INTERLINK ELECTRONICS, INC

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2026

☐ Transition Report Pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________________ to ______________________.

Commission file number 001-37659

INTERLINK ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)


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

48389 Fremont Boulevard, Suite 110

Fremont, California 94538

(Address of principal executive offices, zip code)

(510) 244-0424

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 14, 2026, the issuer had 15,750,007 shares of common stock issued and outstanding.

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PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

INTERLINK ELECTRONICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


		March 31,			December 31,
		2026			2025

		(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents		$	2,106		$	2,724
Accounts receivable, net			1,709			1,542
Inventories			1,987			1,801
Prepaid expenses and other current assets			280			236
Total current assets			6,082			6,303
Property, plant and equipment, net			422			474
Intangible assets, net			1,139			1,333
Goodwill			2,539			2,586
Right-of-use assets			669			760
Deferred tax assets			215			202
Other assets			76			80
Total assets		$	11,142		$	11,738

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	1,039		$	985
Accrued liabilities			305			330
Lease liabilities, current			304			324
Accrued income taxes			29			24
Total current liabilities			1,677			1,663

Long-term liabilities
Lease liabilities, long term			419			493
Deferred tax liabilities			305			361
Total long-term liabilities			724			854
Total liabilities			2,401			2,517

Commitments and contingencies (Note 9)			—			—

Stockholders’ equity
Preferred stock, $0.01 par value: 1,000 shares authorized, no shares issued or outstanding at March 31, 2026 and December 31, 2025			—			—
Common stock, $0.001 par value: 30,000 shares authorized, 15,750 shares issued and outstanding at both March 31, 2026 and December 31, 2025			16			16
Additional paid-in-capital			62,601			62,594
Accumulated other comprehensive income			257			406
Accumulated deficit			(54,133)			(53,795)
Total stockholders’ equity			8,741			9,221
Total liabilities and stockholders’ equity		$	11,142		$	11,738

See accompanying notes to these unaudited condensed consolidated financial statements.

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INTERLINK ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


		Three Months Ended March 31,
		2026			2025

		(in thousands, except per share data)
Revenue		$	3,074		$	2,664
Cost of revenue			1,738			1,715
Gross profit			1,336			949
Operating expenses:
Engineering, research and development			303			434
Selling, general and administrative			1,483			1,364
Total operating expenses			1,786			1,798
(Loss) from operations			(450)			(849)
Other income (expense), net			60			5
(Loss) before income taxes			(390)			(844)
Income tax expense (benefit)			(52)			(39)
Net (loss)		$	(338)		$	(805)

Net (loss) applicable to common stockholders		$	(338)		$	(905)
Earnings (loss) per common share – basic and diluted		$	(0.02)		$	(0.06)
Weighted average common shares outstanding – basic and diluted			15,750			14,796

See accompanying notes to these unaudited condensed consolidated financial statements.

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INTERLINK ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)


															Accumulated
												Additional			Other						Total
		Preferred Stock					Common Stock					Paid-in-			Comprehensive			Accumulated			Stockholders’
Three Months Ended March 31, 2026		Shares		Amount			Shares		Amount			Capital			Income (Loss)			Deficit			Equity
(in thousands)
Balance at December 31, 2025		—		$	—		15,750		$	16		$	62,594		$	406		$	(53,795)		$	9,221
Net (loss)		—			—		—			—			—			—			(338)			(338)
Stock-based compensation expense		—			—		—			—			7			—			—			7
Foreign currency translation adjustment		—			—		—			—			—			(149)			—			(149)
Balance at March 31, 2026		—		$	—		15,750		$	16		$	62,601		$	257		$	(54,133)		$	8,741


															Accumulated
												Additional			Other						Total
		Preferred Stock					Common Stock					Paid-in-			Comprehensive			Accumulated			Stockholders’
Three Months Ended March 31, 2025		Shares		Amount			Shares		Amount			Capital			Income (Loss)			Deficit			Equity
(in thousands)
Balance at December 31, 2024		200		$	2		14,796		$	15		$	62,308		$	15		$	(51,847)		$	10,493
Net (loss)		—			—		—			—			—			—			(805)			(805)
Stock-based compensation expense		—			—		—			—			7			—			—			7
Preferred stock dividends		—			—		—			—			—			—			(100)			(100)
Foreign currency translation adjustment		—			—		—			—			—			170			—			170
Balance at March 31, 2025		200		$	2		14,796		$	15		$	62,315		$	185		$	(52,752)		$	9,765

See accompanying notes to these unaudited condensed consolidated financial statements.

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INTERLINK ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


		Three Months Ended March 31,
		2026			2025

		(in thousands)
Cash flows from operating activities:
Net (loss)		$	(338)		$	(805)
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
Depreciation and amortization			219			219
Stock-based compensation expense			7			7
Adjustment to reconcile operating lease expense to cash paid			(3)			—
Deferred income taxes			(78)			(84)
Changes in operating assets and liabilities:
Accounts receivable			(180)			(1)
Inventories			(190)			183
Prepaid expenses and other assets			(37)			29
Accounts payable			54			206
Accrued liabilities			(22)			(106)
Accrued income taxes			25			81
Net cash (used in) operating activities			(543)			(271)
Cash flows from investing activities:
Purchases of property, plant and equipment			—			(29)
Net cash (used in) investing activities			—			(29)
Cash flows from financing activities:
Payment of dividends on preferred stock			—			(100)
Net cash (used in) financing activities			—			(100)

Effect of exchange rate changes on cash			(76)			35
Net (decrease) in cash and cash equivalents			(619)			(365)
Cash and cash equivalents, beginning of period			2,724			2,950
Cash and cash equivalents, end of period		$	2,106		$	2,584

Supplemental disclosure of cash flow information:
Income taxes paid		$	—		$	39
Interest paid			—			—

See accompanying notes to these unaudited condensed consolidated financial statements.

