INTERLINK ELECTRONICS INC (Form: 10-12G, Received: 02/17/2016 17:22:41)

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As filed with the Securities and Exchange Commission on February 17, 2016

File No.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934

INTERLINK ELECTRONICS, INC.

(Exact Name of Registrant as Specified in Its charter)

Nevada (State or Other Jurisdiction of Incorporation or Organization)		77-0056625 (I.R.S. Employer Identification No.)

31248 Oak Crest Drive Westlake Village, California (Address of Principal Executive Offices)		91361 (Zip Code)

(805) 484-8855
(Registrant’s Telephone Number, Including Area Code)

Securities to be registered pursuant to Section 12(b) of the Act: None

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

Common Stock, $0.001 par value

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

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o (Do not check if smaller reporting company)		Smaller reporting company x

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INTERLINK ELECTRONICS, INC.

FORM 10

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		Page

Special Note Regarding Forward-Looking Statements		3

Item 1.	Business	5
Item 1A.	Risk Factors	11
Item 2.	Financial Information	19
Item 3.	Properties	28
Item 4.	Security Ownership of Certain Beneficial Owners and Management	28
Item 5.	Directors and Executive Officers	29
Item 6.	Executive Compensation	31
Item 7.	Certain Relationships and Related Transactions and Director Independence	34
Item 8.	Legal Proceedings	35
Item 9.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters	36
Item 10.	Recent Sales of Unregistered Securities	37
Item 11.	Description of Registrants Securities to be Registered	37
Item 12.	Indemnification of Directors and Officers	39
Item 13.	Financial Statements and Supplementary Data	40
Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	41
Item 15.	Financial Statements and Exhibits	42

Signatures		43

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Registration Statement on Form 10 contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

· our future financial and operating results;

· our business strategy;

· our intentions, expectations and beliefs regarding anticipated growth, market penetration and trends in our business;

· our dependence on growth in our customers’ businesses;

· the effects of market conditions on our stock price and operating results;

· our ability to maintain our competitive technological advantages against competitors in our industry;

· our ability to timely and effectively adapt our existing technology and have our technology solutions gain market acceptance;

· our ability to introduce new products and bring them to market in a timely manner;

· our ability to maintain, protect and enhance our intellectual property;

· the effects of increased competition in our market and our ability to compete effectively;

· costs associated with defending intellectual property infringement and other claims;

· our expectations concerning our relationships with customers and other third parties;

· our expectations concerning relationships between our customers and their manufacturers;

· the attraction and retention of qualified employees and key personnel;

· future acquisitions of or investments in complementary companies or technologies; and

· our ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company and United States export regulations.

These forward-looking statements speak only as of the date of this Form 10 and are subject to uncertainties, assumptions and business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of the factors set forth below in Item 1A, “Risk Factors,” and in our other reports filed with the Securities and Exchange Commission, or SEC. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10 may not occur, and actual results could differ materially and adversely from those anticipated or implied in our forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10 to conform these statements to actual results or to changes in our expectations, except as required by law.

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You should read this Registration Statement on Form 10 and the documents that we have filed with the Securities and Exchange Commission as exhibits hereto with the understanding that our actual future results and circumstances may be materially different from what we expect.

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ITEM 1. BUSINESS

Our Company

Interlink Electronics, Inc. (“Interlink”, the “Company”, “we”, “us”, “our”) designs, develops, manufactures and sells a range of force-sensing technologies that incorporate our proprietary materials technology, firmware and software into a portfolio of standard products and custom solutions. These include sensor components, subassemblies, modules and products that support effective, efficient cursor control and novel 3 dimensional user inputs. Our disruptive, leading edge human machine interface, or HMI, technology platforms are deployed in a wide range of markets including consumer electronics, automotive, industrial, and medical. Our solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world’s top electronics manufacturers.

We invented force sensing resistor, or 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, along with our customers, incorporate our FSR and force sensing sensors and modules into end user products. Our sensors and modules are used in electronics devices and systems where user input must be converted into electronics and software data. Our force sensing technology solution platforms enabled industry first implementations in gaming, smartphone, rugged notebook, automotive cockpit and automotive entry applications. Insatiable consumer and end user demand for enhanced user experience is driving the need for innovative multi-modal HMI technologies and applications. Force sensing input provide a critical novel modality that drives a paradigm shift in HMI.

Market requirements for innovative solutions that enable smaller, thinner devices, lower power consumption, highly refined designs, better navigation and more intuitive usability in all environments, are also driving increased demand for our products. Consumers expect to use multi-modal HMI in the home, industrial and medical environments, automotive spaces (both inside and outside the vehicle), and in all technology interactions where they formerly used switches and knobs. Interlink delivers cutting edge solutions for all of 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. In contrast, force sensing solutions require a deliberate application of force to operate. We have had recent 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 us with new opportunities for growth. We continue to simultaneously expand our standard product portfolio and develop new technology platforms to grow existing markets and capture emerging markets.

We serve a global customer base from our corporate headquarters in Westlake Village, California, our research and development center in Singapore, our manufacturing facility in Shenzhen, China and our regional offices in Hong Kong and Tokyo. We sell our products in a wide range of markets, including consumer electronics, automotive, industrial, and medical, and to some of the world’s largest companies and most recognizable brands.

Our competitive strengths include:

· Innovative technology platforms that focus on disruptive technology and sensor fusion to enable scalable product architecture;

· Global expertise and resources for research and development, product development and manufacturing to deliver timely and cost effective solutions to our customers; and

· Proven track record by our senior management and world-class research and development teams to be the trusted advisor in HMI solutions.

We were incorporated in California on February 27, 1985. We reincorporated in Delaware on July 10, 1996 and again reincorporated in Nevada on July 20, 2012. On May 29, 2014, we effected a four-for-one forward

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split of our common stock, and on February 24, 2015, we effected a two-for-one forward split of our common stock. The information in this Registration Statement on Form 10 gives effect to each of these forward splits of our common stock.

Our principal executive office is located at 31248 Oak Crest Drive, Westlake Village, California 91361 and our telephone number is (805) 484-8855. Our website address is www.interlinkelectronics.com. None of the information on our website is part of this Registration Statement.

Our Industry

HMI technologies have been available since the early 1970’s, but were used almost exclusively in industrial products during the first 20 years of their existence. The introduction of touchpad mouse devices for laptop computers in the early 1990’s represented the first significant transition of HMI technologies into the consumer electronics market. Personal devices utilizing touch sensitive technology became ubiquitous in our daily human-machine interactions with the introduction in 2007 of smart phone technology incorporating capacitive screens. As the smart phone became an integral part of the consumers’ daily life throughout the world, it influenced consumers’ expectations of how we should interact with all types of devices. Whether those devices are personal electronics, industrial and medical equipment, or our automobiles, purchasers of equipment expect sleek, highly-functioning design including touch-sensing technology. Consumers no longer want to push buttons or flip switches; rather, they expect smooth touch pads and gesture-driven input. Engineers are responding to this demand by incorporating touch sensitive technology into a wide range of products, and any device that can utilize force and position sensing inputs to control or enhance its functionality is a candidate for use of the technology.

The products and solutions that we design, develop and manufacture for HMI applications are primarily printed electronic products. Printed electronics is a set of printing methods used to create electrical devices on various substrates. For over 30 years, we have honed and developed the processes necessary to manufacture high quality printed electronic products for HMI applications. According to industry analyst group IDTechEx, the market for printed and potentially printed products is expected to grow from more than $29.8 billion in 2013 to nearly $74 billion in 2025.

Our Strategy

Our primary objective is to be the global leader in providing force-sensing HMI solutions for the automotive, consumer electronics, medical and industrial automation markets. We also intend to utilize our role as a disruptive technology provider to bring our HMI solutions to new markets. To achieve our strategy, we intend to:

· Expand our presence in the markets we occupy . We will continue to exploit new opportunities in the markets we occupy by leveraging our demonstrable success in the solutions we’re providing today.

· Expand into new and emerging markets . We are bringing our highly-successful product lines and technologies to markets previously unaware of the opportunities provided by force-sensing solutions.

· Expand our presence with our current customers . We work with some of the world’s largest companies and most recognizable brands and are providing second and third-generation turn-key solutions to meet their technology needs. 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.

· Pursue a multi-technology roadmap . We utilize multiple technologies in our HMI solutions, and we will continue to expand our offerings to include resistive, piezo, capacitive and other emerging touch technologies.

Our product development teams are skilled in concept definition, rapid prototyping, hardware and firmware development and integration support. Interlink benefits from its own world-class manufacturing facility in Shenzhen, China, allowing us to react quickly to customer needs, while ensuring the highest quality standards. We also maintain a sales force that can address new and existing customer opportunities worldwide.

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Our Technology Platforms and Products

Interlink was founded on the invention and commercialization of the Force Sensing Resistor — 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 pursue and embrace leading edge force sensing technology platforms. Our chief technology officer and global research and development center, both located in Singapore, along with our US-based research and development team, are focused on strategic technology roadmaps, research and development of scalable technology platform architectures and synergistic technology partnerships. In an ever changing and competitive landscape, Interlink is 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 all smart phones and similar devices used globally by millions of consumers. The most significant drawback to the capacitive technology is its inability to measure force, although there has been some progress recently in enhancing the technology with pseudo force sensing. Capacitive sensors have become a high-volume, low margin commodity product.

Our patented FSR technology consists of a bottom layer of conductor traces, a proprietary resistive ink top layer and a spacer that separates the two layers. An additional top layer that contains graphics and protects the sensor can also be added. FSR sensors can be as thin as eight thousandths of an inch, making them particularly well suited for use where space is a critical issue, as in portable electronics. Our force sensing technology enables the sensor to be used for continuously variable control functions. For example, in a pointing device, increased pressure can be used to produce faster cursor movement. Unlike capacitive devices, an FSR sensor’s performance is not impeded by the presence of moisture, dirt or dust, making the sensor suitable for use outdoors and in moist and other “hostile” environments. Our FSR sensors have no moving parts, can be packaged in a sealed environment, and consume substantially lower power and are less susceptible to false readings or unintended touches than capacitive sensors. We have developed sophisticated firmware that allows our FSR technology to become a complete solution delivering effective HMI functionality to our customers.

Custom Solutions

Interlink offers a comprehensive portfolio of standard solutions, from simple force sensors to multi-finger capable rugged trackpads. The largest part of our business, however, is the development and manufacture of custom solutions for our major customers. We offer full turnkey capability spanning initial concept to large volume manufacturing. Custom solutions can be a single or multi-technology platform to meet customer requirements, and include both input and output technologies. We also offer full firmware development and integration support.

Standard Solutions

Our portfolio of standard solutions include:

· Our Force Sensing Resistor® technology is the most versatile force sensing technology on the market today. These innovative sensors provide an inverse change in resistance in response to an increase or decrease in applied force. Our standard range of sensors provides engineers and designers with a durable, reliable, easy to measure, thin form factor and low-cost solution for HMI touch solutions and analog data capture for machines. The sensors are available in a range of sizes, shapes and lengths and with several connection options.

· Force sensing linear potentiometers, or FSLP, are sensors which can be used for menu navigation and control. Our use of force allows for high-rate scrolling and a more intuitive user experience. The FSLP is an easy to integrate, high resolution, ultra-low power based solution that brings intuitive user controls to reduced form factor hand-held consumer electronic devices. These sensors are available in multiple lengths. We also offer a ring sensor for full 360-degree position sensing. These sensors are designed to be integrated into a device’s host processor without the need for a dedicated microprocessor.

· Our integrated mouse modules and pointing solutions can add touchpad or 360-degree pointing control to virtually any electronic device. Ranging from simple mouse button integration to National Electrical Manufacturer Association, or NEMA, rated industrial pointing devices, these solutions are ideal for

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applications away from the desktop. The modules use Force Sensing Resistor technology and measurement firmware in a four-zone sensor or 4-wire resistive touchpad configuration along with a micro-controller to provide pressure sensitive cursor direction and speed control in a durable and easy to integrate form factor.

Intellectual Property

We believe that intellectual property protection is crucial to our business. We rely on a combination of patents, copyrights, trade secrets, trademarks, nondisclosure agreements with employees and third parties, licensing and other contractual agreements with third parties to protect our intellectual property. 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.

Our failure to obtain or maintain adequate protection for our intellectual property rights for any reason could hurt our competitive position. There is no guarantee that patents will be issued from the patent applications that we have filed or may file. Our issued patents may be challenged, invalidated or circumvented, and claims of our patents may not be of sufficient scope or strength, or issued in the proper geographic regions, to provide meaningful protection or any commercial advantage. See “Risk Factors” under Item 1A of this Registration Statement for further discussion of the risks associated with patents and intellectual property.

Our FSR sensors are manufactured using proprietary screen-printing techniques. All proprietary aspects of the manufacturing process are currently conducted in-house at our US and China manufacturing facilities to maintain quality and protect our force sensing technology from infringement. 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 expertise. We believe this expertise is difficult to replicate over the short term and, to our knowledge, no unrelated party has done so. 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 October 30, 2015, we held 15 United States patents, and had two patents pending in the United States and three foreign pending patent applications. We group our patents into three general categories: sensors, which includes four patents expiring between 2022 and 2027; sensing systems, which includes two patents expiring in 2026 and 2031; and human interface devices, which includes nine patents expiring between 2017 and 2026. Our intellectual property strategy involves filing additional patent applications in our strategic focus markets on a regular basis. We do not expect that the upcoming expiration of a portion of our patents will have a material adverse impact on our business.

Competition

The markets for our products 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. Our ability to compete is dependent on the needs of our customers, how well our products address those needs, our corporate relationships, and a variety of other factors.

We offer a disruptive technology that is replacing outdated and undesirable approaches including switch technology. We 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 resistor technology. However, our solutions are focused on providing functionality in situations where capacitive is unreliable or entirely unavailable.

The markets for our products are characterized by significant price competition and we anticipate that our products will continue to face substantial pricing pressure.

Sales and Marketing

We sell our HMI solutions and force sensing devices through our direct sales employees as well as outside sales representatives and distributors. We work directly with Fortune 500 customers, technology design houses and original equipment manufacturers, or OEMs. Our sales personnel have extensive engineering backgrounds and receive substantial support from our internal engineering resources. Sales frequently result from interactions

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between senior management, design engineers, procurement departments, and our sales personnel. We interact with our customer’s throughout the product development and order process. We maintain sales offices at our Corporate Headquarters in the United States, and in Hong Kong and Japan.

Due to the technical nature of our products, the length of our sales cycle can vary from a few months to several years and requires continued participation from our sales, engineering and management teams. Our sales cycle for our custom solutions generally includes the following two phases.

Design Opportunity to Design Win

Our sales and engineering team engages with the customer to establish the nature of the design and explore various technical applications that may fit the customer’s need.

· A customer might select one of our standard solutions or a custom design might be required to fulfill the customer’s product needs. Custom solutions might require engineering design fees and tooling costs.

· Product samples are provided to the customer and our team works with the customer to ensure product performance and address customer needs and specifications.

· A firm commitment from a customer’s engineering and/or purchasing organization or pre-production orders indicate a design win. In most cases, we are a sole-source supplier to our customer and cannot be easily and/or quickly replaced once the product goes into production.

Mass Production

Once the customer has chosen our solution, they may move their product into the production phase. It may take several months or more to go from design win to production. Product lifespan varies dramatically depending on the market place 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.

Our Customers

As of December 31, 2015, we had almost 200 active customers, including many of the world’s leading electronics companies. Our customers are diverse and include Fortune 500 companies as well as start-ups, design houses, original design manufacturers, OEMs and universities. 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 Internet-Of-Things market, and companies of all different sizes in other markets.

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, a trend we expect to continue. On a bill-to basis, international sales constituted 42% and 40% of our revenues for the nine months ended September 30, 2015 and fiscal year 2014, respectively.

Future sales of our products will be based on, among other elements, 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.

For the year ended December 31, 2014, we had three customers that represented 19%, 17% and 10% of revenues, respectively. For the nine months ended September 30, 2015, we had three customers that represented 21%, 17% and 17% of revenues, respectively.

Manufacturing Operations

We have our own, world-class manufacturing facility in Shenzhen, China that is ISO 9001 compliant. We also maintain a small manufacturing facility in Simi Valley, California. We purchase our materials from outside suppliers. We carefully select suppliers based on their ability to provide quality parts and components that meet

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technical specifications. We actively monitor these suppliers, but we are subject to substantial risks associated with the performance of our suppliers. We source certain of our components from a single supplier, which increases the risk of shortages and shipment delays and decreases our ability to negotiate with that supplier.

Engineering, Research and Development

Rapid advancements in process technologies, and increasing levels of functional integration characterize the market for our products. We believe that our future success will depend largely on our ability to continue improving our products and our process technologies, and to develop new technologies.

Our chief technology officer and global research and development center are located in Singapore, where we focus on product innovation. We intend to grow this facility substantially over the next five years, including by expanding our research and development team by approximately 20% per year, expanding the size of the facility, and investing in additional tools and equipment. We also operate research and development centers in the United States and China, primarily focused on customer support and product integration.

Our Employees

As of December 31, 2015, we had 112 employees worldwide. Our employees, listed in population size order from largest to smallest, are in the following departments: operations, research and development, sales, and administration. 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, and we have never experienced a work stoppage. We believe our employee relations are good.

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ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10, including our consolidated financial statements and related notes, before investing in our common stock. If any of the following risks materialize, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business and 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 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. Doing so will require, among other things, that we accomplish the following:

· accurately predict the evolving needs of our customers and develop, in a timely manner, the technology required to support those needs;

· provide products that are not only technologically sophisticated and well supported but are also available at a price within market tolerances and competitive with comparable products;

· establish and effectively defend our ownership on the intellectual property supporting our products; and

· enter into relationships with other companies that have developed complementary technology on which our products also depend.

We cannot assure you that we will be able to achieve any of these objectives.

If we fail to manage change successfully, our operations could be adversely impacted and our business could be impaired.

The ability to operate our business in rapidly evolving markets requires an effective planning and management process. We expect that responding to changes in our business will place a significant strain on our personnel, management systems, infrastructure and other resources. Our ability to manage change effectively will require us to attract, train, motivate and manage new employees, to reallocate human and other resources to support new undertakings and to restructure our operations to manage a restructured business effectively. If we are unable to respond effectively to change, our operations could be adversely affected and our business could be impaired.

We rely on third parties for the materials that we use to manufacture our products and a shortage of supply 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 cannot assure you that our suppliers will be able to maintain an adequate supply of these raw materials to enable us to fulfill all of our customers’ orders on a timely basis. A failure to obtain an adequate supply of the materials for our products could increase our costs of goods sold, cause us to fail to meet delivery commitments and cause our customers to purchase from our competitors, which could adversely affect our operating results and customer relationships. 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.

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Disruptions in our manufacturing facilities or arrangements could cause our revenues and operating results to decline.

We currently manufacture the majority of our products in Shenzhen, China. This facility is vulnerable to damage from earthquakes, floods, fires, power loss and similar events. It could also be subject to break-ins, sabotage and intentional acts of vandalism. Our insurance may not cover such events and, if the event is covered, our insurance may not be sufficient to compensate us for any losses that may occur. Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problem at our manufacturing facility could result in delayed shipment of products, missed delivery deadlines and harm to our reputation, which may cause our revenues and operating results to decline. Performance, reliability or quality problems with our products may cause our customers to reduce or cancel orders which would harm our operating results.

We regularly introduce new products with new technologies or manufacturing processes. Our products have in the past contained, and may in the future contain, errors or defects that may be detected at any point in the life of the product. Detection of such errors could result in delays in shipping and sales during the period required to correct such errors. Defects may also result in product returns, loss of sales and cancelled orders, delays in market acceptance, injury to our reputation, injury to customer relationships and increased warranty costs, which could have an adverse effect on our business, operating results and financial condition.

International sales and manufacturing risks could adversely affect our operating results.

