Interlink Electronics Inc 10-K for FY2023

Interlink Electronics Inc (LINK)

10-K 2024-03-25 For: 2023-12-31

Added on April 08, 2026

About this 10-K

Interlink Electronics Inc filed this 10-K on March 25, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $13.94M; up 86.0% from $7.49M a year earlier
Net loss: $383K; compared with net income of $1.67M a year earlier
Diluted EPS: -$0.08; compared with $0.13 a year earlier

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

15707 Rockfield Boulevard, Suite 105
Irvine, CA		92618
(Address of principal executive offices)		(Zip Code)


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
Special Note Regarding Forward-Looking Statements		3

	PART I
Item 1.	Business	5
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	28
Item 1C.	Cybersecurity	28
Item 2.	Properties	29
Item 3.	Legal Proceedings	29
Item 4.	Mine Safety Disclosures	29
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
Item 6.	Reserved	31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 8.	Financial Statements and Supplementary Data	40
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	67
Item 9A.	Controls and Procedures	67
Item 9B.	Other Information	68
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	68
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	68
Item 11.	Executive Compensation	71
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	75
Item 13.	Certain Relationships and Related Transactions, and Director Independence	76
Item 14.	Principal Accountant Fees and Services	78
	PART IV
Item 15.	Exhibit and Financial Statement Schedules	80
Item 16.	Form 10–K Summary	81
Signatures		82


					Maximum
				Total Number of	Number of Shares
				Shares Purchased	that May Yet Be
				as Part of Publicly	Purchased Under
	Total Number of	Average Price		Announced Plans	the Plans or
Period	Shares Purchased	Paid Per Share		or Programs	Programs
May 1, 2023 to May 31, 2023	20,250	$	6.08	20,250	129,750
June 1, 2023 to June 30, 2023	8,854	$	6.09	604	129,146
July 1, 2023 to July 31, 2023	—		—	—	129,146
August 1, 2023 to August 31, 2023	12,326	$	6.31	12,326	116,820
September 1, 2023 to September 30, 2023	15,000	$	6.36	15,000	101,820
October 1, 2023 to October 31, 2023	—		—	—	101,820
November 1, 2023 to November 30, 2023	—		—	—	101,820
December 1, 2023 to December 31, 2023	—		—	—	101,820
Total	56,430			48,180


	Year ended December 31,
	2023				2022
	$		%		$		%

	(in thousands, except percentages)
Revenue, net	$	13,940	100.0	%	$	7,493	100.0	%
Cost of revenue		7,381	52.9			3,632	48.5
Gross profit		6,559	47.1			3,861	51.5
Operating expenses:
Engineering, research and development		2,326	16.7			1,220	16.3
Selling, general and administrative		4,672	33.5			3,309	44.2
Total operating expenses		6,998	50.2			4,529	60.4
Loss from operations		(439)	(3.1)			(668)	(8.9)
Other income (expense):
Other income (expense), net		164	1.2			2,611	34.8
Income (loss) before income taxes		(275)	(2.0)			1,943	25.9
Income tax expense		108	0.8			271	3.6
Net income (loss)	$	(383)	(2.7)	%	$	1,672	22.3	%


		Page
Report of Independent Registered Public Accounting Firm (LMHS, P.C., Norwell, MA, Firm ID 3373)		41
Consolidated Balance Sheets as of December 31, 2023 and 2022		42
Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022		43
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023 and 2022		44
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023 and 2022		45
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022		46
Notes to Consolidated Financial Statements		47


	December 31,		December 31,
	2023		2022

	(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	4,304	$	10,091
Accounts receivable, net		2,167		1,178
Inventories		2,476		2,112
Prepaid expenses and other current assets		381		321
Total current assets		9,328		13,702
Property, plant and equipment, net		313		184
Intangible assets, net		2,654		76
Goodwill		2,461		650
Right-of-use assets		143		172
Deferred tax assets		83		134
Other assets		80		65
Total assets	$	15,062	$	14,983

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	464	$	273
Accrued liabilities		492		568
Lease liabilities, current		126		131
Accrued income taxes		293		117
Total current liabilities		1,375		1,089

Long-term liabilities
Lease liabilities, long term		33		46
Deferred tax liabilities		626		—
Total long-term liabilities		659		46
Total liabilities		2,034		1,135

Commitments and contingencies (Note 12)		—		—

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 December 31, 2023 and 2022 ($5.0 million liquidation preference)		2		2
Common stock, $0.001 par value: 30,000 shares authorized, 9,860 and 9,915 shares issued and outstanding at December 31, 2023 and 2022, respectively		10		10
Additional paid-in-capital		62,279		62,614
Accumulated other comprehensive income (loss)		200		(98)
Accumulated deficit		(49,463)		(48,680)
Total stockholders’ equity		13,028		13,848
Total liabilities and stockholders’ equity	$	15,062	$	14,983


									Accumulated
							Additional		Other				Total
	Preferred Stock			Common Stock			Paid-in-		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit		Equity