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Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes to the consolidated financial statements. Management regularly evaluates estimates and assumptions related to revenue recognition, allowances for credit losses, warranty reserves, inventory valuation reserves, stock-based compensation, purchased intangible asset valuations and useful lives, asset retirement obligations, and deferred income tax asset valuation allowances. These estimates and assumptions are based on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The actual results we experience may differ materially and adversely from our original estimates. To the extent there are material differences between the estimates and the actual results, our future results of operations will be affected.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, we perform the following five steps; (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) we satisfy a performance obligation. The five-step model is applied to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Delivery occurs when goods are shipped and title and risk of loss transfer to the customer, in accordance with the terms specified in the arrangement with the customer. Revenue recognition is deferred until the earnings process is complete.

We (i) input orders based upon receipt of a customer purchase order, (ii) confirm pricing through the customer purchase order record, (iii) validate creditworthiness through past payment history, credit agency reports and other financial data, and (iv) recognize revenue when goods are shipped and title and risk of loss transfer to the customer. All customers have warranty rights, and some customers also have explicit or implicit rights of return. We establish reserves for potential customer returns or warranty repairs based on historical experience and other factors that enable us to reasonably estimate the obligation.

A portion of our product sales is made through distributors under agreements allowing for right of return. Our past history with these sell-through right of return provisions allows us to reasonably estimate the amount of inventory that could be returned pursuant to these agreements, and revenue is recognized accordingly.

Revenue for engineering services contracts and grants is recognized ratably over the contract term as the related performance obligations are satisfied. Progress toward completion is measured based on the ratio of costs incurred to total estimated costs at completion. This method reflects the pattern of transfer of control, as it aligns revenue recognition with the extent of work performed.

Revenue recognized at a point in time primarily relates to product sales. Revenue recognized over time primarily relates to engineering service contracts and other services agreements. The following table presents revenue recognized at a point in time and revenue recognized over time:


		Three Months Ended March 31,
		2026			2025

		(in thousands)
Revenue recognized at a point in time		$	2,822		$	2,502
Revenue recognized over time			252			162
Total revenue		$	3,074		$	2,664

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Risk and Uncertainties

Our future results of operations involve a number of risks and uncertainties. Factors that could affect our business or future results and cause actual results to vary materially from historical results include, but are not limited to, the rapid change in our industry; problems with the performance, reliability or quality of our products; loss of customers; impacts of doing business internationally, including foreign currency fluctuations, changes in the trade policies of countries in which we or our customers do business (including fluctuating tariff rates), and political instability; potential shortages of the supplies we use to manufacture our products; disruptions in our manufacturing facilities; changes in environmental directives impacting our manufacturing process or product lines; the development of new proprietary technology and the enforcement of intellectual property rights by or against us; our ability to attract and retain qualified employees; and our ability to raise additional capital.

Our operations and financial results may be adversely affected by outbreaks of viruses, widespread illness, infectious diseases, contagions and unforeseen epidemics (such as the COVID-19 coronavirus) in countries in which our products are manufactured and sold. We experienced delays in the receipt of certain goods and the supply of our products from international and domestic shipping origins as a result of the COVID-19 pandemic and more general global supply chain constraints in 2021, and to a lesser extent in the years following. Depending on the continued extent and duration of these and similar constraints and disruptions, our supply chain, results of operations (including sales) or future business may be materially and adversely impacted. These and other issues affecting our international suppliers or internationally manufactured merchandise could have a material adverse effect on our business, results of operations and financial condition.

Fair Value Measurements

We determine fair value measurements based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, we follow the following fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) our own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs):

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets;

Level 2: Other inputs observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborate inputs; and

Level 3: Unobservable inputs for which there is little or no market data and which requires the owner of the assets or liabilities to develop its own assumptions about how market participants would price these assets or liabilities.

Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy.

Recently Issued Accounting Pronouncements

We reviewed all recently issued accounting pronouncements and, other than as described below, concluded they are not applicable or not expected to be material to our financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its fourth quarter of 2026 using a prospective transition method.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization,

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as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. The Company will adopt ASU 2024-03 in its fourth quarter of 2027 using a prospective transition method.

Subsequent Events

We have evaluated subsequent events through May 14, 2026, being the date these condensed consolidated financial statements were issued.

Note 2 – Details of Certain Financial Statement Components

The following tables provide details of selected balance sheet items:


		March 31,			December 31,
		2026			2025

Accounts receivable, net		(in thousands)
Accounts receivable, gross		$	1,760		$	1,593
Allowance for expected credit losses			(51)			(51)
Accounts receivable, net		$	1,709		$	1,542


		Three Months			Three Months
		Ended			Ended
		March 31,			March 31,
		2026			2025

Allowance for expected credit losses		(in thousands)
Balance, beginning of period		$	51		$	34
Provisions for expected credit losses, net of recoveries			1			5
Foreign currency exchange rate changes			(1)			1
Balance, end of period		$	51		$	40


		March 31,			December 31,
		2026			2025

Inventories		(in thousands)
Raw materials		$	1,459		$	1,344
Work-in-process			230			204
Finished goods			298			253
Total inventories		$	1,987		$	1,801


	March 31,		December 31,
	2026		2025

Property, plant and equipment, net	(in thousands)
Furniture, machinery and equipment	$	2,241	$	2,243
Leasehold improvements		530		527
		2,771		2,770
Less: accumulated depreciation		(2,349)		(2,296)
Total property, plant and equipment, net	$	422	$	474

Depreciation expense totaled $47,000 for each of the three months ended March 31, 2026 and 2025.