Our revenue from international sales accounted for approximately 42% and 40% of revenue for the nine months ended September 30, 2015 and for the year ended December 31, 2014, respectively. We believe that international sales will represent a substantial portion of our sales for the foreseeable future. The majority of our manufacturing is currently performed in China. 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 manufacturing facility;

· collecting foreign receivables;

· currency exchange fluctuations;

· reduced protection of intellectual property rights

· political and economic instability, and terrorism; and

· transportation risks.

Any of the above factors could adversely affect our operating results.

Our markets are intensely competitive and many of our potential competitors have resources that we lack.

Our markets are competitive and we expect competition in our newer markets to increase. 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 products that they currently buy from us. Our competitors and potential competitors may have established business relationships that afford them a competitive advantage or may create technologies that are superior to ours or that set a new industry standard that will define the successful product for that market. If any of our competitors establish a close working relationship with our customers, they may obtain advance knowledge of our customers’ technology choices or may be afforded an opportunity to work in partnership to develop compatible technologies and may therefore achieve a competitive advantage. We may be unable to compete successfully against our current and future competitors.

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We cannot guarantee that our HMI solutions for new markets will be successful or that we will be able to continue to generate significant revenue from these markets.

Our HMI solutions may not be successful in new markets despite the fact that these product solutions are capable of enabling people to interact more easily and intuitively with a wide variety of electronic devices. Various target markets for our interface solutions may develop slower than anticipated or could utilize competing technologies. The markets for certain of these products depend in part upon the continued development and deployment of wireless and other technologies, which may or may not address the needs of the users of these products.

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; and our ability to provide our customers with HMI solutions that provide advantages in terms of size, power consumption, reliability, durability, performance, and value-added features compared with alternative solutions.

The failure of any of these target markets to develop as we expect, or our failure to serve these markets to a significant extent, will impede our sales growth and could result in substantially reduced earnings. We cannot predict the size or growth rate of these markets or the market share we will achieve or maintain in these markets in the future.

If we fail to maintain and build relationships with our customers, or our customers’ products which utilize our human-machine interface solutions do not gain widespread market acceptance, our revenue may stagnate or decline.

We do not sell products to end users and we do not control or influence the manufacture, promotion, distribution, or pricing of the products that incorporate our HMI solutions. Instead, we sell component products that our customers incorporate into their products, and we depend on our customers to successfully manufacture and distribute products incorporating our component products and to generate consumer demand through marketing and promotional activities. As a result of this, our success depends almost entirely upon the widespread market acceptance of our customers’ products that incorporate our HMI solutions. Even if our technologies successfully meet our customers’ price and performance goals, our sales would decline or fail to develop if our customers do not achieve commercial success in selling their products that incorporate our HMI solutions.

Our customers generally do not provide us with firm, long-term volume purchase commitments, opting instead, to issue purchase orders that they can cancel, reduce, or delay at any time. In order to meet the expectations of our customers, we must provide innovative HMI solutions on a timely and cost-effective basis. This requires us to match our design and production capacity with customer demand, maintain satisfactory delivery schedules, and meet performance goals. If we are unable to achieve these goals for any reason, our sales may decline or fail to develop, which would result in decreasing revenue.

We cannot provide any assurance that current environmental laws and product quality specification standards, or any laws or standards enacted in the future, will not have a material adverse effect on its business.

Our operations are subject to environmental and various other regulations in each of the jurisdictions in which we conduct business. Regulations have been enacted in certain jurisdictions which impose restrictions on waste disposal of electronic products and electronics recycling obligations. 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.

If we are not able to protect our intellectual property or if we infringe on the intellectual property of others, our business and operating results could be adversely affected.

We consider our intellectual property to be a key element of our ability to compete in our chosen markets. We rely on a combination of patents, trade secrets and proprietary software to establish and protect our intellectual property rights. We cannot assure you that patents will be issued from any of our pending applications or that any

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claims allowed from existing or pending patents will be sufficiently broad to protect our technology. We also cannot assure you that any patents issued to us will not be challenged, invalidated or circumvented, or that the rights granted will provide proprietary protection. Litigation may be necessary to enforce our patents, trade secrets and other intellectual property rights, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement. Such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on our business, regardless of the final outcome of the litigation.

We are not currently engaged in any patent infringement suits. Despite our efforts to maintain and safeguard our proprietary rights, we cannot assure you that we will be successful in doing so or that our competitors will not independently develop or patent technologies that are substantially equivalent or superior to our technologies. If any of the holders of these patents assert claims that we are infringing them, we could be forced to incur substantial litigation expenses, and if we were found to be infringing on someone else’s patent, we could be required to pay substantial damages, pay royalties in the future or be enjoined from infringing in the future.

We face risks associated with security breaches or cyber attacks.

We face risks associated with security breaches or cyber attacks of our computer systems or those of our third-party representatives, vendors, and service providers. Although we have implemented security procedures and controls to address these threats, our systems may still be vulnerable to data theft, computer viruses, programming errors, attacks by third parties, or similar disruptive problems. If our systems, or systems owned by third parties affiliated with our company, were breached or attacked, the proprietary and confidential information of our company and our customers could be disclosed and we may be required to incur substantial costs and liabilities, including the following: expenses to rectify the consequences of the security breach or cyber attack; liability for stolen assets or information; costs of repairing damage to our systems; lost revenue and income resulting from any system downtime caused by such breach or attack; loss of competitive advantage if our proprietary information is obtained by competitors as a result of such breach or attack; increased costs of cyber security protection; costs of incentives we may be required to offer to our customers or business partners to retain their business; and damage to our reputation. In addition, any compromise of security from a security breach or cyber attack could deter customers or business partners from entering into transactions that involve providing confidential information to us. 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.

Our ability to operate effectively could be impaired if we were to lose the services of key personnel, or if we are unable to recruit qualified managers and key personnel in the future.

Our success is substantially dependent on the continued availability of our key management and technical personnel. Several of our key management personnel have been with us throughout most of our history and have substantial experience with our business and technology. If one or more of our key management personnel leaves Interlink and we are unable to find a replacement with the combination of skills and attributes necessary to execute our business plan, it may have an adverse impact on our business. Our success will also depend, in part, on our ability to attract and retain additional qualified professional, technical, production, managerial and marketing personnel, both domestically and internationally.

Risks Relating to the Securities Markets and Ownership of Our Common Stock

We intend to apply for listing of our common stock on the NASDAQ Capital Market. If our listing is approved, and we subsequently fail to comply with the continuing listing standards of The NASDAQ Capital Market, our securities could be delisted.

We expect that our common stock will be eligible to be quoted on the NASDAQ Capital Market. For our common stock to be listed on the NASDAQ Capital Market, we must meet the current NASDAQ Capital Market listing requirements. If we were unable to meet these requirements in the future, our common stock could be delisted from the NASDAQ Capital Market. If our common stock were to be delisted from the NASDAQ Capital Market, our common stock could continue to trade “over-the-counter” following such delisting. Any such delisting of our common stock could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and less coverage of us by securities analysts, if any. Also, if in the

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future we were to determine that we need to seek additional equity capital, it could have an adverse effect on our ability to raise capital in the public or private equity markets.

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, President and CEO, beneficially owns approximately 71% of the outstanding shares of our common stock as of December 31, 2015. As a result, Mr. Bronson has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. In addition, 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. Bronson owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, Mr. Bronson may have interests that differ from yours and he may vote in a manner that is adverse to your interests. This concentration of ownership may have the effect of deterring, delaying or preventing a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

The price of our common stock may be volatile and the value of your investment could decline.

Technology stocks have historically experienced high levels of volatility. The trading price of our common stock may fluctuate substantially, depending on many factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include 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;

· whether our results of operations 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;

· major catastrophic events;

· lockup releases, sales of large blocks of our common stock;

· departures of key employees; or

· an adverse impact on the company from any of the other risks cited herein.

In addition, if the market for technology stocks or the stock market, in general, experience a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. 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.

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Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us.

We may seek additional capital through a variety of means, including through private and public equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds from third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. 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 grant to others the rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified board members.

As a public company, we will be subject to the reporting requirements of the Exchange Act, and will be required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the securities exchange on which our common stock is traded and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and results of operations. We may need to hire additional employees to comply with these requirements, which will increase our costs and expenses.

In addition, we also expect that being a public company and these new rules and regulations will 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. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

We will be required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required to furnish a report by our management on our internal control over financial reporting the year following our first annual report required to be filed with the SEC. When required, such report will contain, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on our stock price.

We are an “emerging growth company,” as defined by the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In this Form 10, we have elected to take advantage of

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certain of the reduced disclosure obligations regarding financial statements and executive compensation. In addition, Section 107(b) of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to “opt in” to such extended transition period election under Section 107(b). Therefore we are electing to delay adoption of new or revised accounting standards, and as a result, we may choose to not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result of such election, our financial statements may not be comparable to the financial statements of other public companies.

If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research reports about our business, our share price and trading volume could decline.

The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us should downgrade our shares or change their opinion of our business prospects, our share price would likely decline. 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.

We do not intend to pay dividends for the foreseeable future and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.

Our charter documents and Nevada law could discourage takeover attempts and lead to management entrenchment.

Our articles of incorporation and bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to take other corporate actions, including effecting changes in our management. These provisions include:

· the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

· the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

· the requirement that a special meeting of stockholders may be called only by our board of directors, by majority vote, or by any shareholder or group of shareholders who own and have the right to vote more than 25% of our issued and outstanding securities, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

· the ability of our board of directors, by majority vote, to amend our bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our amended and restated bylaws to facilitate an unsolicited takeover attempt.

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 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.

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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 are obligated by law to comply with all U.S. laws and regulations governing the export and import of goods, technology, and services, including the International Traffic in Arms Regulations, or ITAR, the Export Administration Regulations, or EAR, regulations administered by the Department of Treasury’s Office of Foreign Assets Control, and regulations administered by the Bureau of Alcohol Tobacco Firearms and Explosives governing the importation of items on the U.S. Munitions Import List. Pursuant to these regulations, we are responsible for determining the proper licensing jurisdiction and export classification of our products, and obtaining all necessary licenses or other approvals, if required, for exports and imports of technical data, and software, or for the provision of technical assistance or other defense services to or on behalf of foreign persons. We are also required to obtain export licenses, if required, before employing or otherwise utilizing foreign persons in the performance of our contracts if the foreign person will have access to export-controlled technical data or software. The violation of any of the applicable laws and regulations could subject us to administrative, civil, and criminal penalties.

These regulations could restrict our ability to sell products and develop new products. For example, as a result of ITAR requirements, we are unable to supply certain products to China satellite companies or end users, which comprise a significant part of the overall satellite market. Changes in our products or changes in export and import regulations may create delays in the introduction of our products in international markets, prevent our customers with international operations from deploying products incorporating our products throughout their global systems or, in some cases, prevent the export or import of products that include our products to certain countries altogether. Any change in export or import regulations or related legislation, shift in approach to the enforcement or scope of existing regulations, or change in the countries, persons, or technologies targeted by such regulations, could result in decreased use of our products by, or our ability to export or license our products to, existing or potential customers with international operations and decreased revenue. 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, or 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. Department of Justice, the Securities and Exchange Commission, or SEC, or other U.S. or foreign governmental authorities could seek civil and/or criminal sanctions, including monetary fines and penalties against us or our employees, as well as additional changes to our business practices and compliance programs, which could have a material adverse effect on our business, results of operations, or financial condition.

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ITEM 2. FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes to the consolidated financial statements included later in this Registration Statement on Form 10. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Registration Statement on Form 10, particularly in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

Overview

We sell our products globally to a diverse array of customers that include the Fortune 500 as well as start-ups, design houses, original design manufacturers, original equipment manufacturers and universities. Our technology has been deployed in the consumer electronics, industrial automation, automotive and medical markets. Our global presence in the United States, China, Singapore and Japan, allows us to provide local sales and engineering support services to our existing and future customers. Our products are manufactured by our wholly-owned subsidiary in a state-of-the-art facility in Shenzhen, China. We also maintain manufacturing operations in Simi Valley, California. We control 100% of the manufacturing and shipping process which enables us to respond quickly to customer product demand and design requirements.

Over the next five years, we anticipate investing significantly in the expansion of our technology platforms through our own internal development to ensure we provide the market with leading-edge HMI solutions that are seamless to deploy and preform flawlessly. We anticipate dramatically growing our R&D organization in Singapore to ensure we have the right team to launch our current designs and develop new product offerings that will meet the market’s growing demand for touch technology. Our Singapore location will allow us to take advantage of the abundance of engineering talent for future new product development. We also plan to explore potential strategic relationships with Singapore-based companies and technology institutes that will support our growth initiatives.

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Results of Operations

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

	Year Ended December 31,
	2014					2013
	(in thousands, except for percentages)
Revenues, net	$	10,278		100	%	$	7,551		100	%
Cost or revenues	5,200			51		4,360			58
Gross profit	5,078			49		3,191			42

Operating expenses:
Product development and research	811			8		660			9
Selling, general and administrative	2,719			26		2,595			34
Total operating expenses	3,530			34		3,255			43
Operating income (loss)	1,548			15		(64		)	(1	)

Other income (expense):
Interest income	2			—		4			—
Other income (expense), net	(16		)	—		39			1
Other income (expense), net	(14		)	—		43			1
Income (loss) from continuing operations, before provision for income taxes	1,534			15		(21		)	—
Provision for income taxes	13			—		1			—
Income (loss) from continuing operations, net of tax	1,521			15		(22		)	—
Income from discontinued operations, net of tax	34			—		34			—
Net income	$	1,555		15	%	$	12		—	%

	For the Nine Months Ended September 30,
	2015					2014
	(in thousands, except for percentages)
Revenues, net	$	7,744		100	%	$	7,321	100	%
Cost or revenues	3,638			47		3,830		52
Gross profit	4,106			53		3,491		48

Operating expenses:
Engineering, research and development	637			8		650		9
Selling, general and administrative	2,291			30		2,094		29
Total operating expenses	2,928			38		2,744		38
Income from operations	1,178			15		747		10

Other income:
Interest income	1			—		2		—
Other income	31			1		22		1
Other income	32			1		24		1
Income before income tax expense (benefit)	1,210			16		771		11
Income tax expense (benefit)	(3		)	—		1		—
Net income	$	1,213		16	%	$	770	11	%

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Comparison of the Years Ended December 31, 2014 and 2013

	December 31,
	2014				2013
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change			% Change
	(in thousands, except percentages)
Automotive	$	2,431	24	%	$	1,752	23	%	$	679		39	%
Industrial	1,936		19	%	994		13	%	942			95	%
Medical	1,024		10	%	1,412		19	%	(388		)	(27	)%
Consumer	754		7	%	366		5	%	388			106	%
Standard	4,133		40	%	3,027		40	%	1,106			37	%
Revenues, net	10,278		100	%	7,551		100	%	$	2,727		36	%

We sell our custom products into the following markets: automotive, industrial, medical and consumer. We sell our standard products in many different markets which are often unknown to us at the time of sale.

The increase in revenues, net is driven by the growth in both our custom and standard products. The increase in our custom products relates primarily to growth in orders from current customers. Our growth in standard products is due to both increased orders from current customers as well as first time orders from new customers. Revenues for our products sold into medical markets can fluctuate due to both permanent and temporary changes in the market; however, design wins in the medical market tend to have a long life-cycle, often exceeding twenty years.

	December 31,
	2014				2013
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change		% Change
	(in thousands, except percentages)
Cost of revenues	$	5,200	51	%	$	4,360	58	%	$	840	19	%

Our cost of revenues is affected by various factors including product mix, volume, material costs, manufacturing efficiencies, facilities costs, compensation costs and any provisions for excess and obsolete inventories. The increase in cost of revenues is primarily due to increased material costs to support higher sales in the period. Labor costs also increased to support higher demand. In addition, we temporarily increased our Shenzhen manufacturing space during 2014. Cost of revenues decreased as a percentage of revenues primarily due to efficiencies gained, including improved utilization of fixed costs, as revenues increase.

	December 31,
	2014				2013
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change		% Change
	(in thousands, except percentages)
Product development and research	$	811	8	%	$	660	9	%	$	151	23	%

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Product development and research, or R&D, expenses consist primarily of compensation expenses for employees engaged in research, design and development activities. Our R&D team focuses both on internal design development, as well as design development aimed at addressing customer design challenges, in order to develop our HMI solutions. The increase in R&D costs resulted from additional compensation and materials costs relative to the growth of our Singapore technology team.

	December 31,
	2014				2013
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change		% Change
	(in thousands, except percentages)
Selling, general and administrative	$	2,719	26	%	$	2,595	34	%	$	124	5	%

Selling, general and administrative, or SG&A, expenses consist primarily of compensation expenses, legal and other professional fees, facilities expenses and communication expenses. The increase in SG&A expense is driven by increased travel costs to our international locations as well as an increased, non-refundable VAT assessment at our China manufacturing facility. SG&A decreased as a percentage of sales due to improved utilization of fixed costs as revenues increase.

Comparison of the Nine Months Ended September 30, 2015 and 2014

	For the Nine Months Ended September 30,
	2015				2014
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change			% Change
	(in thousands, except percentages)
Automotive	$	2,142	28	%	$	1,752	24	%	$	390		22	%
Industrial	745		10	%	1,428		20	%	(683		)	(48	)%
Medical	1,335		17	%	708		10	%	627			89	%
Consumer	1,329		17	%	600		8	%	729			122	%
Standard	2,193		28	%	2,833		38	%	(640		)	(23	)%
Revenues, net	7,744		100	%	7,321		100	%	$	423		6	%

The increase in revenues, net was driven by increased sales of our custom products in automotive, medical and consumer markets, partially offset by decreased sales of our custom products into the industrial markets and a decrease in sales of our standard products. The growth in our custom product sales was driven by increased sales to our current customers. The decrease in custom industrial market sales was driven by the absorption of product purchased in the previous year by two of our larger customers. Standard product sales decreased primarily due to a customer’s decision to put a product through “end-of-life”, resulting in decreased sales of the product in 2015.

	For the Nine Months Ended September 30,
	2015				2014
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change			% Change
	(in thousands, except percentages)
Cost of revenues	$	3,638	47	%	$	3,830	52	%	$	(192	)	(5	)%

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The decrease in cost of revenues was primarily due to savings obtained upon the relocation of our corporate headquarters along with decreased compensation costs as we aligned our quality processes to support our Shenzhen manufacturing facility.

	For the Nine Months Ended September 30,
	2015				2014
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change			% Change
	(in thousands, except percentages)
Engineering, research and development	$	637	8	%	$	650	9	%	$	(13	)	(2	)%

The decrease in engineering, research and development is due to the temporary reallocation of staff to manufacturing processes in order to meet the rapid growth in sales. In future periods, we anticipate engineering, research and development costs will meet and ultimately surpass prior years as we normalize manufacturing staffing to meet our current production levels and then increase our engineering, research and development staffing to enhance our technology and product offerings. We intend to grow our global research and development center in Singapore substantially over the next five years, including by expanding our research and development team by approximately 20% per year, expanding the size of the facility, and investing in additional tools and equipment.

	For the Nine Months Ended September 30,
	2015				2014
	Amount		% of Net Revenues		Amount		% of Net Revenues		Change		% Change
	(in thousands, except percentages)
Selling, general and administrative	$	2,291	30	%	$	2,094	29	%	$	197	9	%

The increase in selling, general and administrative is driven by increased compensation costs as we expand our sales and marketing team to support our customer and revenue growth initiatives, as well as increased insurance costs. The increase was partially offset by decreased facilities costs due to the relocation of our headquarters and decreased attendance at tradeshows as we refocus our marketing strategy.

Liquidity and Capital Resources

As of September 30, 2015, we had cash and cash equivalents of $3.6 million of which $259,000 was held by our foreign subsidiaries, working capital of $5.9 million and no indebtedness. Cash and cash equivalents consist of cash and money market funds. We did not have any short-term or long-term investments as of September 30, 2015.

