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What changed in INTERLINK ELECTRONICS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INTERLINK ELECTRONICS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+192 added−177 removedSource: 10-K (2025-03-27) vs 10-K (2024-03-25)

Top changes in INTERLINK ELECTRONICS INC's 2024 10-K

192 paragraphs added · 177 removed · 160 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

70 edited+17 added−9 removed73 unchanged
Biggest changeThis portfolio expansion will incorporate other complimentary sensing technologies and will allow us to use our expertise in integrating multiple sensing technologies for applications in the rapidly growing Internet-of-Things (“IoT”). We have already begun integrating our force sensing technology into our recently acquired membrane keypad product line to create unique solutions not offered by others in this market.
Biggest changeWe have already begun integrating our force sensing technology into our recently acquired Calman membrane keypad product line to create unique solutions not offered by others in this market. Gas and Environmental Sensors. We entered the gas and environmental sensing market in 2022 through our acquisition of the business assets of SPEC Sensors, LLC (“SPEC”) and KWJ Engineering, Inc.
Through our acquisitions of SPEC and KWJ, we combine a long history and deep domain knowledge with cutting-edge sensor technology and advanced instrumentation to make reliable products that also enable new applications for wireless and wearable gas sensing. Our engineering team includes five PhDs in a broad range of disciplines from chemical engineering to electrical engineering and physics.
Through our acquisitions of SPEC and KWJ, we combine a long history and deep domain knowledge with cutting-edge sensor technology and advanced instrumentation to make reliable products that also enable new applications for wireless and wearable gas sensing. Our engineering team includes PhDs in a broad range of disciplines from chemical engineering to electrical engineering and physics.
Ozone is commonly used in a wide variety of commercial applications to clean, disinfect and remediate odors without the use of environmentally harmful chemicals. Ozone is a powerful oxidant that can be produced on site and dissipates into oxygen after reaction or its end of half-life.
Ozone is commonly used in a wide variety of commercial applications to clean, disinfect and remediate odors without the use of environmentally harmful chemicals; it is a powerful oxidant that can be produced on site and dissipates into oxygen after reaction or its end of half-life.
We invented FSR ® technology and pioneered commercialization of printed electronics manufacturing, paving the way for industry-wide adoption of force-sensing technology. Our extensive knowledge and experience with this technology, along with the firmware we incorporate in our HMI solutions, differentiates us from other providers of HMI solutions.
We invented FSR ® technology and pioneered commercialization of printed electronics manufacturing, paving the way for industry-wide adoption of force-sensing technology. Our extensive knowledge and experience with this technology, along with the firmware we incorporate in our HMI solutions, we believe differentiates us from other providers of HMI solutions.
At the same time, we continue to expand our standard product portfolio and develop new technology platforms to grow existing markets and capture emerging markets. We have recently added a range of standard piezoelectric sensor products which are used as dynamic strain gauges and vibration sensors. These sensors are thin, flexible and light-weight while also being extremely rugged and durable.
At the same time, we continue to expand our standard product portfolio and develop new technology platforms to grow existing markets and capture emerging markets. We added a range of standard piezoelectric sensor products which are used as dynamic strain gauges and vibration sensors. These sensors are thin, flexible and light-weight while also being extremely rugged and durable.
Printed electronics is an additive manufacturing technology used to create electrical devices on various substrates. For nearly 40 years, we have honed and developed the processes necessary to manufacture high quality printed electronic products for HMI applications. Printed electronic technologies are emerging as potential low-cost replacements to silicon-based electronics in many specific application areas.
Printed electronics is an additive manufacturing technology used to create electrical devices on various substrates. For over 40 years, we have honed and developed the processes necessary to manufacture high quality printed electronic products for HMI applications. Printed electronic technologies are emerging as potential low-cost replacements to silicon-based electronics in many specific application areas.
Interlink has been a leader in the printed electronics industry for nearly 40 years with the commercialization of our patented FSR ® technology that has enabled rugged and reliable HMI solutions. Our applications and solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world’s top electronics manufacturers.
Interlink has been a leader in the printed electronics industry for over 40 years with the commercialization of our patented FSR ® technology that has enabled rugged and reliable HMI solutions. Our applications and solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world’s top electronics manufacturers.
This requires us to match our design and production capacity with customer demand, manage inventory, maintain satisfactory delivery schedules, and meet performance goals. Our customer base is widely dispersed geographically. Sales to customers located outside the United States have historically accounted for a significant percentage of our revenues, and we expect this to continue.
This requires us to match our design and production capacity with customer demand, manage inventory, maintain satisfactory delivery schedules, and meet performance goals. Our customer base is widely dispersed geographically. Sales to customers located outside the United States have historically accounted for a significant percentage of our revenue, and we expect this to continue.
Our force-sensing/HMI engineering team is based in this center where we work with our U.S. and global customers on developing, engineering, prototyping and implementing our advanced HMI and sensing solutions. The gas and environmental technology engineering team is located at the Newark facility. We also maintain a focused, embedded software and IoT application development center in Singapore.
Our force-sensing/HMI engineering team is based in this center where we work with our U.S. and global customers on developing, engineering, prototyping and implementing our advanced HMI and sensing solutions. The gas and environmental technology engineering team is located at the Fremont facility. We also maintain a focused, embedded software and IoT application development center in Singapore.
It may take several months or more to go from design win to production. Product lifespan varies dramatically depending on the marketplace and product. Consumer electronics may have a lifespan of six months to five years, industrial and automotive applications may continue for three to ten years, and medical product lifespans may continue past 20 years.
It may take several months or more to progress from design win to production. Product lifespan varies dramatically depending on the marketplace and product. Consumer electronics may have a lifespan of six months to five years, industrial and automotive applications may continue for three to ten years, and medical product lifespans may continue past 20 years.
We also operate an engineering center in our facility in Shenzhen, China, which is focused on sustaining engineering, customer support, quality control and new product introduction in our force-sensing/HMI business, and an engineering and R&D facility in Newark, California, focused on new product development, SBIR-funded research and quality control in our gas and environmental sensors business.
We also operate an engineering center in our facility in Shenzhen, China, which is focused on sustaining engineering, customer support, quality control and new product introduction in our force-sensing/HMI business, and an engineering and R&D facility in Fremont, California, focused on new product development, SBIR-funded research and quality control in our gas and environmental sensors business.
Additionally, we offer our own line of full-function instruments, including, for example, Eco Sensors™ ozone monitors; an inline monitor for carbon monoxide and other gases; a low-pressure alarm to notify users when tanks for life-critical gases such as oxygen and nitrogen need to be replenished; and sensor modules for air quality monitoring in “smart city” projects and IoT applications. ● Custom Design and Engineering .
Additionally, we offer our own line of full-function instruments, including, for example, Eco Sensors™ ozone monitors; a family of inline monitors for carbon monoxide and other gases; a low-pressure alarm to notify users when tanks for life-critical gases such as oxygen and nitrogen need to be replenished; and sensor modules for air quality monitoring in “smart city” projects and IoT applications. ● Custom Design and Engineering .
We maintain and support an active program to protect our intellectual property primarily through the filing of patent applications and the defense of issued patents against infringement. We are not currently engaged in any patent infringement suits. We implement a ring-fencing strategy of patenting core technology platforms related to sensors, sensing systems and HMI devices.
We maintain and support an active program to protect our intellectual property primarily through the filing of patent applications and the defense of issued patents against infringement. We are not currently engaged in any patent 11 Table of Contents infringement suits. We implement a ring-fencing strategy of patenting core technology platforms related to sensors, sensing systems and HMI devices.
We conduct our sales activities from the U.S., Japan, China, and the United Kingdom. We use worldwide distributors, primarily Digi-Key Electronics, for full-service distribution of our 12 Table of Contents standard products, and we have representative companies located in key markets so we can provide local support to strategic customers in these regions.
We conduct our sales activities from the U.S., Japan, China, and the United Kingdom. We use worldwide distributors, primarily Digi-Key Electronics, for full-service distribution of our standard products, and we have representative companies located in key markets so we can provide local support to strategic customers in these regions.
Our ability to attract and retain qualified personnel is essential to our continued success. None of our employees are represented by a collective bargaining agreement. We believe our employee relations are good. ​ 14 Table of Contents
Our ability to attract and retain qualified personnel is essential to our continued success. None of our employees are represented by a collective bargaining agreement. We believe our employee relations are good. ​ 15 Table of Contents
These sensors are polymeric piezoelectric sensors with a wide range of applications and uses such as dynamic strain gauges, impact/force sensors, vital signs sensors, motion sensors, vibration sensors, accelerometers, and solid-state rugged switches . Many of these diverse application modes require extensive domain knowledge for successful integration.
These sensors are polymeric piezoelectric sensors with a wide range of applications and uses such as dynamic strain 10 Table of Contents gauges, impact/force sensors, vital signs sensors, motion sensors, vibration sensors, accelerometers, and solid-state rugged switches . Many of these diverse application modes require extensive domain knowledge for successful integration.
The modern era of gas detection started in the 1920s with the development of the catalytic combustion sensor by Dr. Oliver Johnson, the father of KWJ’s namesake Ken Johnson. Dr. Johnson also started what 7 Table of Contents is widely recognized as the first electronics company in Silicon Valley to commercialize the technology, J-W Instruments.
The modern era of gas detection started in the 1920s with the development of the catalytic combustion sensor by Dr. Oliver Johnson, the father of KWJ’s namesake Ken Johnson. Dr. Johnson also started what is widely recognized as the first electronics company in Silicon Valley to commercialize the technology, J-W Instruments.
Interlink was founded on the invention and commercialization of FSR ® technology, the industry’s first force-sensing solution using printed electronics manufacturing. As we transition from an FSR ® sensor supplier to an HMI solutions provider, we are pursuing and embracing leading edge force-sensing and related technology platforms.
Our Technology Platforms and Products Force/Touch Sensing Technology and HMI . Interlink was founded on the invention and commercialization of FSR ® technology, the industry’s first force-sensing solution using printed electronics manufacturing. As we transition from an FSR ® sensor supplier to an HMI solutions provider, we are pursuing and embracing leading edge force-sensing and related technology platforms.
This team also explores opportunities to work on government funded research projects that are aligned with our technology competencies. Our Employees As of December 31, 2023, we had 107 full-time employees worldwide. Our employees, listed in population size order from largest to smallest, are in the following departments: operations, R&D, administration, and sales.
This team also explores opportunities to work on government funded research projects that are aligned with our technology competencies. Our Employees As of December 31, 2024, we had 102 full-time employees worldwide. Our employees, listed in population size order from largest to smallest, are in the following departments: operations, R&D, administration, and sales.
In connection with our growth strategy, we will continue to evaluate potential acquisitions that provide us with relevant new technologies to add to our “technology toolbox” and/or expand the customer base for our existing products and solutions. 8 Table of Contents Our product development teams are skilled in concept definition, rapid prototyping, hardware and firmware development and integration support.
In connection with our growth strategy, we will continue to evaluate potential acquisitions that provide us with relevant new technologies to add to our “technology toolbox” and/or expand the customer base for our existing products and solutions. Our product development teams are skilled in concept definition, rapid prototyping, hardware and firmware development and integration support.
We supply some of the world’s largest consumer electronics manufacturers, luxury and mid-market car companies, familiar names in the medical and industrial equipment markets, research engineers and designers entering the IoT market, and companies of all different sizes in other markets.
We supply some of the world’s largest consumer 13 Table of Contents electronics manufacturers, luxury and mid-market car companies, familiar names in the medical and industrial equipment markets, research engineers and designers entering the IoT market, and companies of all different sizes in other markets.
The sensors are unique in that they can also be operated in reverse whereby applying an electrical charge to the sensor can cause it to bend or deform. This deformation can be used to create polymeric actuators for haptic applications. Finally, these sensors can also generate an electrical charge when exposed to a temperature change.
The sensors are unique in that they can also be operated in reverse whereby applying an electrical charge to the sensor can cause it to bend or deform. This deformation can be used to create 9 Table of Contents polymeric actuators for haptic applications. Finally, these sensors can also generate an electrical charge when exposed to a temperature change.