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	Weighted	March 31, 2026						December 31, 2025
	Average	Gross				Net		Gross				Net
	Amortization	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Period	Amount		Amortization		Amount		Amount		Amortization		Amount

Intangible assets, net		(in thousands)
Patents, tradenames, and trademarks	5 Years	$	943	$	(825)	$	118	$	948	$	(817)	$	131
Developed technology	3.5 Years		644		(537)		107		654		(504)		150
Customer relationships	6 Years		1,496		(806)		690		1,525		(761)		764
Non-compete agreements	4 Years		962		(738)		224		981		(693)		288
Total intangible assets, net		$	4,045	$	(2,906)	$	1,139	$	4,108	$	(2,775)	$	1,333

Amortization expense totaled $172,000 for each of the three months ended March 31, 2026 and 2025. Future remaining amortization expense is as follows:


Years ending December 31,	(in thousands)
2026 (remainder of year)	$	416
2027		369
2028		285
2029		69
	$	1,139

The changes in the carrying amount of goodwill for the periods ended March 31, 2026 and 2025 are as follows:


		(in thousands)
Balance as of January 1, 2026		$	2,586
Adjustment to goodwill, foreign currency exchange rate changes			(47)
Balance as of March 31, 2026		$	2,539


		(in thousands)
Balance as of January 1, 2025		$	2,658
Adjustment to goodwill, acquisition price allocation of Conductive Transfers			(232)
Adjustment to goodwill, foreign currency exchange rate changes			65
Balance as of March 31, 2025		$	2,491

Accrued liabilities consisted of the following:


	March 31,		December 31,
	2026		2025

Accrued liabilities	(in thousands)
Accrued wages and benefits	$	136	$	185
Accrued vacation		126		113
Other accrued liabilities		43		32
Total accrued liabilities	$	305	$	330

Note 3 – Series A Convertible Preferred Stock

In October and November 2021, the Company sold to investors in a private placement exempt from registration under the Securities Act of 1933, as amended, an aggregate of 200,000 shares of its 8.0% Series A Convertible Preferred Stock, par value $0.01 per share, at an offering price of $25.00 per share, for gross proceeds of $5.0 million. After payment of placement agent cash fees and expenses of the offering, the Company received net proceeds of approximately $4.6 million.

On October 15, 2025, with the closing price of the Company’s Common Stock having equaled or exceeded $6.67 (120% of the initial conversion price of $5.56, as adjusted for stock splits since the issuance) for at least 20 out of the prior 30 consecutive trading days, the Company converted all 200,000 shares of Series A Convertible Preferred Stock into 900,000 shares of Common Stock as permitted by the certificate of designations of the preferred stock.

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Note 4 – Earnings Per Share

Basic earnings per share is computed by dividing net income/loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income/loss by the weighted average number of common shares outstanding during the period, plus the dilutive effect of any dilutive securities.

For all periods presented, all share and per share data have been retroactively adjusted for the effect of the 50% Stock Dividend paid in October 2025, which was accounted for as a stock split effected in the form of a stock dividend.

The following table sets forth the computation of basic and diluted earnings per share:


		Three Months Ended
		March 31,
		2026			2025

		(in thousands, except per share data)
Net (loss)		$	(338)		$	(805)
Less: Preferred stock dividends			—			(100)
Net (loss) applicable to common stockholders		$	(338)		$	(905)

Weighted average common shares outstanding – basic			15,750			14,796
Dilutive potential common shares from convertible preferred stock and restricted stock units			—			—
Weighted average common shares outstanding – diluted			15,750			14,796

Earnings (loss) per common share, basic		$	(0.02)		$	(0.06)
Earnings (loss) per common share, diluted		$	(0.02)		$	(0.06)

Shares issuable upon conversion of Series A Convertible Preferred Stock excluded from calculation because their conversion would be anti-dilutive			—			900
Shares subject to restricted stock units excluded from calculation because their effect would be anti-dilutive			47			47

For the three months ended March 31, 2025, 200,000 shares of Series A Convertible Preferred Stock convertible into 900,000 shares of common stock were outstanding but were not included in the computation of diluted earnings (loss) per share because the effect of their conversion would be anti-dilutive due to the net losses; the 900,000 shares of common stock that were issued on conversion of the Series A Convertible Preferred Stock in October 2025 are included in the computation of basic and diluted shares outstanding for the three months ended March 31, 2026. For the three months ended March 31, 2026 and 2025, 46,875 restricted stock units (relating to the same number of shares of common stock) were outstanding but were not included in the computation of diluted earnings (loss) per share for those periods because their effect would be anti-dilutive due to the net loss applicable to common stockholders.

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Note 5 – Stock-Based Compensation and Restricted Stock Units

In May 2024, the Compensation Committee of the Company’s Board of Directors approved the Company’s grant of 46,875 restricted stock units to certain employees under the Interlink Electronics, Inc. 2016 Omnibus Incentive Plan. These restricted stock unit grants had a grant-date fair value of approximately $136,000 and vest over a five-year service period. The related compensation expense is recognized ratably over the vesting period. During each of the three-month periods ended March 31, 2026 and 2025, the Company recorded $7,000 of stock-based compensation expense for these restricted stock units. A summary of the status of the Company’s nonvested restricted stock units as of and for the three-month period ended March 31, 2026, is as follows:


				Weighted-
				Average
				Grant-Date
				Fair Value
Nonvested Restricted Stock Units		Shares		(per share)
Nonvested at January 1, 2026		46,875		$	2.90
Granted		—			—
Vested		—			—
Forfeited		—			—
Nonvested at March 31, 2026		46,875		$	2.90

As of March 31, 2026, there was approximately $81,000 of total unrecognized compensation cost related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.9 years.

Note 6 – Significant Customers, Concentrations of Credit Risk, and Geographic Information

We manage and operate our business through one operating segment.

