Interlink Electronics Inc 10-Q for FY2023 Q2

Interlink Electronics Inc (LINK)

10-Q 2023-08-10 For: 2023-06-30

Added on April 08, 2026

About this 10-Q

Interlink Electronics Inc filed this 10-Q on August 10, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.05M; up 98.5% from $2.04M a year earlier
Net income: $381K; up 240.2% from net income of $112K a year earlier
Diluted EPS: $0.04; compared with $0.00 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	31

PART II -- OTHER INFORMATION

Item 1A.	Risk Factors	32

Item 6.	Exhibits	32

Signatures		33


	June 30,		December 31,
	2023		2022

	(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	5,106	$	10,091
Accounts receivable, net		2,147		1,178
Inventories		2,940		2,112
Prepaid expenses and other current assets		252		321
Total current assets		10,445		13,702
Property, plant and equipment, net		337		184
Intangible assets, net		324		76
Goodwill		4,545		650
Right-of-use assets		225		172
Deferred tax assets		129		134
Other assets		74		65
Total assets	$	16,079	$	14,983

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,090	$	273
Accrued liabilities		476		568
Lease liabilities, current		157		131
Accrued income taxes		423		117
Total current liabilities		2,146		1,089

Long-term liabilities
Lease liabilities, long term		77		46
Total long-term liabilities		77		46
Total liabilities		2,223		1,135

Commitments and contingencies (Note 10)		—		—

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, 2023 and December 31, 2022 ($5.0 million liquidation preference)		2		2
Common stock, $0.001 par value: 30,000 shares authorized, 6,591 shares issued and outstanding at June 30, 2023; 6,610 shares issued and outstanding at December 31, 2022		7		7
Additional paid-in-capital		62,440		62,617
Accumulated other comprehensive income (loss)		97		(98)
Accumulated deficit		(48,690)		(48,680)
Total stockholders’ equity		13,856		13,848
Total liabilities and stockholders’ equity	$	16,079	$	14,983


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

	(in thousands, except per share data)
Revenue, net	$	4,049	$	2,040	$	7,327	$	4,031
Cost of revenue		1,988		1,088		3,679		1,838
Gross profit		2,061		952		3,648		2,193
Operating expenses:
Engineering, research and development		650		330		1,177		593
Selling, general and administrative		1,005		773		2,238		1,733
Total operating expenses		1,655		1,103		3,415		2,326
Income (loss) from operations		406		(151)		233		(133)
Other income (expense):
Other income (expense), net		64		342		128		497
Income before income taxes		470		191		361		364
Income tax expense		89		79		171		110
Net income	$	381	$	112	$	190	$	254

Net income (loss) applicable to common stockholders	$	281	$	12	$	(10)	$	54
Earnings (loss) per common share – basic and diluted	$	0.04	$	0.00	$	0.00	$	0.01
Weighted average common shares outstanding – basic and diluted		6,600		6,602		6,610		6,602


									Accumulated
							Additional		Other				Total
	Preferred Stock			Common Stock			Paid-in-		Comprehensive		Accumulated		Stockholders’
Three Months Ended June 30, 2023	Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit		Equity
(in thousands)
Balance at March 31, 2023	200	$	2	6,610	$	7	$	62,617	$	84	$	(48,971)	$	13,739
Net income	—		—	—		—		—		—		381		381
Preferred stock dividends	—		—	—		—		—		—		(100)		(100)
Foreign currency translation adjustment	—		—	—		—		—		13		—		13
Repurchases of common stock	—		—	(19)		—		(177)		—		—		(177)
Balance at June 30, 2023	200	$	2	6,591	$	7	$	62,440	$	97	$	(48,690)	$	13,856


Years ending December 31,	(in thousands)
2023 (remainder of year)	$	70
2024		125
2025		48
2026		27
2027		25
Thereafter		29
	$	324


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 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 assets acquired		2,398
Goodwill		4,052
Net assets acquired	$	6,450


	Pro Forma				Pro Forma
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

	(in thousands)
Revenue	$	4,049	$	3,978	$	8,088	$	8,177
Net income (loss)	$	381	$	86	$	677	$	908


