Interlink Electronics (NASDAQ:LINKE)
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Interlink Electronics, Inc. (Nasdaq:LINKE), a world
leader in the development of intuitive interface technologies and
solutions for business and home applications, today announced that it
will be unable to file its annual report on Form 10-K by March 31,
2006 as previously expected. In the course of preparing its 2005 year
end audit, Interlink discovered two discrepancies in its historical
financial statements. The first of these discrepancies involved
accounting for stock options and resulted in an unrecorded, non-cash
expense of approximately $100,000 in 2005, $200,000 in 2004, and
$2,400,000 in 2001. This issue has been resolved and is awaiting final
audit approval. The second discrepancy involves the valuation of
certain inventory in transit between the parent company and
Interlink's Hong Kong subsidiary as of December 31, 2004. Interlink is
continuing to investigate this matter, which must be resolved in order
to finalize the required restatements of Interlink's historical
financial statements and to permit the filing of Interlink's report on
Form 10-Q for the third quarter of 2005 and its 2005 Annual Report.
Interlink currently expects to complete its examination of this matter
and to file all required reports and restatements as quickly as
possible. On the basis of its investigation to date, Interlink
believes that the matter will require a reduction in inventory value
at December 31, 2004 of approximately $750,000 and have a minimal
effect on the 2005 quarters and full year.
As a result of the delay in the filing of its reports, Interlink
will exceed the period in which to comply with applicable listing
requirements. Accordingly, Interlink expects that its common stock
will be delisted from Nasdaq NMS and will thereafter trade in the
over-the-counter market on the "pink sheets." Interlink is currently
working toward relisting on Nasdaq at the earliest available
opportunity after it has filed the required reports and restatements.
The Company expects to take all necessary steps to cause such
relisting to occur at the earliest possible opportunity.
"Interlink's management wishes to express the highest level of
concern over these inaccuracies in the Company's financial statements
and the resulting compliance issues regarding applicable financial
reporting requirements," said E. Michael Thoben, Interlink's Chairman,
CEO and President. "The reasons for these issues are now well
understood by the Company and its new financial team. Those previously
responsible for the Company's financial reports and statements have
been replaced, and Interlink has substantially increased the depth and
expertise of its internal accounting and finance staff. As a result of
these actions, I expect that Interlink's future financial statements
will fully comply with all applicable standards and that Interlink
will comply in a timely matter with future reporting obligations.
"Even during these difficult times, the Company has continued to
execute its fundamental growth strategies," said E. Michael Thoben.
"We have strengthened management, improved our business measurement
systems and internal controls and further expanded our product reach
in our key markets. We expect to continue to see our most significant
growth in our higher margin business segments of E-Transaction,
Branded Products and Specialty Components."
About Interlink Electronics, Inc.
Interlink Electronics, Inc., (NASDAQ:LINKE), is a global leader in
the design, development and manufacture of human interface products
and technologies. Setting tomorrow's standards for electronic
signature and e-notarization products, advanced remote controls and
consumer electronics interface solutions, Interlink has established
itself as one of the world's leading innovators of intuitive interface
design. With more than 80 patents around the world protecting its
technologies and products, Interlink Electronics serves a world-class
customer-base from its corporate headquarters in Camarillo,
California, and offices in Japan, Taiwan, Hong Kong and China. For
more information, see http://www.interlinkelectronics.com.
All registrations and trademarks are properties of their
respective owners.
This release contains forward-looking statements that involve a
number of risks and uncertainties. The following are among the factors
that could cause actual results to differ materially from the
forward-looking statements: business conditions and growth in the
electronics industry and general economies, both domestic and
international; lower than expected customer orders; delays in receipt
of orders or cancellation of orders; competitive factors, including
increased competition, new product offerings by competitors and price
pressures; the availability of third party parts and supplies at
reasonable prices; changes in product mix; significant quarterly
performance fluctuations due to the receipt of a significant portion
of customer orders and product shipments in the last month of each
quarter; and product shipment interruptions due to manufacturing
problems. The forward-looking statements contained in this document
regarding industry and revenue trends, technology adoption, and future
business activities should be considered in light of these factors.