We believe that our existing cash and cash equivalents balance will be sufficient to meet our business requirements for at least the next twelve months. If we require additional cash, we may attempt to raise additional capital through equity, equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we will be subject to fixed payment obligations and could also be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. If we are unable to raise additional needed funds, we may also take measures to reduce expenses to offset any shortfall.

There can be no assurances that we will be able to raise additional needed capital on acceptable terms or at all, and the failure to do so could adversely affect our ability to achieve our business objectives. In addition, if our future operating performance is below our expectations, our liquidity and ability to operate our business could be adversely affected.

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Cash Flow Analysis

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

	Year Ended December 31,						Nine Months Ended September 30,
	2014			2013			2015			2014
	(in thousands)						(in thousands)
Net Cash Provided By (Used In) Operating Activities	$	1,007		$	(533	)	$	1,316		$	333
Net Cash Used In Investing Activities	$	(130	)	$	(83	)	$	(83	)	$	(118	)
Net Cash Provided By Financing Activities	$	16		$	—		$	—		$	16

Net Cash Provided By (Used In) Operating Activities

For the year ended December 31, 2014, the $1.0 million in net cash provided by operating activities was primarily attributable to net income of $1.6 million. The net change to operating assets of $551,000 was primarily due to the increase of $291,000 in accounts receivable and $343,000 in inventory partially offset by a decrease of $156,000 in accounts payable, accrued expenses and other liabilities and $60,000 in deferred revenue.

For the year ended December 31, 2013, the $533,000 in net cash used in operating activities was primarily attributable to the net loss of $22,000 and the net change in operating assets of $696,000 partially offset by non-cash charges of $15,000.

Accounts receivable increased from $1.5 million at December 31, 2013 to $1.8 million at December 31, 2014 due to the timing of shipments at year end. Inventories increased from $670,000 at December 31, 2013 to $1.1 million at December 31, 2014 as we increased materials on hand to meet increased sales demand. Inventory balances will fluctuate depending on the timing of materials purchases and product shipment. Accounts payable and accrued expenses increased from $617,000 at December 31, 2013 to $773,000 at December 31, 2014 primarily due to the timing of payment for materials purchases. Deferred revenue decreased from $205,000 at December 31, 2013 to $145,000 at December 31, 2014 primarily due to the recognition of non-recurring engineering fees as deliverables were provided to the customer.

For the nine months ended September 30, 2015, the $1.3 million in net cash provided by operating activities was primarily attributable to net income of $1.2 million and adjustments for non-cash charges of $92,000. Operating assets and liabilities had no significant net change due to the decrease of $122,000 in inventory and $129,000 in prepaid expenses and other assets being offset by a decrease of $183,000 in accounts payable, accrued expenses and other liabilities.

For the nine months ended September 30, 2014, the $335,000 in net cash provided by operating activities was primarily attributable to net income of $770,000 and the net change in operating assets of $450,000.

Inventories decreased $122,000 from $1.1 million at September 30, 2014 to $0.9 million at September 30, 2015 as we utilized stock on hand to meet increased sales demand. Inventory balances will fluctuate depending on the timing of materials purchases and product shipment. Prepaid expenses and other assets decreased $129,000 primarily due to the amortization of insurance premiums paid in advance. Accounts payable and accrued expenses decreased primarily due to the timing of payment for materials purchases.

Net Cash Used In Investing Activities

Net cash used in investing activities of $130,000 and $83,000 for the years ended December 31, 2014 and 2013, respectively, related to the purchase of capital equipment in the US and China and patent costs.

Net cash used in investing activities of $83,000 and $118,000 for the nine months ended September 30, 2015 and 2014, respectively, related to the purchase of capital equipment in the US and China and patent costs.

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Net Cash Provided By Financing Activities

Net cash provided by financing activities of $16,000 for the year ended December 31, 2014 was due to the exercise of stock options by an employee. There were no financing activities for the year ended December 31, 2013.

There were no financing activities for the nine months ended September 30, 2015. Net cash provided by financing activities of $16,000 for the nine months ended September 30, 2014 was due to the exercise of stock options by an employee.

Off-Balance Sheet Transactions

We do not have any off-balance sheet arrangements.

Contractual Obligations and Known Future Cash Requirements

Indemnification Agreements

In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated balance sheet, consolidated statements of operations, consolidated statements of comprehensive loss or consolidated statements of cash flows.

Operating Leases

We lease various office and manufacturing facilities, including our corporate headquarters in Westlake Village, California, under operating lease agreements that expire through 2020. The terms of the lease agreements provide for rental payments on a graduated basis. We recognize rent expense on a straight-line basis over the lease periods.

Commitments

As of September 30, 2015, our principal commitments consisted of obligations under the operating leases for our offices. The following table summarizes our future minimum payments under these arrangements as of September 30, 2015 (in thousands):

	Payments Due
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Contractual Obligations	$	395	$	146	$	231	$	18	$	—

Critical Accounting Policies and Estimates

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

We believe that the assumptions and estimates associated with revenue recognition, inventory valuation, accounts receivable, stock-based compensation expense and income taxes have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

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For further information on all of our significant accounting policies, see the notes to our consolidated financial statements.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition , when there is persuasive evidence that an arrangement exists, title and risk of loss have passed, delivery has occurred or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to our customers upon shipment. In limited circumstances where either title or risk of loss pass upon destination or acceptance or when collection is not reasonably assured, we defer revenue recognition until such events occur.

To satisfy the criteria, we input orders based upon receipt of a customer purchase order, record revenue upon shipment of goods and when risk of loss and title transfer, confirm pricing through the customer purchase order, and validate credit worthiness through past payment history or other financial data. All customers have warranty rights, and some customers have explicit or implicit rights of return. We record reserves for potential customer returns and warranty rights.

Inventory Valuation

Inventories are stated at lower of cost or market and consist of materials, labor and overhead. Inventory costs are determined using standard costs which approximate actual costs under the first-in, first-out method. We evaluate inventories for excess quantities and obsolescence. Our evaluation considers market and economic conditions; technology changes, new product introductions, and changes in strategic business direction; and requires estimates that may include elements that are uncertain. In order to state the inventory at lower of cost or market, we maintain reserves against individual stocking units. Inventory write-downs, once established, are not reversed until the related inventories have been sold or scrapped. If future demand or market conditions are less favorable than our projections, a write-down of inventory may be required, and would be reflected in cost of goods sold in the period the revision is made.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoice amount and presented net of the allowance for doubtful accounts; they do not bear interest. We evaluate the collectability of accounts receivable at each balance sheet date using a combination of factors, such as historical experience, credit quality, age of the accounts receivable balances, and economic conditions that may affect a customer’s ability to pay. We included any accounts receivable balances that are determined to be uncollectible in the overall allowance for doubtful accounts using the specific identification method. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Stock Based Compensation

We account for stock based compensation under ASC Topic 718, Compensation-Stock Compensation, which requires us to record related compensation costs. Calculating the fair value of stock-based compensation awards requires the input of highly subjective assumptions, including the expected life of the awards and expected volatility of our stock price. Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. Our estimates of expected volatilities are based on weighted historical implied volatility. The expected forfeiture rate applied in calculating stock-based compensation cost is estimated using historical data and is updated annually.

The assumptions used in calculating the fair value of stock-based awards involve estimates that require management judgment. If factors change and we use different assumptions, our stock-based compensation expense could change significantly in the future. In addition, if our actual forfeiture rate is different from our estimate, our stock-based compensation expense could change significantly in the future.

Income Taxes

We account for income taxes in accordance with ASC Topic 740, Income Taxes , which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been

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included in the financial statements or tax returns. Under this method, we must make estimates and judgments in determining the provision for taxes for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, benefits, and deductions, and in the calculation of certain tax assets and liabilities that arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions. Significant changes in these estimates may result in an increase or decrease to our tax provision in a subsequent period. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We must assess the likelihood that we will be able to recover our deferred tax assets. Our valuation allowance against the deferred tax assets is based on our assessments of historical losses and projected operating results in future periods on a “more likely than not” basis. If and when we generate future taxable income in our tax jurisdictions against which these tax assets may be applied, some portion or all of the valuation allowance would be reversed and an increase in net income would consequently be reported in future years.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. If we determine that a tax position will more likely than not be sustained on audit, the second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We re-evaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors such as changes in facts or circumstances, changes in tax law, new audit activity, and effectively settled issues. Determining whether an uncertain tax position is effectively settled requires judgment. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period in which a change in judgment occurs.

Recently Issued and Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) .” The amendments to this update supersede nearly all existing revenue recognition guidance under GAAP. The core principle of this Topic is to 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. This Topic defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. A nonpublic entity may elect to apply this guidance earlier, however, only as of the following: (1) an annual reporting period beginning after December 15, 2016, including interim periods within that reporting period (public entity effective date), (2) an annual reporting period beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017, (3) an annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. The Company has not yet assessed the impact of ASU 2014-09 but does not believe it will have a material effect on the Company’s consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “ Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force)”, effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. This update is intended to resolve the diverse accounting treatment of share-based payment awards whose performance target may be achieved after the requisite service period. An entity may apply the standards (1) prospectively to all share-based payment awards that are granted or modified on or after the effective date, or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. Earlier application is permitted. The Company has not yet assessed the impact of ASU 2014-12 but does not believe it will have a material effect on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, “ Presentation of Financial Statements — Going Concern (Sub-Topic 205-40) ”, which provides guidance in GAAP about management’s responsibility to evaluate

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whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This update is effective for annual periods ending after December 15, 2016 and for annual periods and interim periods thereafter. Early application is permitted. The Company has not yet assessed the impact of ASU 2014-15 but does not believe it will have a material effect on the Company’s consolidated financial statements.

In February 2015, the Financial Accounts Standards Board, or FASB, issued Accountings Standards Update, or ASU, 2015-02 to change the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The standard is effective for fiscal and interim periods within those fiscal years, beginning after December 15, 2015. We are currently evaluating this standard and after adoption, we will incorporate this guidance in our analysis for consolidations.

ITEM 3. PROPERTIES

We maintain our principal office, totaling approximately 3,000 square feet, in Westlake Village, California, under a lease that expires in 2020. We maintain additional leased spaces, totaling approximately 21,000 square feet, in several locations, including manufacturing facilities in Simi Valley, California and Shenzhen, China, a research and development center in Singapore, and regional offices in Hong Kong, China and Tokyo, Japan. 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.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of January 11, 2016, for:

· each of our named executive officers;

· each of our directors;

· all of our executive officers and directors as a group; and

· each person, or group of affiliated persons, who beneficially owned more than 5% of our common stock.

We have determined beneficial ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned, subject to applicable community property laws.

We have based percentage ownership of our common stock on 5,861,018 shares of our common stock outstanding as of January 11, 2016. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of common stock subject to options held by the person that are currently exercisable or exercisable within 60 days of January 11, 2016, as well as all shares of common stock issuable pursuant to restricted stock units held by the person that are subject to vesting conditions expected to occur within 60 days of January 11, 2016. However, we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Interlink Electronics, Inc., 31248 Oak Crest Drive, Westlake Village, California 91361.

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	Common Stock Beneficially Owned
Name of Beneficial Owner	Number	Percentage
Named Executive Officers and Directors:
Steven N. Bronson (1)	4,179,523	71.3	%
Albert Lu	—	*
Mark Bailey	—	*
Angela Blatteis	17,357	*
Frank Levinson	101,334	1.7	%
Howard Goldberg	—	*
All executive officers and directors as a group (5 persons)	4,298,214	73.3	%

Other 5% Stockholders:
BKF Capital Group, Inc. (2)	700,311	11.9	%
Leonard Hagan (3)	716,410	12.2	%

*Represents beneficial ownership of less than 1%

(1) Consists of (i) 3,316,212 shares of common stock held by Mr. Bronson individually and jointly with his spouse, (ii) 700,311 shares of common stock held by BKF Capital Group, Inc. and (iii) 163,000 shares of common stock held by Mr. Bronson’s spouse.

(2) Steven N. Bronson, Chief Executive Officer of BKF Capital Group, Inc., has voting and dispositive power with respect to these securities.

(3) The address for Mr. Hagan is 120 Broadway, Suite 940, New York, NY 10271-0999.

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS

Executive Officers and Directors

The following table provides information regarding our executive officers and directors as of January 11, 2016:

Name	Age	Company Position
Steven N. Bronson	50	Chairman of the Board, Chief Executive Officer, and President
Tracy A. Kern	48	Chief Financial Officer
Albert Lu	44	Chief Technology Officer
Mark Bailey	67	Director
Angela Blatteis	55	Director
Frank Levinson	62	Director

Executive Officers

Steven N. Bronson . Mr. Bronson has over 30 years of business and entrepreneurial experience. His successful background in investment banking and principal investing has led to him taking executive positions in several companies. Mr. Bronson became our Chief Executive Officer and Chairman of our board of directors in July 2010. In March 2011, he also took on the role of President, bringing both his operational and financial expertise to the company. Since successfully turning around Interlink’s business to profitability, Mr. Bronson has focused on strategic matters, mission-critical decisions, and identification of potential acquisitions and business partnership opportunities.

In July 2013, Mr. Bronson assumed the positions of President and Chief Executive Officer of Qualstar Corporation (NASDAQ: QBAK), a high quality tape library manufacturer, and its subsidiary N2Power, a manufacturer of high efficiency power supplies for diverse electronics industries. From 1996 until November 2014, Mr. Bronson served as Chief Executive Officer and Chairman of Bronson & Co., LLC, an investment banking firm. Since October 2008, Mr. Bronson also has served as Chief Executive Officer and Chairman of BKF Capital Group, Inc. (OTCMKTS: BKFG), a publicly traded company operating through its wholly-owned subsidiaries, BKF Investment Group, Inc. and BKF Asset Holdings, Inc. since October 2008. Mr. Bronson currently holds series 4, 7, 24, 53, 55, 63, 65, 66 and 79 licenses.

Mr. Bronson was selected to serve on our board of directors because of the perspective and experience he brings as our largest stockholder, his extensive experience with technology companies, and his experience serving as a senior executive officer of a public company.

Tracy A. Kern. Ms. Kern has served as our Chief Financial Officer since June 2015. Ms. Kern has over 15 years of business experience in public accounting. From July 2008 until April 2015, Ms. Kern was Corporate Controller of Vitesse Semiconductor Corporation (NASDAQ:VTSS), a global provider of high performance

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integrated circuit solutions for carrier, enterprise and internet-of-things networks. Prior to Vitesse, from January 2003 to June 2008, Ms. Kern was the Chief Financial Officer for Chad Therapeutics, a publicly traded medical device manufacturing company headquartered in Chatsworth, California. Ms. Kern also was a manager at the public accounting firm KPMG, and is a Certified Public Accountant. She holds a Bachelor of Science degree in Accounting from California Lutheran University.

Albert Lu . Dr. Lu has served as our Chief Technology Officer since February 2014, and is based in Singapore at our wholly-owned subsidiary, Interlink Electronics Singapore Private Limited. Prior to joining Interlink, for over 15 years Dr. Lu had made significant R&D contributions to the Singapore Institute of Manufacturing Technology, or SIMTech, which develops high-value manufacturing technology and human capital to enhance the competitiveness of Singapore’s manufacturing industry. SIMTech is a research institute of the Agency for Science, Technology and Research (A*STAR). Dr. Lu’s most recent role was Program Manager of the Large Area Processing Program, where he established and spearheaded Singapore’s key R&D facility and pilot line for roll-to-roll manufacturing of functional films and printed electronics. In his other technology leadership roles at SIMTech, Dr. Lu orchestrated R&D collaborations and industry consortia in disruptive and emerging technology platforms that included embedded passives, broadband communications, and electronics packaging with multinational corporations and local enterprises.

Dr. Lu earned both a Ph.D. and B. Eng. in electrical engineering from the University of Manchester, Institute of Science and Technology in the United Kingdom. Dr. Lu also received the Lee Kuan Yew Award for Mathematics and Science in Singapore and the Institution of Electrical Engineers Prize in the United Kingdom.

Our executive officers are appointed by our board of directors and serve until their successors have been duly elected and qualified. There are no family relationships among any of our directors or executive officers.

Non-Employee Directors

Mark Bailey . Mr. Bailey has served as a member of our board of directors since January 2016, and brings to Interlink more than 42 years of experience in public accounting. He began his public accounting career with Arthur Young & Company, advancing to supervisor in the bank audit division. He then became an audit partner in a firm on the central coast of California. He opened his accounting firm, Mark Bailey & Company, in 1984, which he rebranded to Excelsis in 2012. Excelsis specializes in small to mid-sized companies and offers diverse services including, audit, tax, strategic planning, internal control evaluation and testing, business valuation and management consulting and is registered with the Public Company Accounting Oversight Board. Mr. Bailey is the managing partner of the firm and consults extensively on business valuations, mergers and acquisitions, tax planning, accounting and management. He holds a bachelor’s degree with a concentration in accounting from California Polytechnic State University, San Luis Obispo and is accredited in business valuation and certified in financial forensics. He is a member of the American Institute of Certified Public Accounts, the California Society of Certified Public Accountants, and the Nevada Society of Certified Public Accountants. Mr. Bailey was selected to serve on our board of directors because of his extensive experience in public accounting.

Angela Blatteis . Ms. Blatteis has served as a member of our board of directors since July 2014, and brings to Interlink over 30 years of experience in investment banking, bankruptcy, private equity, and mergers and acquisitions. Ms. Blatteis presently is an Ambassador to The Gores Group, a Los Angeles based private equity firm, and remains a key consultant to The Gores Group in addition to providing consulting services to various companies and management teams. From 1996 through December 2011, Ms. Blatteis worked with The Gores Group, serving as Managing Director beginning in 2004, where she was responsible for key aspects of mergers and acquisitions and divestitures for the firm’s portfolio companies. From July 2007 through July 2011, Ms. Blatteis co-founded Global Equity Capital (GEC), an affiliate of The Gores Group, to focus on acquiring businesses in the small capitalization market and held the title Managing Director. In August 2014, Ms. Blatteis launched Soupure, a soup company which uses science and research to develop soup for health conscious individuals by leveraging the power of proteins and smart energy nutrients, and serves as the company’s chief executive officer and chief financial officer. Ms. Blatteis received an MBA from the University of Chicago, Booth School of Business and a Bachelor of Economics from the University of California, Berkeley.

Through her experience in various senior level investment banking positions with The Gores Group, Ms. Blatteis has developed a substantial financial and accounting background and expertise, which she contributes to our board of directors. Ms. Blatteis’ financial expertise and acumen in private equity, mergers and acquisition, portfolio company management and investment banking in general assists our board in providing oversight to management on these matters. Ms. Blatteis’ senior leadership experience also enables her to provide strategic input to our board, in addition to her financial expertise, discipline and oversight.

Frank Levinson . Dr. Levinson has served as a member of our board of directors since July 2014. Presently he is a General Partner with Phoenix Venture Partners, a venture capital firm focused on advanced materials innovations, and a Managing Director of the Small World Group (SWG) Incubator, a technology incubator focusing on clean tech, optical systems and advanced material technologies active in both Singapore and the United States. Dr. Levinson has an exceptional 30-year track record of starting and building companies. Most notably, Dr. Levinson was the founder, Chief Technology Officer, and Chairman of Finisar Corporation (NASDAQ:FNSR),which he built into a multibillion dollar optical components and subsystems supplier and grew revenue from zero to over $500 million in annual sales. During his tenure at Finisar, Dr. Levinson built the company’s manufacturing operations in Asia and oversaw the implementation of more than 12 corporate partnerships, including those with Honeywell, Sensors Unlimited, and Infineon. He is currently on the board of

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directors of Fabrinet (NYSE:FN). Dr. Levinson earned his Ph.D. in Astronomy from the University of Virginia and his Bachelor of Science in physics and mathematics from Butler University.

Dr. Levinson was selected to serve on our board of directors because of his extensive experience in growing technology companies, including companies with substantial operations in Asia where a significant amount of our operations occur.

