Interlink Electronics Inc 10-K for FY2021

Interlink Electronics Inc (LINK)

10-K 2022-03-29 For: 2021-12-31

Added on April 08, 2026

About this 10-K

Interlink Electronics Inc filed this 10-K on March 29, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Headline figures

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $7.48M; up 8.6% from $6.89M a year earlier
Net loss: $734K; compared with net income of $113K a year earlier
Diluted EPS: -$0.12; compared with $0.02 a year earlier

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

1 Jenner, Suite 200
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	4
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	22
Item 2.	Properties	22
Item 3.	Legal Proceedings	22
Item 4.	Mine Safety Disclosures	22
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Reserved	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 8.	Financial Statements and Supplementary Data	31
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	58
Item 9A.	Controls and Procedures	58
Item 9B.	Other Information	59
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	59
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	59
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	66
Item 13.	Certain Relationships and Related Transactions, and Director Independence	67
Item 14.	Principal Accountant Fees and Services	69
	PART IV
Item 15.	Exhibit and Financial Statement Schedules	71
Item 16.	Form 10–K Summary	72
Signatures		73


	Year ended December 31,
	2021				2020
	$		%		$		%

	(in thousands, except percentages)
Revenue, net	$	7,478	100.0	%	$	6,888	100.0	%
Cost of revenue		3,420	45.7			2,986	43.4
Gross profit		4,058	54.3			3,902	56.6
Operating expenses:
Engineering, research and development		893	11.9			918	13.3
Selling, general and administrative		3,244	43.4			2,874	41.7
Total operating expenses		4,137	55.3			3,792	55.1
Income (loss) from operations		(79)	(1.1)			110	1.6
Other income (expense):
Other income (expense), net		(50)	(0.7)			(92)	(1.3)
Income (loss) before income tax expense		(129)	(1.7)			18	0.3
Income tax expense (benefit)		605	8.1			(95)	(1.4)
Net income (loss)	$	(734)	(9.8)	%	$	113	1.6	%


		Page
Report of Independent Registered Public Accounting Firm (Macias Gini & O’Connell LLP, Irvine, CA, Firm ID 324)		33
Report of Independent Registered Public Accounting Firm (RBSM LLP, Larkspur, CA, Firm ID 587)		34
Consolidated Balance Sheets as of December 31, 2021 and 2020		36
Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020		37
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2021 and 2020		38
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2021 and 2020		39
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020		40
Notes to Consolidated Financial Statements		41


	December 31,		December 31,
	2021		2020

	(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	10,777	$	6,120
Restricted cash		5		5
Accounts receivable, net		1,080		1,113
Inventories		814		866
Prepaid expenses and other current assets		391		392
Total current assets		13,067		8,496
Property, plant and equipment, net		338		407
Intangible assets, net		131		195
Right-of-use assets		163		334
Deferred tax assets		8		527
Other assets		72		63
Total assets	$	13,779	$	10,022

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	338	$	235
Accrued liabilities		507		343
Lease liabilities, current		138		219
PPP loan payable		—		186
Accrued income taxes		54		59
Total current liabilities		1,037		1,042

Long-term liabilities
Lease liabilities, long term		37		140
Total long-term liabilities		37		140
Total liabilities		1,074		1,182

Commitments and contingencies (Note 11)		—		—

Stockholders’ equity
Preferred stock, $0.01 par value: 1,000 shares authorized, 200 and 0 shares of Series A Convertible Preferred Stock issued and outstanding at December 31, 2021 ($5.0 million liquidation preference) and 2020, respectively		2		—
Common stock, $0.001 par value: 30,000 shares authorized, 6,602 and 6,601 shares issued and outstanding at December 31, 2021 and 2020, respectively		7		7
Additional paid-in-capital		62,552		57,966
Accumulated other comprehensive income		96		37
Accumulated deficit		(49,952)		(49,170)
Total stockholders’ equity		12,705		8,840
Total liabilities and stockholders’ equity	$	13,779	$	10,022


									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, 2019	—	$	—	6,563	$	7	$	57,940	$	(93)	$	(49,283)	$	8,571
Net income	—		—	—		—		—		—		113		113
Foreign currency translation adjustment	—		—	—		—		—		130		—		130
Stock-based compensation expense	—		—	38		—		26		—		—		26
Balance at December 31, 2020	—		—	6,601		7		57,966		37		(49,170)		8,840
Net (loss)	—		—	—		—		—		—		(734)		(734)
Issuance of preferred stock	200		2	—		—		4,566		—		—		4,568
Preferred stock dividends	—		—	—		—		—		—		(48)		(48)
Foreign currency translation adjustment	—		—	—		—		—		59		—		59
Stock-based compensation expense	—		—	1		—		20		—		—		20
Balance at December 31, 2021	200	$	2	6,602	$	7	$	62,552	$	96	$	(49,952)	$	12,705


Years ending December 31,	(in thousands)
2022	$	55
2023		42
2024		27
2025		7
2026		—
Thereafter		—
	$	131