Shifting more functionality to the slim keypad interface and away from the printed circuit boards on a device provides improved functionality and space saving benefits at a lower cost. The products and solutions that we design, develop and manufacture for HMI and IoT applications are primarily printed electronic products.
Shifting more functionality to the slim keypad interface and away from the printed circuit boards on a device provides improved functionality and space saving benefits at a lower cost. 7 Table of Contents The products and solutions that we design, develop and manufacture for HMI and IoT applications are primarily printed electronic products.
Our Strategy Our primary objective is to be the global leader and provider of multi-sensing based HMI technology and gas-sensing solutions for the consumer electronics, automotive, industrial automation, medical, and environmental monitoring markets. We also intend to utilize our role as a disruptive technology provider to bring our HMI and gas-sensing solutions to new markets.
Our Strategy Our primary objective is to be the global leader and provider of multi-sensing based HMI technology and gas-sensing solutions for the consumer electronics, automotive, industrial automation, medical, and environmental monitoring markets. We also intend to utilize our role as an innovative technology provider to bring our HMI and gas-sensing solutions to new markets.
We also combine our sensors with custom electronics, calibration and compensation techniques to enhance performance and provide plug-and-play solutions that reduce the customer’s need to invest in calibration infrastructure. We maintain a market advantage in ozone sensing through our deep industry knowledge and advanced calibration and compensation techniques.
We also combine our sensors with custom electronics, calibration and 12 Table of Contents compensation techniques to enhance performance and provide plug-and-play solutions that reduce the customer’s need to invest in calibration infrastructure. We maintain a market advantage in ozone sensing through our deep industry knowledge and advanced calibration and compensation techniques.
All proprietary aspects of our force-sensing technology manufacturing process are currently conducted in-house at our U.S., China and Scotland manufacturing facilities to maintain quality and protect our technology from infringement.
All proprietary aspects of our force-sensing technology manufacturing process are currently conducted in-house at our U.S., China and United Kingdom manufacturing facilities to maintain quality and protect our technology from infringement.
We design and build all of our sensors and instruments in-house in Newark, California, and our capabilities include proprietary high-volume electrochemical sensor manufacturing, device assembly and calibration, and advanced test and measurement capabilities.
We design and build all of our gas sensors and instruments in-house in Fremont, California, and our capabilities include proprietary high-volume electrochemical sensor manufacturing, device assembly and calibration, and advanced test and measurement capabilities.
We believe we are positioned to take advantage of these trends with our proprietary, low-cost, low-power gas- and environmental-sensing technologies and deep domain expertise in instrument design and implementation. Locations . We serve our world-wide customer base from our corporate headquarters in Irvine, California, from our facility in Camarillo, California, and from our facility in Newark, California (Silicon Valley area).
We believe we are positioned to take advantage of these trends with our proprietary, low-cost, low-power gas- and environmental-sensing technologies and deep domain expertise in instrument design and implementation. Locations . We serve our world-wide customer base from our corporate headquarters in Fremont, California (Silicon Valley area).
We will continue to develop these existing relationships by working closely with our customers to understand how we can support their product and technology strategies and continue to be a trusted advisor. ● Pursue a multi-technology roadmap .
We will 8 Table of Contents continue to develop these existing relationships by working closely with our customers to understand how we can support their product and technology strategies and continue to be a trusted advisor. ● Pursue a multi-technology roadmap .
The market has consistently demanded innovations to make gas sensors smaller and more portable, and KWJ, SPEC and their predecessors have been on the forefront; for example, KWJ’s SPARROW™ stands out in today’s marketplace as the world’s smallest Bluetooth low energy (“BLE”)-enabled carbon monoxide monitor. Similarly, Dr.
The market has consistently demanded innovations to make gas sensors smaller and more portable, and KWJ, SPEC and their predecessors have been on the forefront; for example, KWJ’s SPARROW™ stands out in today’s marketplace as one of the world’s smallest Bluetooth low energy (“BLE”)-enabled carbon monoxide monitors.
We have established a Global Product 6 Table of Contents Development and Materials Science Center in our Camarillo footprint that has a state-of-the-art printed electronics development laboratory as well as a materials science lab.
We have established a Global Product Development and Materials Science Center in our Camarillo, California footprint that has a state-of-the-art printed electronics development laboratory as well as a materials science lab.
In addition, we maintain a global distribution and logistics center in Hong Kong, a technical sales office in Japan, and several manufacturer representatives and distributors in strategic locations in our key markets, all of which allows us to support our global customer base. We were incorporated in California in 1985.
In addition, we maintain a global distribution and logistics center in Hong Kong, a technical sales office in Japan, administrative and executive offices in Irvine, California and Bellevue, Washington, and several manufacturer representatives and distributors in strategic locations in our key markets, all of which allows us to support our global customer base. We were incorporated in California in 1985.
The integration of our force- 9 Table of Contents sensing technology into this capability is already underway and offers significant improvement in the design options available to our customers. Our solutions fall into two categories, custom and standard: Custom Solutions . We offer a comprehensive portfolio of standard solutions, from simple force and piezo sensors to multi-finger capable rugged trackpads.
The integration of our force-sensing technology into these capabilities is already underway and offers significant improvement in the design options available to our customers. Our solutions fall into two categories, custom and standard: Custom Solutions . We offer a comprehensive portfolio of standard solutions, from simple force and piezo sensors to multi-finger capable rugged trackpads.
We purchase our materials from outside suppliers. We carefully select suppliers based on their ability to provide quality parts and components that meet technical specifications. We actively monitor these suppliers, but we are subject to substantial risks associated with their performance.
We carefully select suppliers based on their ability to provide quality parts and components that meet technical specifications. We actively monitor these suppliers, but we are subject to substantial risks associated with their performance.
We now offer electrochemical gas-sensing technology products and solutions for industry, community, health and home, with uses in fields such as safety, personal wellness and air quality monitoring. Our gas and environmental sensors operations focus on three primary business activities: ● Proprietary Product Lines .
(“KWJ”), early pioneers in miniaturized, low-cost gas and environmental sensing technologies. We now offer electrochemical gas-sensing technology products and solutions for industry, community, health and home, with uses in fields such as safety, personal wellness and air quality monitoring. Our gas and environmental sensors operations focus on three primary business activities: ● Proprietary Product Lines .
In contrast, force-sensing solutions require a deliberate application of force to operate. We have had success in using our force-sensing solutions in combination with capacitive technologies to minimize the latter’s performance issues, enabling force-sensing solutions to complement competitive technologies and provide hybrid solutions and open up new opportunities for growth.
We have had success in using our force-sensing solutions in combination with capacitive technologies to minimize the latter’s performance issues, enabling force-sensing solutions to complement competitive technologies and provide hybrid solutions and open up new opportunities for growth.
For the year ended December 31, 2023, we had three customers that each represented over 10% of our net revenues, compared to two in 2022.
For the year ended December 31, 2024, we had two customers that each represented over 10% of our revenue, compared to three in 2023.
Joseph Stetter, the inventor of SPEC’s Screen Printed Electrochemical Sensor technology, was one of the first to design and build commercial electrochemical gas sensors, and today SPEC delivers one of the smallest electrochemical gas sensors on the market.
SPEC’s Screen-Printed Electrochemical Sensor technology was one of the first commercial electrochemical gas sensors, and today SPEC delivers one of the smallest electrochemical gas sensors on the market.
We manufacture all of our force-sensing/HMI products in our printed electronics manufacturing facility in Shenzhen, China, and at the Calman facility in Irvine, Scotland, and all of our gas and environmental sensing products in our production facility in Newark, California.
We manufacture our force-sensing/HMI products in our printed electronics manufacturing facility in Shenzhen, China, at the Calman facility in Irvine, Scotland, and at the Conductive Transfers facility in Barnsley, England, and we manufacture our gas and environmental sensing products in our production facility in Fremont, California.
We partner with leading institutions such as Georgia Institute of Technology and San Jose State University to develop novel technologies under government grants, while also performing new product development and engineering services for private partners that include companies ranging in size from startups to Fortune 500 companies. 10 Table of Contents Gas and environmental sensor technologies are diverse and fragmented with devices and sensors focused on specific solutions and applications.
We partner with leading institutions such as Georgia Institute of Technology and San Jose State University to develop novel technologies under government grants, while also performing new product development and engineering services for private partners that include companies ranging in size from startups to Fortune 500 companies.
In 1996, we re-incorporated into a Delaware corporation and, in 2012, we again changed our domicile from Delaware to Nevada by completing a merger with a newly formed Nevada corporation named Interlink Electronics, Inc. Our principal executive office is located at 15707 Rockfield Boulevard, Suite 105, Irvine, California 92618 and our telephone number is (805) 484-8855.
In 1996, we re-incorporated into a Delaware corporation and, in 2012, we again changed our domicile from Delaware to Nevada by completing a merger with a newly formed Nevada corporation named Interlink Electronics, Inc. Our principal executive office is located at 48389 Fremont Boulevard, Suite 110, Fremont, California 94538 and our telephone number is (510) 244-0424.
Recent SBIR-funded projects include wildfire air pollution monitoring and firefighter safety devices, transdermal blood alcohol monitors, a simple lead test for drinking water safety, and a grant to enable large-scale, mass-manufacturing of printed electrochemical gas sensors.
Recent SBIR-funded projects include wildfire air pollution monitoring and firefighter safety devices, transdermal blood alcohol monitors, a simple lead test for drinking water safety, a grant to enable large-scale, mass-manufacturing of printed electrochemical gas sensors, and an intelligent AI-based sensing approach for monitoring plant health in greenhouses or traditional agricultural fields.
International sales constituted 52% and 55% of our net revenues for the years ended December 31, 2023 and 2022, respectively, with sales in 2023 to customers in Japan and China each representing 11% of net revenues, compared to representing 24% and 15%, respectively, in 2022.
International sales constituted 56% and 52% of our revenue for the years ended December 31, 2024 and 2023, respectively, with sales in 2024 to customers in Japan and China representing 11% and 7%, respectively, compared to each representing 11% in 2023.
Interlink benefits from its own world-class manufacturing facilities in Shenzhen, China, and Irvine, Scotland, and its advanced and proprietary gas and environmental sensors production and development facility in Silicon Valley, allowing us to react quickly to customer needs while ensuring the highest quality standards. We also maintain a technical sales force that can address new and existing customer opportunities worldwide.
Interlink benefits from its own world-class manufacturing facilities in Shenzhen, China; Irvine, Scotland; and Barnsley, England, and its advanced and proprietary gas and environmental sensors production and development facility in Silicon Valley, allowing us to react quickly to customer needs while ensuring the highest quality standards.
The market is increasingly requiring innovative solutions that enable smaller, thinner devices, lower power consumption, highly refined designs, better navigation and more intuitive usability in all environments, and the need for these solutions is driving increased demand for our products. High-tech products are moving towards the use of multi-modal HMI in the home, industrial, medical and automotive spaces.
The market is increasingly requiring innovative solutions that enable smaller, thinner devices, lower power consumption, highly refined designs, better navigation and more intuitive usability in all environments, and the need for these solutions is driving increased demand for our products.
In an ever-changing and competitive landscape, we are committed to staying ahead of the technology curve. The two primary types of user-input technologies common in today’s devices are capacitive and resistive. Capacitive sensors are used in the touch screens found in most smartphones and similar devices used globally by millions of consumers.
The two primary types of user-input technologies common in today’s devices are capacitive and resistive. Capacitive sensors are used in the touch screens found in most smartphones and similar devices used globally by millions of consumers.
Additionally, through our acquisition of Calman Technology Limited in March 2023, we offer customized membrane keypads, graphic overlays, printed electronics and industrial label products for use in a wide range of fields, from industrial instrumentation, process control and monitoring to medical and diagnostic devices and defense systems.
Through our 2023 acquisition of Calman Technology Limited (“Calman”), which brought us over 25 years of HMI design and manufacturing expertise as a leading provider of specialized printed electronics, we offer customized membrane keypads, graphic overlays, printed electronics and industrial label products for use in a wide range of fields, from industrial instrumentation, process control and monitoring to medical and diagnostic devices and defense systems.
