision detection, speed and torque controls, pressure mapping, biological monitoring and others. Through our 2023 acquisition of Calman, which brought us over 25 years of HMI design and manufacturing expertise as a leading provider of specialized printed electronics, we offer customized membrane keypads, graphic overlays, printed electronics and industrial label products for use in a wide range of fields, from industrial instrumentation, process control and monitoring to medical and diagnostic devices and defense systems. Additionally, through our 2024 acquisition of Conductive Transfers, which deepened our innovative patented processes for integration of printed electronic technologies, we offer functional e-textiles and wearable technology, including heated clothing and personal protection equipment, and other products in development for medical and automotive environments and other wearable form-factors.

Current wording

Force/Touch Sensors. We design, develop, manufacture and sell a range of force-sensing technologies that incorporate our proprietary materials technology, firmware and software into a portfolio of standard products and custom solutions. These include sensor components, subassemblies, modules and products that support effective, efficient cursor control and novel three-dimensional user inputs. Our HMI technology platforms are deployed in a wide range of markets, including medical, industrial, automotive, and consumer products. The application of our HMI technology platforms includes vehicle entry, vehicle multi-media control interface, rugged touch controls, presence detection, collision detection, speed and torque controls, pressure mapping, biological monitoring and others. Through our 2023 acquisition of Calman, which brought us over 25 years of HMI design and manufacturing expertise as a leading provider of specialized printed electronics, we offer customized membrane keypads, graphic overlays, printed electronics and industrial label products for use in a wide range of fields, from industrial instrumentation, process control and monitoring to medical and diagnostic devices and defense systems. Additionally, through our 2024 acquisition of Conductive Transfers, which deepened our innovative patented processes for integration of printed electronic technologies, we offer functional e-textiles and wearable technology, including heated clothing and personal protection equipment, and other products in development for medical and automotive environments and other wearable form-factors.

Previous wording

We sell our products and solutions globally to a diverse array of customers that include Fortune Global 500 companies with the world’s most recognizable brands, as well as start-ups, design houses, original design and equipment manufacturers, and universities. Our technology has been deployed in the consumer electronics, automotive, industrial automation, medical, defense and environmental monitoring markets. Our global presence in the United States, China, United Kingdom, Hong Kong, Singapore and Japan allows us to broadly provide sales and engineering support services to our existing and future worldwide customers. We manufacture our products in a state-of-the-art facility in Shenzhen, China, and in our advanced and proprietary facilities in Fremont, California; Irvine, Scotland; and Barnsley, England. We control 100% of the manufacturing and shipping process, which enables us to respond quickly to customer product demand and design requirements.

Current wording

We sell our products and solutions globally to a diverse array of customers that include Fortune Global 500 companies with the world’s most recognizable brands, as well as start-ups, design houses, original design and equipment manufacturers, and universities. Our technology has been deployed in numerous markets, such as medical, industrial automation, consumer electronics, automotive, defense and environmental monitoring. Our global presence in the United States, China, United Kingdom, Hong Kong, Singapore and Japan allows us to broadly provide sales and engineering support services to our existing and future worldwide customers. We manufacture our products in a state-of-the-art facility in Shenzhen, China, and in our advanced and proprietary facilities in Fremont, California; Irvine, Scotland; and Barnsley, England. We control 100% of the manufacturing and shipping process, which enables us to respond quickly to customer product demand and design requirements.

Previous wording

We sell our custom products into the medical, industrial, automotive and other specialty markets. We sell our standard products to customers in many markets through various distribution networks. The ultimate customer for our products may come from different markets that are often unknown to us at the time of sale. Each market has different product design cycles. Products with longer design cycles often have much longer product life cycles. Medical, industrial, and environmental monitoring products generally have longer design and life cycles than consumer products. We currently have products with life cycles that have exceeded 20 years and are ongoing.

Current wording

We sell our custom products into the medical, industrial, automotive and other specialty markets. We sell our standard products to customers in many markets through various distribution networks. The ultimate customer for our products may come from different markets that are often unknown to us at the time of sale. Each market has different product design cycles. Products with longer design cycles often have much longer product life cycles. Medical, industrial, and environmental monitoring products generally have long design and life cycles. We currently have products with life cycles that have exceeded 20 years and are ongoing.