	Year Ended
	December 31,
	2021		2020

	(in thousands, except per share data)
Net income (loss)	$	(734)	$	113
Less: Preferred stock dividends		(48)		—
Net income (loss) applicable to common stockholders	$	(782)	$	113

Weighted average common shares outstanding – basic		6,601		6,586
Dilutive potential common shares from stock options, restricted stock units, and convertible preferred stock		—		13
Weighted average common shares outstanding – diluted		6,601		6,599

Earnings (loss) per common share, basic	$	(0.12)	$	0.02
Earnings (loss) per common share, diluted	$	(0.12)	$	0.02

Shares subject to anti-dilutive stock options and restricted stock units excluded from calculation		—		3
Shares subject to anti-dilutive Series A Convertible Preferred Stock excluded from calculation		400		—


Name	Age	Company Position
Steven N. Bronson	56	Chairman of the Board, President, and Chief Executive Officer
Ryan J. Hoffman	43	Chief Financial Officer and Secretary
Gene Chen, PhD	50	Vice President of Engineering & Advanced Materials
Joy C. Hou	46	Director
David J. Wolenski	60	Director
Maria N. Fregosi	56	Director


				All Other
		Salary	Bonus⁽¹⁾	Compensation⁽²⁾	Total
Name and Principal Position	Year	($)	($)	($)	($)
Steven N. Bronson	2021	300,000	100,000	1,677	401,677
Chief Executive Officer, President, and Chairman of the Board	2020	300,000	—	1,677	301,677

Ryan J. Hoffman⁽³⁾	2021	94,379	50,000	697	145,076
Chief Financial Officer	2020	12,079	—	16	12,095

Gene Chen, PhD⁽⁴⁾	2021	103,713	10,000	250	113,963
Vice President of Engineering & Advanced Materials	2020	—	—	—	—


	Fees Earned or
	Paid in Cash	Stock Awards⁽¹⁾	Total
Director	($)	($)	($)
Joy C. Hou⁽²⁾	15,000	5,000	20,000
David J. Wolenski⁽²⁾	15,000	5,000	20,000
Maria N. Fregosi⁽²⁾⁽³⁾	8,750	10,000	18,750


	Common Stock
	Beneficially Owned
Name of Beneficial Owner	Number	Percentage
Named Executive Officers and Directors:
Steven N. Bronson⁽¹⁾	5,448,698	82.5	%
Ryan J. Hoffman	—	—
Gene Chen, PhD	—	—
Joy C. Hou⁽²⁾	11,535	0.2	%
David J. Wolenski	535	—
Maria N. Fregosi	878	—
All executive officers and directors as a group (6 persons)	5,461,646	82.7	%

Other 5% Stockholders:
BKF Asset Holdings, Inc.⁽³⁾	993,658	15.0	%


			Number of
			Securities
			Remaining
	Number of		Available for
	Securities to	Weighted	Future Issuance
	be Issued Upon	Average	Under Equity
	Exercise	Exercise Price	Compensation
	of Outstanding	of Outstanding	Plans (Excluding
	Options,	Options,	Securities
	Warrants and	Warrants and	Reflected in
	Rights	Rights	Column (a))
Plan Category	(a)	(b)	(c)
Equity compensation plans approved by security holders⁽¹⁾	—	—	1,538,543
Equity compensation plans not approved by security holders	—	—	—
Total	—	—	1,538,543


	2021
Audit Fees⁽¹⁾	$	130,000
Audit-Related Fees⁽²⁾		—
Tax Fees⁽³⁾		—
All Other Fees⁽⁴⁾		—
Total Fees	$	130,000

Exhibit		Incorporated by Reference				Filed
Number	Exhibit Description	Form	File Number	Exhibit	Filing Date	Herewith
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
3.3	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
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	Sublease, dated June 8, 2020, by and between Overland, Pacific & Cutler, LLC and Interlink Electronics, Inc.	10-12G	000-21858	10.6	August 4, 2020
10.5*	Employment Offer Letter, dated November 4, 2020, between the Registrant and Ryan J. Hoffman	8-K	000-21858	10.1	November 17, 2020


Dated: March 29, 2022	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	March 29, 2022
Steven N. Bronson	the Board of Directors (Principal Executive Officer)

/s/ Ryan J. Hoffman	Chief Financial Officer and Secretary	March 29, 2022
Ryan J. Hoffman	(Principal Financial and Accounting Officer)

/s/ Maria N. Fregosi	Director	March 29, 2022
Maria N. Fregosi

/s/ Joy C. Hou	Director	March 29, 2022
Joy C. Hou

/s/ David J. Wolenski	Director	March 29, 2022
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

Date: March 29, 2022	/s/ Steven N. Bronson
	Steven N. Bronson, Chief Executive Officer
	(Principal Executive Officer)

Date: March 29, 2022	/s/ Ryan J. Hoffman
	Ryan J. Hoffman, Chief Financial Officer
	(Principal Financial and Accounting Officer)