Interlink Electronics Inc 10-Q for FY2022 Q2

Interlink Electronics Inc (LINK)

10-Q 2022-08-11 For: 2022-06-30

Added on April 08, 2026

About this 10-Q

Interlink Electronics Inc filed this 10-Q on August 11, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.04M; down 1.2% from $2.06M a year earlier
Net income: $112K; up 77.8% from net income of $63K a year earlier
Diluted EPS: $0.00; compared with $0.01 a year earlier

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Nevada		77-0056625
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value per share	LINK	The Nasdaq Stock Market LLC


Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☐


		Page No.

PART I -- FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations	4

	Condensed Consolidated Statements of Comprehensive Income (Loss)	5

	Condensed Consolidated Statements of Stockholders’ Equity	6

	Condensed Consolidated Statements of Cash Flows	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30

Item 4.	Controls and Procedures	30

PART II -- OTHER INFORMATION

Item 1A.	Risk Factors	32

Item 6.	Exhibits	32

Signatures		33


	June 30,		December 31,
	2022		2021

	(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	4,402	$	10,777
Restricted cash		5		5
Marketable securities		6,408		—
Accounts receivable, net		719		1,080
Inventories		1,008		814
Prepaid expenses and other current assets		475		391
Total current assets		13,017		13,067
Property, plant and equipment, net		245		338
Intangible assets, net		102		131
Right-of-use assets		252		163
Deferred tax assets		8		8
Other assets		41		72
Total assets	$	13,665	$	13,779

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	371	$	338
Accrued liabilities		289		507
Lease liabilities, current		172		138
Accrued income taxes		136		54
Total current liabilities		968		1,037

Long-term liabilities
Lease liabilities, long-term		87		37
Total long-term liabilities		87		37
Total liabilities		1,055		1,074
Commitments and contingencies (Note 8)		—		—
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 June 30, 2022 and December 31, 2021 ($5.0 million liquidation preference)		2		2
Common stock, $0.001 par value: 30,000 shares authorized, 6,602 shares issued and outstanding at both June 30, 2022 and December 31, 2021		7		7
Additional paid-in-capital		62,552		62,552
Accumulated other comprehensive income (loss)		(53)		96
Accumulated deficit		(49,898)		(49,952)
Total stockholders’ equity		12,610		12,705
Total liabilities and stockholders’ equity	$	13,665	$	13,779


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021

	(in thousands, except per share data)
Revenue, net	$	2,040	$	2,064	$	4,031	$	3,632
Cost of revenue		1,088		937		1,838		1,631
Gross profit		952		1,127		2,193		2,001
Operating expenses:
Engineering, research and development		330		232		593		449
Selling, general and administrative		773		762		1,733		1,479
Total operating expenses		1,103		994		2,326		1,928
Income (loss) from operations		(151)		133		(133)		73
Other income (expense):
Other income (expense), net		342		(29)		497		(19)
Income before income taxes		191		104		364		54
Income tax expense		79		41		110		34
Net income	$	112	$	63	$	254	$	20

Net income applicable to common stockholders	$	12	$	63	$	54	$	20
Earnings per common share – basic and diluted	$	0.00	$	0.01	$	0.01	$	0.00
Weighted average common shares outstanding – basic and diluted		6,602		6,601		6,602		6,601


									Accumulated
							Additional		Other				Total
	Preferred Stock			Common Stock			Paid-in-		Comprehensive		Accumulated		Stockholders’
Three months ended June 30, 2022	Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit		Equity
(in thousands)
Balance at March 31, 2022	200	$	2	6,602	$	7	$	62,552	$	103	$	(49,910)	$	12,754
Net income	—		—	—		—		—		—		112		112
Preferred stock dividends	—		—	—		—		—		—		(100)		(100)
Foreign currency translation adjustment	—		—	—		—		—		(156)		—		(156)
Balance at June 30, 2022	200	$	2	6,602	$	7	$	62,552	$	(53)	$	(49,898)	$	12,610


Years ending December 31,	(in thousands)
2022 (remainder of year)	$	26
2023		42
2024		27
2025		7
	$	102


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021

	(in thousands, except per share data)
Net income	$	112	$	63	$	254	$	20
Less: Preferred stock dividends		(100)		—		(200)		—
Net income applicable to common stockholders		12		63		54		20