Previous wording

Revenues were up in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, from customers in the industrial and automotive markets, and were up from customers of our standard products, while revenues from customers in the medical market were down. The increase in revenue from customers in the industrial and automotive markets was due to increased shipments due to higher customer demand, while the decrease in revenue from customers in the medical market was primarily due to lower shipments to one of our larger medical customers in alignment with its level of demand and production plans. In all markets, the timing of orders from our customers is not always predictable and can be less in some periods and higher in others depending on the level of their demand which is driven by their projects and operating plans.

Current wording

For the three months ended September 30, 2025, compared to the three months ended September 30, 2024, revenues from customers in the medical market and from customers of our standard products were up, while revenues from customers in the industrial and automotive markets were down. The increase in revenue from customers in the medical market was due to increased shipments of our force-sensing products and of our printed electronics in our Calman subsidiary due to higher customer demand, and the decrease in revenue from customers in the industrial market was due to reduced shipments and lower demand on our gas-sensing products. In all markets, the timing of orders from our customers is not always predictable and can be less in some periods and higher in others depending on the level of their demand which is driven by their projects and operating plans.

Previous wording

Our gross profit and gross margin percentage are impacted by various factors including product mix, customer mix, sales volume, and fluctuations in our cost of revenues, which are comprised of material costs, direct and indirect production labor costs, warehousing and logistics costs, facilities costs, and other costs related to production activities. Gross profit was up during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 due primarily to higher revenues, while gross margin percentage was flat, as higher margins on certain of our products was offset by lower margins on others.

Current wording

Our gross profit and gross margin percentage are impacted by various factors including product mix, customer mix, sales volume, and fluctuations in our cost of revenues, which are comprised of material costs, direct and indirect production labor costs, warehousing and logistics costs, facilities costs, and other costs related to production activities. Gross profit was up during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 due primarily to higher revenues, while gross margin percentage was up slightly due to higher revenues and favorable changes in our product and customer mix.

Previous wording

Selling, general and administrative expenses consist primarily of compensation expenses for sales and administrative employees, legal and other professional fees, facilities expenses, communication expenses, and intangible asset amortization expense. Selling, general and administrative costs for the three months ended June 30, 2025 were flat compared to the three months ended June 30, 2024.

Current wording

Selling, general and administrative expenses consist primarily of compensation expenses for sales and administrative employees, legal and other professional fees, facilities expenses, communication expenses, and intangible asset amortization expense. Selling, general and administrative costs for the three months ended September 30, 2025 were up compared to the three months ended September 30, 2024 due to increased professional fees and consultant compensation costs.

Previous wording

Other income (expense) consists of non-operating income and expenses, such as gains and losses on marketable securities, foreign currency transaction gains and losses, interest income and expense, and other non-operating income and expenses. Other income (expense) for the three months ended June 30, 2025 was comprised of $7,000 of interest income and $18,000 of foreign currency transaction gains, while other income (expense) for the three months ended June 30, 2024 was comprised of $14,000 of interest income and $2,000 of foreign currency transaction gains.

Current wording

Other income (expense) consists of non-operating income and expenses, such as gains and losses on marketable securities, foreign currency transaction gains and losses, interest income and expense, and other non-operating income and expenses. Other income (expense) for the three months ended September 30, 2025 was comprised of $5,000 of interest income and offset by $2,000 of foreign

Previous wording

Income taxes were 9.9% of pre-tax income for the three months ended June 30, 2025, versus 3.4% of pre-tax loss for the three months ended June 30, 2024. Our income tax expense/benefit and rate 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-month periods ended June 30, 2025 and 2024 were impacted by the amount of our foreign pre-tax income/loss and the tax expense/benefit thereon while not realizing a benefit on our domestic pre-tax loss and certain foreign losses due to the valuation allowances thereon.

Current wording

Income taxes were 8.4% of pre-tax income/loss for the three months ended September 30, 2025, versus 5.7% of pre-tax income/loss for the three months ended September 30, 2024. Our income tax expense/benefit and rate 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-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.

Previous wording

Revenues were up in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, from customers in the industrial and automotive markets into which we sell, while they were down from our medical market customers and from customers of our standard products. The increase in revenue from customers in the industrial and automotive markets was due to increased shipments of our force-sensing and gas-sensing products and solutions due to higher customer demand, while the decrease in revenue from customers in the medical market was primarily due to lower shipments to one of our larger medical customers in alignment with its level of demand and production plans. In all markets, the timing of orders from our customers is not always predictable and can be less in some periods and higher in others depending on the level of their demand which is driven by their projects and operating plans.