Revenues from customers equal to or greater than 10% of total revenues are as follows:


		Three Months Ended March 31,
		2026		2025
Customer A		17	%	22	%
Customer B		12	%	*	%

*Less than 10% of total revenues

Revenues by geographic area are as follows:


		Three Months Ended March 31,
		2026			2025

		(in thousands)
United States		$	1,267		$	1,102
Asia and Middle East			645			369
Europe and other			1,162			1,193
Revenue		$	3,074		$	2,664

Revenues by geographic area are based on the country of shipment destination. The geographic location of distributors and third-party manufacturing service providers may be different from the geographic location of the purchasers and/or ultimate end users.

We provide credit only to creditworthy third parties who are subject to our credit verification procedures. Accounts receivable balances are monitored on an ongoing basis, and accounts deemed to have credit risk are fully reserved. At March 31, 2026, one customer accounted for 23% of total accounts receivable. At December 31, 2025, the same customer accounted for 23% of total accounts receivable.

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Our long-lived assets were geographically located as follows:


		March 31,			December 31,
		2026			2025

		(in thousands)
United States		$	1,045		$	1,122
Europe			3,698			3,973
Asia			317			340
Total long-lived assets		$	5,060		$	5,435

Note 7 – Related Party Transactions

Qualstar Corporation (OTCMKTS:QBAK)

Qualstar Corporation (OTCMKTS:QBAK) (“Qualstar”) is a related party. Steven N. Bronson, our Chairman of the Board, President and CEO, is also the President, CEO and a director of Qualstar. Ryan J. Hoffman, our CFO, is also the CFO of Qualstar. Mr. Bronson, together with BKF Capital Group, Inc. which he controls, has a controlling interest in both Interlink and Qualstar. We have a mutual facilities sharing agreement with Qualstar under which Qualstar allows us to use of a portion of its Camarillo, California office and warehouse facility, and we previously allowed Qualstar to use (while we occupied such facilities) a portion of our former office facilities in Irvine, California and Bellevue, Washington, in each case splitting substantially all rent and lease-related costs on an apportioned basis according to the approximate relative usage levels by each entity. In addition, we have a mutual consulting agreement with Qualstar under which certain of our respective employees and/or independent contractors provide certain operational, sales, marketing, general and administrative services to the other entity. Interlink and Qualstar also agree to reimburse, or be reimbursed by, one another for expenses paid by one company on behalf of the other. Transactions with Qualstar and its subsidiaries are as follows:


	Three months ended March 31,
	2026				2025
	Due from		Due to		Due from		Due to
	Qualstar		Qualstar		Qualstar		Qualstar

	(in thousands)
Balance at January 1,	$	5	$	25	$	8	$	12
Billed (or accrued) to Qualstar by Interlink		67		—		121		—
Paid by Qualstar to Interlink		(17)		—		(118)		—
Billed (or accrued) to Interlink by Qualstar		—		39		—		49
Paid by Interlink to Qualstar		—		(25)		—		—
Balance at March 31,	$	55	$	39	$	11	$	61

BKF Capital Group, Inc. (OTCMKTS:BKFG)

BKF Capital Group, Inc. (OTCMKTS:BKFG) (“BKF Capital”) is a related party. Steven N. Bronson, our Chairman of the Board, President and CEO, is also the CEO and Chairman of the Board of BKF Capital. Ryan J. Hoffman, our CFO, is also the CFO of BKF Capital. Mr. Bronson, together with BKF Capital, has a controlling interest in Interlink. We previously had a facilities agreement with BKF Capital to allow BKF Capital to use a portion of our office facility in Irvine, California, for which we had agreed to split substantially all rent and lease-related costs on an apportioned basis according to the approximate relative usage levels by each entity. Interlink and BKF Capital also agree to reimburse, or be reimbursed by, one another for expenses paid by one company on behalf of the other. Transactions with BKF Capital and its subsidiaries were not material during the periods ended March 31, 2026 and 2025.

Ridgefield Acquisition Corp (OTCMKTS:RDGA)

Ridgefield Acquisition Corp (OTCMKTS:RDGA) (“Ridgefield”) is a related party. Steven N. Bronson, our Chairman of the Board, President and CEO, is also the CEO and Chairman of the Board of Ridgefield as well as Ridgefield’s largest shareholder. Ryan J. Hoffman, our CFO, is also the CFO of Ridgefield. Interlink and Ridgefield agree to reimburse, or be reimbursed by, one another for expenses paid by one company on behalf of the other. Transactions with Ridgefield were not material during the periods ended March 31, 2026 and 2025.

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Note 8 – Income Taxes

Income taxes represented 13.3% of pre-tax loss for the three months ended March 31, 2026, compared to 4.6% of pre-tax loss for the same period in the prior year. Our income taxes are impacted by the mix of domestic and foreign pre-tax earnings and losses, permanent differences between book income/loss and taxable income/loss, and our ability to utilize net operating loss carryforwards (“NOLs”). Accordingly, our effective tax rate typically will vary from the U.S. statutory tax rate of 21% from quarter to quarter. The effective tax rates for the three-month periods ended March 31, 2026 and 2025 were impacted by the amount of our foreign pre-tax income/loss and the tax expense/benefit thereon while not realizing a benefit on our domestic pre-tax loss due to the valuation allowances thereon.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. We analyzed our need to record a valuation allowance against our otherwise recognizable net deferred tax assets in the federal, state and foreign jurisdictions, and we determined that a valuation allowance on federal, state, and certain foreign deferred tax assets was necessary at both March 31, 2026 and December 31, 2025. The amount of deferred tax assets considered realizable could be adjusted in future periods if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future profitability.