Balance at December 31, 2021	200	$	2	9,904	$	10	$	62,549	$	96	$	(49,952)	$	12,705
Net income	—		—	—		—		—		—		1,672		1,672
Issuance of common stock	—		—	8		—		50		—		—		50
Preferred stock dividends	—		—	—		—		—		—		(400)		(400)
Foreign currency translation adjustment	—		—	—		—		—		(194)		—		(194)
Stock-based compensation expense	—		—	3		—		15		—		—		15
Balance at December 31, 2022	200	$	2	9,915	$	10	$	62,614	$	(98)	$	(48,680)	$	13,848
Net income	—		—	—		—		—		—		(383)		(383)
Repurchases of common stock	—		—	(56)		—		(350)		—		—		(350)
Preferred stock dividends	—		—	—		—		—		—		(400)		(400)
Foreign currency translation adjustment	—		—	—		—		—		298		—		298
Stock-based compensation expense	—		—	1		—		15		—		—		15
Balance at December 31, 2023	200	$	2	9,860	$	10	$	62,279	$	200	$	(49,463)	$	13,028


	(in thousands)
Balance as of January 1, 2022	$	—
Goodwill acquired in acquisition of SPEC/KWJ		650
Balance as of December 31, 2022		650
Adjustment to goodwill, acquisition price allocation of SPEC/KWJ		(404)
Goodwill acquired in acquisition of Calman		2,064
Adjustment to goodwill, foreign currency exchange rate changes		151
Balance as of December 31, 2023	$	2,461


	Weighted
	Averge
	Amortization	December 31,		December 31,
	period	2023		2022

Intangible assets, net		(in thousands)
Patents, tradenames, and trademarks	5 Years	$	935	$	658
Developed technology	3.5 Years		543		—
Customer relationships	6 Years		1,449		—
Non-compete agreements	4 Years		930		—
Order backlog	0.5 Years		22		—
In-process research and development	Indefinite		29		—
			3,908		658
Less: accumulated amortization			(1,254)		(582)
Total intangible assets, net		$	2,654	$	76


Years ending December 31,	(in thousands)
2024	$	751
2025		674
2026		545
2027		336
2028		264
Thereafter		84
	$	2,654



Cash	$	541
Accounts receivable		306
Inventories		952
Prepaid expenses and other current assets		52
Property and equipment		50
Deposits		16
Accounts payable and accrued liabilities		(415)
Net identifiable tangible assets acquired		1,502
Developed technology		134
Customer relationships		96
Tradenames and trademarks		47
In-process research and development		29
Non-compete agreements		26
Order backlog		22
Goodwill		246
Net assets acquired	$	2,102


Cash	$	1,577
Accounts receivable		656
Inventories		622
Prepaid expenses and other current assets		12
Property, plant, and equipment		146
Right-of-use assets		91
Accounts payable and accrued liabilities		(615)
Lease liabilities		(91)
Net identifiable tangible assets acquired		2,398
Developed technology		381
Tradenames and trademarks		214
Customer relationships		1,260
Non-compete agreements		843

Deferred tax liabilities		(710)
Goodwill		2,064
Net assets acquired	$	6,450


	Pro Forma
	Year Ended December 31,
	2023		2022

	(in thousands)
Revenue	$	14,705	$	14,708
Net income	$	157	$	2,835


	Year Ended
	December 31,
	2023		2022

	(in thousands, except per share data)
Net income (loss)	$	(383)	$	1,672
Less: Preferred stock dividends		(400)		(400)
Net income (loss) applicable to common stockholders	$	(783)	$	1,272

Weighted average common shares outstanding – basic		9,887		9,905
Dilutive potential common shares from convertible preferred stock		—		—
Weighted average common shares outstanding – diluted		9,887		9,905

Earnings (loss) per common share, basic	$	(0.08)	$	0.13
Earnings (loss) per common share, diluted	$	(0.08)	$	0.13

Shares subject to anti-dilutive Series A Convertible Preferred Stock excluded from calculation		600		600


Name	Age	Company Position
Steven N. Bronson	58	Chairman of the Board, President, and Chief Executive Officer
Ryan J. Hoffman	45	Chief Financial Officer and Secretary
Gene Chen, PhD	52	Vice President of Engineering & Advanced Materials
Joy C. Hou	48	Director
David J. Wolenski	62	Director
Maria N. Fregosi	58	Director


				All Other
		Salary	Bonus⁽¹⁾	Compensation⁽²⁾	Total
Name and Principal Position	Year	($)	($)	($)	($)
Steven N. Bronson	2023	300,000	—	1,677	301,677
Chief Executive Officer, President, and Chairman of the Board	2022	300,000	50,000	1,677	351,677

Ryan J. Hoffman⁽³⁾	2023	112,417	—	3,142	115,559
Chief Financial Officer	2022	95,128	20,000	2,684	117,813

Gene Chen, PhD	2023	165,000	—	—	165,000
Vice President of Engineering & Advanced Materials	2022	165,169	—	—	165,169


	Fees Earned or
	Paid in Cash	Stock Awards⁽¹⁾⁽²⁾	Total
Director	($)	($)	($)
Joy C. Hou	10,000	5,000	15,000
David J. Wolenski	10,000	5,000	15,000
Maria N. Fregosi	10,000	5,000	15,000