ITEM 6. EXECUTIVE COMPENSATION

Processes and Procedures for Compensation Decisions

The compensation committee of the board is responsible for the executive compensation programs for our executive officers and reports to the board on its discussions, decisions and other actions. Typically, our chief executive officer makes recommendations to our compensation committee, often attends committee meetings and is involved in the determination of compensation for the executive officers that report to him, except that he does not make recommendations as to his own compensation. Our chief executive officer makes recommendations to our compensation committee regarding short-term and long-term compensation for all executive officers, excluding himself, based on our results, an individual executive officer’s contribution toward these results and performance toward individual goal achievement. Our compensation committee then reviews the recommendations and other data and makes decisions as to total compensation for each executive officer other than the chief executive officer, as well as each individual compensation component. The compensation committee makes recommendations to the board regarding compensation for the chief executive officer. The independent members of the board make the final decisions regarding executive compensation for our chief executive officer.

The compensation committee is authorized to retain the services of one or more executive compensation advisors, as it sees fit, in connection with the establishment of our compensation programs and related policies. The compensation committee did not retain the services of a compensation consultant during 2013, 2014 and 2015.

Summary Compensation Table

The following table provides information regarding the compensation of our named executive officers during 2014 and 2015. As a “smaller reporting company,” as such term is defined in the rules promulgated under the Securities Act of 1933, as amended, or the Securities Act, we are required to provide compensation disclosure for our principal executive officer and the two most highly compensated executive officers other than our principal executive officer. Throughout this proxy statement, these three officers are referred to as our “named executive officers.”

Name and Principal Position	Year	Salary		Bonus		Stock Awards (1)		Total
Steven N. Bronson (2)	2015	$	268,750	$	—	$	392,400	$	661,150
Chief Executive Officer, President and Chairman of the Board	2014	$	120,000	$	—	$	—	$	120,000

Tracy A. Kern (3)	2015	$	91,590	$	—	$	37,500	$	129,090
Chief Financial Officer	2014	$	—	$	—	$	—	$	—

Albert Lu (4)	2015	$	151,048	$	19,986	$		$	171,034
Chief Technology Officer	2014	$	122,673	$	12,211	$	80,000	$	214,884

(1) These amounts represent the grant date fair value of the stock and stock option awards determined in accordance with ASC Topic 718. These amounts may not correspond to the actual value eventually realized by the officer, which depends in part on the market value of our common stock in future periods. Assumptions used in calculating these amounts are set forth in the Notes to Consolidated Financial Statements included in this Registration Statement on Form 10.

(2) In July 2013, Mr. Bronson volunteered to accept a 40% reduction in his annual base salary from $200,000 to $120,000. Mr. Bronson’s annual base salary was increased to $300,000 effective as of April, 20, 2015.

(3) Ms. Kern’s employment with Interlink commenced in June 2015.

(4) Dr. Lu’s employment with Interlink commenced in February 2014. Mr. Lu received a discretionary bonus in 2014 and 2015 based on his performance for the year.

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Outstanding Equity Awards at Fiscal Year End

The following table presents certain information concerning equity awards held by our named executive officers as of December 31, 2015.

Name	Grant Date	Number of Shares or Units of Stock that Have Not Vested		Market Value of Shares or Units of Stock that Have Not Vested (1)
Steven N. Bronson	5/18/2015	60,000	(2)	$	428,400

Tracy Kern	6/1/2015	5,000	(3)	$	35,700

Albert Lu	1/31/2014	64,000	(4)	$	456,960

(1) The market value of the restricted stock award is based on the closing market price of our common stock as of December 31, 2015, which was $7.14 per share.

(2) Represents a grant of restricted stock units, of which 50% vests on each of May 18, 2019 and May 18, 2020.

(3) Represents a grant of restricted stock units, of which 50% vests on each of June 1, 2019 and June 1, 2020.

(4) Represents a grant of restricted stock units, of which 50% vests on each of January 31, 2018 and January 31, 2019.

Employment Arrangements

We have entered into employment agreements with each of the named executive officers. With the exception of his own arrangement, each of these employment agreements was negotiated on our behalf by our Chief Executive Officer with the oversight and approval of the compensation committee of the board.

Steven N. Bronson

We entered into an employment agreement with Steven N. Bronson, our Chairman, President and Chief Executive Officer, in July 2010. The employment agreement provides for an annual base salary of $200,000 payable in shares of our common stock with a value of $200,000, issuable at the rate of 1/12 per month based on the market value of our common stock on the date of issuance, and an annual bonus at the discretion of the compensation committee.

In June 2013, Mr. Bronson voluntarily agreed to reduce his annual base salary by 40%, to $120,000, which continued until January 1, 2015 at which time his annual base salary was returned d to $200,000. On April 20, 2015, Mr. Bronson’s salary was increased to $300,000. In addition, in May 2015 Mr. Bronson received a restricted stock unit award of 60,000 shares of common stock of which 50% vests on each of the fourth and fifth anniversaries of the date of grant. Mr. Bronson’s restricted stock unit award shall immediately vest upon his death or if he suffers a permanent disability, or upon a “change of control” of Interlink.

In the event Mr. Bronson’s employment is terminated by Interlink without cause, he will be entitled to receive the following benefits:

· Accrued Compensation : Mr. Bronson will receive all accrued but unpaid paid time off, expense reimbursements, wages, and other benefits due to him under any Interlink -provided plans, policies, and arrangements.

· Severance Payment : Mr. Bronson will receive severance in an amount in cash equal to twelve months of his base salary then in effect, immediately prior to the date of the participant’s termination of employment, less all required tax withholdings and other applicable deductions, payable as soon as practicable following the participant’s termination of employment.

· Bonus Payment : Mr. Bronson will receive any bonus amount earned by him prior to termination, payable as soon as practicable following the participant’s termination of employment.

· Continued Benefits : We will reimburse Mr. Bronson for premiums for coverage of Mr. Bronson and his eligible dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) (at the coverage levels in effect immediately prior to termination of employment) for a period of twelve months from the last date of employment with us. In addition, we will continue to pay, or reimburse Mr. Bronson for, premiums for coverage of Mr. Bronson for life and long-term disability insurance for a period of twelve months from the last date of employment with us.

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· Equity : All of Mr. Bronson’s unvested and outstanding equity awards shall immediately vest and become exercisable as of the date of termination.

Mr. Bronson’s employment agreement also provides that upon a “change of control” of Interlink, Mr. Bronson is entitled to receive an amount in cash equal to twelve months of his base salary then in effect, and all of Mr. Bronson’s unvested and outstanding equity awards shall immediately vest and become exercisable.

Albert Lu

We entered into an employment agreement with Albert Lu, our Chief Technology Officer, in February 2014. The employment agreement provides for an annual base salary of $206,250 SGD and an annual bonus of up to $41,250 SGD. Dr. Lu also received a restricted stock unit award of 64,000 shares of common stock, of which 50% vests on each of January 31, 2018 and January 31, 2019. Dr. Lu’s employment agreement provides for “at will” employment and may be terminated at any time by either party on one month’s written notice. Dr. Lu is not entitled to any termination or “change of control” payments or benefits under his employment agreement.

Tracy Kern

We entered into an offer letter with Tracy Kern, our Chief Financial Officer, in June 2015. The offer letter provides for an annual base salary of $160,000 increasing to $180,000 beginning January 1, 2016. Ms. Kern also received a restricted stock unit award of 5,000 shares of common stock, of which 50% vests on each of the fourth and fifth anniversaries of the commencement of her employment with us. The restricted stock unit award shall immediately vest upon her death or if she suffers a permanent disability, or upon a "change of control" of Interlink. Ms. Kern’s offer letter provides for “at will” employment and may be terminated at any time by either party on one month’s written notice. Ms. Kern is not entitled to any termination payments or benefits under her offer letter.

Pension Benefits and Nonqualified Deferred Compensation

We do not provide a pension plan for our employees, and none of our named executive officers participated in a nonqualified deferred compensation plan in 2014.

401(k) Plan

We maintain a tax-qualified retirement plan, or the 401(k) plan, that provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis. Eligible employees are able to participate in the 401(k) plan as of the first day of the month following the date they meet the 401(k) plan’s eligibility requirements, and participants are able to defer up to 100% of their eligible compensation subject to applicable annual Code limits. All participants’ interests in their deferrals are 100% vested when contributed. The 401(k) plan permits us to make matching contributions and profit sharing contributions to eligible participants. The match is limited to 50% of base salary up to $500. In 2014, we made matching contributions of $4,500 into the plan.

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Non-Employee Director Compensation

Director Compensation Table

The following table details the total compensation earned by our non-employee directors in fiscal year 2015:

Name	Fees Earned or Paid in Cash		Stock Awards (1)		Total
Angela Blatteis (2)	$	10,000	$	5,000	$	15,000
Frank Levinson (2)	$	10,000	$	5,000	$	15,000

(1) Represents awards of our common stock.

(2) On July 15, 2015, each of Ms. Blatteis and Mr. Levinson received 607 shares of our common stock.

Outside Director Compensation Policy

Our board of directors has adopted a policy for the compensation for our non-employee directors, or the Outside Directors. Outside Directors will receive compensation in the form of equity and cash, as described below:

Annual award . Annually, on July 15, each Committee Chairman who has served on our board of directors for at least the preceding six months will be granted common stock with a grant date fair value equal to $5,000.

Cash compensation . Each Outside Director receives an annual retainer of $10,000 in cash for serving on our board of directors, or the Annual Fee. The Annual Fee is paid in quarterly installments to each Outside Director who has served in the relevant capacity for the immediately preceding fiscal quarter no later than 30 days following the end of such preceding fiscal quarter. An Outside Director who has served in the relevant capacity for only a portion of the immediately preceding fiscal quarter will receive a prorated payment of the quarterly payment of the Annual Fee.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

We describe below transactions, and series of related transactions, since January 1, 2013 to which we were or will be a party, in which:

· the amounts involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at December 31, 2015 and 2014; and

· any of our directors, executive officers, or beneficial holders of more than 5% of any class of our capital stock, or their immediate family members, had or will have a direct or indirect material interest.

Other than as described below, there has not been, nor is there any currently proposed, transaction or series of related transactions to which we have been or will be a party other than compensation arrangements, which are described where required in Item 6., “Executive Compensation.”

Catalyst Financial

We paid fees of $75,000 to Catalyst Financial in both 2014 and 2013 to assist us in identifying potential merger and acquisition opportunities. The agreement for consulting services was terminated in December 2014. Steven N. Bronson our Chairman and CEO was also Chairman and CEO of Catalyst Financial.

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Qualstar Corporation

At the end of 2013, we agreed to reimburse, or be reimbursed by, Qualstar Corporation (“Qualstar”), for IT support and other expenses paid on behalf of our Company. In 2015, we also entered into a sublease agreement for our occupation and use of a portion of Qualstar’s Simi Valley manufacturing location. Steven N. Bronson, our CEO and Chairman, is the Chairman and CEO of Qualstar. Transactions with Qualstar are as follows:

	December 31,				Nine Months Ended September 30,
	2014		2013		2015		2014
	(in thousands)				(in thousands)
Paid to Qualstar	$	33	$	2	$	45	$	28
Reimbursed from Qualstar	$	157	$	63	$	13	$	133

Director Independence

In connection with the filing of this Registration Statement on Form 10 and the registration of our common stock under Exchange Act, we have applied to list our common stock on the NASDAQ Capital Market. Under the rules of NASDAQ, independent directors must comprise a majority of a listed company’s board of directors. In addition, the rules of NASDAQ require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent. Under the rules of NASDAQ, a director will only qualify as an ‘‘independent director’’ if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our board of directors has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise such director’s ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our board of directors has determined that Messrs. Bailey and Levinson and Ms. Blatteis are ‘‘independent directors’’ as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of NASDAQ.

In addition, our board of directors has established an audit committee, a compensation committee and a nominating and governance committee. Ms. Blatteis and Messrs. Bailey and Levinson, each of whom is a non-employee member of our board of directors, serve on these board committees. Our board of directors has determined that each of Ms. Blatteis and Messrs. Bailey and Levinson satisfies the requirements for independence and, in the case of the audit committee, financial literacy for service on the audit committee, compensation committee and nominating and governance committee under the rules and regulations of NASDAQ and the SEC.

ITEM 8. LEGAL PROCEEDINGS

We are not party to any legal proceedings. We may, from time to time, be party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, we may become party to an increasing number of litigation matters and claims. The 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.

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ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information for Common Stock

Our common stock is quoted on the OTCPink marketplace of the OTC Markets Group under the symbol “LINK.” The following table sets forth for the periods indicated the high and low closing bid prices per share of our common stock as reported by the OTC Markets Group. These prices reflect inter-dealer quotations, without retail markups, markdowns, or commissions, and do not necessarily represent actual transactions:

	High		Low
Fiscal 2015
First Quarter	$	9.75	$	7.00
Second Quarter	$	9.00	$	6.00
Third Quarter	$	8.80	$	7.00
Fourth Quarter	$	9.55	$	7.06

Fiscal 2014
First Quarter	$	1.88	$	1.00
Second Quarter	$	4.88	$	1.69
Third Quarter	$	4.75	$	3.75
Fourth Quarter	$	8.03	$	3.76

Fiscal 2013
First Quarter	$	1.75	$	1.09
Second Quarter	$	1.80	$	1.16
Third Quarter	$	1.69	$	1.13
Fourth Quarter	$	1.50	$	0.94

On December 31, 2015, the closing bid price of our common stock as reported by the OTC Markets Group was $7.14 per share.

As of December 31, 2015, we had 57 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable future, if at all. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

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Equity Compensation Plan Information

The following table summarizes certain information about our equity compensation plans as of December 31, 2015.

	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights	Weighted Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category	(a)	(b)(1)		(c)
Equity compensation plans approved by security holders (2)	143,528	$	5.88	—
Equity compensation plans not approved by security holders	—	—		—
Total	143,528	$	5.88	—

(1) The weighted average exercise price is calculated based solely on outstanding stock options. It does not take into account restricted stock units, which have no exercise price.

(2) Consists of our 1996 Stock Incentive Plan, as amended. Our 1996 Stock Incentive Plan was cancelled effective November 16, 2015.

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES

During the last three years, Interlink has issued the following unregistered securities:

Equity Compensation Issuances

From November 15, 2012 through November 15, 2015, pursuant to the terms of our 1996 Stock Incentive Plan, as amended, or 1996 Plan, Interlink granted to its officers restricted stock units for an aggregate of 169,000 shares of common stock in exchange for services, for an aggregate dollar value of $567,000.

From November 15, 2012 through November 15, 2015, pursuant to the terms of our 1996 Plan, Interlink granted to its directors an aggregate of 9,818 shares of common stock in exchange for services, for an aggregate dollar value of $30,000.

From November 15, 2012 through November 15, 2015, pursuant to the terms of our 1996 Plan, Interlink issued and sold to an employee an aggregate of 8,000 shares of common stock upon the exercise of options at an exercise price of $1.95 per share, for an aggregate exercise price of $15,600.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe the offers, sales and issuances of the above securities were exempt from registration under the Securities Act by virtue of (i) Section 4(2) of the Securities Act as transactions not involving a public offering or (ii) Rule 701 promulgated under the Securities Act as transactions pursuant to compensatory benefit plans or contracts relating to compensation as provided under such rule. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about Interlink. The sales of these securities were made without any general solicitation or advertising.

ITEM 11. DESCRIPTION OF REGISTRANTS SECURITIES TO BE REGISTERED

General

The following is a summary of the rights of our common stock and preferred stock and certain provisions of our articles of incorporation and bylaws. This summary does not purport to be complete and is qualified in its entirety by the provisions of our articles of incorporation and bylaws, copies of which have been filed as exhibits to this Registration Statement on Form 10.

Immediately following the completion of this offering, our authorized capital stock will consist of 31,000,000 shares, of which:

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· 30,000,000 shares are designated as common stock, with a par value of $0.001 per share; and

· 1,000,000 shares are designated as preferred stock, with a par value of $0.01 per share.

As of December 31, 2015, we had outstanding 5,861,018 shares of common stock, and we had outstanding options to acquire 14,528 shares of our common stock.

Common Stock

The holders of common stock are entitled to one vote per share on all matters submitted to a vote of our stockholders and do not have cumulative voting rights. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election. Subject to preferences that may be applicable to any preferred stock outstanding at the time, the holders of outstanding shares of common stock are entitled to receive ratably any dividends declared by our board of directors out of assets legally available. Upon our liquidation, dissolution, or winding up, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any then-outstanding shares of preferred stock. Holders of common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

No shares of our preferred stock are outstanding. Pursuant to our articles of incorporation, our board of directors has the authority, without further action by the stockholders, to issue from time to time up to 1,000,000 shares of preferred stock in one or more series. Our board of directors may designate the powers, designations, preferences, and relative participation, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, redemption rights, liquidation preference, sinking fund terms and the number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on the common stock, diluting the voting power of the common stock, impairing the liquidation rights of the common stock, or delaying, deterring, or preventing a change in control. Such issuance could have the effect of decreasing the market price of the common stock. We currently have no plans to issue any shares of preferred stock.

Anti-Takeover Effects of Nevada Law and Our Articles of Incorporation and Bylaws

Our articles of incorporation and bylaws contains provisions that could have the effect of delaying, deferring, or discouraging another party from acquiring control of us. These provisions and certain provisions of Nevada law, which are summarized below, could discourage takeovers, coercive or otherwise. These provisions are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us.

Undesignated Preferred Stock

As discussed above under “Preferred Stock,” our board of directors will have the ability to designate and issue preferred stock with voting or other rights or preferences that could deter hostile takeovers or delay changes in our control or management.

Limits on Ability of Stockholders to Call a Special Meeting

Our articles of incorporation provide that special meetings of the stockholders may be called only by our board of directors, by majority vote, or by any stockholder or group of stockholders who own and have the right to vote more than 25% of our issued and outstanding securities, which may delay the ability of our stockholders to force consideration of a proposal or for holders controlling a majority of our capital stock to take any action, including the removal of directors.

Nevada Law

Nevada has enacted the following legislation that may deter or frustrate takeovers of Nevada corporations:

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Evaluation of Acquisition Proposals . The Nevada Revised Statutes expressly permit our board, when evaluating any proposed tender or exchange offer, any merger, consolidation or sale of substantially all of our assets, or any similar extraordinary transaction, to consider all relevant factors including, without limitation, the social, legal, and economic effects on the employees, customers, suppliers, and other of our constituencies, and on the communities and geographical areas in which we operate. Our board may also consider the amount of consideration being offered in relation to the then current market price for our outstanding shares of capital stock and our then current value in a freely negotiated transaction.

Control Share Acquisitions . We are subject to the Nevada control share acquisitions statute. This statute is designed to afford stockholders of public corporations in Nevada protection against acquisitions in which a person, entity or group seeks to gain voting control. With enumerated exceptions, the statute provides that shares acquired within certain specific ranges will not possess voting rights in the election of directors unless the voting rights are approved by a majority vote of the public corporation’s disinterested stockholders. Disinterested shares are shares other than those owned by the acquiring person or by a member of a group with respect to a control share acquisition, or by any officer of the corporation or any employee of the corporation who is also a director. The specific acquisition ranges that trigger the statute are: acquisitions of shares possessing one-fifth or more but less than one-third of all voting power; acquisitions of shares possessing one-third or more but less than a majority of all voting power; or acquisitions of shares possessing a majority or more of all voting power. Under certain circumstances, the statute permits the acquiring person to call a special stockholders meeting for the purpose of considering the grant of voting rights to the holder of the control shares. The statute also enables a corporation to provide for the redemption of control shares with no voting rights under certain circumstances.

The provisions of Nevada law and the provisions of our articles of incorporation and bylaws could have the effect of discouraging others from attempting hostile takeovers and as a consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions might also have the effect of preventing changes in our management. It is also possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare. The transfer agent’s address is 350 Indiana Street, Suite 750, Golden, CO 80901, and its telephone number is (303) 262-0678.

Exchange Listing

Our common stock is quoted on the OTCPink marketplace of the OTC Markets Group under the symbol “LINK.” We have applied to list our common stock on the NASDAQ Capital Market under the symbol “LINK.”

ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Nevada Law

We are a Nevada corporation and subject to the provisions of the Nevada Revised Statutes, which govern indemnification of officers and directors and related matters.

Section 78.138 of the Nevada Revised Statutes provides that a director or officer will not be individually liable unless it is proven that (i) the director’s or officer’s acts or omissions constituted a breach of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud or a knowing violation of the law.

Section 78.7502 of Nevada Revised Statutes permits a company to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending or completed action, suit or proceeding if the officer or director (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner the officer or director reasonably believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable cause to believe the conduct of the officer or director was unlawful.

Section 78.751 of Nevada Revised Statutes permits a Nevada company to indemnify its officers and directors against expenses incurred by them in defending a civil or criminal action, suit or proceeding as they are

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incurred and in advance of final disposition thereof, upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that such officer or director is not entitled to be indemnified by the company. Section 78.751 of Nevada Revised Statutes further permits the company to grant its directors and officers additional rights of indemnification under its articles of incorporation or bylaws or otherwise.

Section 78.752 of Nevada Revised Statutes provides that a Nevada company may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the company, or is or was serving at the request of the company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses.

Articles of Incorporation

Our articles of incorporation provide that no director shall be personally liable to Interlink or its stockholders for monetary damages for conduct as a director, provided that the articles do not eliminate the liability of a director for any act or omission for which such elimination of liability is not permitted under the Nevada Revised Statutes. No amendment to the Nevada Revised Statutes that further limits the acts or omissions for which elimination of liability is permitted shall affect the liability of a director for any act or omission that occurs prior to the effective date of the amendment.

Our articles of incorporation also provide that we must indemnify and hold harmless each of our directors and officers to the fullest extent not prohibited by the Nevada Revised Statutes, who is made, or threatened to be made, a party to an action, suit or proceeding, whether civil, criminal, administrative, investigative or other (including an action, suit or proceeding by or in the right of the company), by reason of the fact that such person is or was a director, officer, employee or agent of the company or a fiduciary within the meaning of the Employee Retirement Income Security Act of 1974 with respect to any employee benefit plan of the company, or serves or served at the request of the company as a director, officer, employee or agent, or as a fiduciary of an employee benefit plan, of another corporation, partnership, joint venture, trust or other enterprise. We must pay for or reimburse the reasonable expenses incurred by any such current or former director or officer in any such proceeding in advance of the final disposition of the proceeding if the person sets forth in writing (i) the person’s good faith belief that the person is entitled to indemnification under our articles of incorporation and (ii) the person’s agreement to repay all advances if it is ultimately determined that the person is not entitled to indemnification under our articles of incorporation.

Other Matters

Our policy is to enter into separate indemnification agreements with each of our directors and officers that provide the maximum indemnity allowed to directors and executive officers under the Nevada Revised Statutes and also to provide for certain additional procedural protections. We also maintain directors and officers insurance to insure such persons against certain liabilities.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we has been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of Interlink Electronics, Inc. are filed under this Item, beginning on page F-1. The financial statement schedules required by Regulation S-X are filed under Item 15 of this Registration Statement.

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ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Dismissal of Independent Registered Public Accounting Firm

On January 5, 2016, we dismissed SingerLewak LLP (“SingerLewak”) as our independent registered public accounting firm. The decision to dismiss SingerLewak was approved by the audit committee of our board of directors.

The audit report of SingerLewak on our financial statements as of and for the fiscal years ended December 31, 2013 and 2014 did not contain an adverse opinion or disclaimer of opinion, and were not modified as to uncertainty, audit scope, or accounting principles.

In connection with the audit of our financial statements for the fiscal years ended December 31, 2013 and 2014, and for the subsequent interim period through January 5, 2016, there were: (i) no disagreements between us and SingerLewak on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of SingerLewak, would have caused SingerLewak to make reference to the subject matter of the disagreements in its report on our financial statements for such fiscal years; and (ii) no “reportable events” within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.

We provided SingerLewak with a copy of the disclosures in this registration statement and requested that SingerLewak furnish us with a letter addressed to the Securities and Exchange Commission stating whether or not SingerLewak agrees with our statements in this Item 14. A copy of the letter dated January 20, 2016, furnished by SingerLewak in response to that request is filed as Exhibit 16.1 to this registration statement.

Engagement of New Independent Registered Public Accounting Firm

The audit committee of our board of directors approved the appointment of Marcum LLP (“Marcum”) as our new independent registered public accounting firm, and we formally engaged Marcum as our independent registered public accounting firm on January 8, 2016.

During our two most recent fiscal years ended December 31, 2013 and 2014 and through January 8, 2016, neither we nor anyone on our behalf consulted with Marcum with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on our financial statements, and Marcum did not provide either a written report or oral advice to us that Marcum concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) any matter that was the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a “reportable event” within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.

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ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS

We have filed the following documents as part of this Registration Statement on Form 10:

1. Consolidated Financial Statements

Our consolidated financial statements are included beginning on page F-1 of this Registration Statement.

	Page

Annual Financial Statements (audited):
Index to Audited Consolidated Financial Statements	F-1
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2014 and 2013	F-3
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2014 and 2013	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2014 and 2013	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 and 2013	F-6
Notes to Consolidated Financial Statements	F-7

Interim Financial Statements (unaudited):
Index to Unaudited Condensed Consolidated Financial Statements	F-29
Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	F-30
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014	F-31
Condensed Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2015	F-32
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	F-33
Notes to Condensed Consolidated Financial Statements	F-34

2. Financial Statement Schedules

All schedules have been omitted because they are not required, not applicable, not present in amounts sufficient to require submission of the schedule, or the required information is otherwise included in our consolidated financial statements and related notes.

3. Exhibits

Exhibit
Number		Exhibit Description

3.1		Articles of Incorporation of Interlink Electronics, Inc., as amended.
3.2		Bylaws of Interlink Electronics, Inc.
3.3		Amendment to Bylaws of Interlink Electronics, Inc.
4.1		Specimen of common stock certificate.
10.1*		Form of Indemnification Agreement between Interlink Electronics, Inc. and directors and officers.
10.2*		Employment Agreement, dated July 13, 2010, between Interlink Electronics, Inc. and Steven N. Bronson.
10.3*		Offer Letter, dated May 19, 2015, between Interlink Electronics, Inc. and Tracy A. Kern.
10.4*		Employment Agreement, dated January 31, 2014, between Interlink Electronics Singapore Private Limited and Albert Lu Chee Wai.
10.5		Standard Multi-Tenant Office Lease — Gross, dated December 8, 2014, between K-Swiss Inc. and Interlink Electronics, Inc.
16.1		Letter to the Securities and Exchange Commission from SingerLewak LLP dated January 20, 2016.
21.1		List of Subsidiaries.

* Each a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: February 17, 2016	Interlink Electronics, Inc.

	By:	/s/ Tracy A. Kern
		Tracy A. Kern
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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INTERLINK ELECTRONICS, INC.

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Page

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2014 and 2013	F-3
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2014 and 2013	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2014 and 2013	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 and 2013	F-6
Notes to Consolidated Financial Statements	F-7

F- 1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Interlink Electronics, Inc. and its subsidiaries

Westlake Village, California

We have audited the accompanying consolidated balance sheets of Interlink Electronics, Inc. and its subsidiaries (collectively, the “Company”) as of December 31, 2014 and 2013, and the related consolidated statements of income and comprehensive income, changes in stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

/s/SingerLewak LLP

Los Angeles, California

December 11, 2015

F- 2

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

	December 31,
	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	2,381		$	1,487
Restricted cash	5			5
Accounts receivable, less allowance for doubtful accounts of $0 and $0 at December 31, 2014 and December 31, 2013, respectively	1,838			1,547
Inventories	1,056			670
Prepaid expenses and other current assets	286			263

Total current assets	5,566			3,972

Property and equipment, net	154			98
Intangibles, net	23			29
Other assets	39			49

Total assets	$	5,782		$	4,148

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued payables	$	473		$	312
Accrued payroll and other accrued liabilities	300			305
Deferred revenues—current	53			60

Total current liabilities	826			677

Deferred revenues—non-current	92			145

Total liabilities	918			822

Stockholders’ equity:
Preferred stock, $0.01 par value (1,000 shares authorized, none issued and outstanding at December 31, 2014 and December 31, 2013)	—			—
Common stock, $0.001 par value (30,000 shares authorized, 5,860 and 5,848 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively)(1)	6			6
Additional paid-in capital	60,163			60,181
Accumulated other comprehensive income	27			26
Accumulated deficit	(55,332		)	(56,887		)

Total stockholders’ equity	4,864			3,326

Total liabilities and stockholders’ equity	$	5,782		$	4,148

(1) Issued and outstanding share amounts reflect the four-for-one forward stock split effected on May 29, 2014 and the two-for-one forward stock split effected on February 24, 2015.

See accompanying notes to the consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(in thousands, except per share value)

	Years Ended December 31,
	2014			2013

Revenues, net	$	10,278		$	7,551
Cost of revenues	5,200			4,360

Gross profit	5,078			3,191

Operating expenses:
Product development and research	811			660
Selling, general and administrative	2,719			2,595

Total operating expenses	3,530			3,255

Operating income(loss)	1,548			(64		)

Other income (expense):
Interest income	2			4
Other income (expense), net	(16		)	39

Other income (expense), net	(14		)	43

Income (loss) from continuing operations before provision for income taxes	1,534			(21		)

Provision for income taxes	13			1

Income (loss) from continuing operations, net of tax	1,521			(22		)

Income from discontinued operations, net of tax	34			34

Net income	1,555			12
Other comprehensive income, net of tax:
Foreign currency translation adjustments	1			1

Comprehensive income	$	1,556		$	13

Earnings (loss) per share from continuing operations, net of tax: basic and diluted(1)	$	0.26		$	(0.00	)

Earnings per share on discontinued operations, net of tax: basic and diluted(1)	$	0.01		$	0.00

Earnings per share: basic and diluted(1)	$	0.27		$	0.00

Comprehensive income per share: basic and diluted(1)	$	0.27		$	0.00

Weighted-average shares used to calculate each of the per share amounts above: basic and diluted(1)	5,852			5,856

(1) All per-share and weighted-average share amounts have been adjusted to retroactively reflect the four-for one forward stock split effected on May 29, 2014 and the two-for-one forward stock split effected on February 24, 2015.

See accompanying notes to the consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

					Additional			Accumulated					Total
	Common Stock				Paid-In			Comprehensive		Accumulated			Stockholders’
	Shares		Amount		Capital			Income		Deficit			Equity

Balance, December 31, 2012	5,864		6		60,139			25		(56,899		)	3,271

Comprehensive income

Net income	—		—		—			—		12			12

Foreign currency translation adjustment	—		—		—			1		—			1

Comprehensive income													13

Restricted shares, net of cancellations	(16	)	—		42			—		—			42

Balance, December 31, 2013	5,848		6		60,181			26		(56,887		)	3,326

Comprehensive income

Net income	—		—		—			—		1,555			1,555

Foreign currency translation adjustment	—		—		—			1		—			1

Comprehensive income													1,556

Exercised stock options	8		—		16			—		—			16

Restricted shares, net of cancellations	4		—		(34		)	—		—			(34		)

Balance, December 31, 2014	5,860		$	6	$	60,163		$	27	$	(55,332	)	$	4,864

Share amounts reflect the four-for-one forward stock split effected on May 29, 2014 and the two-for-one stock split effected on February 24, 2015.

See accompanying notes to the consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended December 31,
	2014			2013
Cash flows from operating activities:
Net income	$	1,555		$	12
Income from discontinued operations, net of tax	34			34

Income (loss) from continuing operations, net of tax	1,521			(22		)

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) operating activities:
Decrease in allowance for doubtful accounts	—			(5		)
Increase (decrease) in reserves for excess and obsolete inventories	(43		)	(10		)
Depreciation and amortization	80			124
Issuance (cancellation) of restricted stock	(34		)	42
Changes in operating assets and liabilities
Accounts receivable	(291		)	(677		)
Inventories	(343		)	47
Prepaid expenses and other current assets	(23		)	(16		)
Other assets	10			(6		)
Accounts payable and accrued payables	161			(35		)
Accrued payroll and other accrued liabilities	(5		)	55
Deferred revenue	(60		)	(64		)

Net cash provided by (used in) operating activities — continuing operations	973			(567		)

Net cash provided by discontinued operations	34			34

Net cash provided by (used in) operations	1,007			(533		)

Cash flows from investing activities:
Purchases of property and equipment	(118		)	(77		)
Costs of intangibles	(12		)	(6		)

Net cash used in investing activities	(130		)	(83		)

Cash flows from financing activities:
Proceeds from exercise of stock options	16			—

Net cash provided by financing activities	16			—

Effect of exchange rate changes on cash and cash equivalents	1			1

Increase (decrease) in cash and cash equivalents	894			(615		)

Cash and cash equivalents, beginning of period	1,487			2,102

End of period	$	2,381		$	1,487

Supplemental disclosures of cash flow information: interest paid	$	—		$	—

Supplemental disclosures of cash flow information: income taxes paid	$	1		$	1

See accompanying notes to the consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

1. Basis of Presentation

Interlink Electronics, Inc. and its subsidiaries are engaged in the development, manufacture and sale of intuitive sensor technology that incorporates proprietary technologies. Our proprietary sensor technology integrates Force Sensing Restive (“FSR”) based sensors, subassemblies and modules that support cursor control and other input functions. Our FSR sensors are used in many applications, primarily in the electronic components and medical device markets.

The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries in Hong Kong, China, Singapore and United Kingdom (collectively “Interlink,” “we,” “us,” “our” or the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation.

On January 29, 2014, the Company established a wholly-owned subsidiary named Interlink Electronics Singapore Private Limited to serve as its Asia-Pacific regional research and development center. On January 31, 2014, the Company established a wholly-owned subsidiary named Interlink Electronics Europe Limited to serve as its European regional sales office.

On April 23, 2014, the board of directors approved a four (4) share for one (1) share forward stock split of Interlink’s common stock. The record date for the forward stock split is May 29, 2014. The purpose of the forward stock split is to increase the liquidity of the common stock and to enhance Interlink Electronics’ ability to list its shares of common stock on a national exchange.

The board of directors authorized the adoption of an amendment to the Articles of Incorporation to increase the authorized number of shares of capital stock to 16,000,000 shares, consisting of 15,000,000 shares of common stock, par value $0.001 and 1,000,000 shares of preferred stock, par value $0.01. The number of authorized shares, common and preferred, and par values for the accompanying consolidated financial statements have been recast to reflect the number of authorized shares and par values.

On February 3, 2015, the board of directors approved a two (2) share for one (1) share forward stock split (the “Forward Stock Split”) of Interlink’s common stock, par value $.001 per share (the “Common Stock”). The record date for the Forward Stock Split is February 19, 2015. In connection with the Forward Stock Split, Interlink is also increasing its authorized Common Stock from 15,000,000 shares to 30,000,000 shares (the “Authorized Shares Increase”). The Forward Stock Split will be effective on February 24, 2015. The number of authorized shares, common and preferred, and par values for the December 31, 2014 accompanying consolidated financial statements have been recast to reflect the number of authorized shares and par values.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents —We invest excess cash in highly liquid interest-bearing instruments, including commercial paper or money market accounts. Investments with original maturities less than 90 days are classified as cash equivalents.

Restricted Cash— We have $5,000 in restricted cash on our consolidated balance sheets as of December 31, 2014 and 2013 related to collateral for our credit card (merchant services) exposure with our bank.

Accounts Receivable and Allowance for Doubtful Accounts —Our accounts receivable are unsecured and are at risk to the extent such amounts become uncollectible. We continually monitor individual accounts receivable balances and provide for an allowance for doubtful accounts at the time collection may become questionable based on payment performance, due to the age of the receivable or other factors, including the customer’s ability to pay and our historical collection experience related to issues not yet specifically identified. We generally offer thirty-day payment terms; however, some international customers require as long as ninety-day payment terms, which do not require collateral and generally charge interest on past due balances. If future collections are not as expected, the allowance is adjusted accordingly.

Inventories— Inventories are stated at the lower of cost or market and include the cost of materials. Cost is determined using the average cost method.

Inventory Reserve —At each balance sheet date, we evaluate ending inventories for excess quantities and obsolescence. This evaluation includes analyses of forecasted sales levels by product and historical demand. We write off inventories that are considered obsolete. Remaining inventory balances are adjusted to approximate the lower of cost or market value and result in a new cost basis in such inventory until sold. If future demand or market conditions are less favorable than internal projections, additional inventory write-downs may be required and would be reflected in “cost of revenues” in the period the revision is made.

Property and Equipment— Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets, which range from three to ten years. Amortization of leasehold improvements is based upon the estimated useful lives of the assets or the term of the lease (including appropriate renewal options), whichever is shorter. Maintenance and repairs are charged to operations as incurred, while significant improvements are capitalized. Upon retirement or disposition of property, the asset and related accumulated depreciation or amortization is removed from the accounts, and any resulting gain or loss is charged to operations. The carrying value of property and equipment is assessed periodically and/or when factors indicating impairment are present. We recognize impairment losses when the expected future cash flows are less than the asset’s carrying value, in which case the asset is written down to its estimated fair value.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

2. Summary of Significant Accounting Policies (Continued)

Intangibles —Our costs to acquire patents and trademarks are amortized on a straight-line basis over their estimated useful lives, which we estimate to be five years. The related carrying value of the intangibles amounted to $23,000 and $29,000 as of December 31, 2014 and 2013, respectively. Amortization expense for the years ended December 31, 2014 and 2013 was $18,000 and $25,000, respectively. Amortization expense on existing costs for intangibles over the next five years is summarized as follows (in thousands):

Year ending
December 31,

2015	$	10
2016	5
2017	4
2018	3
2019	1

Total	$	23

The carrying value of intangibles is assessed periodically and/or when factors indicating impairment are present. We recognize impairment losses when the expected future cash flows are less than the asset’s carrying value, in which case the asset is written down to its estimated fair value. Based on the Company’s review of both qualitative and quantitative factors, no significant indicators of impairment were identified during the years ended December 31, 2014 and 2013.

Foreign Currency Translation/Transactions —The accounts of our Chinese subsidiary have been translated as required by the “Foreign Currency Matters” Topic of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 830 (“ASC 830”). Management has determined that the functional currency for the Chinese subsidiary is the Chinese Yuan Renminbi, and the functional currency for our Hong Kong, Singapore and United Kingdom subsidiaries is the U.S. Dollar. Translation gains or losses for the Chinese subsidiary are recorded as “accumulated other comprehensive income.” All of the accumulated other comprehensive income represents cumulative translation adjustments. The Chinese subsidiary’s assets and liabilities are translated into U.S. Dollars using the period-end exchange rate. Revenues and expenses are translated at average rates during the year. Any gains or losses resulting from foreign currency transactions are reflected in the accompanying consolidated statements of income and comprehensive income for the period in which they occur.

Revenue Recognition— We recognize revenue in accordance with the “Revenue Recognition” Topic of FASB ASC Topic No. 605 (“ASC 605”). ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the fee is fixed and determinable and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) requires management’s judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectibility of those fees.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

2. Summary of Significant Accounting Policies (Continued)

Revenue Recognition (Continued) — To satisfy the criteria, we (1) input orders based upon receipt of a customer purchase order, (2) record revenue upon shipment of goods and when risk of loss and title transfer, (3) confirm pricing through the customer purchase order and (4) validate creditworthiness through past payment history, credit agency reports and other financial data. All customers have warranty rights, and some customers also have explicit or implicit rights of return. We comply with ASC 605 with respect to sell-through and returns and the related recording of reserves for potential customer returns or warranty repairs.

We defer revenue on advanced cash receipts until the delivery of the goods or over the service term, whichever is sooner.

Research and Development —Research and development costs are expensed as incurred.