Current wording

For the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, revenues from customers in the industrial and automotive markets and from customers of our standard products were up, while revenues were down from our medical market customers. The increase in revenue from customers in the industrial and automotive markets was due to increased shipments of our force-sensing and gas-sensing products and solutions due to higher customer demand, while the decrease in revenue from customers in the medical market was primarily due to lower shipments to some of our larger medical customers according to their demand and production plans. In all markets, the timing of orders from our customers is not always predictable and can be less in some periods and higher in others depending on the level of their demand which is driven by their projects and operating plans.

Previous wording

Gross profit and gross margin percentage were down slightly during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 due primarily to changes in product and customer mix.

Current wording

Gross profit was up slightly during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due primarily to higher revenues, while gross margin percentage was down slightly due to changes in our product and customer mix.

Previous wording

Engineering and R&D costs for the six months ended June 30, 2025 were down compared to the six months ended June 30, 2024 due to lower engineering employee and consultant compensation costs.

Current wording

Engineering and R&D costs for the nine months ended September 30, 2025 were down compared to the nine months ended September 30, 2024 due to lower engineering employee and consultant compensation costs.

Previous wording

Selling, general and administrative costs for the six months ended June 30, 2025 were down slightly compared to the six months ended June 30, 2024 due primarily to lower sales and administrative compensation expense on lower headcount, offset in part by higher costs incurred for consultants and professional services.

Current wording

Selling, general and administrative costs for the nine months ended September 30, 2025 were generally flat compared to the nine months ended September 30, 2024 due primarily to lower sales and administrative compensation expense on lower headcount, offset by higher costs incurred for consultants and professional services.

Previous wording

Other income (expense) for the six months ended June 30, 2025 was comprised of $13,000 of interest income and $17,000 of foreign currency transaction gains, while other income (expense) for the six months ended June 30, 2024 was comprised of $32,000 of interest income and $16,000 of foreign currency transaction gains.

Current wording

Other income (expense) for the nine months ended September 30, 2025 was comprised of $18,000 of interest income and $15,000 of foreign currency transaction gains, while other income (expense) for the nine months ended September 30, 2024 was comprised of $46,000 of interest income, offset by $17,000 of foreign currency transaction losses.

Previous wording

Income taxes were 6.4% of pre-tax loss for the six months ended June 30, 2025, versus 3.1% for the six months ended June 30, 2024. Our income tax expense/benefit and rate 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”).

Current wording

Income taxes were 2.1% of pre-tax income/loss for the nine months ended September 30, 2025, versus 4.0% for the nine months ended September 30, 2024. Our income tax expense/benefit and rate 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”).

Previous wording

Cash requirements for working capital and capital expenditures have historically been funded from cash balances on hand, cash generated from operations, and sales of equity securities. As of June 30, 2025, we had cash and cash equivalents of $2.3 million, working capital of $5.0 million and no indebtedness. Cash and cash equivalents consist of cash and money market funds. Of our $2.3 million of cash, $1.5 million was held by foreign subsidiaries. If these funds are needed for our operations in the U.S. or for acquisitions, we have several methods to repatriate without significant tax effects, including repayment of intercompany loans or distributions of previously taxed income. Other distributions may require us to incur U.S. or foreign taxes to repatriate these funds.

Current wording

Cash requirements for working capital and capital expenditures have historically been funded from cash balances on hand, cash generated from operations, and sales of equity securities. As of September 30, 2025, we had cash and cash equivalents of $3.0 million, working capital of $4.9 million and no indebtedness. Cash and cash equivalents consist of cash and money market funds. Of our $3.0 million of cash, $1.8 million was held by foreign subsidiaries. If these funds are needed for our operations in the U.S. or for acquisitions, we have several methods to repatriate 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.

Previous wording

We believe that our existing cash and cash equivalents balance will be sufficient to maintain our current operations considering our current financial condition, obligations, and other expected cash flows. If our circumstances change, however, we may require additional cash. If we require additional cash, we may attempt to raise additional capital through equity, equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we could be subject to fixed payment obligations and could also be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. If we are unable to raise additional needed funds, we may also take measures to reduce expenses to offset any shortfall.