	Common Stock
	Beneficially Owned
Name of Beneficial Owner	Number⁽¹⁾	Percentage
Named Executive Officers and Directors:
Steven N. Bronson⁽²⁾	8,192,720	83.1	%
Ryan J. Hoffman	—	—
Gene Chen, PhD	—	—
Joy C. Hou⁽³⁾	18,899	0.2	%
David J. Wolenski	5,024	0.1	%
Maria N. Fregosi	3,663	0.0	%
All executive officers and directors as a group (6 persons)	8,220,306	83.4	%

Other 5% Stockholders:
BKF Asset Holdings, Inc.⁽⁴⁾	1,490,487	15.1	%


			Number of Securities
			Remaining Available for
	Number of Securities to be	Weighted Average Exercise	Future Issuance Under
	Issued Upon Exercise of	Price of Outstanding	Equity Compensation Plans
	Outstanding Options,	Options, Warrants and	(Excluding Securities
	Warrants and Rights	Rights	Reflected in Column (a))
Plan Category	(a)	(b)	(c)
Equity compensation plans approved by security holders⁽¹⁾	—	—	2,307,815
Equity compensation plans not approved by security holders	—	—	—
Total	—	—	2,307,815


	2023		2022
Audit Fees⁽¹⁾	$	175,000	$	140,000
Audit-Related Fees⁽²⁾		—		—
Tax Fees⁽³⁾		—		—
All Other Fees⁽⁴⁾		50,000		—
Total Fees	$	225,000	$	140,000


	2022
Audit Fees⁽¹⁾	$	111,000
Audit-Related Fees⁽²⁾		—
Tax Fees⁽³⁾		—
All Other Fees⁽⁴⁾		—
Total Fees	$	111,000


Exhibit		Incorporated by Reference				Filed
Number	Exhibit Description	Form	File Number	Exhibit	Filing Date	Herewith
2.1*	Share Purchase Agreement dated March 17, 2023 by and among the Registrant and the shareholders of Calman.	8-K	001-37659	2.1	March 23, 2023
2.2*	Asset Purchase Agreement dated December 16, 2022 by and among the Registrant, SPEC Sensors, LLC, KWJ Engineering, Inc., and the members of SPEC and shareholders of KWJ.	8-K	001-37659	2.1	December 22, 2022
3.1	Articles of Incorporation of the Registrant	10	000-21858	3.1	February 17, 2016
3.2	Certificate of Designations of Series A Preferred Stock	8-K	001-37659	3.1	October 25, 2021
3.2.1	Certificate of Amendment of Certificate of Designations of Series A preferred Stock	8-K	001-37659	3.1	November 23, 2021
3.3	Bylaws of the Registrant	10	000-21858	3.2	February 17, 2016
3.4	Amendment to Bylaws of the Registrant	10	000-21858	3.3	February 17, 2016
4.1	Form of the Registrant’s common stock certificate	10	000-21858	4.1	February 17, 2016
4.2	Description of Securities					X
10.1**	Form of Indemnification Agreement between the Registrant and each of its directors and officers	10	000-21858	10.1	February 17, 2016
10.2**	Employment Agreement, dated July 7, 2016, between the Registrant and Steven N. Bronson	8-K	001-37659	10.1	July 11, 2016
10.3**	Interlink Electronics, Inc. 2016 Omnibus Incentive Plan	8-K	001-37659	10.1	June 22, 2016
10.4**	Employment Offer Letter, dated November 4, 2020, between the Registrant and Ryan J. Hoffman	8-K	000-21858	10.1	November 17, 2020
21.1	List of Subsidiaries					X
23.1	Consent of LMHS, P.C.					X


Dated: March 25, 2024	Interlink Electronics, Inc.

	By:	/s/ RYAN J. HOFFMAN
		RYAN J. HOFFMAN
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


Signature	Title	Date

/s/ Steven N. Bronson	Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer)	March 25, 2024
Steven N. Bronson

/s/ Ryan J. Hoffman	Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)	March 25, 2024
Ryan J. Hoffman

/s/ Maria N. Fregosi	Director	March 25, 2024
Maria N. Fregosi

/s/ Joy C. Hou	Director	March 25, 2024
Joy C. Hou

/s/ David J. Wolenski	Director	March 25, 2024
David J. Wolenski

		State or Other
		Jurisdiction of
		Incorporation or
Name of Entity		Organization
Interlink Electronics Asia Pacific Limited		Hong Kong
Interlink Electronics (China) Co. Ltd.		China
Interlink Electronics Singapore Private Limited		Singapore
IE Sensors, Inc.		Nevada
Interlink Electronics Limited		United Kingdom
Calman Technology Limited		United Kingdom


Date: March 25, 2024	/s/ Steven N. Bronson
	Steven N. Bronson, Chief Executive Officer
	(Principal Executive Officer)

5
Date: March 25, 2024	/s/ Ryan J. Hoffman
	Ryan J. Hoffman, Chief Financial Officer
	(Principal Financial and Accounting Officer)