Electrochemical gas sensors are typically more sensitive and selective to particular gases and are inherently low power to operate. They are also typically very large, expensive and prone to short lifespans in the field.
Gas and environmental sensor technologies are diverse and fragmented with devices and sensors focused on specific solutions and applications. Electrochemical gas sensors are typically more sensitive and selective to particular gases and are inherently low power to operate, but they are also typically very large, expensive and prone to short lifespans in the field.
The growth of the hydrogen economy is expected to create a large need for hydrogen sensors that are low-cost, low-power and widely distributed, and our hydrogen sensor solutions are ideally suited to exploit this growing market. New applications in breath analysis and transdermal detection are also expected to create new opportunities in medical, law enforcement, commercial and consumer markets.
The growth of the hydrogen economy is expected to create a large need for hydrogen sensors that are low-cost, low-power and widely distributed, and our hydrogen sensor solutions are ideally suited to exploit this growing market.
While screen-printing is a common process in various industries, the quality and precision of printing, as well as the specific processes required to make high-quality FSR ® sensors, require considerable domain knowledge expertise and knowhow.
While screen-printing is a common process in various industries, the quality and precision of printing, as well as the specific processes required to make high-quality FSR ® sensors, require considerable domain knowledge expertise and knowhow. We believe this expertise is difficult to replicate over the short term and, to our knowledge, no unrelated party has done so.
Competition The markets for our products, both in force/touch-sensing and gas/environmental-sensing, are highly competitive and subject to rapid advancement in design technology. We must identify and capture future market opportunities by developing and deploying value-added products. We compete for market share based on our customers’ selection of our components over our competitors during the design phase of their products.
We must identify and capture future market opportunities by developing and deploying value-added products. We compete for market share based on our customers’ selection of our components over our competitors during the design phase of their products.
In gas and environmental sensing, we offer sensors that are smaller, thinner, and lower-cost than those sold by most of our competitors, who generally offer sensors in commoditized packages and standard connection pinouts.
Our broader toolbox of technologies, our proven track record, our collaborative design approach and our technical and engineering expertise significantly differentiate us from our competitors. In gas and environmental sensing, we offer sensors that are smaller, thinner, and lower-cost than those sold by most of our competitors, who generally offer sensors in commoditized packages and standard connection pinouts.
Our teams engage early in the development phase with our customers and we provide critical design inputs to ensure the solutions developed address the customer’s needs and meet their design goals and intent. We strive to solve our customers’ problems. Our Technology Platforms and Products Force/Touch Sensing Technology and HMI .
We also maintain a technical sales force that can address new and existing customer opportunities worldwide. Our teams engage early in the development phase with our customers and we provide critical design inputs to ensure the solutions developed address the customer’s needs and meet their design goals and intent. We strive to solve our customers’ problems.
Our materials science and engineering team in Camarillo, California, led by our VP of Engineering & Advanced Materials, and our embedded software engineering team located in Singapore, are focused on strategic technology roadmaps, development of scalable technology platform architectures and pursuit of synergistic technology partnerships.
Our materials science and engineering team in Camarillo, California, and our embedded software engineering team located in Singapore are focused on strategic technology roadmaps, development of scalable technology platform architectures and pursuit of synergistic technology partnerships. In an ever-changing and competitive landscape, we are committed to staying ahead of the technology curve.
We have been successful in obtaining Small Business Innovation Research (“SBIR”) grants from government agencies such as the NIH, the USDA, the NSF and the EPA that have enabled us to conduct research and development and develop new products. For example, SPEC’s Screen Printed Electrochemical Sensor technology was developed in part under NSF Phase I, II and IIB grants.
We have been successful in obtaining Small Business Innovation Research (“SBIR”) grants from government agencies such as the NIST, NASA, the NIH, the USDA, the NSF, the EPA, and others, that have enabled us to conduct research and development and develop new products.
We work hard to meet current environmental and sustainability standards required by our customers and legislation in various geographic markets. All products are RoHS (Restriction of Hazardous Substances) and REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) compliant. We also monitor our suppliers as part of our efforts to eliminate conflict minerals from our supply chain.
All products are RoHS (Restriction of Hazardous Substances) and REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) compliant. We also monitor our suppliers as part of our efforts to eliminate conflict minerals from our supply chain. We purchase our materials from outside suppliers.
Similarly, environmental regulations increasingly target fugitive gas emissions in the oil and gas (energy) space, where monitoring has become mandatory. Additionally, government and consumer demand for air quality information and pollution monitoring represent a significant opportunity for high performance, low-cost sensors and IoT devices as part of smart cities and smart homes.
Additionally, government and consumer demand for air quality information and pollution monitoring represent a significant opportunity for high performance, low-cost sensors and IoT devices as part of smart cities and smart homes.
We operate our Global Product Development and Materials Science Center in Camarillo, California, where our VP of Engineering & Advanced Materials is located, along with other current and future resources. At this location, we focus on new product development including, among other areas, materials science and printed electronics. We maintain a core embedded software engineering team in Singapore.
At this location, we focus on new product development including, among other areas, materials science and printed electronics. We maintain a core embedded software engineering team in Singapore.
We often must convince companies to abandon older, proven but less elegant technologies and adopt our solutions. This change is supported by significant end-user demand for touch-sensitive solutions. We also compete against the highly commoditized capacitive sensing technology. However, our solutions are focused on providing functionality in situations where capacitive is not the appropriate solution, is unreliable or entirely unavailable.
We often must convince companies to abandon older, proven but less elegant technologies and adopt our solutions, which we do in part by emphasizing significant end-user demand for touch-sensitive solutions. We also compete against the highly commoditized capacitive sensing technology.
We possess deep domain knowledge about how to integrate these into custom applications and have developed machine learning and artificial intelligence to make information-rich data available to our customers for their unique and innovative applications.
We possess deep domain knowledge about how to integrate these into custom applications and have developed machine learning and artificial intelligence to make information-rich data available to our customers for their unique and innovative applications. Our piezoelectric sensor solutions can be used in force-sensing, impact and vibration detection, contact microphones, air/liquid flow detection, ultrasonic transducers and many other settings.
Engineering, Research and Development The markets for our products are characterized by rapid advancements in process technologies and increasing levels of functional integration. We believe that our future success will depend largely on our ability to continue improving our products and our process technologies, and to develop or acquire new technologies.
Engineering, Research and Development The markets for our products are characterized by rapid advancements in process technologies and increasing levels of functional integration.
Future sales of our products will be based on, among other factors, expansion into adjacent markets, continued expansion of our product line, the acceptance of our product line, expansion into additional domestic and international markets, and our ability to maintain a competitive position against other technology providers. 13 Table of Contents Manufacturing Operations and Principal Suppliers We have our own modern manufacturing facility of approximately 14,476 square feet in Shenzhen, China that is ISO 9001, ISO 14001 and ISO 13485 certified.
Future sales of our products will be based on, among other factors, expansion into adjacent markets, continued expansion of our product line, the acceptance of our product line, expansion into additional domestic and international markets, and our ability to maintain a competitive position against other technology providers.
Interlink delivers cutting-edge, high-performance HMI solutions for customers who wish to replace outdated switches and knobs in these environments. Significant market opportunities are rapidly emerging for us to improve upon the functionality of standard capacitive sensors which are widely available and competitively priced. Inadvertent activation, where users unintentionally activate a control, is a common problem with capacitive technology.
Force-sensing input provides a critical novel modality that drives a paradigm shift in HMI, and Interlink delivers cutting-edge, high-performance HMI solutions for customers who wish to replace outdated switches and knobs in these environments. 5 Table of Contents Significant market opportunities are rapidly emerging for us to improve upon the functionality of standard capacitive sensors.
We require our employees to sign nondisclosure agreements and seek to limit access to sensitive information to the greatest practical extent. As of December 31, 2023, we held twenty-four (24) patents and had fourteen (14) patents pending.
As a result, we consider this expertise to be one of our more important trade secrets. We require our employees to sign nondisclosure agreements and seek to limit access to sensitive information to the greatest practical extent. As of December 31, 2024, we held thirty (30) patents and had fifteen (15) patents pending.
Our team of in-house scientists has an established track record in winning awards for this advanced research and we continue to submit proposals for funding for strategically relevant research projects that we could commercialize in the future.
We have an established track record in winning awards for this advanced research and we continue to submit proposals for funding for strategically relevant research projects that we could commercialize in the future. The market for gas and environmental sensors is growing rapidly, driven by demand in a broad range of industries and the availability of smaller, lower-cost, connected sensors.
We are now also using machine learning and artificial intelligence to further enhance the user experience and provide compelling solutions for our customers. The acquisition of Calman Technology has given us a manufacturing capability close to the UK and European markets, providing custom solutions in a broad range of sectors, including the medical and diagnostic sensor marketplace.
We are now also using machine learning and artificial intelligence to further enhance the user experience and provide compelling solutions for our customers.
We plan to start the process of acquiring IATF 16949 certification as our automotive customer base expands. We also conduct manufacturing operations in our approximately 10,635 square-foot production facility in Newark, California and our approximately 9,800 square-foot manufacturing facility in Irvine, Scotland.
Manufacturing Operations and Principal Suppliers We have our own modern manufacturing facility of 21,763 square feet in Shenzhen, China that is ISO 9001, ISO 14001 and ISO 13485 certified. We plan to start the process of acquiring IATF 16949 certification as our automotive customer base expands.
We group our patents into three general categories: sensors, which includes eight (8) patents expiring between 2024 and 2032; sensing systems, which includes five (5) patents expiring between 2029 and 2038; and HMI devices, which includes eleven (11) patents expiring between 2024 and 2036.
We group our patents into four (4) general categories: technology, sensors, sensing systems and HMI devices. The technology category includes IP we recently added through our acquisition of Conductive Transfers and incorporates four (4) issued patents expiring between 2036 and 2041 and three (3) pending patents. The sensors category includes ten (10) patents expiring between 2029 and 2038.
The market for gas and environmental sensors is growing rapidly, driven by demand in a broad range of industries and the availability of smaller, lower-cost, connected sensors. On a worldwide basis, green initiatives and accompanying government mandates are driving demand for facilities monitoring.
On a worldwide basis, green initiatives and accompanying government mandates are 6 Table of Contents driving demand for facilities monitoring. Similarly, environmental regulations increasingly target fugitive gas emissions in the oil and gas (energy) space, where monitoring has become mandatory.
ITEM 1. BUSINESS Our Company Interlink Electronics, Inc. (“we”, “us”, “our”, “Interlink” or the “Company”) is a global sensor and printed electronics company operating in two principal sensor technology divisions: force/touch sensors, and gas and environmental sensors.
ITEM 1. BUSINESS Our Company Interlink Electronics, Inc. (“we”, “us”, “our”, “Interlink” or the “Company”) is a leading provider of sensors and printed electronics used extensively in Human-Machine Interface (“HMI”) devices and Internet-of-Things (“IoT”) solutions. Our broad product and technology portfolio encompasses force, piezo-electric, rugged HMI, wearable sensors for textiles and fabrics, gas sensors, instruments, and systems.
Removed
Our force/touch sensors, including our Force-Sensing Resistor (“FSR ® ”) technology and related technologies, and our membrane keypads, graphic overlays and printed electronics, are used extensively in Human-Machine Interface (“HMI”) devices. Our gas and environmental sensors and instruments are used in environmental and air quality monitoring across a broad range of applications. Force/Touch Sensors .
Added
Our blue-chip customers trust our products and solutions which span various markets, including industrial, medical, automotive, consumer, wearables, and IoT. Our technical and engineering expertise in materials science, manufacturing, embedded electronics, firmware, and software enables us to create and deliver high-quality, cost-effective custom solutions tailored to our customers’ unique requirements.
Removed
With over 25 years as a leading HMI provider, Calman Technology has developed to also become a specialized provider of printed electronics for the medical sector in the UK and Europe.
Added
Our force-sensing products and solutions include sensor components, subassemblies, modules and products that support effective, efficient cursor control and novel three-dimensional user inputs. Our membrane keypads, graphic overlays, printed electronics and industrial label products are applicable for use in a wide range of fields, from industrial automation, process control and monitoring to medical and diagnostic devices and defense systems.