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022

	(in thousands, except per share data)
Net income	$	381	$	112	$	190	$	254
Less: Preferred stock dividends		(100)		(100)		(200)		(200)
Net income (loss) applicable to common stockholders		281		12		(10)		54

Weighted average common shares outstanding – basic		6,600		6,602		6,610		6,602
Dilutive potential common shares from convertible preferred stock		—		—		—		—
Weighted average common shares outstanding – diluted		6,600		6,602		6,610		6,602

Earnings (loss) per common share, basic	$	0.04	$	0.00	$	0.00	$	0.01
Earnings (loss) per common share, diluted	$	0.04	$	0.00	$	0.00	$	0.01

Shares subject to anti-dilutive Series A Convertible Preferred Stock excluded from calculation		400		400		400		400

Date: August 10, 2023	Interlink Electronics, Inc.
	(Registrant)

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

Date: August 10, 2023	/s/ Steven N. Bronson
	Steven N. Bronson, Chief Executive Officer
	(Principal Executive Officer)

Date: August 10, 2023	/s/ Ryan J. Hoffman
	Ryan J. Hoffman, Chief Financial Officer
	(Principal Financial and Accounting Officer)


	Six Months Ended June 30,
	2023		2022

	(in thousands)
Cash flows from operating activities:
Net income	$	190	$	254
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		189		131
Unrealized and realized (gains) on marketable securities		—		(381)
Adjustment to reconcile operating lease expense to cash paid		5		(5)
Changes in operating assets and liabilities:
Accounts receivable		(273)		361
Inventories		(189)		(226)
Prepaid expenses and other assets		74		(56)
Accounts payable		85		74
Accrued liabilities		(198)		(210)
Accrued income taxes		(128)		86
Net cash provided by (used in) operating activities		(245)		28
Cash flows from investing activities:
Acquisition of Calman Technology Limited, net of cash acquired		(4,278)		—
Purchases of marketable securities		—		(6,027)
Purchases of property, plant and equipment		(32)		(9)
Net cash used in investing activities		(4,310)		(6,036)
Cash flows from financing activities:
Payment of dividends on preferred stock		(200)		(200)
Repurchases of common stock		(177)		—
Net cash used in financing activities		(377)		(200)

Effect of exchange rate changes on cash, cash equivalents and restricted cash		(53)		(167)
Net (decrease) in cash, cash equivalents and restricted cash		(4,985)		(6,375)
Cash, cash equivalents and restricted cash, beginning of period		10,091		10,782
Cash, cash equivalents and restricted cash, end of period	$	5,106	$	4,407

Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents, end of period	$	5,106	$	4,402
Restricted cash, end of period		—		5
Cash, cash equivalents and restricted cash, end of period	$	5,106	$	4,407

Supplemental disclosure of cash flow information:


	June 30,		December 31,
	2023		2022

Inventories	(in thousands)
Raw materials	$	2,539	$	1,635
Work-in-process		200		192
Finished goods		201		285
Total inventories	$	2,940	$	2,112


	June 30,		December 31,
	2023		2022

	(in thousands)
United States	$	782	$	935
Europe		4,527		—
Asia		325		344
Total long-lived assets	$	5,634	$	1,279


	Three Months Ended June 30,
	2023				2022
	Due from		Due to		Due from		Due to
	Qualstar		Qualstar		Qualstar		Qualstar

	(in thousands)
Balance at April 1,	$	21	$	—	$	19	$	8

Billed (or accrued) to Qualstar by Interlink		209		—		200		—
Paid by Qualstar to Interlink		(144)		—		(196)		—

Billed (or accrued) to Interlink by Qualstar		—		31		—		22
Paid by Interlink to Qualstar		—		(22)		—		(23)
Balance at June 30,	$	86	$	9	$	23	$	7

Date: August 10, 2023	/s/ Steven N. Bronson
	Steven N. Bronson
	Chief Executive Officer
	(Principal Executive Officer)

Date: August 10, 2023	/s/ Ryan J. Hoffman
	Ryan J. Hoffman
	Chief Financial Officer
	(Principal Financial and Accounting Officer)