Interlink Announces Delay in Filing its Annual Report
March 30 2006 - 3:05PM
Business Wire
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.
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