Removed
Consumer and end-user demand for enhanced user experience is driving the need for innovative multi-modal HMI technologies and applications. Force-sensing input provides a critical novel modality that drives a paradigm shift in HMI.
Added
Our innovative conductive transfer technology enables the integration of electronics and sensors into fabrics and textiles enabling smart fabric and textile applications in the wearables, consumer, medical and automotive markets.
Removed
Our piezoelectric sensor solutions 5 Table of Contents can be used in force-sensing, impact and vibration detection, contact microphones, air/liquid flow detection, ultrasonic transducers and many other settings. They have applications in medical vital sign monitoring, industrial solid-state switches, structural health and condition monitoring, touch and tactile sensing and motion sensing amongst others.
Added
Our electrochemical gas-sensing technology instruments, products and solutions are deployed in industry, community, health and home settings, with uses in fields such as carbon monoxide and ozone detection and air quality monitoring. Force/Touch Sensors .
Removed
Gas and Environmental Sensors . We entered the gas and environmental sensing market in 2022 through our acquisition of the business assets of SPEC Sensors, LLC (“SPEC”) and KWJ Engineering, Inc. (“KWJ”), early pioneers in miniaturized, low-cost gas and environmental sensing technologies.
Added
Additionally, through our 2024 acquisition of the assets of Conductive Transfers Limited and Global Print Solutions Limited (jointly, “Conductive Transfers” or “CT”), which deepened our innovative patentened processes for integration of printed electronic technologies, we offer functional e-textiles and wearable technology, including heated clothing and personal protection equipment, and other products in development for medical and automotive environments and other wearable form-factors.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, any compromise to the security of our systems could have a material adverse effect on our business, reputation, financial condition, and operating results. 18 Table of Contents Risks Related to Our Industry If we are unable to keep pace with rapid technological change and gain market acceptance of new products, we may not be able to compete effectively.
Biggest changeRisks Related to Our Industry If we are unable to keep pace with rapid technological change and gain market acceptance of new products, we may not be able to compete effectively. Technology, both in our markets and in our customers’ markets, is undergoing and will continue to undergo rapid change.
Any of the above factors could adversely affect our operating results. Political Instability and Uncertainty The political landscape in the United States is characterized by increasing polarization, uncertainty, and volatility.
Any of the above factors could adversely affect our operating results. Political instability and uncertainty could adversely affect our operating results. The political landscape in the United States is characterized by increasing polarization, uncertainty, and volatility.
In particular, if COVID-19 re-emerges with serious and widespread impact on public health, particularly in the United States, Singapore, China, and the United Kingdom where our operations are most concentrated, and results in a prolonged period of travel, commercial, social and other similar restrictions, we could experience, among other things: ● Adverse impacts on our operations and financial results caused by government and regulatory measures to contain or mitigate the spread of the virus, temporary closures of our facilities or the facilities of our customers or suppliers, which could impact our ability to timely meet our customers’ orders or negatively impact our supply chain; ● The failure of third parties on which we rely, including our suppliers, customers and external business partners, to meet their respective obligations to us, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties including bankruptcy or default; ● Disruptions or restrictions on our employees’ ability to work effectively, due to illness, quarantines, travel bans, shelter-in-place orders or other limitations; ● Interruptions to the operations of our business if the health of our executives, management personnel and other employees are affected, particularly if a significant number of individuals are impacted; ● Litigation, manufacturing delays and harm to our reputation resulting from any accident, illness, or injury to our employees related to COVID-19 that could negatively affect our business, results of operations and financial condition; ● Changes in prices of products and services impacted by worldwide demand and by the pandemic, which price increases could materially increase our operating costs and adversely affect our profit margin; ● Increased cybersecurity and privacy risks and risks related to the reliability of technology to support remote operations; ● Sudden and/or severe declines in the market price of our common stock; and ● Costs incurred and revenues lost during and from the effects of the COVID-19 pandemic that likely will not be recoverable.
In particular, if COVID-19 re-emerges with serious and widespread impact on public health, particularly in the United States, China,or the United Kingdom where our operations are most concentrated, and results in a prolonged period of travel, commercial, social and other similar restrictions, we could experience, among other things: ● Adverse impacts on our operations and financial results caused by government and regulatory measures to contain or mitigate the spread of the virus, temporary closures of our facilities or the facilities of our customers or suppliers, which could impact our ability to timely meet our customers’ orders or negatively impact our supply chain; ● The failure of third parties on which we rely, including our suppliers, customers and external business partners, to meet their respective obligations to us, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties including bankruptcy or default; ● Disruptions or restrictions on our employees’ ability to work effectively, due to illness, quarantines, travel bans, shelter-in-place orders or other limitations; ● Interruptions to the operations of our business if the health of our executives, management personnel and other employees are affected, particularly if a significant number of individuals are impacted; ● Litigation, manufacturing delays and harm to our reputation resulting from any accident, illness, or injury to our employees related to COVID-19 that could negatively affect our business, results of operations and financial condition; ● Changes in prices of products and services impacted by worldwide demand and by the pandemic, which price increases could materially increase our operating costs and adversely affect our profit margin; ● Increased cybersecurity and privacy risks and risks related to the reliability of technology to support remote operations; ● Sudden and/or severe declines in the market price of our common stock; and ● Costs incurred and revenues lost during and from the effects of the COVID-19 pandemic that likely will not be recoverable.
We also are subject to provisions of Nevada law found in Nevada Revised Statutes, Sections 78.411 to 78.444, inclusive, that prohibit us from engaging in any business combination with any “interested stockholder,” meaning generally that a stockholder who beneficially owns 10 percent (10%) or more of our stock, cannot acquire us for a period of time after the date this person became an interested stockholder, unless various conditions are met, such as approval of the transaction by our board of directors and stockholders. 22 Table of Contents Risks Related to Government Regulation Our failure to comply with U.S. laws and regulations relating to the export and import of goods, technology, and software could subject us to penalties and other sanctions and restrict our ability to license and develop our circuit designs.
We also are subject to provisions of Nevada law found in Nevada Revised Statutes, Sections 78.411 to 78.444, inclusive, that prohibit us from engaging in any business combination with any “interested stockholder,” meaning generally that a stockholder who beneficially owns 10 percent (10%) or more of our stock, cannot acquire us for a period of time after the date this person became an interested stockholder, unless various conditions are met, such as approval of the transaction by our Board of Directors and stockholders. 23 Table of Contents Risks Related to Government Regulation Our failure to comply with U.S. laws and regulations relating to the export and import of goods, technology, and software could subject us to penalties and other sanctions and restrict our ability to license and develop our circuit designs.
In addition, the COVID-19 pandemic adversely affected the global economy and the economies and financial markets of many countries, and a re-emergence of the pandemic could result in further economic downturns affecting demand for our products and services and impact our operations. ● Employee-related risks : We have experienced and may in the future experience disruptions to our operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to deliver our products and services in a timely manner or meet milestones or customer commitments. 24 Table of Contents The full extent of the effect of the pandemic on us, our customers, our supply chain and our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak or subsequent outbreaks.
In addition, the COVID-19 pandemic adversely affected the global economy and the economies and financial markets of many countries, and a re-emergence of the pandemic could result in further economic downturns affecting demand for our products and services and impact our operations. ● Employee-related risks : We have experienced and may in the future experience disruptions to our operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to deliver our products and services in a timely manner or meet milestones or customer commitments. 25 Table of Contents The full extent of the effect of the pandemic on us, our customers, our supply chain and our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak or subsequent outbreaks.
Because our customers generally do not provide us with firm, long-term volume purchase commitments, our customers, including our largest customers upon whom we may become dependent, can reduce or terminate altogether their business with us at any time, whether because they choose an alternate supplier, see reduced demand for their products, or otherwise.
Because they generally do not provide us with firm, long-term volume purchase commitments, our customers, including our largest customers upon whom we are or may become dependent, can reduce or terminate altogether their business with us at any time, whether because they choose an alternate supplier, see reduced demand for their products, or otherwise.
Armed conflicts in the Middle East and between Russia and Ukraine, tensions between the U.S. and countries such as Iran and North Korea and between other countries such as China and Taiwan, and disruptions to traffic through key shipping routes such as the Suez Canal, also could adversely impact our sales, shipping costs, and results of operations.
Armed conflicts in the Middle East and between Russia and Ukraine, tensions between the U.S. and countries such as Iran and North Korea and between other countries such as China and Taiwan, and disruptions to traffic through key shipping routes such as the Panama Canal and the Suez Canal, also could adversely impact our sales, shipping costs, and results of operations.
Factors that could cause fluctuations in the trading price of our common stock include, without limitation, the following: ● announcements of new offerings, products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors; ● price and volume fluctuations in the overall stock market from time to time; ● significant volatility in the market price and trading volume of technology companies in general; ● fluctuations in the trading volume of our shares or the size of our public float; ● actual or anticipated changes or fluctuations in our results of operations; ● failure of our results of operations to meet the expectations of securities analysts or investors; ● actual or anticipated changes in the expectations of investors or securities analysts; ● litigation involving us, our industry, or both; ● regulatory developments in the United States, foreign countries, or both; ● general economic conditions and trends; ● economic disruptions caused by political disputes and governmental gridlock in the United States; ● major catastrophic events; ● lockup releases, and sales of large blocks of our common stock; ● the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak, on our sourcing and manufacturing operations as well as on consumer spending; ● departures of key employees; or ● an adverse impact on the company from any of the other risks cited herein.
Factors that could cause fluctuations in the trading price of our common stock include, without limitation, the following: ● announcements of new offerings, products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors; ● price and volume fluctuations in the overall stock market from time to time; ● significant volatility in the market price and trading volume of technology companies in general; ● fluctuations in the trading volume of our shares or the size of our public float; ● actual or anticipated changes or fluctuations in our results of operations; ● failure of our results of operations to meet the expectations of securities analysts or investors; ● actual or anticipated changes in the expectations of investors or securities analysts; ● litigation involving us, our industry, or both; ● regulatory developments in the United States, foreign countries, or both; ● general economic conditions and trends; ● economic disruptions caused by political disputes and governmental gridlock in the United States; ● major catastrophic events; ● lockup releases, and sales of large blocks of our common stock; ● the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak in 2020 and the current avian flu outbreak, on our sourcing and manufacturing operations as well as on consumer spending; ● departures of key employees; or ● an adverse impact on the company from any of the other risks cited herein.
This is due in part to the significant percentage (approximately 83% as of December 31, 2023) of our shares that are held by officers and directors and their affiliates. We cannot predict the extent to which investor interest in our Company will lead to the development of an active trading market or how liquid that market might become.
This is due in part to the significant percentage (approximately 83% as of December 31, 2024) of our shares that are held by officers and directors and their affiliates. We cannot predict the extent to which investor interest in our Company will lead to the development of an active trading market or how liquid that market might become.
An inactive market may also impair our ability to raise capital by selling our common stock (or other securities convertible into our common stock) and may impair our ability to acquire or invest in other companies, products, or technologies by using our common stock as consideration. 19 Table of Contents The price of our common stock may be volatile, and the value of a stockholder’s investment could decline.
An inactive market may also impair our ability to raise capital by selling our common stock (or other securities convertible into our common stock) and may impair our ability to acquire or invest in other companies, products, or technologies by using our common stock as consideration. 20 Table of Contents The price of our common stock may be volatile, and the value of a stockholder’s investment could decline.
If we are unable to respond effectively to change, our operations could be adversely affected and our business could be impaired. 25 Table of Contents International sales and manufacturing risks could adversely affect our operating results. Our revenue from international sales represents a substantial portion of our overall sales, and this trend will continue for the foreseeable future.
If we are unable to respond effectively to change, our operations could be adversely affected and our business could be impaired. 26 Table of Contents International sales and manufacturing risks could adversely affect our operating results. Our revenue from international sales represents a substantial portion of our overall sales, and this trend will continue for the foreseeable future.