Shipping and Handling —We account for shipping and handling costs as required by the Revenue Recognition Topic of FASB ASC Topic No. 605-45, which requires fees billed to customers to be included in revenue. During 2014 and 2013, related shipping and handling expenses of $122,000 and $62,000, respectively, are included in “revenues” and “cost of revenues” in the accompanying consolidated statements of income and comprehensive income.

Stock-based Compensation —We account for stock-based awards in accordance with the provisions of the Compensation — Stock Compensation Topic of FASB ASC Topic No. 718 (“ASC 718”). Accordingly, we measure stock-based compensation expense at the grant date, based on the fair value of the award, and recognize the expense over the employee’s requisite service period using the straight-line method. The measurement of stock-based compensation expense is based on several criteria, including but not limited to the valuation model used and associated input factors, such as expected term of the award, stock price volatility, risk-free interest rate and award forfeiture rate. We elected to adopt the alternative transition method for calculating the tax effects of stock-based compensation and continue to use the simplified method in developing the expected term used in the valuation of stock-based compensation in accordance with ASC 718.

Income Taxes —Under the Income Taxes Topic of FASB ASC Topic No. 740 (“ASC 740”), we are required to estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the accompanying consolidated balance sheets. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. The valuation allowance is reviewed annually based upon the facts and circumstances known at the time. In assessing this valuation allowance, we review historical and future expected operating results and other factors, including recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

2. Summary of Significant Accounting Policies (Continued)

Income Taxes (Continued) — ASC 740 provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company. ASC 740 contains a two-step approach to recognizing and measuring uncertain income tax positions.

The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit will be recorded.

The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above, if any, is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

During the year ended December 31, 2014, we performed an evaluation of uncertain tax positions and did not note any matters that would require recognition in the consolidated financial statements.

The Company is subject to U.S. federal income tax as well as state of California income tax. Our federal and state of California income tax returns are subject to examination for the following periods:

Jurisdiction		Open Tax Years

Federal		2011 — 2014
State		2010 — 2014

Earnings per Common Share —Basic earnings per common share are computed by dividing net earnings by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are computed by adjusting outstanding shares assuming any dilutive effects of options and restricted stock calculated using the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock results in a greater dilutive effect from outstanding options and restricted stock. Additionally, the exercise of employee stock options and the vesting of restricted stock results in a greater dilutive effect on net earnings per share.

Comprehensive Income —Comprehensive income is calculated in accordance with the “Comprehensive Income” Topic of FASB ASC Topic No. 220, which requires the disclosure of all components of comprehensive income, including net income and changes in equity during a period from transactions and other events and circumstances generated from non-owner sources.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

2. Summary of Significant Accounting Policies (Continued)

Segment Reporting —FASB ASC Topic No. 280, “Segment Reporting” (“ASC 280”), establishes standards for the way that entities report information about operating segments in annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. We operate in one reportable segment: the manufacturing and sale of intuitive sensor technology.

Use of Estimates —The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Significant estimates by management include the allowance for doubtful accounts, excess and obsolete reserves for inventory, impairment of long-lived assets, including patents, ASC 740 positions, deferred taxes and the valuation allowance. Actual results could materially differ from those estimates.

Concentration of Credit Risk —Financial instruments that potentially subject us to credit risk consist primarily of cash and cash equivalents and accounts receivable. All of our cash and cash equivalents are invested at major financial institutions primarily within the United States, United Kingdom, Hong Kong, Singapore and China. At December 31, 2014 and December 31, 2013, our cash and cash equivalents were maintained in accounts that are insured up to the limit determined by the appropriate governmental agency. The amounts held in accounts with U.S. banks were insured up to the Federal Deposit Insurance Corporation (“FDIC”) general insurance limit of $250,000, and approximately $1,890,000 and $867,000 was not insured at December 31, 2014 and December 31, 2013, respectively. The amounts held by Hong Kong banks were fully insured at December 31, 2014 and December 31, 2013. Approximately $31,000 and $361,000 held at Chinese banks was not insured at December 31, 2014 and December 31, 2013, respectively. Approximately $151,000 held at a Singaporean bank opened in 2014 was not insured at December 31, 2014. To date, we have not suffered any losses to our cash and cash equivalents. The amounts held by United Kingdom bank accounts opened in 2014 were fully insured at December 31, 2014.

With regard to accounts receivable, we trade only with recognized, creditworthy third parties. It is our policy that all customers that wish to trade on credit terms are subject to credit verification procedures. In addition, accounts receivable are monitored on an ongoing basis with the result that the accounts deemed to have a credit risk have been fully reserved for as of December 31, 2014 and 2013. For the year ended December 31, 2014, three customers accounted for approximately 19%, 17% and 10% of total revenues. For the year ended December 31, 2013, three customers accounted for approximately 19%, 18% and 18% of total revenues. At December 31, 2014, four customers accounted for approximately 22%, 22%, 10% and 10% of total accounts receivable. At December 31, 2013, four customers accounted for approximately 29%, 14%, 14% and 10% of total accounts receivable.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

2. Summary of Significant Accounting Policies (Continued)

Fair Value Measurements —We comply with the provisions of FASB ASC Topic No. 820, “Fair Value Measurements and Disclosures” (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial assets and liabilities and nonfinancial assets and liabilities.

As of December 31, 2014 and December 31, 2013, the carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued payables, accrued expenses and other accrued liabilities approximate fair value due to the short-term nature of such items.

Recently Adopted Accounting Pronouncements— In February 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”), which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (“GAAP”) to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. Nonpublic companies are required to comply with the requirements of ASU 2013-02 for all reporting periods beginning after December 15, 2013. The adoption of this guidance did not have a material financial impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements— In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The amendments to this Update supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of this Topic is to 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. This Topic defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. A nonpublic entity may elect to apply this guidance earlier, however, only as of the following: (1) an annual reporting period beginning after December 15, 2016, including interim periods within that reporting period (public entity effective date), (2) an annual reporting period beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017, (3) an annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. The Company has not yet assessed the impact of ASU 2014-09 but does not believe it will have a material effect on the Company’s consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

2. Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Pronouncements (Continued)— In June 2014, the FASB issued ASU No. 2014-12, “Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force)”, effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. This update is intended to resolve the diverse accounting treatment of share-based payment awards whose performance target may be achieved after the requisite service period. An entity may apply the standards (1) prospectively to all share-based payment awards that are granted or modified on or after the effective date, or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. Earlier application is permitted. The Company has not yet assessed the impact of ASU 2014-12 but does not believe it will have a material effect on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements — Going Concern (Sub-Topic 205-40), which provides guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This Update is effective for annual periods ending after December 15, 2016 and for annual periods and interim periods thereafter. Early application is permitted. The Company has not yet assessed the impact of ASU 2014-15 but does not believe it will have a material effect on the Company’s consolidated financial statements.

3. Discontinued Operations and Assets Held for Sale

On October 14, 2009, we completed the sale of our eTransactions business segment. The sale was structured as an asset sale and included the inventory, fixed assets, intangible assets and related intellectual property rights and other assets that constituted the operations of the divested business segment.

Our consolidated financial statements have been reclassified for all periods presented to reflect the eTransactions business segment as discontinued operations in accordance with the Property, Plant and Equipment Topic under FASB ASC Topic No. 360. Accordingly, the revenues, costs and expenses directly associated with the eTransactions business segment have been reclassified as discontinued operations on the consolidated statements of operations for all periods presented.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

3. Discontinued Operations and Assets Held for Sale (Continued)

Corporate expenses such as general corporate overhead, facility costs and interest have not been allocated to discontinued operations. Income from discontinued operations, net of tax, is summarized as follows (in thousands):

	Year Ended December 31,
	2014		2013

Net revenue from discontinued operations	$	53	$	53

Income from discontinued operations before income tax benefit	34		34

Income tax benefit, net of reserve	—		—

Income from discontinued operations	$	34	$	34

4. Fair Value Measurements

We comply with the provisions of ASC 820 which define fair value, provide a framework for measuring fair value and expand the disclosures required for fair value measurements of financial assets and liabilities and nonfinancial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1— Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2— Includes other inputs that are directly or indirectly observable in the marketplace

Level 3— Unobservable inputs which are supported by little or no market activity

The following is a description of the valuation methodologies used for our financial instruments measured at fair value:

The estimated fair values of our accounts receivables, accounts payable and accrued payables, accrued payroll and other accrued liabilities approximate their carrying values because of the short-term maturity of these instruments.

Cash and cash equivalents and restricted cash are estimated at fair value and valued primarily using quoted market prices utilizing market-observable inputs.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

4. Fair Value Measurements (Continued)

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and 2013 (in thousands):

	Level 1		Level 2		Level 3		Total
December 31, 2014
Cash and cash equivalents	$	2,381	$	—	$	—	$	2,381
Restricted cash	5		—		—		5

December 31, 2013
Cash and cash equivalents	$	1,487	$	—	$	—	$	1,487
Restricted cash	5		—		—		5

5. Inventories

Inventories consisted of the following at December 31, 2014 and 2013 (in thousands):

	December 31,
	2014		2013

Raw material	$	589	$	350
Work in process	326		160
Finished goods	141		160

Total inventories	$	1,056	$	670

6. Property and Equipment

Property and equipment consisted of the following at December 31, 2014 and 2013 (in thousands):

	December 31,
	2014			2013

Furniture, machinery and equipment	$	2,105		$	1,993
Leasehold improvements	606			600

	2,711			2,593
Less accumulated depreciation and amortization	(2,557		)	(2,495		)

Property and equipment, net	$	154		$	98

Depreciation expense charged to operations amounted to $62,000 and $99,000 for the years ended December 31, 2014 and 2013, respectively.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

7. Stockholders’ Equity

Stock Split — On April 23, 2014, the board of directors approved a four (4) share for one (1) share forward stock split of Interlink’s common stock. The record date for the forward stock split is May 29, 2014. The purpose of the forward stock split is to increase the liquidity of the common stock and to enhance Interlink’s’ ability to list its shares of common stock on a national exchange. References to shares and exercise prices of our common stock and stock options (and associated dollars amounts) in the accompanying consolidated financial statements are provided on post-split basis.

On February 3, 2015, the board of directors approved a two (2) share for one (1) share forward stock split (the “Forward Stock Split”) of Interlink’s common stock, par value $.001 per share (the “Common Stock”). The record date for the Forward Stock Split is February 19, 2015. In connection with the Forward Stock Split, Interlink is also increasing its authorized Common Stock from 15,000,000 shares to 30,000,000 shares (the “Authorized Shares Increase”). The Forward Stock Split will be effective on February 24, 2015. The number of authorized shares, common and preferred, and par values for the accompanying consolidated financial statements have been recast to reflect the number of authorized shares and par values.

Restricted Stock— On March 15, 2012, the board of directors approved the issuance of 80,000 shares each of restricted stock to two employees ($0.001 par value, valued at $67,500 for each employee based on the Company’s stock closing price on March 15, 2012 of $0.84375). One employee has left the Company and the other individual’s employment agreement was revised which resulted in forfeiture of the restricted stock. As a result, the 160,000 shares were forfeited and $57,400 is subtracted from stock compensation expense which is reflected in “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

The board of directors, in accordance with the employment agreement dated March 6, 2012, approved the issuance of 40,000 shares of restricted stock to one employee ($0.001 par value, valued at $42,750, based on the Company’s stock closing price on July 23, 2012 of $1.06875). The employee was terminated in July 2013. As a result of the termination, 40,000 shares were forfeited and $10,700 is subtracted from stock compensation expense which is reflected in “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

7. Stockholders’ Equity (Continued)

Restricted Stock (Continued)— On July 13, 2012, the board of directors approved that the chairman of each committee (the audit committee and compensation committee) will be paid $5,000 per annum on July 15 of each year through the issuance of common stock, $0.001 par value, valued at $5,000, based on the Company’s stock closing price on July 13, 2012 of $1.0625. The shares vested at the rate of 1/12 th per month on the 15 th day of each month during the period from July 15, 2012 through June 14, 2013. As of December 31, 2014, 9,430 shares are vested, and the $10,000 of the shares is reflected in “common stock” and “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

On February 5, 2013, the board of directors approved the issuance of 40,000 shares of restricted stock to an employee ($0.001 par value, valued at $57,500 based on the Company’s stock closing price on February 5, 2013 of $1.4375). The employee was terminated in September 2014. As a result of the termination, 40,000 shares were forfeited and $18,200 is subtracted from stock compensation expense which is reflected in “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

On July 12, 2013, the board of directors approved that the chairman of each committee (the audit committee and compensation committee) will be paid $5,000 per annum on July 15 of each year through the issuance of common stock ($0.001 par value, valued at $5,000, based on the Company’s stock closing price on July 12, 2013 of $1.6875). The shares vested at the rate of 1/12 th per month on the 15 th day of each month during the period from July 15, 2013 through June 14, 2014. As of December 31, 2014, 5,930 shares are vested, and the $10,000 of the shares is reflected in “common stock” and “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

The board of directors, in accordance with the employment agreement dated January 31, 2014, approved the issuance of 64,000 shares of restricted stock to one employee ($0.001 par value, valued at $80,000, based on the Company’s stock closing price on January 31, 2014 of $1.25). The first 32,000 shares will vest after four years, on January 31, 2018, and the remaining 32,000 shares will vest on January 31, 2019. As of December 31, 2014, the Company recorded $14,700 of stock compensation expense, which is reflected in “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

On July 18, 2014, the board of directors approved that the chairman of each committee (the audit committee and compensation committee) will be paid $5,000 per annum on July 15 of each year through the issuance of common stock ($0.001 par value, valued at $5,000, based on the Company’s stock closing price on July 15, 2014 of $3.75). The shares vested at the rate of 1/12 th per month on the 15 th day of each month during the period from July 15, 2014 through June 14, 2015. As of December 31, 2014, 1,200 shares are vested, and the $4,200 of the shares is reflected in “common stock” and “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

7. Stockholders’ Equity (Continued)

Restricted Stock (Continued)— On July 18, 2014, the board of directors approved that the chairman of each committee (the audit committee and compensation committee) will be paid $5,000 per annum on July 15 of each year through the issuance of common stock ($0.001 par value, valued at $5,000, based on the Company’s stock closing price on July 15, 2014 of $3.75). The shares vested at the rate of 1/12 th per month on the 15 th day of each month during the period from July 15, 2014 through June 14, 2015. As of December 31, 2014, 1,200 shares are vested, and the $4,200 of the shares is reflected in “common stock” and “additional paid-in capital” in the December 31, 2014 accompanying consolidated balance sheet.

A summary of our restricted stock activity for the year ended December 31, 2014 and 2013 is presented below:

			Weighted-
			average
			Grant Date
	Options		Fair Value (1)

Nonvested as of December 31, 2012	205,500		$	.89
Granted	45,900		$	1.47
Vested	(8,000	)	$	1.26
Cancelled	(40,000	)	$	1.08

Nonvested as of December 31, 2013	203,400		$	.97
Granted	66,700		$	1.35
Vested	(4,500	)	$	2.19
Cancelled	(200,000	)	$	.96

Nonvested as of December 31, 2014	65,600		$	1.31

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

7. Stockholders’ Equity (Continued)

Stock Options— Under the terms of our 1996 Stock Incentive Plan, officers and key employees may be granted non-qualified or incentive stock options, and outside directors and independent contractors may be granted non-qualified stock options. The aggregate number of shares that may be issued under the Plan is 7,250,000. New options are granted at fair market value on the date of grant and generally vest ratably over thirty-six months and have a ten-year term but terminate earlier if employment is terminated. As of December 31, 2014, options for 149,500 shares of stock have been granted (17,500 are outstanding, and 132,000 have been exercised, forfeited or expired). Activity under the Plan for the years ended December 31, 2014 and 2013 is summarized as follows:

			Weighted-
			average
			Grant Date
	Options		Fair Value (1)

Outstanding as of December 31, 2012	70,200		$	9.20
Granted	—		$	—
Exercised	—		$	—
Forfeited or expired	(3,600	)	$	10.45

Outstanding as of December 31, 2013	66,600		$	9.13
Granted	—		$	—
Exercised	(8,000	)	$	1.95
Forfeited or expired	(41,100	)	$	11.41

Outstanding as of December 31, 2014	17,500		$	7.05

Exercisable as of December 31, 2014	17,500		$	7.05

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

7. Stockholders’ Equity (Continued)

The following table summarizes information about stock options outstanding as of December 31, 2014:

	Employee Options Outstanding				Employee Options Exercisable
Range of Exercise Prices	Shares	Weighted- average. Remaining Contractual Life (Years) (1)	Weighted- average Exercise Price		Shares	Weighted- average Exercise Price (1)

$0.00 — $1.95	3,200	3.27	$	1.95	3,200	$	1.95
$6.00 — $13.90	13,100	1.68	7.28		13,100	7.28
$15.38 — $19.55	1,200	.16	$	18.16	1,200	$	18.16

	17,500	1.87	$	7.05	17,500	$	7.05

(1) Issued and outstanding share amounts and weighted-average grant date fair values reflect the four-for-one forward stock split effected on May 29, 2014 and the two-for-one stock split effected on February 24, 2015.

As of December 31, 2014, we do not have any unrecognized stock-based compensation cost related to nonvested stock options to be recognized. There were no stock options granted and 8,000 stock options were exercised during 2014. There were no stock options granted nor stock options exercised during the years ended December 31, 2014 and 2013.

8. 401(k) Savings Plan

In 1995, we implemented a savings plan for all eligible employees, which qualifies under Section 401(k) of the Internal Revenue Code (“IRC”). Participating employees may contribute up to 25% of their pretax salary, but not more than statutory limits. We match 50% of the first $1,000 a participant contributes. We expensed $5,000 and $6,000 in 2014 and 2013, respectively, related to this plan.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

9. Income Taxes

The provision for income taxes for the years ended December 31, 2014 and 2013 is as follows (in thousands):

	2014		2013
Current taxes:
Federal	$	—	$	—
State	1		1
Foreign	12		—

Subtotal	13		1

Deferred taxes:
Federal	—		—
State	—		—
Foreign	—		—

Subtotal	—		—

Provision for income taxes	$	13	$	1

Differences between the provision for income taxes and income taxes at the statutory federal income tax rate for the years ended December 31, 2014 and 2013 are as follows (in thousands):

	2014			2013
Income tax benefit at the statutory federal rate	$	526		$	4
State income taxes, net of federal income tax effect	82			12
Foreign taxes at rates different than U.S. taxes	(10		)	18
Expiring net operating loss carryforwards	533			70
Valuation allowance	(1,219		)	(103		)
Other	101			—

Total provision for income taxes	$	13		$	1

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

9. Income Taxes (Continued)

The tax effects of temporary differences and carryforwards that give rise to a significant portion of the deferred tax assets at December 31, 2014 and 2013 are summarized as follows (in thousands):

	2014			2013
Deferred tax assets:
Net operating loss carryforwards	$	19,287		$	20,639
Credits	658			654
Accruals	21			36
Reserves	452			499
State taxes	36			(991		)
Other	(792		)	44

Total deferred tax assets	19,662			20,881

Valuation allowance	(19,662		)	(20,881		)

Net deferred tax assets	$	—		$	—

In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portions or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible and the periods before the carryforwards expire. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes there is insufficient evidence to conclude that it is more likely than not that the results of future operations will generate sufficient taxable income to realize a portion of the net deferred tax assets. Accordingly, the Company has recorded a valuation allowance against its entire net deferred tax asset as of December 31, 2014 and 2013.

The United States income and loss before provision for taxes was $1,407,000 and $218,000 for the years ended December 31, 2014 and 2013, respectively. The corresponding income and loss before provision for taxes for non-U.S.-based operations was $162,000 and $(275,000) for the years ended December 31, 2014 and 2013, respectively.