The Internal Revenue Code includes a provision, referred to as Global Intangible Low-Taxed Income (“GILTI”), which provides for a 10.5% tax on certain income of controlled foreign corporations. We have elected to account for GILTI as a period cost if and when incurred, rather than recognizing deferred taxes for basis differences expected to reverse.

Of our $2.1 million of cash, $1.4 million was held by our foreign subsidiaries. If these funds are needed for our operations in the U.S. or for acquisitions, we have several methods to repatriate the funds without significant tax effects, including repayment of intercompany loans or distributions of previously taxed income. Certain methods of distribution may require us to incur U.S. or foreign taxes to repatriate these funds.

Note 9 – Commitments and Contingencies

Lease Agreements

We lease facilities under non-cancellable operating leases. Our current leases expire at various dates through 2029 and frequently include renewal provisions for varying periods of time, provisions for taxes, insurance and maintenance costs, and provisions for minimum rent increases. Minimum leases payments, including scheduled rent increases are recognized as rent expenses on a straight-line basis over the term of the lease.

The rate implicit in each lease is not readily determinable, and we therefore use our incremental borrowing rate to determine the present value of the lease payments. No new right-of-use (“ROU”) assets were capitalized during the three months ended March 31, 2026 or 2025.

ROU assets for operating leases are periodically assessed for impairment. We have not recognized any impairment losses for our ROU assets.

We monitor for events or changes in circumstances that require a reassessment of our leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss.

In May 2024, we entered into a lease agreement for a 5,183 square-foot manufacturing facility and administrative offices located in Fremont, California. The lease term is five years and three months, with monthly base rent of approximately $11,000, subject to annual increases of 3.5%. In addition to base rent, we are responsible for our proportionate share of common area operating expenses.

In June 2023, we entered into a lease agreement for a 1,560 square-foot administrative office in Irvine, California for approximately $4,000 per month for a term commencing June 2023 and ending May 2024. In March 2024 we extended the term of this lease through May 2025, and in March 2025 we again extended the term through December 31, 2025. We vacated this facility in December 2025.

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In April 2024, we entered into a lease agreement for a 2,480 square - foot administrative office in Bellevue, Washington, at a monthly rent of approximately $9,000. This lease term began in July 2024 and ends in October 2027. In March 2025, we entered into a sublease agreement with a third party for the same office space at a monthly rate of approximately $10,000. In accordance with the terms of our lease agreement, a portion of the premium of the sublease rent over our base rent is shared with the landlord. The sublease term began in March 2025 and also ends in October 2027.

We lease a 14,476 square-foot manufacturing facility and administrative office in Shenzhen, China. In May 2024, we renewed this lease for the period June 2024 through May 2026 for approximately $8,000 per month. In May 2024, we also leased an additional 7,287 square-foot manufacturing facility in Shenzhen, China for the same two - year period for approximately $3,000 per month. In June 2025, we modified the lease on this additional facility, reducing the footprint to 1,292 square - feet, reducing the monthly rent to approximately $1,000, and extending the term to June 2027.

We lease a 9,800 square-foot manufacturing facility and administrative offices in Irvine, Scotland for approximately $5,000 per month. This lease term ends February 2028.

For the period from January 2025 to September 2025, we used a 10,786 square-foot manufacturing facility and administrative offices in Barnsley, England subject to a temporary premise license agreement with payments of approximately $11,000 per month. We are in the process of relocating this facility.

We lease a 3,000 square-foot logistics and distribution facility in Hong Kong for approximately $2,000 per month. This lease term ends April 2027.

We lease a 500 square-foot sales office in Tokyo, Japan for approximately $1,000 per month. This lease term ends November 2026.

We previously leased a 275 square - foot engineering and administrative office in Singapore for approximately $1,000 per month through June 2025.

As of March 31, 2026, we had ROU assets of $669,000 and current and long-term lease liabilities of $304,000 and $419,000, respectively. As of December 31, 2025, we had ROU assets of $760,000 and current and long-term lease liabilities of $324,000 and $493,000, respectively. Future imputed interest as of March 31, 2026 totaled $95,000 (weighted average discount rate of 9.1%); and future imputed interest as of December 31, 2025 totaled $113,000 (weighted average discount rate of 9.1%). The weighted average remaining lease term of the Company’s leases as of March 31, 2026 is 1.3 years; and as of December 31, 2025 was 1.5 years.

Future minimum lease payments under non-cancellable operating leases that have remaining non-cancellable lease terms in excess of one year are as follows:


Years ending December 31,	(in thousands)
2026 (remainder of year)	$	273
2027		299
2028		158
2029		88
2030		—
Total undiscounted future non-cancelable minimum lease payments		818
Less: imputed interest		(95)
Present value of lease liabilities	$	723

During the three months ended March 31, 2026, we incurred approximately $107,000 in operating lease costs, of which $61,000 is included in cost of revenue and $46,000 is included in operating expenses in our condensed consolidated statements of operations. During the three months ended March 31, 2025, we incurred approximately $133,000 in operating lease costs, of which $73,000 are included in cost of revenue and $60,000 are included in operating expenses in our condensed consolidated statements of operations.

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Litigation

We are not currently party to any legal proceedings. We are occasionally involved in legal proceedings in the ordinary course of business, including actions against us which assert or may assert claims or seek to impose fines and penalties in substantial amounts. Related legal defense costs are expensed as incurred.

Warranties

We establish reserves for future product warranty costs that are expected to be incurred pursuant to specific warranty provisions with our customers. We generally warrant our products against defects for one year from date of shipment, with certain exceptions in which the warranty period can extend to more than one year based on contractual agreements. Our warranty reserves are established at the time of sale and updated throughout the warranty period based upon numerous factors including historical warranty return rates and expenses over various warranty periods. Historically, our warranty returns have not been material.