Investors should carefully evaluate the potential implications of ongoing COVID-19 challenges on our financial performance, operational resilience, and competitive position when making investment decisions. The extent and duration of these challenges remain uncertain, and our ability to effectively manage them will be critical to our long-term success.
Investors should carefully evaluate the potential implications of ongoing COVID-19 challenges and other potential pandemics on our financial performance, operational resilience, and competitive position when making investment decisions. The extent and duration of these challenges remain uncertain, and our ability to effectively manage them will be critical to our long-term success.
Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problem at any of our manufacturing facilities could result in delayed shipment of products, missed delivery deadlines and harm to our reputation, which could cause our revenues and operating results to decline.
Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problem at any of our manufacturing facilities could result in delayed shipment of products, missed delivery deadlines and harm to our reputation, which could cause our revenue and operating results to decline.
We rely on third parties for the materials that we use to manufacture our products, and supply shortages and price increases could adversely affect our revenues, operating results and customer relationships. We rely on third-party suppliers for the raw material components of our products.
We rely on third parties for the materials that we use to manufacture our products, and supply shortages and price increases could adversely affect our revenue, operating results and customer relationships. We rely on third-party suppliers for the raw material components of our products.
Bronson and Hoffman currently works an equivalent full-time schedule; 17 Table of Contents however, there can be no assurance that the amount of time these officers devote to our company will not diminish from time to time for limited or extended periods as their other business obligations require a greater portion of their attention. Neither Mr. Bronson nor Mr.
Bronson and Hoffman currently works an equivalent full-time schedule; however, there can be no assurance that the amount of time these officers devote to our company will not diminish from time to time for limited or extended periods as their other business obligations require a greater portion of their attention. Neither Mr. Bronson nor Mr.
There is no assurance that we would be successful in enforcing our legal rights against the offending party in such circumstances. Our success depends in part on our CEO and CFO, who simultaneously lead other public corporations. Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer, and Ryan J.
There is no assurance that we would be successful in enforcing our legal rights against the offending party in such circumstances. 18 Table of Contents Our success depends in part on our CEO and CFO, who simultaneously lead other public corporations. Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer, and Ryan J.
Our international operations involve a number of risks, including with respect to: ● import-export license agreements, tariffs, taxes and other trade barriers; ● staffing and managing foreign operations; ● securing credit and funding; ● maintaining an effective system of internal controls at our foreign facilities; ● collecting foreign receivables; ● transfer pricing and other tax uncertainties; ● currency exchange fluctuations; ● reduced protection of intellectual property rights; ● the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak, on our sourcing and manufacturing operations as well as consumer spending; ● political and economic instability, and terrorism; and ● transportation risks.
Our international operations involve a number of risks, including with respect to: ● import-export license agreements, tariffs (which may be increasing globally), taxes and other trade barriers; ● staffing and managing foreign operations; ● securing credit and funding; ● maintaining an effective system of internal controls at our foreign facilities; ● collecting foreign receivables; ● transfer pricing and other tax uncertainties; ● currency exchange fluctuations; ● reduced protection of intellectual property rights; ● the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak, on our sourcing and manufacturing operations as well as consumer spending; ● political and economic instability, and terrorism; and ● transportation risks.
There are risks and uncertainties related to acquisitions, including: difficulties integrating acquired technology, operations, personnel and financial and 26 Table of Contents other systems; unrealized sales expectations from the acquired business; unrealized synergies and cost savings; unknown or underestimated liabilities; diversion of management attention from running our existing businesses and potential loss of key management employees of the acquired business.
There are risks and uncertainties related to acquisitions, including: difficulties integrating acquired technology, operations, personnel and financial and other systems; unrealized sales expectations from the acquired business; unrealized synergies and cost savings; unknown or underestimated liabilities; diversion of management attention from running our existing businesses and potential loss of key management employees of the acquired business.
Holders of our Series A Convertible Preferred Stock have a liquidation preference equal to the greater of $25.00 per share plus any accrued and unpaid 20 Table of Contents dividends, and such amount per share as would have been payable had all shares of Series A Convertible Preferred Stock been converted into our common stock in the event of our liquidation or winding up.
Holders of our Series A Convertible Preferred Stock have a liquidation preference equal to the greater of $25.00 per share plus any accrued and unpaid dividends, and such amount per share as would have been payable had all shares of Series A Convertible Preferred Stock been converted into our common stock in the event of our liquidation or winding up.
The aggregate liquidation preference of the Series A Convertible Preferred Stock as of December 31, 2023 was $5 million. We may also issue additional shares of preferred stock in the future.
The aggregate liquidation preference of the Series A Convertible Preferred Stock as of December 31, 2024 was $5 million. We may also issue additional shares of preferred stock in the future.
These factors could also make it more difficult for us to attract and retain qualified executive officers and qualified members of our board of directors, particularly to serve on our audit committee and compensation committee. ​ 27 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None. ​
These factors could also make it more difficult for us to attract and retain qualified executive officers and qualified members of our Board of Directors, particularly to serve on our audit committee and compensation committee. ​ ITEM 1B. UNRESOLVED STAFF COMMENTS None. ​
Furthermore, political instability and social unrest may disrupt supply chains, distribution networks, and consumer confidence, leading to operational disruptions, decreased consumer spending, and market volatility. Heightened geopolitical tensions or domestic conflicts may also contribute to economic uncertainty and market fluctuations. Acquisitions involve multiple risks and uncertainties.
Furthermore, political instability and social unrest may disrupt supply chains, distribution networks, and consumer confidence, leading to operational disruptions, decreased consumer spending, and market volatility. Heightened geopolitical tensions or domestic conflicts may also contribute to economic uncertainty and market fluctuations. 27 Table of Contents Acquisitions involve multiple risks and uncertainties.
We manufacture our products in Shenzhen, China; Newark, California; and Irvine, Scotland. These facilities are vulnerable to damage from earthquakes, floods, fires, power loss and similar events. They could also be subject to break-ins, sabotage and intentional acts of vandalism.
We manufacture our products in Shenzhen, China; Fremont, California; Irvine, Scotland; and Barnsley, England. These facilities are vulnerable to damage from earthquakes, floods, fires, power loss and similar events. They could also be subject to break-ins, sabotage and intentional acts of vandalism.
Hoffman serves as Chief Financial Officer of BKF Capital Group, Inc., and until August 2023, of Qualstar Corporation. As a result, each of Messrs. Bronson and Hoffman divides his time among these companies and does not devote his full business time and attention to Interlink’s business. Each of Messrs.
Hoffman serves as Acting Chief Financial Officer of Qualstar Corporation and as Chief Financial Officer of BKF Capital Group, Inc. As a result, each of Messrs. Bronson and Hoffman divides his time among these companies and does not devote his full business time and attention to Interlink’s business. Each of Messrs.
Bronson has the ability to control the management and affairs of our company as a 21 Table of Contents result of his position as our CEO and his ability to control the election of our directors. As a board member and officer, Mr.
Bronson has the ability to control the management and affairs of our company as a result of his position as our CEO and his ability to control the election of our directors. As a board member and officer, Mr.
We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any such dividends on our common stock in the foreseeable future, if at all.
We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any such dividends in the foreseeable future.
Our insurance may not cover such events and, if the event is covered, our insurance may not be sufficient to compensate us 15 Table of Contents in full for any losses that may occur.
Our insurance may not cover such events and, if the event is covered, our insurance may not be sufficient to compensate us in full for any losses that may occur.
We recently completed the acquisitions of SPEC, KWJ and Calman, and we expect to make further acquisitions in the future. Acquisitions involve numerous inherent challenges, such as properly evaluating acquisition opportunities, properly evaluating risks and other diligence matters, ensuring adequate capital availability and balancing other resource constraints.
Within the last 18 months, we completed the acquisitions of SPEC, KWJ, Calman, and Conductive Transfers, and we expect to make further acquisitions in the future. Acquisitions involve numerous inherent challenges, such as properly evaluating acquisition opportunities, properly evaluating risks and other diligence matters, ensuring adequate capital availability and balancing other resource constraints.
As a result of our international operations, we may be subject to anti-bribery laws, including the FCPA, which prohibits companies from making improper payments to foreign officials for the purpose of obtaining or keeping business. If we fail to comply with these laws, the U.S.
Foreign Corrupt Practices Act (“FCPA”), we could be subject to civil and/or criminal penalties. As a result of our international operations, we may be subject to anti-bribery laws, including the FCPA, which prohibits companies from making improper payments to foreign officials for the purpose of obtaining or keeping business. If we fail to comply with these laws, the U.S.
If one or more of these analysts ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
If analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
The majority of our international manufacturing is currently performed in China and Scotland.
The majority of our international manufacturing is currently performed in China and the United Kingdom.
Furthermore, changes in U.S. trade policies, including new restrictions, tariffs or other changes, especially as regards China, could lead to additional costs, delays in shipments, embargos and other uncertainties that could negatively impact our relationships with our international suppliers and materially adversely affect our business.
Furthermore, changes in U.S. trade policies, such as those being implemented by the new U.S. administration. including new restrictions, tariffs or other changes, especially as regards China, and reciprocal tariffs imposed by other countries, could lead to additional costs, delays in shipments, embargos and other uncertainties that could negatively impact our relationships with our international suppliers and materially adversely affect our business.
Our ability to generate significant revenue from new markets will depend on various factors, including the following: ● the development and growth of these markets; ● the ability of our technologies and product solutions to address the needs of these markets; ● the price and performance requirements of our customers and the preferences of end users; ● our ability to provide our customers with solutions that provide advantages in terms of size, power consumption, reliability, durability, performance and value-added features compared with alternative solutions; and ● the effectiveness of our sales and marketing efforts in communicating all of these capabilities to the marketplace. 16 Table of Contents The failure of any of these target markets to develop as we expect, or any significant failure on our part to serve these markets, will impede our sales growth and could result in substantially reduced earnings.
Our ability to generate significant revenue from new markets will depend on various factors, including the following: ● the development and growth of these markets; ● the ability of our technologies and product solutions to address the needs of these markets; ● the price and performance requirements of our customers and the preferences of end users; 17 Table of Contents ● our ability to provide our customers with solutions that provide advantages in terms of size, power consumption, reliability, durability, performance and value-added features compared with alternative solutions; and ● the effectiveness of our sales and marketing efforts in communicating all of these capabilities to the marketplace.
Our competitors include companies with similar products or technologies, companies that sell complementary products to our target markets, and our customers themselves, who could choose to manufacture in-house products that they currently buy from us.
Our competitors include companies with similar products or technologies, companies that sell complementary products to our target markets, and our customers themselves, who could choose to manufacture in-house products that they currently buy from us. Many of our competitors have substantially greater financial resources than we do.
Technology, both in our markets and in our customers’ markets, is undergoing and will continue to undergo rapid change. In order to maintain our leadership position in our existing markets and to emerge as a leader in new markets, we will have to maintain a leadership position in the technologies supporting those markets.
In order to maintain our leadership position in our existing markets and to emerge as a leader in new markets, we will have to maintain a leadership position in the technologies supporting those markets.
If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have a material adverse effect on our business, results of operations and financial condition.
If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business.
If we are unable to raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts for our product candidates, or we may need to grant to others the rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
If we are unable to raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts for our product candidates, or we may need to grant to others the rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 22 Table of Contents Our CEO has control over key decision making as a result of his control of a majority of our voting stock.
We do not have any control over these analysts. If one or more of the analysts who cover us downgrades our shares or changes their opinion of our business prospects, our share price would likely decline.
We do not have any control over these analysts. If analysts downgrade our shares or change their opinion of our business prospects, our share price would likely decline.
Our CEO has control over key decision making as a result of his control of a majority of our voting stock. Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer, beneficially owned approximately 83% of the outstanding shares of our common stock as of December 31, 2023. As a result, Mr.
Steven N. Bronson, our Chairman of the Board, President and Chief Executive Officer, beneficially owned approximately 83% of the outstanding shares of our common stock as of December 31, 2024. As a result, Mr.
