Interlink Electronics Inc 10-K for FY2022

Interlink Electronics Inc (LINK)

10-K 2023-03-29 For: 2022-12-31

Added on April 08, 2026

About this 10-K

Interlink Electronics Inc filed this 10-K on March 29, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $7.49M; up 0.2% from $7.48M a year earlier
Net income: $1.67M; compared with a net loss of $734K a year earlier
Diluted EPS: $0.19; compared with -$0.12 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	5
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	25
Item 3.	Legal Proceedings	25
Item 4.	Mine Safety Disclosures	25
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Reserved	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 8.	Financial Statements and Supplementary Data	35
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	61
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	61
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	61
Item 11.	Executive Compensation	64
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	67
Item 13.	Certain Relationships and Related Transactions, and Director Independence	69
Item 14.	Principal Accountant Fees and Services	71
	PART IV
Item 15.	Exhibit and Financial Statement Schedules	73
Item 16.	Form 10–K Summary	74
Signatures		75


	Year ended December 31,
	2022				2021
	$		%		$		%

	(in thousands, except percentages)
Revenue, net	$	7,493	100.0	%	$	7,478	100.0	%
Cost of revenue		3,632	48.5			3,420	45.7
Gross profit		3,861	51.5			4,058	54.3
Operating expenses:
Engineering, research and development		1,220	16.3			893	11.9
Selling, general and administrative		3,309	44.2			3,244	43.4
Total operating expenses		4,529	60.4			4,137	55.3
Loss from operations		(668)	(8.9)			(79)	(1.1)
Other income (expense):
Other income (expense), net		2,611	34.8			(50)	(0.7)
Income (loss) before income taxes		1,943	25.9			(129)	(1.7)
Income tax expense		271	3.6			605	8.1
Net income (loss)	$	1,672	22.3	%	$	(734)	(9.8)	%


		Page
Report of Independent Registered Public Accounting Firm (LMHS, P.C., Norwell, MA, Firm ID 3373)		36
Report of Independent Registered Public Accounting Firm (Macias Gini & O’Connell LLP, Irvine, CA, Firm ID 324)		37
Consolidated Balance Sheets as of December 31, 2022 and 2021		38
Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021		39
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2022 and 2021		40
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2022 and 2021		41
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021		42
Notes to Consolidated Financial Statements		43


	December 31,		December 31,
	2022		2021

	(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	10,091	$	10,777
Restricted cash		—		5
Accounts receivable, net		1,178		1,080
Inventories		2,112		814
Prepaid expenses and other current assets		321		391
Total current assets		13,702		13,067
Property, plant and equipment, net		184		338
Intangible assets, net		76		131
Goodwill		650		—
Right-of-use assets		172		163
Deferred tax assets		134		8
Other assets		65		72
Total assets	$	14,983	$	13,779

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	273	$	338
Accrued liabilities		568		507
Lease liabilities, current		131		138
Accrued income taxes		117		54
Total current liabilities		1,089		1,037

Long-term liabilities
Lease liabilities, long term		46		37
Total long-term liabilities		46		37
Total liabilities		1,135		1,074

Commitments and contingencies (Note 13)		—		—

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, 2022 and 2021 ($5.0 million liquidation preference)		2		2
Common stock, $0.001 par value: 30,000 shares authorized, 6,610 and 6,602 shares issued and outstanding at December 31, 2022 and 2021, respectively		7		7
Additional paid-in-capital		62,617		62,552
Accumulated other comprehensive income (loss)		(98)		96
Accumulated deficit		(48,680)		(49,952)
Total stockholders’ equity		13,848		12,705
Total liabilities and stockholders’ equity	$	14,983	$	13,779


									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, 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
Net income	—		—	—		—		—		—		1,672		1,672
Issuance of common stock	—		—	6		—		50		—		—		50
Preferred stock dividends	—		—	—		—		—		—		(400)		(400)
Foreign currency translation adjustment	—		—	—		—		—		(194)		—		(194)
Stock-based compensation expense	—		—	2		—		15		—		—		15
Balance at December 31, 2022	200	$	2	6,610	$	7	$	62,617	$	(98)	$	(48,680)	$	13,848


Years ending December 31,	(in thousands)
2023	$	42
2024		27
2025		7
2026		—
2027		—
Thereafter		—
	$	76


Cash	$	541
Accounts receivable		316
Inventories		1,063
Prepaid expenses and other current assets		42
Deposits		16
Accounts payable		(157)
Accrued liabilities		(257)
Net identifiable assets acquired		1,564
Goodwill		650
Net assets acquired	$	2,214


	Year Ended
	December 31,
	2022		2021

	(in thousands, except per share data)
Net income (loss)	$	1,672	$	(734)
Less: Preferred stock dividends		(400)		(48)
Net income (loss) applicable to common stockholders	$	1,272	$	(782)

Weighted average common shares outstanding – basic		6,603		6,601
Dilutive potential common shares from stock options, restricted stock units, and convertible preferred stock		—		—
Weighted average common shares outstanding – diluted		6,603		6,601

Earnings (loss) per common share, basic	$	0.19	$	(0.12)
Earnings (loss) per common share, diluted	$	0.19	$	(0.12)

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


Name	Age	Company Position
Steven N. Bronson	57	Chairman of the Board, President, and Chief Executive Officer
Ryan J. Hoffman	44	Chief Financial Officer and Secretary
Gene Chen, PhD	51	Vice President of Engineering & Advanced Materials
Joy C. Hou	47	Director
David J. Wolenski	61	Director
Maria N. Fregosi	57	Director


				All Other
		Salary	Bonus⁽¹⁾	Compensation⁽²⁾	Total
Name and Principal Position	Year	($)	($)	($)	($)
Steven N. Bronson	2022	300,000	50,000	1,677	351,677
Chief Executive Officer, President, and Chairman of the Board	2021	300,000	100,000	1,677	401,677

Ryan J. Hoffman⁽³⁾	2022	95,128	20,000	2,684	117,813
Chief Financial Officer	2021	94,379	50,000	697	145,076

Gene Chen, PhD⁽⁴⁾	2022	165,169	—	—	165,169
Vice President of Engineering & Advanced Materials	2021	103,713	10,000	250	113,963


	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	Percentage
Named Executive Officers and Directors:
Steven N. Bronson⁽¹⁾	5,448,698	82.4	%
Ryan J. Hoffman	—	—
Gene Chen, PhD	—	—
Joy C. Hou⁽²⁾	12,135	0.2	%
David J. Wolenski	2,885	0.0	%
Maria N. Fregosi	1,978	0.0	%
All executive officers and directors as a group (6 persons)	5,465,696	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


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


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
21.1	List of Subsidiaries					X
23.1	Consent of Macias Gini & O’Connell LLP					X
23.2	Consent of RBSM LLP					X
24.1	Power of Attorney (included on signature page)					X
31.1	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X


Dated: March 29, 2023	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 29, 2023
Steven N. Bronson

/s/ Ryan J. Hoffman	Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)	March 29, 2023
Ryan J. Hoffman

/s/ Maria N. Fregosi	Director	March 29, 2023
Maria N. Fregosi

/s/ Joy C. Hou	Director	March 29, 2023
Joy C. Hou

/s/ David J. Wolenski	Director	March 29, 2023
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, 2023	/s/ Steven N. Bronson
	Steven N. Bronson, Chief Executive Officer
	(Principal Executive Officer)

Date: March 29, 2023	/s/ Ryan J. Hoffman
	Ryan J. Hoffman, Chief Financial Officer
	(Principal Financial and Accounting Officer)