Current wording

We believe that our existing cash and cash equivalents balances will be sufficient to maintain our current operations considering our current financial condition, obligations, and other expected cash flows. If our circumstances change, however, we may require additional cash. If we require additional cash, we may attempt to raise additional capital through equity, equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we could be subject to fixed payment obligations and could also be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. If we are unable to raise additional needed funds, we may also take measures to reduce expenses to offset any shortfall.

Previous wording

Net Cash (Used In) Operating Activities

Current wording

Net Cash Provided By (Used In) Operating Activities

Previous wording

For the six months ended June 30, 2025, the $409,000 of cash used in operating activities was attributable to net loss of $705,000, adjusted for non-cash charges of $303,000 and cash used in changes in operating assets and liabilities of $7,000. For the six months ended June 30, 2024, the $76,000 of cash used in operating activities was attributable to net loss of $1,048,000, adjusted for non-cash charges of $395,000 and cash provided by changes in operating assets and liabilities of $577,000.

Current wording

For the nine months ended September 30, 2025, the $244,000 of cash provided by operating activities was attributable to net loss of $1,041,000, adjusted for non-cash charges of $511,000 and cash provided by changes in operating assets and liabilities of $774,000. For the nine months ended September 30, 2024, the $144,000 of cash used in operating activities was attributable to net loss of $1,571,000, adjusted for non-cash charges of $638,000 and cash provided by changes in operating assets and liabilities of $789,000.

Previous wording

Accounts receivable increased from $1.6 million at December 31, 2024 to $2.1 million at June 30, 2025 resulting from higher shipments during the second quarter of 2025 compared to the fourth quarter of 2024, and also from slightly higher days-sales outstanding at June 30, 2025 (56) compared to December 31, 2024 (49). Many of our customers pay promptly and the accounts receivable balance is generally related to the most recent shipments. Inventories were down from $2.0 million at December 31, 2024 to $1.7 million at June 30, 2025. Inventory balances fluctuate depending on the timing of materials purchases and product shipments. Prepaid expenses and other current assets were unchanged at $0.3 million at both December 31, 2024 and June 30, 2025; this balance fluctuates with the timing of making prepayments versus when the benefits of those prepayments are consumed. Accounts payable, accrued liabilities, and accrued income taxes increased slightly from $1.0 million at December 31, 2024 to $1.1 million at June 30, 2025; the balances of these working capital liabilities fluctuate due to the timing of purchases and payments on inventories and other accruals of employee compensation and outside services.

Current wording

Accounts receivable decreased from $1.6 million at December 31, 2024 to $1.4 million at September 30, 2025 resulting from improved collections and lower days-sales outstanding at September 30, 2025 (41) compared to December 31, 2024 (49). Many of our customers pay promptly and the accounts receivable balance is generally related to the most recent shipments. Inventories were down from $2.0 million at December 31, 2024 to $1.8 million at September 30, 2025; inventory balances fluctuate depending on the timing of materials purchases and product shipments. Prepaid expenses and other current assets were unchanged at $0.3 million at both December 31, 2024 and September 30, 2025; this balance fluctuates with the timing of making prepayments versus when the benefits of those prepayments are consumed. Accounts payable, accrued liabilities, and accrued income taxes increased from $1.0 million at December 31, 2024 to $1.2 million at September 30, 2025; the balances of these working capital liabilities fluctuate due to the timing of purchases and payments on inventories and other accruals of employee compensation and outside services.

Previous wording

Net cash used in investing activities of $34,000 for the six months ended June 30, 2025, and $20,000 for the six months ended June 30, 2024, consisted of purchases of property, plant, and equipment.

Current wording

Net cash used in investing activities of $37,000 for the nine months ended September 30, 2025, and $107,000 for the nine months ended September 30, 2024, consisted of purchases of property, plant, and equipment.

Previous wording

Net cash used in financing activities of $200,000 for each of the six months ended June 30, 2025 and 2024 consisted of payment of dividends on our Preferred Stock.

Current wording

Net cash used in financing activities of $193,000 for the nine months ended September 30, 2025 consisted of proceeds of $107,000 from issuance of common stock (net of $81,000 of offering costs), offset by payment of $300,000 of dividends on our Series A Convertible Preferred Stock. Net cash used in financing activities of $300,000 for the nine months ended September 30, 2024 consisted of payment of dividends on our Series A Convertible Preferred Stock. On October 15, 2025, we converted all of our Series A Convertible Preferred Stock into common stock, which will eliminate the payment of $400,000 per annum in dividends previously payable to holders of our preferred stock.