Intellectual Property Indemnities

We indemnify certain customers and our contract manufacturers against liability arising from third-party claims of intellectual property rights infringement related to our products. These indemnities appear in development and supply agreements with our customers as well as manufacturing service agreements with our contract manufacturers, are not limited in amount or duration and generally survive the expiration of the contract. Given that the amount of any potential liabilities related to such indemnities cannot be determined until an infringement claim has been made, we are unable to determine the maximum amount of losses that we could incur related to such indemnifications.

Director and Officer Indemnities and Contractual Guarantees

Pursuant to our bylaws, we will indemnify our directors and executive officers to the fullest extent permitted by Nevada law, without limitation as to amount or duration, in the event of any actual or threatened lawsuit or proceeding. Certain costs incurred in connection with such indemnifications may be recovered under certain circumstances under various insurance policies. Given that the amount of any potential liabilities related to such indemnities cannot be determined until a lawsuit or proceeding has been threatened or filed, we are unable to determine the maximum amount of losses that we could incur relating to such indemnities.

We have entered into an employment agreement with Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer. This agreement contains certain severance and change in control obligations. Under the agreement, if Mr. Bronson’s employment is terminated due to his death or disability (as such terms are defined in the agreement), Mr. Bronson or his beneficiaries will be entitled to receive: (i) his base compensation to the end of the monthly pay period immediately following the date of termination; (ii) accrued bonus payments; and (iii) immediate and full vesting of all unvested equity and/or options issued by the Company. If Mr. Bronson’s employment is terminated by him for good reason (as such term is defined in the agreement), or by us without cause, then Mr. Bronson will be entitled to receive: (i) his base compensation to the date of termination; (ii) a severance payment equal to twelve months of his base compensation; (iii) any earned bonus compensation; (iv) employee benefits for twelve months following the date of termination; (v) any vested company match 401(k) or other retirement contribution; and (vi) immediate and full vesting of all unvested equity and/or options issued by the Company.

In the event of a change in control of the Company (as such term is defined in the agreement), Mr. Bronson is entitled to receive: (i) a change in control payment in an amount equal to twelve months of his base compensation, payable as of the date the change in control occurs; and (ii) immediate and full vesting of all unvested equity and/or options issued by the Company.

Guarantees and Indemnities

In the normal course of business, we are occasionally required to undertake indemnification for which we may be required to make future payments under specific circumstances. We review our exposure under such obligations no less than annually, or more frequently as required. The amount of any potential liabilities related to such obligations cannot be accurately determined until a formal claim is filed. Historically, any such amounts that become payable have not had a material negative effect on our business, financial condition or results of operations. We maintain general and product liability insurance which may provide a source of recovery to us in the event of an indemnification claim.

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

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These forward-looking statements speak only as of the date of this Form 10-Q and are subject to uncertainties, assumptions and business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of the factors set forth below in Part II, Item 1A, “Risk Factors,” and in our other reports filed with the Securities and Exchange Commission. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required by law.

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

Executive Overview

Interlink Electronics, Inc. is a leading global provider of advanced sensing technologies and printed electronics solutions that enable Human-Machine Interface (“HMI”) devices and Internet-of-Things (“IoT”) applications. Our broad product and technology portfolio spans force and touch sensors, piezoelectric sensors, rugged HMI devices, wearable and textile-based sensors, electrochemical gas and environmental sensors, instruments, and fully integrated systems.

Our business is organized around two technology platforms:

Force/Touch Sensing and HMI Solutions. Our force-sensing resistor (“FSR®”) technology, together with piezoelectric sensing, printed electronics, rugged interface devices, and emerging smart textile platforms, enables intuitive, durable, and low-power user input solutions. These technologies are deployed in applications such as vehicle entry and control systems, industrial and medical interfaces, presence and pressure detection, wearable monitoring, and other three-dimensional input environments.

Through our acquisitions of Calman in 2023 and Conductive Transfers Limited in 2024, we expanded our capabilities in customized membrane keypads, graphic overlays, industrial labeling, conductive textiles, and integrated printed electronic systems. These additions enhance our vertical integration, broaden our intellectual property portfolio, and strengthen our presence in European markets. We are increasingly positioning our HMI offerings as integrated subsystems that combine sensing hardware with proprietary firmware, signal processing, and system-level design.

Gas and Environmental Sensing Solutions. We entered the gas and environmental sensing market in 2022 through the acquisition of the assets of SPEC Sensors and KWJ Engineering. We now design and manufacture miniaturized electrochemical gas sensors, instruments, and monitoring systems for safety, health, air quality, and industrial applications. Our products are designed to address growing demand for compact, low-power, and cost-effective sensing solutions suitable for wireless, wearable, and IoT deployments.

We prioritize revenue growth in targeted strategic markets, gross margin expansion driven by favorable product mix and operational efficiencies, disciplined capital allocation, and the ongoing advancement of differentiated sensing platforms. Our strategy emphasizes higher-margin, application-specific solutions built on scalable technology foundations. A substantial portion of our revenue is generated from custom solutions developed in close collaboration with OEM customers. Although these engineering and product development engagements often involve extended design cycles, they frequently lead to multi-year production programs that provide long-term revenue visibility and strengthen customer relationships.

We maintain a global operational footprint to support our customers and manufacturing strategy. We manufacture our force-sensing and printed electronic products at our facilities in Shenzhen, China, and Irvine, Scotland, and our gas and environmental sensors and

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instruments at the facility in Fremont, California. Our vertically integrated manufacturing approach allows us to maintain control over proprietary processes, quality standards, and supply chain responsiveness.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statements presentation, financial condition, results of operations, and cash flows will be affected.

A description of our critical accounting policies that represent the more significant judgments and estimates used in the preparation of our financial statements was provided in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2026. There have been no changes to our critical accounting policies and estimates described in the Form 10-K that have had a material impact on our condensed consolidated financial statements and related notes.