In addition, being a public company subject to these rules and regulations make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
We may need to hire additional employees to comply with these requirements, which will increase our costs and expenses. 28 Table of Contents In addition, being a public company subject to these rules and regulations make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
If we fail to comply with applicable rules and regulations in connection with the use and disposal of such substances or other environmental or recycling legislation, we could be subject to significant liability or loss of future sales. 23 Table of Contents General Risks The global COVID-19 pandemic had a significant and adverse effect on, and may continue to adversely affect, our business, financial position, results of operations, and cash flows.
If we fail to comply with applicable rules and regulations in connection with the use and disposal of such substances or other environmental or recycling legislation, we could be subject to significant liability or loss of future sales. 24 Table of Contents General Risks Our business, financial position, results of operations, and cash flows may be adversely affected by the global COVID-19 pandemic, in particular if there is a resurgence in infections, or any broad outbreak of an avian flu or other epidemic in the human population.
In some situations, we rely on a single supplier for raw material components of our products. Any disruption in these supplier relationships could prevent us from maintaining an adequate supply of materials and could adversely affect our results of operation and financial position. Disruptions in our manufacturing facilities or arrangements could cause our revenues and operating results to decline.
Any disruption in these supplier relationships could prevent us from maintaining an adequate supply of materials and could adversely affect our results of operation and financial position. 16 Table of Contents Disruptions in our manufacturing facilities or arrangements could cause our revenue and operating results to decline.
The liquidation preference of shares of our Preferred Stock currently outstanding or issued in the future would reduce the amount available to our common stockholders in the event of our liquidation or winding up. We currently have one series of Preferred Stock outstanding, the Series A Convertible Preferred Stock.
This could have a material adverse effect on our business, results of operations and financial condition. 21 Table of Contents The liquidation preference of shares of our Preferred Stock currently outstanding or issued in the future would reduce the amount available to our common stockholders in the event of our liquidation or winding up.
In 2023, our top three customers accounted for 22%, 12% and 10% of our net revenues, respectively.
In 2024, our top three customers accounted for 15%, 12% and 5% of our revenue, respectively.
Additionally, failure to comply with these laws could result in sanctions by the U.S. government, including substantial monetary penalties, denial of export privileges, and debarment from government contracts. If we fail to comply with anti-bribery laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”), we could be subject to civil and/or criminal penalties.
Additionally, failure to comply with these laws could result in sanctions by the U.S. government, including substantial monetary penalties, denial of export privileges, and debarment from government contracts. Increasing global tariffs create risks to our global business and that of our customers.
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We may need to hire additional employees to comply with these requirements, which will increase our costs and expenses.
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In some situations, we rely on a single supplier for raw material components of our products.
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The failure of any of these target markets to develop as we expect, or any significant failure on our part to serve these markets, will impede our sales growth and could result in substantially reduced earnings.
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As a result, any compromise to the security of our systems could have a material adverse effect on our business, reputation, financial condition, and operating results. 19 Table of Contents Ransomware attacks, in particular, have become more frequent and severe, potentially resulting in the encryption or theft of critical data, operational disruptions, and financial losses.
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A successful ransomware attack on our systems or those of our vendors could lead to prolonged business interruptions, regulatory fines, reputational damage, and substantial remediation costs. While we employ security measures designed to detect, prevent, and respond to such threats, no system is entirely immune from cyberattacks.
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We currently have one series of Preferred Stock outstanding, the Series A Convertible Preferred Stock.
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Recent changes in U.S. trade policies, including the imposition of new tariffs on imported goods, present significant risks to our operations and potentially those of our customers. These tariffs may lead to increased costs for raw materials and components, supply chain disruptions, and heightened market volatility.
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Additionally, retaliatory tariffs from trade partners may hinder our ability and that of our customers to access key markets, further impacting our financial performance. We continue to monitor these developments closely and are evaluating strategies to mitigate potential adverse effects on our business. If we fail to comply with anti-bribery laws, including the U.S.
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The current U.S. political climate, marked by rapid policy changes and regulatory shifts under the Trump-Vance administration, presents significant uncertainties for our global operations. In particular, escalating geopolitical tensions involving key global markets could impact our supply chain stability and market access. These factors collectively may adversely affect our business operations, financial condition, and future prospects.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile we believe that our current cybersecurity measures are robust, we recognize that the cybersecurity landscape is constantly evolving, and we remain vigilant in monitoring and adapting our practices to address emerging threats.
Biggest changeWhile we employ security measures designed to detect, prevent, and respond to such threats, no system is entirely immune from cyberattacks. While we believe that our current cybersecurity measures are robust, we recognize that the cybersecurity landscape is constantly evolving, and we remain vigilant in monitoring and adapting our practices to address emerging threats.
We are committed to maintaining the confidentiality, integrity, and availability of our systems and data and to protecting the interests of our clients and stakeholders. ​ 28 Table of Contents
We are committed to maintaining the confidentiality, integrity, and availability of our systems and data and to protecting the interests of our clients and stakeholders. ​ 29 Table of Contents
Below is an overview of our cybersecurity risk management and the measures we have in place: ● Governance and Oversight : Our Board of Directors and senior management are actively involved in overseeing our cybersecurity policies and practices and managing those responsible for coordinating and implementing cybersecurity initiatives across the organization. ● Risk Assessment and Management : We conduct risk assessments to identify potential cybersecurity threats and vulnerabilities.
Below is an overview of our cybersecurity risk management and the measures we have in place: ● Governance and Oversight : Our Board of Directors and senior management are actively involved in overseeing our cybersecurity policies and practices and managing those responsible for coordinating and implementing cybersecurity initiatives across the organization.
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Our Board of Directors receives updates from senior management on cybersecurity-related news events, developments in technology-related risks, threats and vulnerabilities that could pertain to the Company, and discusses with senior management updates to the Company’s risk-management responses and strategies. ● Risk Assessment and Management : We conduct risk assessments to identify potential cybersecurity threats and vulnerabilities.
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Ransomware attacks, in particular, have become more frequent and severe, potentially resulting in the encryption or theft of critical data, operational disruptions, and financial losses. A successful ransomware attack on our systems or those of our vendors could lead to prolonged business interruptions, regulatory fines, reputational damage, and substantial remediation costs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We maintain our principal office in Irvine, California. We conduct engineering, assembly and prototyping activities in Camarillo, California, where we have established a Global Product Development and Materials Science Center, and also in our Newark, California facility. We conduct production operations in our facilities in Shenzhen, China; Newark, California; and Irvine, Scotland.
Biggest changeITEM 2. PROPERTIES We maintain our principal office in Fremont, California, which is also our advanced and proprietary gas sensor production and product development facility. We conduct engineering, assembly and prototyping activities in Camarillo, California, where we have established a Global Product Development and Materials Science Center.
We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, we will be able to secure additional space to accommodate any expansion of our operations. ​
In total, we lease approximately 55,000 square feet, and do not own any real estate. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, we will be able to secure additional space to accommodate any expansion of our operations. ​
We conduct research and development activities in our electronics lab in Singapore; distribution operations in our Hong Kong facility; and sales operations in our Tokyo office and various other locations in the United States. In total, we lease approximately 40,000 square feet, and do not own any real estate.
We conduct research and development activities in our electronics lab in Singapore; distribution operations in our Hong Kong facility; sales operations in our Tokyo office and various other locations in the United States, and we maintain administrative and executive offices in Irvine, California and Bellevue, Washington.
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We conduct production operations in our facilities in Shenzhen, China; Fremont, California; Irvine, Scotland; and Barnsley, England.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe outcome of litigation and claims cannot be predicted with certainty, and the resolution of any future matters could materially affect our future financial position, results of operations or cash flows. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 29 Table of Contents PART II
Biggest changeThe outcome of litigation and claims cannot be predicted with certainty, and the resolution of any future matters could materially affect our future financial position, results of operations or cash flows. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 30 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAlthough the exact effect on common stock outstanding will depend on the number of fractional share settlements, the stock dividend is expected to increase the number of issued and outstanding shares of common stock from 6,573,570 to approximately 9,860,355.
Biggest changeThe stock dividend increased the number of issued and outstanding shares of common stock from 6,573,570 to 9,860,368.
On March 1, 2024, the Board of Directors declared a 50% common stock dividend with a record date of March 11, 2024, that was paid on March 22, 2024. Settlement of fractional share interests will be made by issuing one full share of common stock in lieu of a fractional share.
On March 1, 2024, the Board of Directors declared a 50% common stock dividend with a record date of March 11, 2024, that was paid on March 22, 2024. Settlement of fractional share interests was made by issuing one full share of common stock in lieu of a fractional share.
ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Our common stock is listed on The Nasdaq Capital Market under the symbol “LINK.” Holders of Record As of December 31, 2023, we had 24 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Our common stock is listed on The Nasdaq Capital Market under the symbol “LINK.” Holders of Record As of December 31, 2024, we had 22 holders of record of our common stock.
Dividends Common Stock We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any such dividends on our common stock in the foreseeable future, if at all.
Dividends Common Stock We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any such dividends in the foreseeable future.
Our board of directors commenced declaring and we commenced paying dividends on our Series A Convertible Preferred Stock in November 2021, and we expect that our board of directors will continue to declare and we will continue to pay monthly cash dividends on our Series A Convertible Preferred Stock, subject to applicable limitations under Nevada law.
Our Board of Directors has declared, and we have paid, cash dividends on the Preferred Stock each month since the Preferred Stock was issued in October 2021, and we expect that our Board of Directors will continue to declare and we will continue to pay monthly cash dividends on our Series A Convertible Preferred Stock, subject to applicable limitations under Nevada law.
Series A Convertible Preferred Stock We have 200,000 shares of our Series A Convertible Preferred Stock outstanding, each of which currently is convertible into 3.0 shares of our common stock, as adjusted for the 50% common stock dividend declared and paid in March 2024.
Series A Convertible Preferred Stock We have 200,000 shares of our Series A Convertible Preferred Stock outstanding, each of which is convertible into three shares of our common stock.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers On May 16, 2023, our Board of Directors authorized the Company to purchase up to 150,000 shares of our common stock. Under this authorization, we have cumulatively purchased 48,180 shares at a total cost of $300,259 through December 31, 2023.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Recent Sales of Unregistered Securities None. ​ ITEM 6. RESERVED ​ Not applicable. ​ 31 Table of Contents
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Our share repurchase program expires on May 15, 2024, does not require us to purchase a specific number of shares and may be modified, suspended, terminated, or extended at any time.
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In addition, in June 2023, the Company repurchased 8,250 shares of our common stock from a prior employee in a private transaction at a total cost of $50,000. ​ 30 Table of Contents The following table presents our purchases of our common stock during the year ended December 31, 2023, and has been adjusted to reflect the 50% common stock dividend declared and paid in March 2024 (which is accounted for as a stock split effected in the form of a stock dividend): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ ​ Total Number of ​ Number of Shares ​ ​ ​ ​ ​ ​ Shares Purchased ​ that May Yet Be ​ ​ ​ ​ ​ ​ as Part of Publicly ​ Purchased Under ​ ​ Total Number of ​ Average Price ​ Announced Plans ​ the Plans or Period Shares Purchased Paid Per Share or Programs Programs May 1, 2023 to May 31, 2023 20,250 ​ $ 6.08 20,250 129,750 June 1, 2023 to June 30, 2023 8,854 ​ $ 6.09 604 129,146 July 1, 2023 to July 31, 2023 — ​ — — 129,146 August 1, 2023 to August 31, 2023 12,326 ​ $ 6.31 12,326 116,820 September 1, 2023 to September 30, 2023 15,000 ​ $ 6.36 15,000 101,820 October 1, 2023 to October 31, 2023 — ​ — — 101,820 November 1, 2023 to November 30, 2023 — ​ — — 101,820 December 1, 2023 to December 31, 2023 — ​ — — 101,820 Total 56,430 ​ 48,180 ​ Recent Sales of Unregistered Securities None. ​ ITEM 6.