As of December 31, 2014, withholding and U.S. taxes had not been provided on unremitted earnings of non-U.S. subsidiaries, because the Company has currently reinvested these earnings permanently in such operations. Such earnings would become taxable upon the sale or liquidation of these subsidiaries or upon remittance of dividends.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

9. Income Taxes (Continued)

As of December 31, 2014, the Company had net operating loss (“NOL”) carryforwards for federal, and state income tax purposes of $49.6 million and $27.2 million, respectively. Such carryforwards may be used to reduce taxable income in those jurisdictions through 2031, subject to limitations of Section 382 of the IRC. For the year ended December 31, 2012, the Company believes an ownership change may have occurred, as defined by Sections 382 and 383 of the IRC, which could result in the forfeiture of a significant portion of its net operating loss and credit carryforwards. The Company is currently analyzing whether a change occurred and the related impact on its gross deferred tax assets, if any. As the Company’s analysis is not complete, the impact to its gross deferred tax assets is uncertain.

10. Earnings per Share

For all periods presented, per-share information was computed pursuant to provisions of the Earnings per Share Topic of FASB ASC Topic No. 260. The computation of earnings per share—basic is based upon the weighted-average number of common shares outstanding during the periods presented. Earnings per share—diluted also includes the effect of common shares contingently issuable from options and warrants (in periods in which they have a dilutive effect).

Common stock equivalents are calculated using the treasury stock method. Under the treasury stock method, the proceeds from the assumed conversion of options and warrants are used to repurchase outstanding shares, using a yearly average market price.

The following table contains information necessary to calculate earnings per share (in thousands):

	2014		2013

Weighted-average shares outstanding(2)	5,852		5,856
Effect of dilutive securities, options and warrants	—	(1)	—	(1)

Weighted-average shares—diluted	5,852		5,856

(1) During the years ended December 31, 2014 and 2013, 83,000 and 270,000 shares of common stock equivalents, respectively, were not added to the basic common shares outstanding, as our average stock price during these periods was lower than the conversion price of all common stock equivalents.

(2) The common shares outstanding for all periods reflect the Company’s four-for-one forward stock split effected on May 29, 2014 and the two-for-one forward stock split effected on February 24, 2015.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

11. Commitments and Contingencies

Operating Leases— We lease our facilities and certain equipment under operating leases expiring through 2020. Rent expense totaled approximately $287,000 and $261,000 for the years ended December 31, 2014 and 2013, respectively.

Our future operating leases amounting to $367,000 for our future rent obligations, as follows (in thousands):

Year ending
December 31,

2015	$	81
2016	67
2017	69
2018	71
2019 and beyond	79

Total	$	367

12. Geographic Information

Geographic Information —We attribute revenues to different geographic areas on the basis of customer location. Our revenues and long-lived assets by geographic area for the years ended December 31, 2014 and 2013 are as follows (in thousands):

	Years Ended December 31,
	2014				2013
			Long-				Long-
			lived				lived
	Revenues		Assets		Revenues		Assets

United States	$	6,183	$	41	$	5,148	$	71
Japan	553		—		490		—
Asia (other than Japan)	1,784		136		588		56
Europe and other	1,758		—		1,325		—

Total	$	10,278	$	177	$	7,551	$	127

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

13. Quarterly Financial Data (Unaudited)(1)

The following table presents certain financial information for each of the following quarters during the years ended December 31, 2014 and 2013 (in thousands):

	December 31,		September 30,		June 30,		March 31,
	2014		2014		2014		2014
Revenues	$	2,957	$	2,928	$	2,680	$	1,713
Gross profit	1,587		1,452		1,283		756
Income (loss) from continuing operations, net of tax	777		468		414		(138		)
Income from discontinued operations, net of tax	8		9		9		8
Net income (loss)	785		477		423		(130		)
Income (loss) per share—basic and diluted	0.14		0.08		0.07		(0.02		)

(1) All per-share and weighted-average share amounts have been adjusted to retroactively reflect the four-for-one forward stock split effected on May 29, 2014 and the two-for-one stock split effected on February 24, 2015.

	December 31,		September 30,			June 30,			March 31,
	2013		2013			2013			2013
Revenues	$	2,013	$	1,802		$	1,910		$	1,826
Gross profit	760		649			882			900
Income (loss) from continuing operations, net of tax	33		(107		)	(10		)	62
Income from discontinued operations, net of tax	8		9			9			8
Net income (loss)	41		(98		)	(1		)	70
Income (loss) per share—basic and diluted	0.01		(0.02		)	0.00			0.01

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

13. Quarterly Financial Data (Unaudited)(1) (Continued)

Quarterly and year-to-date computations of earnings per share amounts are made independently. Therefore, the sum of the computations and per-share amounts for the quarters may not agree with the per-share amounts for the year.

14. Legal

From time to time, the Company is involved in various legal actions that arise in the ordinary course of business, and such items, if any, are not expected to have a significant impact to the consolidated financial statements of the Company.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 2014 AND 2013 AND

FOR THE YEARS THEN ENDED

15. Related Party Transactions

The Company paid fees to a related party for consulting services of $75,000 and $75,000 for the years ended December 31, 2014 and 2013, respectively. The agreement for consulting services was terminated as of December 31, 2014.

The Company shared certain services and expenses with a related party amounting to $48,877 and $0 for the years ended December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, the Company had an outstanding receivable due from the related party amounting to $5,116 and $3,481, respectively.

16. Subsequent Events

Subsequent events have been evaluated through March 16, 2015, which is the date the financial statements were available to be issued.

The Company announced on February 3, 2015, the board of directors had approved a two (2) share for one (1) share forward stock split (the “Forward Stock Split”) of Interlink’s common stock, par value $.001 per share (the “Common Stock”). The record date for the Forward Stock Split is February 19, 2015. In connection with the Forward Stock Split, Interlink is also increasing its authorized Common Stock from 15,000,000 shares to 30,000,000 shares (the “Authorized Shares Increase”). Nevada corporate law does not require Interlink to affect the Forward Stock Split or the Authorized Shares Increase. Interlink will not hold a meeting of its stockholders to consider or to vote upon the Forward Stock Split or Authorized Shares Increase. It is expected that the Forward Stock Split will be effective on February 24, 2015. The purpose of the Forward Stock Split is to increase the liquidity of the Common Stock and to enhance Interlink’s ability to list its shares of common stock on a national securities exchange.

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INTERLINK ELECTRONICS, INC.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

	Page

Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	F-30
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014	F-31
Condensed Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2015	F-32
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	F-33
Notes to Condensed Consolidated Financial Statements	F-34

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

	September 30,			December 31,
	2015			2014

ASSETS
Current assets:
Cash and cash equivalents	$	3,619		$	2,386
Accounts receivable	1,873			1,838
Inventories	934			1,056
Prepaid expenses and other current assets	165			286
Total current assets	6,591			5,566
Property, plant and equipment, net	200			154
Other intangible assets, net	14			23
Other assets	31			39
Total assets	$	6,836		$	5,782

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	304		$	473
Accrued expenses and other current liabilities	286			300
Deferred revenue, current	71			53
Total current liabilities	661			826

Deferred revenue, long-term	52			92
Total liabilities	713			918
Commitments and contingencies (see note )

Stockholder’s equity:
Preferred stock, $0.01 par value: 1,000 shares authorized, no shares issued or outstanding	—			—
Common stock, $0.001 par value: 30,000 shares authorized, 5,860 shares outstanding at September 30, 2015 and December 31, 2014 respectively	6			6
Additional paid-in-capital	60,218			60,163
Accumulated deficit	(54,101		)	(55,305		)
Total stockholders’ equity	6,123			4,864
Total liabilities and stockholders’ equity	$	6,836		$	5,782

See accompanying notes to the unaudited condensed consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2015			2014		2015			2014
Revenues, net	$	2,646		$	2,928	$	7,744		$	7,321
Cost of revenues	1,135			1,476		3,638			3,830
Gross profit	1,511			1,452		4,106			3,491

Operating expenses:
Engineering, research and development	219			242		637			650
Selling, general and administrative	816			740		2,291			2,094
Total operating expenses	1,035			982		2,928			2,744
Income from operations	476			470		1,178			747

Other income (expense):
Interest income	1			1		1			2
Other income (expense), net	(11		)	6		31			22
Other income (expense), net	(10		)	7		32			24
Income before income tax expense (benefit)	466			477		1,210			771
Income tax expense (benefit)	8			—		(3		)	1
Net income	$	458		$	477	$	1,213		$	770

Earnings per share: basic and diluted	$	0.08		$	0.08	$	0.21		$	0.13
Weighted average common shares outstanding - basic	5,860			5,854		5,859			5,852
Weighted average common shares outstanding - diluted	5,865			5,856		5,864			5,854

See accompanying notes to the unaudited condensed consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY

(in thousands)

				Additional					Total
	Common Stock			Paid-in-		Accumulated			Stockholders’
	Shares	Amount		Capital		Deficit			Equity
Balance at December 31, 2014	5,860	$	6	$	60,163	$	(55,305	)	$	4,864
Net income	—	—		—		1,213			1,213
Foreign currency translation adjustment	—	—		—		(9		)	(9		)
Compensation expense related to equity awards	—	—		55		—			55
Balance at September 30, 2015	5,860	$	6	$	60,218	$	(54,101	)	$	6,123

See accompanying notes to the unaudited condensed consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30,
	2015			2014
Cash flows from operating activities:
Net income	$	1,213		$	770
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and Amortization	46			55
Stock-based compensation (forfeiture)	55			(42		)
Other	(9		)	2
Changes in operating asses and liabilities
Accounts receivable	(35		)	(329		)
Inventories	122			(311		)
Prepaid expenses and other assets	129			118
Accounts payable	(169		)	122
Accrued expenses and other current liabilities	(14		)	(3		)
Deferred revenue	(22		)	(47		)
Net cash provided by operating activities	1,316			335

Cash flows from investing activities
Capital expenditures	(83		)	(106		)
Costs of intangibles	—			(12		)
Net cash used in investing activities	(83		)	(118		)

Cash flows from financing activities
Proceeds from exercise of stock options	—			16
Net cash provided by financing activities	—			16

Net increase in cash and cash equivalents	1,233			233
Cash and cash equivalents, beginning of period	2,386			1,492
Cash and cash equivalents, end of period	$	3,619		$	1,725

See accompanying notes to the unaudited condensed consolidated financial statements.

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1-THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Interlink Electronics, Inc. designs, develops, manufactures and sells a range of force-sensing technologies that incorporate our proprietary materials technology, firmware and software into a portfolio of standard products and custom solutions. These include sensor components, subassemblies, modules and products that support effective, efficient cursor control and novel 3 dimensional user inputs. Our disruptive, leading edge human machine interface (HMI) technology platforms are deployed in a wide range of markets including consumer electronics, automotive, industrial, and medical.

Interlink Electronics has been a leader in the printed electronics industry for 30 years with the commercialization of our patented Force-Sensing Resistor (FSR®) technology that has enabled rugged and reliable HMI solutions. Our solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world’s top electronics manufacturers.

Interlink Electronics serves our world-wide customer-base from our corporate headquarters in Westlake Village, California (greater Los Angeles area), our global research and development center in Singapore, our printed-electronics manufacturing facility in Shenzhen, China, our global distribution and logistics center in Hong Kong, and technical and sales offices in North Carolina and Japan.

We were incorporated in California on February 27, 1985. On July 10, 1996, we re-incorporated into a Delaware corporation and, on July 20, 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 31248 Oak Crest Drive, Westlake Village, California 91361 and our telephone number is (805) 484-8855. Our website address is www.interlinkelectronics.com.

Fiscal Year

Our fiscal year is January 1 through December 31.

Basis of Presentation

The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. They do not include all of the information and footnotes required by GAAP for complete financial statements. The December 31, 2014 balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required for annual periods. Therefore, these financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2014, included in our Annual Report.

The condensed consolidated financial statements included herein are unaudited. However, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly our consolidated financial position and our consolidated results of operations, and the consolidated cash flows and the changes in our stockholders’ equity. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for future quarters or the full year.

Share amounts and weighted-average grant date fair value reflect the four-for-one stock split effected on May 29, 2014 and the two-for-one stock split effected on February 24, 2015. The number of authorized shares, common and preferred, and par values reflect the number of authorized shares and par values subsequent to increases to our common and preferred stock approved by the Board of Directors on May 29, 2014 and February 24, 2015.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the consolidated financial statements. Management regularly evaluates estimates and assumptions related to revenue recognitions, allowances for doubtful accounts, warranty reserves, inventory valuations reserves, stock-based compensation, purchased intangible asset valuations and useful lives, asset retirement obligations, and

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

deferred income tax asset valuation allowances. These estimates and assumptions are based on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The actual results we experience may differ materially and adversely from our original estimates. To the extent there are material differences between the estimates and the actual results, our future results of operations will be affected.

Reclassification

Certain reclassifications have been made to prior year amounts and related footnotes to conform to current-year presentation with no changes to stockholders’ equity or net income.

Risk and Uncertainties

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

Recent Accounting Pronouncements

NOTE 2-INVENTORIES

Inventories consist of the following:

	September 30,		December 31,
	2015		2014
	(in thousands)
Raw materials	$	647	$	589
Work-in-process	178		326
Finished goods	109		141
Total inventories	$	934	$	1,056

NOTE 3-STOCKHOLDERS’ EQUITY

On May 29, 2014, we completed a four (4) share for one (1) share forward stock split of Interlink Electronics’ common stock. On February 19, 2015, we completed a two (2) share for one (1) share forward stock split of our common stock. All share amounts, exercise prices, and weighted-average grant date fair value for our common stock, stock options and restricted stock reflect the stock splits.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In conjunction with the May 29, 2014 stock split, the board of directors authorized the adoption of an amendment to the Articles of Incorporation to increase the authorized number of shares of capital stock to 16,000,000 shares, consisting of 15,000,000 shares of common stock, par value $0.001 and 1,000,000 shares of preferred stock, par value $0.01. In conjunction with the February 19, 2015 stock split, the board of directors authorized the adoption of an amendment to the Articles of Incorporation to increase its authorized Common Stock from 15,000,000 shares to 30,000,000 shares. The number of authorized shares, common and preferred, and par values in the accompanying unaudited condensed consolidated financial statements have been recast to reflect the number of authorized shares and par values on a post-split basis.

NOTE 4-STOCK BASED COMPENSATION

Share amounts and weighted-average grant date fair value reflect the four-for-one stock split effected on May 29, 2014 and the two-for-one stock split effected on February 24, 2015.

Restricted Stock Units

Activity for our restricted stock units is as follows:

	Restricted Stock Units	Weighted-Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
Restricted stock units, December 31, 2014	64,000	$	1.25	3.60	$	528,000
Awarded	65,000	$	6.61
Released	—	—
Forfeited	—	—
Restricted stock units, September 30, 2015	129,000	$	3.95	3.50	$	1,161,000

Stock Options

Under the terms of our 1996 Stock Incentive Plan (the “Plan”), officers and key employees may be granted non-qualified or incentive stock options, and outside directors and independent contractors may be granted non-qualified stock options. The aggregate number of shares that may be issued under the Plan is 7,250,000. New options are granted at fair market value on the date of grant, generally vest ratably over thirty-six months and have a ten-year term, but terminate earlier if employment is terminated. As of September 30, 2015, options for 149,500 shares of stock have been granted (15,928 are outstanding, and 133,572 have been exercised, forfeited or expired).

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
Options outstanding, December 31, 2014	17,528		$	7.05	1.87	$	35,207
Granted	—		—
Exercised	—		—
Cancelled or expired	(1,600	)	17.09
Options outstanding, September 30, 2015	15,928		$	6.04	1.28	$	47,153
Options exercisable, September 30, 2015	15,928		$	6.04	1.28	$	47,153

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INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

This intrinsic value represents the excess of the fair market value of our common stock on the date of exercise over the exercise price of such options. The aggregate intrinsic values in the preceding table for the options outstanding represent the total pretax intrinsic value, based on our closing stock price of $9.00 and $8.25 as of September 30, 2015 and December 31, 2014, respectively, which would have been received by the option holders had those option holders exercised their in-the-money options as of those dates. There are 15,928 in-the-money stock options that were exercisable as of September 30, 2015.

The following table provides additional information in regards to options outstanding as of September 30, 2015:

	Options Outstanding				Options Exercisable
Range of Exercise Price	Number Outstanding	Weighted Average Remaining Contrctual Life (Years)	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$1.95	3,200	2.52	$	1.95	3,200	$	1.95
$6.00 - $8.13	12,728	0.97	$	7.07	12,728	$	7.07
	15,928	1.28	$	6.04	15,928	$	6.04

NOTE 5-EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options and restricted stock-based awards using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2015		2014		2015		2014
Net income	$	458	$	477	$	1,213	$	770
Weighted average outstanding shares of common stock	5,860		5,854		5,859		5,852
Dilutive potential common shares from stock options	5		2		5		2
Common stock and common stock equivalents	5,865		5,856		5,864		5,854

Loss per share:
Basic and diluted net loss per share	$	0.08	$	0.08	$	0.21	$	0.13

Shares subject to anti-dilutive stock options and restricted stock-based awards excluded from calculation	140		80		140		80

NOTE 6-SIGNIFICANT CUSTOMERS, CONCENTRATION OF CREDIT RISK AND GEOGRAPHIC INFORMATION

We manage and operate our business through one operating segment.

Four customers accounted for 23%, 15%, 14% and 13% of our net revenue for the three-month period ended September 30, 2015. As of September 30, 2015, five customers accounted for approximately 32%, 18%, 15%, 11% and 10% of total accounts receivable. Three customers accounted for 22%, 16% and 11% of the Company’s net revenue for the three-month period ended September 30, 2014. As of September 30, 2014, four customers accounted for approximately 22%, 18%, 13% and 13% of total accounts receivable.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three customers accounted for 21%, 17% and 17% of our net revenue for the nine-month period ended September 30, 2015. Three customers accounted for 17%, 17% and 10% of the Company’s net revenue for the nine-month period ended September 30, 2014.

Net revenues by geographic area are as follows:

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
United States	$	1,590	$	1,713	$	4,462	$	4,252
Asia	669		821		2,056		1,700
Europe	356		357		1,104		1,233
Other	31		37		122		136
Revenue, net	$	2,646	$	2,928	$	7,744	$	7,321

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

As of September 30, 2015 our property and equipment, net were geographically located as follows

	September 30,
	2015
	(in thousands)
United States	$	50
Asia	164
Long-lived assets	$	214

NOTE 7-RELATED PARTY TRANSACTIONS

BKF Capital Group - We entered into an agreement, dated March 1, 2015 (the “Agreement”) with BKF Capital Group, Inc. (“BKF”). Pursuant to the Agreement, commencing on March 1, 2015, BKF shall occupy and use one furnished office, telephone and other services, located at our corporate offices. Pursuant to the Agreement, BKF shall pay to the Company a fee of $1,000 per month. For the three and nine months ended September 30, 2015, BKF paid $3,000 and $7,000, respectively, to the Company. Steven N. Bronson, our CEO and Chairman, is also the Chairman, CEO and majority shareholder of BKF.

We paid fees to a related party for consulting services of $0 and $18,750 for the three months ended September 30, 2015 and 2014, respectively. The Company paid fees to a related party for consulting services of $0 and $56,250 for the nine months ended September 30, 2015 and 2014 respectively.

Qualstar Corporation - The Company agreed to reimburse, or be reimbursed by, Qualstar Corporation (“Qualstar”) for our occupation and use of a portion of their Simi Valley manufacturing location, IT support and other expenses paid by or on behalf of our Company. Steven N. Bronson, our CEO and Chairman, is also the Chairman and CEO of Qualstar. Transactions with Qualstar are as follows:

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Paid to Qualstar	$	15	$	7	$	45	$	28
Reimbursed from Qualstar	$	2	$	22	$	13	$	133

NOTE 8-COMMITMENTS AND CONTINGENCIES

Operating Leases

We lease facilities under non-cancellable operating leases. The leases expire at various dates through fiscal 2020 and frequently include renewal provisions for varying periods of time, provisions which require us to pay taxes, insurance and maintenance costs, and provisions for minimum rent increases. Minimum leases payments, including scheduled rent increases are recognized as rent expenses on a straight-line basis over the term of the lease.