Results of Operations

The following table sets forth certain unaudited condensed consolidated statements of operations data for the periods indicated. The percentages in the table are based on revenues.


		Three Months Ended March 31,
		2026					2025
		$			%		$			%

		(in thousands, except percentages)
Revenue		$	3,074		100.0	%	$	2,664		100.0	%
Cost of revenue			1,738		56.5	%		1,715		64.4	%
Gross profit			1,336		43.5	%		949		35.6	%
Operating expenses:
Engineering, research and development			303		9.9	%		434		16.3	%
Selling, general and administrative			1,483		48.2	%		1,364		51.2	%
Total operating expenses			1,786		58.1	%		1,798		67.5	%
(Loss) from operations			(450)		(14.6)	%		(849)		(31.9)	%
Other income (expense), net			60		2.0	%		5		0.2	%
(Loss) before income taxes			(390)		(12.7)	%		(844)		(31.7)	%
Income tax expense (benefit)			(52)		(1.7)	%		(39)		(1.5)	%
Net (loss)		$	(338)		(11.0)	%	$	(805)		(30.2)	%

Comparison of Three Months Ended March 31, 2026 and 2025

Revenue by the markets we serve is as follows:


		Three Months Ended March 31,
		2026				2025
				% of					% of
		Amount		Revenue		Amount			Revenue		$ Change		% Change

		(in thousands, except percentages)
Medical		$	1,003	32.6	%	$	727		27.3	%	$	276	38.0	%
Industrial			880	28.6	%		975		36.6	%		(95)	(9.7)	%
Automotive			89	2.9	%		32		1.2	%		57	178.1	%
Standard			1,102	35.8	%		930		34.9	%		172	18.5	%
Revenue		$	3,074	100.0	%	$	2,664		100.0	%	$	410	15.4	%

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We sell our custom products into the medical, industrial, automotive and other specialty markets. We sell our standard products to customers in many markets through various distribution networks. The ultimate customer for our products may come from different markets that are often unknown to us at the time of sale. Each market has different product design cycles. Products with longer design cycles often have much longer product life cycles. Medical, industrial, and other specialty markets such as environmental monitoring products generally have long design and life cycles. We currently have products with life cycles that have exceeded 20 years and are ongoing.

Revenues were up in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 for customers in the medical and automotive markets and for customers of our standard products, and were down for customers in the industrial market. The increase in revenue from customers in the medical market was due to increased shipments of our force-sensing products and of our Calman subsidiary’s printed electronics due to higher customer demand, while the increase in revenue from customers in the automotive market was due to new innovation and automation products for that market. The decrease in revenue from customers in the industrial market was due to reduced shipments and lower demand for our gas-sensing products. In all markets, the timing of orders from our customers is not always predictable and can be less in some periods and higher in others depending on the level of their demand which is driven by their projects and operating plans.


		Three Months Ended March 31,
		2026				2025
				% of				% of
		Amount		Revenue		Amount		Revenue		$ Change		% Change

		(in thousands, except percentages)
Gross profit		$	1,336	43.5	%	$	949	35.6	%	$	387	40.8	%

Our gross profit and gross margin percentage are impacted by various factors including product mix, customer mix, sales volume, and fluctuations in our cost of revenues, which are comprised of material costs, direct and indirect production labor costs, warehousing and logistics costs, facilities costs, and other costs related to production activities. Gross profit and gross margin percentage were up during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due primarily to higher revenues and favorable changes in our product and customer mix.


		Three Months Ended March 31,
		2026				2025
				% of				% of
		Amount		Revenue		Amount		Revenue		$ Change		% Change

		(in thousands, except percentages)
Engineering, research and development		$	303	9.9	%	$	434	16.3	%	$	(131)	(30.2)	%

Engineering and R&D expenses consist primarily of compensation expenses for employees engaged in research, design and development activities, plus the cost of those employees’ indirect supplies and allocation of facilities expenses. Our R&D team focuses both on internal design development in order to develop our products and solutions, and on custom design development aimed at addressing our customers’ unique design challenges. Engineering and R&D costs for the three months ended March 31, 2026 were down compared to the three months ended March 31, 2025 due to lower engineering employee and consultant compensation costs.


		Three Months Ended March 31,
		2026				2025
				% of				% of
		Amount		Revenue		Amount		Revenue		$ Change		% Change

		(in thousands, except percentages)
Selling, general and administrative		$	1,483	48.2	%	$	1,364	51.2	%	$	119	8.7	%

Selling, general and administrative expenses consist primarily of compensation expenses for sales and administrative employees, legal and other professional fees, facilities expenses, communication expenses, and intangible asset amortization expense. Selling, general and administrative costs for the three months ended March 31, 2026 were up compared to the three months ended March 31, 2025 due to slightly higher costs for compensation, professional fees and consultants.

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		Three Months Ended March 31,
		2026				2025
				% of				% of
		Amount		Revenue		Amount		Revenue		$ Change			% Change

		(in thousands, except percentages)
Other income (expense), net		$	60	2.0	%	$	5	0.2	%	$	55		1,100.0	%

Other income (expense) consists of non-operating income and expenses, such as gains and losses on marketable securities, foreign currency transaction gains and losses, interest income and expense, and other non-operating income and expenses. Other income (expense) for the three months ended March 31, 2026 was comprised of $2,000 of interest income, $52,000 of foreign currency transaction gains, and $6,000 of other income, while other income (expense) for the three months ended March 31, 2025 was comprised of $6,000 of interest income offset by $(1,000) of foreign currency transaction losses.