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RESERVED ​ Not applicable. ​ 31 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe percentages in the tables are based on net revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2023 ​ 2022 ​ ​ $ % $ % ​ ​ (in thousands, except percentages) Revenue, net ​ $ 13,940 ​ 100.0 % $ 7,493 ​ 100.0 % Cost of revenue ​ 7,381 ​ 52.9 ​ 3,632 ​ 48.5 ​ Gross profit ​ 6,559 ​ 47.1 ​ 3,861 ​ 51.5 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Engineering, research and development ​ 2,326 ​ 16.7 ​ 1,220 ​ 16.3 ​ Selling, general and administrative ​ 4,672 ​ 33.5 ​ 3,309 ​ 44.2 ​ Total operating expenses ​ 6,998 ​ 50.2 ​ 4,529 ​ 60.4 ​ Loss from operations ​ (439) ​ (3.1) ​ (668) ​ (8.9) ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ 164 ​ 1.2 ​ 2,611 ​ 34.8 ​ Income (loss) before income taxes ​ (275) ​ (2.0) ​ 1,943 ​ 25.9 ​ Income tax expense ​ 108 ​ 0.8 ​ 271 ​ 3.6 ​ Net income (loss) ​ $ (383) ​ (2.7) % $ 1,672 ​ 22.3 % ​ Comparison of the Years Ended December 31, 2023 and 2022 Revenue, net by the markets we serve is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ ​ Amount Revenue Amount Revenue $ Change % Change ​ (in thousands, except percentages) Industrial ​ $ 4,141 29.7 % $ 2,269 30.3 % $ 1,872 82.5 % Medical ​ 5,210 37.4 ​ 1,865 24.9 ​ 3,345 179.4 ​ Consumer ​ 577 4.1 ​ 363 4.8 ​ 214 59.0 ​ Standard ​ 4,012 28.8 ​ 2,996 40.0 ​ 1,016 33.9 ​ Revenue, net ​ $ 13,940 100.0 % $ 7,493 100.0 % $ 6,447 86.0 % ​ We sell our custom products into the industrial, medical, and consumer markets.
Biggest changeThe percentages in the tables are based on revenue. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ ​ $ % $ % ​ ​ (in thousands, except percentages) Revenue ​ $ 11,679 ​ 100.0 % $ 13,940 ​ 100.0 % Cost of revenue ​ 6,833 ​ 58.5 ​ 7,381 ​ 52.9 ​ Gross profit ​ 4,846 ​ 41.5 ​ 6,559 ​ 47.1 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Engineering, research and development ​ 2,052 ​ 17.6 ​ 2,326 ​ 16.7 ​ Selling, general and administrative ​ 4,844 ​ 41.5 ​ 4,672 ​ 33.5 ​ Total operating expenses ​ 6,896 ​ 59.0 ​ 6,998 ​ 50.2 ​ Loss from operations ​ (2,050) ​ (17.6) ​ (439) ​ (3.1) ​ Other income (expense), net ​ 93 ​ 0.8 ​ 164 ​ 1.2 ​ Loss before income taxes ​ (1,957) ​ (16.8) ​ (275) ​ (2.0) ​ Income tax expense ​ 27 ​ 0.2 ​ 108 ​ 0.8 ​ Net loss ​ $ (1,984) ​ (17.0) % $ (383) ​ (2.7) % ​ Comparison of the Years Ended December 31, 2024 and 2023 Revenue by the markets we serve is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ ​ ​ Amount Revenue Amount Revenue $ Change % Change ​ (in thousands, except percentages) Medical ​ $ 3,926 33.6 % $ 5,210 37.4 % $ (1,284) (24.6) % Industrial ​ ​ 2,631 22.5 ​ ​ 4,141 29.7 ​ ​ (1,510) (36.5) ​ Consumer ​ 326 2.8 ​ 577 4.1 ​ (251) (43.5) ​ Standard ​ 4,796 41.1 ​ 4,012 28.8 ​ 784 19.5 ​ Revenue ​ $ 11,679 100.0 % $ 13,940 100.0 % $ (2,261) (16.2) % ​ We sell our custom products into the medical, industrial, and consumer markets.
Industrial, medical, and environmental monitoring products generally have longer design and life cycles than consumer products.
Medical, industrial, and environmental monitoring products generally have longer design and life cycles than consumer products.
Revenue Recognition In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), we recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.
Revenue Recognition In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), we recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.
Transactions with Related Parties For a discussion of transactions with related parties, see Note 11, Related Party Transactions , of the notes to the consolidated financial statements, and Item 13, Certain Relationships and Related Transactions, and Director Independence , appearing elsewhere in this Annual Report on Form 10-K.
Transactions with Related Parties For a discussion of transactions with related parties, see Note 10, Related Party Transactions , of the notes to the consolidated financial statements, and Item 13, Certain Relationships and Related Transactions, and Director Independence , appearing elsewhere in this Annual Report on Form 10-K.
Off-Balance Sheet Arrangements As of December 31, 2023 and 2022, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Off-Balance Sheet Arrangements As of December 31, 2024 and 2023, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Combined with the advanced and proprietary facilities in Silicon Valley and Scotland that were acquired in connection with the acquisitions of SPEC and KWJ and Calman, we believe this will allow us to grow our business and be more closely aligned with current and future top-tier customers.
Combined with the advanced and proprietary facilities in Silicon Valley, Scotland, and England that were acquired in connection with the acquisitions of SPEC/KWJ, Calman, and Conductive Transfers, we believe this will allow us to grow our business and be more closely aligned with current and future top-tier customers.
Our global presence in the United States, China, United Kingdom, Hong Kong, Singapore and Japan allows us to broadly provide sales and engineering support services to our existing and future worldwide customers. We manufacture our products in a state-of-the-art facility in Shenzhen, China, and in our advanced and proprietary facilities in Newark, California and Irvine, Scotland.
Our global presence in the United States, China, United Kingdom, Hong Kong, Singapore and Japan allows us to broadly provide sales and engineering support services to our existing and future worldwide customers. We manufacture our products in a state-of-the-art facility in Shenzhen, China, and in our advanced and proprietary facilities in Fremont, California, Irvine, Scotland, and Barnsley, England.
We currently have products with life cycles that have exceeded 20 years and are ongoing. ​ 33 Table of Contents Revenues were up in 2023 compared to 2022 to customers in all of the custom markets we sell to and also to customers of our standard products.
We currently have products with life cycles that have exceeded 20 years and are ongoing. 33 Table of Contents Revenues were down in 2024 compared to 2023 to customers in all of the custom markets we sell to, and were up to customers of our standard products.
Liquidity and Capital Resources Cash requirements for working capital, capital expenditures, and acquisition activities have been funded from our cash balances, cash generated from operations and sales of marketable securities, and issuances of equity securities. As of December 31, 2023, we had cash and cash equivalents of $4.3 million, working capital of $8.0 million and no indebtedness.
Liquidity and Capital Resources Cash requirements for working capital, capital expenditures, and acquisition activities have been funded from our cash balances, cash generated from operations and sales of marketable securities, and issuances of equity securities. As of December 31, 2024, we had cash and cash equivalents of $3.0 million, working capital of $5.5 million and no indebtedness.
Our effective tax rate is directly affected by the relative proportions of revenue and income before taxes in the jurisdictions in which we operate and the applicable tax rates in such jurisdictions.
Our effective tax rate is directly affected by the relative proportions of our taxable income in the jurisdictions in which we operate and the applicable tax rates in such jurisdictions.
Cash and cash equivalents consist of cash and money market funds. We did not have any short-term or long-term investments as of December 31, 2023. Of our $4.3 million of cash, $2.3 million was held by foreign subsidiaries.
Cash and cash equivalents consist of cash and money market funds. We did not have any short-term or long-term investments as of December 31, 2024. Of our $3.0 million of cash, $1.8 million was held by foreign subsidiaries.
We entered the gas and environmental sensing market in 2022 through our acquisition of the business assets of SPEC Sensors, LLC (“SPEC”) and KWJ Engineering, Inc. (“KWJ”), early pioneers in miniaturized, low-cost gas and environmental sensing technologies.
We entered the gas and environmental sensing market in 2022 through our acquisition of the business assets of SPEC and KWJ, early pioneers in miniaturized, low-cost gas and environmental sensing technologies.
Based on the expected mix of domestic and foreign earnings, we anticipate our effective tax rate to remain higher than the U.S. statutory rate of 21% primarily due to a significant portion of our earnings originating in higher rate jurisdictions of China (25%) and the United Kingdom (25%), offset in part by earnings in lower-rate jurisdictions of Hong Kong (16.5%) and Singapore (17%).
Based on the expected mix of domestic and foreign earnings, we anticipate our effective tax rate to remain higher than the U.S. statutory rate of 21% primarily due to a portion of our earnings originating in higher rate jurisdictions of China (25%) and the United Kingdom (25%), offset in part by earnings in lower-rate jurisdictions of Hong Kong (16.5%) and Singapore (17%), while our domestic losses are expected to provide no tax benefit due to the valuation allowance recorded on domestic net operating losses and other deferred tax assets.
Cash Flow Analysis Our cash flows from operating, investing and financing activities are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2023 2022 ​ (in thousands) Net cash (used in) operating activities ​ $ (116) ​ $ (915) Net cash provided by (used in) investing activities ​ (4,885) ​ 735 Net cash (used in) financing activities ​ (750) ​ (350) ​ Net Cash (Used In) Operating Activities For the year ended December 31, 2023, the $116,000 in net cash used in operating activities was attributable to net loss of $383,000, adjusted for non-cash charges of $806,000 and cash used in changes in operating assets and liabilities of $539,000.
Cash Flow Analysis Our cash flows from operating, investing and financing activities are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ (in thousands) Net cash (used in) operating activities ​ $ (367) ​ $ (116) Net cash (used in) investing activities ​ (491) ​ (4,885) Net cash (used in) financing activities ​ (400) ​ (750) ​ Net Cash (Used In) Operating Activities For the year ended December 31, 2024, the $367,000 in net cash used in operating activities was attributable to net loss of $1,984,000, adjusted for non-cash charges of $809,000 and cash provided by changes in operating assets and liabilities of $808,000.
Our R&D team focuses both on internal design development in order to develop our force-sensing and gas-sensing technologies and solutions, as well as design development aimed at addressing our customers’ unique design challenges.
Our R&D team focuses both on internal design development of our force-sensing and gas-sensing technologies and other printed electronics solutions, as well as custom design development aimed at addressing our customers’ unique design challenges.
In all markets, the timing of orders from our customers is not always predictable and can be concentrated in varying periods to coincide with their project and building plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ % of Net ​ ​ ​ ​ ​ ​ Amount ​ Revenue ​ Amount ​ Revenue ​ $ Change ​ % Change ​ ​ (in thousands, except percentages) Gross profit ​ $ 6,559 47.1 % $ 3,861 51.5 % $ 2,698 69.9 % ​ 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.
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 their projects and building plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ % of ​ ​ ​ ​ ​ ​ Amount ​ Revenue ​ Amount ​ Revenue ​ $ Change ​ % Change ​ ​ (in thousands, except percentages) Gross profit ​ $ 4,846 41.5 % $ 6,559 47.1 % $ (1,713) (26.1) % ​ 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.
Net Cash Provided By (Used In) Investing Activities Net cash used in investing activities of $4,885,000 for the year ended December 31, 2023 consisted of $4,873,000 used to acquire the equity interests of Calman (which was net of $1,577,000 of cash acquired), $111,000 received from the purchase price escrow for the acquisition of SPEC and KWJ upon finalization of the purchase price (which was in excess of the $56,000 previously anticipated to have been recovered), and $123,000 of cash used for purchases of property and equipment.
Net cash used in investing activities of $4,885,000 for the year ended December 31, 2023 consisted of $4,873,000 used to acquire the equity interests of Calman (which was net of $1,577,000 of cash acquired), $111,000 received from the purchase price escrow for the acquisition of SPEC and KWJ upon finalization of the purchase price, and $123,000 used for purchases of property and equipment. ​ 36 Table of Contents Net Cash (Used In) Financing Activities Net cash used in financing activities for the year ended December 31, 2024 consisted of payment of $400,000 of dividends on our Preferred Stock.
Additionally, through our acquisition of Calman Technology Limited in March 2023, we offer customized membrane keypads, graphic overlays, printed electronics and industrial label products for use in a wide range of fields, from industrial instrumentation, process control and monitoring to medical and diagnostic devices and defense systems.