Weighted average common shares outstanding – basic		6,602		6,601		6,602		6,601
Dilutive potential common shares from stock options, restricted stock units, and convertible preferred stock		—		—		—		—
Weighted average common shares outstanding – diluted		6,602		6,601		6,602		6,601

Earnings per common share, basic	$	0.00	$	0.01	$	0.01	$	0.00
Earnings per common share, diluted	$	0.00	$	0.01	$	0.01	$	0.00

Shares subject to anti-dilutive stock options and restricted stock units excluded from calculation		—		—		—		—
Shares subject to anti-dilutive Series A Convertible Preferred Stock excluded from calculation		400		—		400		—


	Six months ended June 30
	2022				2021
			% of				% of
	Amount		Revenue		Amount		Revenue		$ Change		% Change

	(in thousands, except percentages)
Gross profit	$	2,193	54.4	%	$	2,001	55.1	%	$	192	9.6	%

Date: August 11, 2022	Interlink Electronics, Inc.
	(Registrant)

	By:	/s/ Ryan J. Hoffman
		Ryan J. Hoffman
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


Date: August 11, 2022	/s/ Steven N. Bronson
	Steven N. Bronson, Chief Executive Officer
	(Principal Executive Officer)

Date: August 11, 2022	/s/ Ryan J. Hoffman
	Ryan J. Hoffman, Chief Financial Officer
	(Principal Financial and Accounting Officer)


Date: August 11, 2022	/s/ Steven N. Bronson
	Steven N. Bronson
	Chief Executive Officer
	(Principal Executive Officer)

Date: August 11, 2022	/s/ Ryan J. Hoffman
	Ryan J. Hoffman
	Chief Financial Officer
	(Principal Financial and Accounting Officer)


	Six months ended June 30,
	2022		2021

	(in thousands)
Cash flows from operating activities:
Net income	$	254	$	20
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		131		145
Unrealized (gains) losses on marketable securities		(381)		—
Stock-based compensation		—		5
Gain on forgiveness of PPP loan		—		(186)
Adjustment to reconcile operating lease expense to cash paid		(5)		(9)
Loss on disposal of property and equipment		—		14
Deferred taxes		—		1
Changes in operating assets and liabilities:
Accounts receivable		361		(60)
Inventories		(226)		(7)
Prepaid expenses and other assets		(56)		225
Accounts payable		74		127
Accrued liabilities		(210)		(50)
Accrued income taxes		86		9
Net cash provided by operating activities		28		234
Cash flows from investing activities:
Purchases of marketable securities		(6,027)		—
Purchases of property, plant and equipment		(9)		(142)
Net cash used in investing activities		(6,036)		(142)
Cash flows from financing activities:
Payment of dividends on preferred stock		(200)		—
Net cash used in financing activities		(200)		—

Effect of exchange rate changes on cash, cash equivalents and restricted cash		(167)		33
Net (decrease) increase in cash and cash equivalents		(6,375)		125
Cash, cash equivalents and restricted cash, beginning of period		10,782		6,125
Cash, cash equivalents and restricted cash, end of period	$	4,407	$	6,250

Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents, end of period	$	4,402	$	6,245
Restricted cash, end of period		5		5
Cash, cash equivalents and restricted cash, end of period	$	4,407	$	6,250


	June 30,		December 31,
	2022		2021

Inventories	(in thousands)
Raw materials	$	672	$	447
Work-in-process		164		209
Finished goods		172		159
Total inventories	$	1,008	$	814


	June 30,		December 31,
	2022		2021

	(in thousands)
United States	$	387	$	536
Asia		261		176
Total long-lived assets	$	648	$	712


	Three months ended June 30,
	2022				2021
	Due from		Due to		Due from		Due to
	Qualstar		Qualstar		Qualstar		Qualstar

	(in thousands)
Balance at April 1,	$	19	$	8	$	115	$	1

Billed (or accrued) to Qualstar by Interlink		200		—		266		—
Paid by Qualstar to Interlink		(196)		—		(365)		—

Billed (or accrued) to Interlink by Qualstar		—		22		—		30
Paid by Interlink to Qualstar		—		(23)		—		(30)
Balance at June 30,	$	23	$	7	$	16	$	1