 

Three Months Ended March 31,

2026

2025

Change

% of

in % of

Pre-tax

Income/

Amount

Loss

Amount

Loss

$ Change

Loss

(in thousands, except percentages)

Income tax expense (benefit)

(52)

13.3

(39)

4.6

(13)

8.7

Income taxes were 13.3% of pre-tax loss for the three months ended March 31, 2026, versus 4.6% of pre-tax loss for the three months ended March 31, 2025. Our income taxes are impacted by the mix of domestic and foreign pre-tax earnings and losses, permanent differences between book income/loss and taxable income/loss, and our ability to utilize net operating loss carryforwards (“NOLs”). Accordingly, our effective tax rate typically will vary from the U.S. statutory tax rate of 21% from quarter to quarter. The effective tax rates for the three-month periods ended March 31, 2026 and 2025 were impacted by the amount of our foreign pre-tax income/loss and the tax expense/benefit thereon while not realizing a benefit on our domestic pre-tax loss due to the valuation allowances thereon.

Discrete tax events may cause our effective rate to fluctuate on a quarterly basis. Certain events, including, for example, acquisitions and other business changes, which are difficult to predict, may also cause our effective tax rate to fluctuate. We are subject to changing tax laws, regulations, and interpretations in multiple jurisdictions. Corporate tax reform continues to be a priority in the U.S. and other jurisdictions. Additional changes to the tax system in the U.S. could have significant effects, positive and negative, on our effective tax rate and on our deferred tax assets and liabilities.

Liquidity and Capital Resources

Cash requirements for working capital, capital expenditures, and acquisition activities have historically been funded from our cash balances, cash generated from operations, and issuances of equity securities. As of March 31, 2026, we had cash and cash equivalents of $2.1 million, working capital of $4.4 million and no indebtedness. Cash and cash equivalents consist of cash and money market funds. Of our $2.1 million of cash, $1.4 million was held by foreign subsidiaries. If these funds are needed for our operations in the U.S. or for acquisitions, we have several methods to repatriate without significant tax effects, including repayment of intercompany loans or distributions of previously taxed income. Certain methods of distribution may require us to incur U.S. or foreign taxes to repatriate these funds.

We believe that our existing cash and cash equivalents balances will be sufficient to maintain our current operations considering our current financial condition, obligations, and other expected cash flows. If our circumstances change, however, we may require additional cash. If we require additional cash, we may attempt to raise additional capital through equity, equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we could be subject to fixed payment obligations and could also be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. If we are unable to raise additional needed funds, we may also take measures to reduce expenses to offset any shortfall.

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Cash Flow Analysis

Our cash flows from operating, investing and financing activities are summarized as follows:


		Three Months Ended March 31,
		2026		2025

		(in thousands)
Net cash (used in) operating activities		$	(543)	$	(271)
Net cash (used in) investing activities			—		(29)
Net cash (used in) financing activities			—		(100)

Net Cash (Used In) Operating Activities

For the three months ended March 31, 2026, the $543,000 of cash used in operating activities was attributable to net loss of $338,000, adjusted for non-cash charges of $145,000 and cash used in changes in operating assets and liabilities of $350,000. For the three months ended March 31, 2025, the $271,000 of cash used in operating activities was attributable to net loss of $805,000, adjusted for non-cash charges of $142,000 and cash provided by changes in operating assets and liabilities of $392,000.

Accounts receivable increased from $1.5 million at December 31, 2025 to $1.7 million at March 31, 2026 due to higher sales in the three months ended March 31, 2026 compared to the three months ended December 31, 2025; days-sales outstanding at March 31, 2026 (46) was unchanged from December 31, 2025 (46). Many of our customers pay promptly and the accounts receivable balance is generally related to the most recent shipments. Inventories were up from $1.8 million at December 31, 2025 to $2.0 million at March 31, 2026; inventory balances fluctuate depending on the timing of materials purchases and product shipments. Prepaid expenses and other current assets were up slightly from $0.2 million at December 31, 2025 to $0.3 million at March 31, 2026; this balance fluctuates with the timing of making prepayments versus when the benefits of those prepayments are consumed. Accounts payable, accrued liabilities, and accrued income taxes increased from $1.3 million at December 31, 2025 to $1.4 million at March 31, 2026; the balances of these working capital liabilities fluctuate due to the timing of purchases and payments on inventories and other accruals of employee compensation and outside services.

Net Cash (Used In) Investing Activities

No cash was provided by or used in investing activities for the three months ended March 31, 2026. Net cash used in investing activities of $29,000 for the three months ended March 31, 2025 consisted of purchases of property, plant, and equipment.

Net Cash (Used In) Financing Activities

No cash was provided by or used in financing activities for the three months ended March 31, 2026. Net cash used in financing activities of $103,000 for the three months ended March 31, 2025 consisted of payment of dividends on our preferred stock. In October 2025, we converted all of our Series A Convertible Preferred Stock into common stock, which eliminated the payment of $400,000 per annum in dividends previously payable to holders of our preferred stock.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

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Item 6. Exhibits

Exhibit

Incorporated by Reference

Filed

Number

Exhibit Description

Form

File Number

Exhibit

Filing Date

Herewith

3.1

Articles of Incorporation of the Registrant

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

000-21858

3.2

February 17, 2016

3.4

Amendment to Bylaws of the Registrant

000-21858

3.3

February 17, 2016

4.1

Form of the Registrant’s common stock certificate

000-21858

4.1

February 17, 2016

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

31.2

Certification of Principal Financial 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

32.1*

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

The cover page from Interlink Electronics, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101.

*The information in this exhibit is furnished and deemed not filed with the Securities and Exchange Commission for purposes of section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of Interlink Electronics, Inc. under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


		Page No.

PART I -- FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3

	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	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25

Item 4.	Controls and Procedures	26

PART II -- OTHER INFORMATION

Item 1A.	Risk Factors	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

Signatures		29

Date: May 14, 2026		Interlink Electronics, Inc.
		(Registrant)

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