Through our 2023 acquisition of Calman, which brought us over 25 years of HMI design and manufacturing expertise as a leading provider of specialized printed electronics, we offer customized membrane keypads, graphic overlays, printed electronics and industrial label products for use in a wide range of fields, from industrial instrumentation, process control and monitoring to medical and diagnostic devices and defense systems.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Overview Interlink Electronics, Inc. is a global sensor and printed electronics company operating in two principal sensor technology divisions: force/touch sensors, and gas and environmental sensors.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Overview Interlink Electronics, Inc. is a leading provider of sensors and printed electronics used extensively in HMI devices and IoT solutions.
Other income (expense), net for 2023 was comprised of $155,000 of interest income, $3,000 of foreign currency transaction gains, and $6,000 of other non-operating income, while other income (expense), net for 2022 was comprised of $2,449,000 of gains on marketable securities, $121,000 of foreign currency transaction gains, and $41,000 of interest income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ in % of ​ ​ ​ ​ ​ Pre-tax ​ ​ ​ ​ Pre-tax ​ ​ ​ ​ Pre-tax ​ ​ Amount ​ Income ​ Amount ​ Income $ Change Income ​ ​ (in thousands, except percentages) Income tax expense ​ $ 108 39.3 % $ 271 13.9 % $ (163) 25.4 ​ Income tax expense reflects statutory tax rates in the jurisdictions in which we operate adjusted for permanent book/tax differences.
Other income (expense), net for 2024 was comprised of $54,000 of interest income and $39,000 of foreign currency transaction gains, while other income (expense), net for 2023 was comprised of $155,000 of interest income, $3,000 of foreign currency transaction gains, and $6,000 of other non-operating income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ in % of ​ ​ ​ ​ ​ Pre-tax ​ ​ ​ ​ Pre-tax ​ ​ ​ ​ Pre-tax ​ ​ Amount ​ Income ​ Amount ​ Income $ Change Income ​ ​ (in thousands, except percentages) Income tax expense ​ $ 27 1.4 % $ 108 39.3 % $ (81) (37.9) ​ Income tax expense reflects statutory tax rates in the jurisdictions in which we operate on the taxable income (loss) we generate in each jurisdiction.
Net cash used in financing activities of $350,000 for the year ended December 31, 2022 consisted of payment of $400,000 of dividends on our Preferred Stock, offset by $50,000 of proceeds from issuance of common stock.
Net cash used in financing activities of $750,000 for the year ended December 31, 2023 consisted of payment of $400,000 of dividends on our Preferred Stock, and $350,000 used for repurchases of 56,430 shares of common stock.
Selling, general and administrative expenses for the current year were up compared to last year due to increased employee headcount following our acquisitions of SPEC and KWJ in December 2022 and Calman in March 2023, the inclusion in the current year period of approximately $486,000 of non-cash amortization expense on intangible assets acquired in the Calman purchase, and increased acquisition-related legal and other professional fees. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ Amount ​ Revenue ​ Amount ​ Revenue ​ $ Change ​ % Change ​ (in thousands, except percentages) Other income (expense), net ​ $ 164 1.2 % $ 2,611 34.8 % $ 2,447 93.7 ​ ​ 34 Table of Contents Other income (expense), net 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.
Selling, general and administrative expenses for the current year were up compared to last year due primarily to the inclusion of Calman for the full year of 2024 (versus only the March to December period of 2023). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ ​ Amount ​ Revenue ​ Amount ​ Revenue ​ $ Change ​ % Change ​ (in thousands, except percentages) Other income (expense), net ​ $ 93 0.8 % $ 164 1.2 % $ (71) (43.3) ​ ​ 34 Table of Contents Other income (expense), net 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.
Gross profit for 2023 was up compared to 2022 due to higher revenue (resulting primarily from our acquisitions of SPEC and KWJ and Calman), while gross margin percentage was down due to changes in product and customer mix (primarily acquisition-related) and increased materials and components costs on certain orders. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ ​ Amount ​ Revenue ​ Amount ​ Revenue $ Change % Change ​ ​ ​ (in thousands, except percentages) Engineering, research and development ​ $ 2,326 16.7 % $ 1,220 16.3 % $ 1,106 90.7 % ​ Engineering and R&D expenses consist primarily of compensation expenses for employees engaged in research, design and product development activities, and the cost of those employees’ indirect supplies and allocation of facilities expenses.
Gross profit for 2024 was down compared to 2023 due to lower revenue on lower customer demand, while gross margin percentage was down due primarily to the impact the largely fixed portion of our manufacturing- and production-related cost of revenue has on our gross margin percentage, in addition to changes in product and customer mix. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ ​ ​ ​ ​ ​ Amount ​ Revenue ​ Amount ​ Revenue $ Change % Change ​ ​ ​ (in thousands, except percentages) Engineering, research and development ​ $ 2,052 17.6 % $ 2,326 16.7 % $ (274) (11.8) % ​ Engineering and R&D expenses consist primarily of compensation expenses for employees engaged in research, design and product development activities, and the cost of those employees’ indirect supplies and allocation of facilities expenses.
Engineering and R&D costs for 2023 were up compared to the prior year due primarily to increased engineering employee headcount following our acquisitions of SPEC and KWJ in December 2022, the inclusion in the current year period of approximately $136,000 of non-cash amortization expense on intangible assets acquired in the purchases of SPEC and KWJ, and increased prototyping and product-development activities this year as compared to the prior year. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ Amount Revenue Amount Revenue $ Change % Change ​ ​ (in thousands, except percentages) Selling, general and administrative ​ $ 4,672 33.5 % $ 3,309 44.2 % $ 1,363 41.2 % ​ Selling, general and administrative expenses consist primarily of compensation expenses, legal and other professional fees, facilities expenses and communication expenses.
Engineering and R&D costs for 2024 were down compared to the prior year due primarily to decreased engineering employee headcount, offset in part by increased prototyping and product-development activities this year as compared to the prior year. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ ​ Amount Revenue Amount Revenue $ Change % Change ​ ​ (in thousands, except percentages) Selling, general and administrative ​ $ 4,844 41.5 % $ 4,672 33.5 % $ 172 3.7 % ​ Selling, general and administrative expenses consist primarily of compensation expenses, legal and other professional fees, facilities expenses and communication expenses.
For both 2023 and 2022, the Company’s income tax expense reflects tax expense on its foreign earnings, and on its domestic earnings net of utilization of a portion of the previously recorded valuation allowance on domestic deferred tax assets.
For both 2024 and 2023, the Company’s income tax expense reflects tax expense on its foreign earnings with no tax benefit on its domestic losses due to the valuation allowance recorded on domestic net operating losses and other deferred tax assets.
Prepaid expenses and other current assets increased from $321,000 at December 31, 2022 to $381,000 at December 31, 2023. The balance of our prepaid expenses and other assets fluctuates with the timing of payments of insurance premiums, advances, and estimated income taxes.
The balance of these current assets fluctuates with the timing of payments of insurance premiums, advances, and estimated income taxes. Accounts payable, accrued liabilities, and accrued income taxes decreased from $1,249,000 at December 31, 2023 to $1,038,000 at December 31, 2024.
Accounts receivable increased from $1,178,000 at December 31, 2022 to $2,167,000 at December 31, 2023 due to the addition of accounts receivable from our acquisition of Calman during the year, and also timing of shipments and cash collections during the fourth quarter of 2023 compared to the fourth quarter of 2022.
Accounts receivable decreased from $2,167,000 at December 31, 2023 to $1,612,000 at December 31, 2024 due to the timing of shipments and cash collections during the fourth quarter of 2024 compared to the fourth quarter of 2023. Many of our customers pay promptly and accounts receivable is generally related to the most recent shipments.
For the year ended December 31, 2022, the $915,000 in net cash used in operating activities was attributable to net income of $1,672,000, adjusted for non-cash charges of $256,000, realized gains on marketable securities of $2,449,000, and cash used in changes in operating assets and liabilities of $394,000.
For the year ended December 31, 2023, the $116,000 in net cash used in operating activities was attributable to net loss of $383,000, adjusted for non-cash charges of $806,000 and cash used in changes in operating assets and liabilities of $539,000.
The increase in revenue from customers in all markets is due primarily to the inclusion of sales by the SPEC and KWJ businesses and by Calman, acquired in December 2022 and March 2023, respectively, and also to increased shipments of our existing force-sensing products and solutions resulting from increased customer demand.
The decrease in revenue from customers in all custom markets was due to decreased shipments of our force-sensing and gas-sensing products and solutions resulting from lower customer demand in 2024 compared to 2023.
We design, develop, manufacture and sell a range of technologies that incorporate our proprietary materials technology, firmware and software into a portfolio of standard products and custom solutions. On March 1, 2024, the Board of Directors declared a 50% common stock dividend that was paid on March 22, 2024.
Our technical and engineering expertise in materials science, manufacturing, embedded electronics, firmware, and software enables us to create and deliver high-quality, cost-effective custom solutions tailored to our customers’ unique requirements. On March 1, 2024, the Board of Directors declared a 50% common stock dividend that was paid on March 22, 2024.
Accounts payable, accrued liabilities, and accrued income taxes increased from $958,000 at December 31, 2022 to $1,249,000 at December 31, 2023; payables, accrued expenses, and accrued income taxes fluctuate based on the timing of payment for purchases of materials, compensation accruals, outside services, and income taxes, and increased in part from the addition of Calman’s liabilities to our consolidated balances.
The balance of these current liabilities fluctuates based on the timing of payment for purchases of materials, compensation accruals, outside services, and income taxes.
Many of our customers pay promptly and accounts receivable is generally related to the most recent shipments. Inventories increased from $2,112,000 at December 31, 2022 to $2,476,000 at December 31, 2023 due primarily to the addition of Calman’s inventory to our consolidated balances, as well as fluctuations caused by the variability in the timing of materials purchases and product shipments.
Inventories decreased from $2,476,000 at December 31, 2023 to $2,009,000 at December 31, 2024 due primarily to variability in the timing of materials purchases and customer demand on product shipments. Prepaid expenses and other current assets decreased slightly from $381,000 at December 31, 2023 to $328,000 at December 31, 2024.
Removed
Our force/touch sensors, including our Force-Sensing Resistor (“FSR ® ”) technology and related technologies, and our membrane keypads, graphic overlays and printed electronics, are used extensively in Human-Machine Interface (“HMI”) devices, while our gas and environmental sensors and instruments are used in environmental and air quality monitoring across a broad range of applications.
Added
Our broad product and technology portfolio encompasses force, piezo-electric, rugged HMI, wearable sensors for textiles and fabrics, gas sensors, instruments, and systems. Our blue-chip customers trust our products and solutions which span various markets, including industrial, medical, automotive, consumer, wearables, and IoT.
Removed
With over 25 years as a leading HMI provider, Calman Technology has developed to also become a specialized provider of printed electronics for the medical sector in the UK and Europe. Gas and Environmental Sensors .
Added
Additionally, through our 2024 acquisition of Conductive Transfers, which deepened our innovative patentened processes for integration of printed electronic technologies, we offer functional e-textiles and wearable technology, including heated clothing and personal protection equipment, and other products in development for medical and automotive environments and other wearable form-factors. Gas and Environmental Sensors.
Removed
Net cash provided by investing activities of $735,000 for the year ended December 31, 2022 consisted of net proceeds from purchase and sales of marketable securities of $2,449,000, net cash used in the December 2022 acquisition of SPEC and KWJ of $1,672,000 (which was net of $541,000 of cash acquired in the acquisition and $56,000 anticipated to have been recovered from the purchase price adjustment escrow), and $42,000 of cash used for purchases of property and equipment. ​ 36 Table of Contents Net Cash (Used In) Financing Activities Net cash used in financing activities of $750,000 for the year ended December 31, 2023 consisted of payment of $400,000 of dividends on our Preferred Stock, and $350,000 used for repurchases of 56,430 shares of common stock.
Added
Net Cash (Used In) Investing Activities Net cash used in investing activities of $491,000 for the year ended December 31, 2024 consisted of $314,000 used to acquire the assets of Conductive Transfers in December 2024, and $177,000 used for purchases of property and equipment.

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