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

(in thousands)	Remaining in 2015		2016		2017		2018		2019		Thereafter		Total

Operating Leases	$	42	$	126	$	77	$	71	$	73	$	6	$	395

Warranty

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

Litigation

From time to time as a normal consequence of doing business, various claims and litigation may be asserted or commenced against the Company. In particular, the Company in the ordinary course of business may receive claims concerning contract performance, or claims that its products or services infringe the intellectual property of third parties. While the outcome of any such claims or litigation cannot be predicted with certainty, we do not believe that the outcome of any of such matters existing at the present time would have a material adverse effect on the Company’s consolidated financial position or results of operations

Indemnifications

In the normal course of business, the Company provides certain indemnifications, commitments and guarantees of varying scope to customers, including against claims of intellectual property infringement made by third parties arising from the use of the Company’s products. The Company also has certain obligations to indemnify its officers, directors and employees for certain events or occurrences while the officers, directors or employees are or were serving at the Company’s request in such capacity. The duration of these indemnifications, commitments and guarantees varies and in certain cases is indefinite. Many of these indemnifications, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. However, the Company’s director and officer insurance policy may enable it to recover a portion of any future payments related to its officer, director or employee indemnifications. We also maintain general and product liability insurance which may provide a source of recovery to us in the event of an indemnification claim.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Historically, costs related to these indemnifications, commitments and guarantees have not been significant. With the exception of the product warranty accrual associated with the Company’s initial standard warranty, no liabilities have been recorded for these indemnifications, commitments and guarantees.

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Exhibit 3.1


		040101

	ROSS MILLER Secretary of State 204 North Carson Street, Suite 4 Carson City, Nevada 89701-4520 (775) 684 5708 Website: www.nvsos.gov

Articles of Incorporation	Filed in the office of	Document Number
(PURSUANT TO NRS CHAPTER 78)		20120424704-66
	/s/ Ross Miller	Filing Date and Time
	Ross Miller	06/18/2012 1:20 PM
	Secretary of State	Entity Number
	State of Nevada	E0328962012-7

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

1. Name of Corporation:

INTERLINKS ELECTRONICS INC.

2. Registered Agent for Service of Process: (check only one box)

x Commercial Registered Agent:

XL CORPORATE SERVICES, INC.

Name

o Noncommercial Registered Agent

o Office or Position with Entity

(name and address below)

Name of Noncommercial Registered Agent OR Name of Title of Office or Other Position with Entity

88 SOUTH “E” STREET

VIRGINIA CITY

Nevada

89440

Street Address

City

Zip Code

Nevada

Mailing Address (if different from street address)

City

Zip Code

3. Authorized Stock: (number of shares corporation is authorized to issue)

Number of shares with par value:

5,000,000 common

1,000,000 preferred

Par value

per share: $

0.001

0.01

Number of shares without par value:

4. Names and Addresses of the Board of Directors/Trustees: (each Director/Trustee must be a natural person at least 18 years of age; attach additional page if more than two directors/trustees)

1) Steven N. Bronson

Name

546 Flynn Road

Camarillo

93012

Street Address

City

State

Zip Code

Name

Street Address

City

State

Zip Code

5. Purpose: (optional; see instructions)

The purpose of the corporation shall be:

This corporation is authorized to carry on any lawful business or enterprise.

6. Name, Address and Signature of Incorporator: (attach additional page if more than one Incorporator)

Ana Maisonave

/s/ Ana Maisonave

Name

Incorporator Signature

62 White St

New York

10013

Address

City

State

Zip Code

7. Certificate of Acceptance of Appointment of Registered Agent:

I hereby accept appointment as Registered Agent for the above named Enti ty.

Asst. Secretary Jose Mojica

/s/ Jose Mojica

June 18, 2012

Authorized Signature of Registered Agent or On Behalf of Registered Agent Entity

Date

	Nevada Secretary of State NRS 78 Articles
This form must be accompanied by appropriate fees.	Revised: 4-10-09

ARTICLES OF INCORPORATION

Interlink Electronics, Inc.

KNOW ALL MEN BY THESE PRESENTS:

That I, Ana Maisonave the undersigned, for the purpose of forming a corporation under the laws of the State of Nevada, relating to the General Corporation Law,

DO HEREBY CERTIFY:

FIRST: The name of the corporation is:

Interlink Electronics, Inc.

SECOND: This corporation is authorized to carry on any lawful business or enterprise.

THIRD: The amount of the total authorized capital stock of this corporation is 6,000,000 shares, consisting of 5,000,000 common stock at $0.001 par value and 1,000,000 preferred stock at $0.01 par value.

Common Stock

The holders of the Common Stock shall vote as a single class on all matters submitted to a vote of the stockholders, with each Share entitled to one vote. The holders of Common Stock are not entitled to cumulate votes in the election of any directors.

In the event that the shares of Common Stock shall be listed and quoted on an exchange or other trading system, the Board of Directors of the Corporation shall ensure, and shall have all powers necessary to ensure, that the membership of the Board of Directors and the voting rights of the Holders of Common Stock shall at all times be consistent with the applicable rules and regulations, if any, for the Common Stock to be eligible for listing and quotation on such exchange or other trading system.

Preferred Stock

General, Subject to the provisions of these Articles of Incorporation, the Board of Directors is authorized, subject to limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Nevada, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(a) The number of shares constituting that series and the distinctive designation of that series;

(b) The dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

(c) Whether that series shall have voting rights, in addition to the voting rights provided by law, and if so, the terms of such voting rights;

(d) Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine;

(e) Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(f) Whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund; and

(g) The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the

Corporation, and the relative rights of priority, if any, of payment of shares of that series.

FOURTH: Liquidation Rights

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, after payment shall have been made to holders of outstanding Preferred Stock, if any, of the full amount to which they are entitled pursuant to these Articles of Incorporation and any resolutions that may be adopted from time to time by the Corporation’s Board of Directors, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock, if any, to share ratably in accordance with the number of Common Stock held by each such holder, in all remaining assets of the Corporation available for distribution among the holders of Common Stock, whether such assets are capital, surplus or earnings. For purposes of this Section, neither the consolidation or merger of the Corporation with or into any other corporation or corporations pursuant to which the stockholders of the Corporation receive capital stock and/or other securities (including debt securities) of the acquiring corporation (or of the direct or indirect parent corporation of the acquiring corporation), nor the sale, lease or transfer by the Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation, shall be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the Corporation as those terms are used in this Section “Fourth”.

FIFTH: The members of the governing board of this corporation shall be styled directors. The first board of directors shall consist of one member and the name and address is as follows:

Steven N. Bronson

546 Flynn Road

Camarillo, California 93012

SIXTH: The name and address of the incorporator is as follows:

Ana Maisonave

62 White Street

New York, NY 10013

SEVENTH: The period of existence of this corporation shall be perpetual.

EIGHTH: The name of the resident agent and the registered office address of the corporation is as follows:

XL CORPORATE SERVICES, INC.

88 South “E” Street,

Virginia City, Nevada 89440

NINTH: Limitation on Director Liability

No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Nevada General Corporation Law, or (d) for any transaction from which the director derived an improper personal benefit. If the Nevada General Corporation Law hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitations on personal liability provided herein, shall be limited to the fullest extent permitted by the amended Nevada General Corporation law. Any repeal or modification of this Section shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

TENTH: Indemnification

General . Each person who was or is made a party to or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in any other capacity while serving as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Nevada General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment),

against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided herein, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the Nevada General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers.

Failure to Pay a Claim . If an indemnification claim is not paid in full by the Corporation within thirty (30) days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Nevada General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Nevada General Corporation Law, nor an actual determination by the Corporation (including its Board of

Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

Not Exclusive . The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

Insurance . The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trusts or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Nevada General Corporation Law.

Definition of the Corporation . As used in this Section, references to “the Corporation” shall include, in addition to the resulting or surviving corporation, any constituent corporation absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees and agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, shall stand in the same position under the provisions of this Section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

Severability . If this Section or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director, officer, employee and agent of the Corporation as to expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including a grand jury proceeding and an action by the Corporation, to the fullest extent permitted by any applicable portion of this Section that shall not have been invalidated or by any other applicable law.

TWELVETH: Bylaws

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the bylaws of the Corporation.

THIRTEENTH: Amendment

The Corporation reserves the right to amend, alter change or repeal any provision contained in these Articles of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

I, Ana Maisonave, the undersigned, for the purpose of forming a corporation under the laws of the State of Nevada, do make, file and record this certificate, and do certify that the facts herein stated are true and I have accordingly hereunto set my hand this 3 rd day of March, 2003 .

By:	/s/ Ana Maisonave
	*Incorporator*

I hereby accept appointment as Resident Agent of Interlink Electronics, Inc. , and do hereby affix my signature of acceptance on this 15 day of June 2012.

By:	/s/ Jose Mojica

For:	*XL CORPORATE SERVICES, INC.*
	Asst. Secretary, Jose Mojica


		090401

	ROSS MILLER Secretary of State 204 North Carson Street, Suite 1 Carson City, Nevada 89701-4520 (775) 684-5708 Website: www.nvsos.gov

Certificate of Correction	Filed in the office of	Document Number
(PURSUANT TO NRS CHAPTERS 78,		20120483182-81
78A, 80, 81, 82, 84, 86, 87, 87A, 88,	/s/ Ross Miller	Filing Date and Time
88A, 89 AND 92A)	Ross Miller	07/12/2012 9:20 AM
	Secretary of State	Entity Number
	State of Nevada	E0328962012-7

USE BLACK INK ONLY · DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

Certificate of Correction

(Pursuant to NRS Chapters 78, 78A, 80, 81, 82, 84, 86, 87, 87A, 88, 88A, 89 and 92A)

1. The name of the entity for which correction is being made:

INTERLINKS ELECTRONICS INC.

2. Description of the original document for which correction is being made:

Articles Of Incorporation

3. Filing date of the original document for which correction is being made: 6/18/2012

4. Description of the inaccuracy or defect:

Name of Corporation:

The spelling on the incorporation name is (INTERLINKS ELECTRONICS INC) the name is spelled incorrect. There is an S on INTERLINKS. And it should read INTERLINK ELECTRONICS INC.

5. Correction of the inaccuracy or defect:

Name of Corporation: INTERLINK ELECTRONICS INC.

6. Signature:

/s/ [ILLEGIBLE]				7-10-12
Authorized Signature		Title *		Date

If entity is a corporation, it must be signed by an officer If stock has been Issued, OR an Incorporator or director if stock has not been issued; a limited-liability company, by a manager or managing members; a limited partnership or limited-liability limited partnership, by a general partner; a limited-liability partnership, by a managing partner; a business trust, by a trustee.

IMPORTANT : Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

	Nevada Secretary of State Correction
This form must be accompanied by appropriate fees.	Revised: 3-26-09


		090303

	BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov

Certificate of Change Pursuant

to NRS 78.209

USE BLACK INK ONLY - DO NOT HIGHLIGHT

ABOVE SPACE IS FOR OFFICE USE ONLY

Certificate of Change filed Pursuant to NRS 78.209

For Nevada Profit Corporations

1. Name of corporation:

Interlink Electronics, Inc.

2. The board of directors have adopted a resolution pursuant to NRS 78.209 and have obtained any required approval of the stockholders.

3. The current number of authorized shares and the par value, if any, of each class or series, if any, of shares before the change:

Common stock authorized: 15,000,000 shares, par value $0.001 per share

Preferred stock authorized: 1,000,000 shares, par value $0.01 per share

4. The number of authorized shares and the par value, if any, of each class or series, if any, of shares after the change:

Common stock authorized: 30,000,000 shares, par value $0.001 per share

Preferred stock authorized: 1,000,000 shares, par value $0.01 per share

5. The number of shares of each affected class or series, if any, to be issued after the change in exchange for each issued share of the same class or series:

One additional share of the company’s common stock shall be issued for each issued share of the company’s common stock held by each stockholder of record on the record date of February 19, 2015.

6. The provisions, if any, for the issuance of fractional shares, or for the payment of money or the issuance of scrip to stockholders otherwise entitled to a fraction of a share and the percentage of outstanding shares affected thereby:

N/A

7. Effective date and time of filing:	(optional)		Date:	2/24/15	Time:	6:30 AM
		(must not be later than 90 days after the certificate is filed)

8. Signature: (required)

/s/ [ILLEGIBLE]		CONTROLLER
Signature of Officer		Title

IMPORTANT : Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.

	Nevada Secretary of State Stock Split
This form must be accompanied by appropriate fees.	Revised: 1-5-15

Exhibit 3.2

BY-LAWS

INTERLINK ELECTRONICS, INC.

ARTICLE I

OFFICES

SECTION 1.1 Registered Office. The registered office of Interlink Electronics, Inc. (the “Corporation”) in the State of Nevada shall be at 88 South “E” Street, Virginia City, Nevada 89440. The name of the registered agent of the Corporation at that address is XL Corporate Services, Inc.

SECTION 1.2 Principal Office. The principal office for the transaction of the business of the Corporation shall be at 546 Flynn Road, Camarillo, California, 93012. The Board of Directors (the “Board”) is hereby granted full power and authority to change said principal office from one location to another.

SECTION 1.3 Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Nevada, as the Board may from time to time determine or as the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

SECTION 2.1 Annual Meetings. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings shall be held at such place, time and date as the Board shall determine by resolution.

SECTION 2.2 Special Meetings. Special meetings of the stockholders for any purpose or purposes may be called by the Board or a committee of the Board which has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in these Bylaws, include the power to call such meetings. Special meetings of the stockholders for any purpose or purposes may also be called by any shareholder or group of shareholders who own and have the right to vote more than twenty five percent (25%) of the issued and outstanding securities of the Company. Unless otherwise prescribed by statute or by the Certificate of Incorporation, special meetings may not be called by any other person or persons. No business may be transacted at any special meeting of stockholders other than such business as may be designated in the notice calling such meeting.

SECTION 2.3 Place of Meetings. All meetings of the stockholders shall be held at such places, within or without the State of Nevada, as may from time to time be designated by the person or persons calling the respective meeting and specified in the respective notices or waivers of notice thereof.

SECTION 2.4 Notice of Meetings. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his post office address furnished by him to the Secretary of the Corporation for such purpose or, if he shall not have furnished to the Secretary the address for such purpose, then at his post office address last known to the Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable or telecopier. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.

SECTION 2.5 Quorum. Except as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.

SECTION 2.6 Voting.

(a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation having voting rights on the matter in question and which shall have been held by him and registered in his name on the books of the Corporation:

(i) on the date fixed pursuant to Section 6.5 of these Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or

(ii) if no such record date shall have been so fixed, then (A) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (B) if notice of the meeting shall be waived, at the close of business on the day preceding the day on which the meeting shall be held.

(b) Shares of stock of the Corporation belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the laws of the State of Nevada.

(c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in these Bylaws or by law, shall be decided by the vote of a majority of the shares present in person or by proxy and entitled to vote thereat and thereon. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a

vote by ballot each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and it shall state the number of shares voted.

SECTION 2.7 List of Stockholders. The Secretary of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, at the offices of the Company or at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the duration thereof, and may be inspected by any stockholder who is present.

SECTION 2.8 Inspector of Election. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the Board or the chairman of such meeting may appoint an Inspector of Election to act with respect to such vote. The Inspector of Election so appointed shall first subscribe an oath faithfully to execute the duties of an inspector of election at such meeting with strict impartiality and according to the best of his ability. Such Inspector of Election shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed, shall ascertain and report the number of shares voted respectively for and against the question. Reports of the Inspector of Election shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The Inspector of Election need not be a stockholder of the Corporation, and any officer or director of the Corporation may be an Inspector of Election on any question other than a vote for or against a proposal in which he shall have a material interest.

SECTION 2.9 Conduct of Meeting. The chairman of a meeting of the stockholders, as determined pursuant to Article IV of these Bylaws, shall conduct such meeting in a businesslike and fair manner, but shall not be obligated to follow any technical, formal or parliamentary rules or principles of procedure. The chairman’s ruling on procedural matters shall be conclusive and binding on all stockholders, unless at the time of a ruling a request for a vote is made to the stockholders entitled to vote and represented in person or by proxy at the meeting, in which case the decision of a majority of such shares shall be conclusive and binding on all stockholders. Without limiting the generality of the foregoing, the chairman shall have all of the powers usually vested in the chairman of a meeting of stockholders.

ARTICLE III

BOARD OF DIRECTORS

SECTION 3.1 General Powers. The property, business and affairs of the Corporation shall be managed by the Board.

SECTION 3.2 Number, Qualifications and Term of Office. The authorized number of directors shall be no less than 1 and no more than 9, with the exact number to be determined from time to time by a resolution adopted by a majority of the Board or by the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding shares of voting stock of the Corporation. The initial number of authorized directors shall be three (3). Each director shall be a natural person not less than twenty-one (21) years of age but need not be a resident of Nevada or a shareholder of the Corporation. Each of the directors of the Corporation shall hold office until his successor shall have been duly elected and shall qualify or until he shall resign or shall have been removed in the manner provided herein or at law.

SECTION 3.3 Election of Directors. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for cumulative voting.

SECTION 3.4 Resignation. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, it shall take effect immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 3.5 Removal. All or any number of the directors may, subject to any agreement among stockholders of the Corporation, be removed with cause by a vote of the holders of a majority of the shares then entitled to vote at an election of directors and otherwise as provided by applicable law.

SECTION 3.6 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office until his successor shall have been elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided.

SECTION 3.7 Place of Meeting and Telephone Meetings. The Board may hold any of its meetings at such place or places within or without the State of Nevada as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice of a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting.

SECTION 3.8 Annual Meeting. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required.

SECTION 3.9 Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given.

SECTION 3.10 Special Meetings. Special meetings of the Board may be called by the Chairman of the Board or the Chief Executive Officer, and shall be called by the Chairman, Chief Executive Officer, Secretary on the written request of two directors. Notice of all special meetings of the Board shall be given to each director:

(a) by first-class mail, postage prepaid, deposited in the United States mail in the city where the principal executive office of the Corporation is located at least five (5) days before the date of such meeting; or

(b) by personal delivery or telecopier or e-mail or orally in person or by telephone, at least twenty-four (24) hours prior to the time of holding such meeting.

Notice given in accordance with paragraph (a) above shall conclusively be deemed to be given to a director if addressed to the director at the address the person giving the notice has reason to believe will result in actual notice to the director prior to the time of the meeting. Notice given in accordance with paragraph (b) above shall conclusively be deemed to be given to a director if delivered in writing or communicated orally either to the director or to a person whom the person giving the notice has reason to believe will deliver or communicate it to the director prior to the time of the meeting. Notice given in accordance with paragraph (a) or (b) above shall conclusively be deemed given to a director if mailed or delivered to the last

address provided by the director to the Secretary of the Corporation for such purpose. The notice need not specify the purpose of the meeting, nor need it specify the place of the meeting if the meeting is to be held at the principal executive office of the Corporation.

Such notice may be waived by any director at any time. Any meeting shall be a legal meeting without notice having been given if all the directors shall be present thereat or those not present shall, either before or after the meeting, sign a written waiver of notice of, or a consent to, such meeting or shall after the meeting sign the approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the Corporation’s records or be made a part of the minutes of the meeting.

SECTION 3.11 Quorum and Manner of Acting. Except as otherwise provided in the Certificate of Incorporation or these Bylaws or by law, the presence of a majority of the total number of directors then in office shall be required to constitute a quorum for the transaction of business at any meeting of the Board. Except as otherwise provided in the Certificate of Incorporation or these Bylaws or by law, all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. Except as otherwise provided in the Certificate of Incorporation, these Bylaws or by law, a meeting at which there is a quorum initially present may continue to transact business notwithstanding the withdrawal of a director, so long as any action taken is approved by at least a majority of the required quorum for such meeting. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such.

SECTION 3.12 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee, if any.

SECTION 3.13 Compensation. The directors shall receive only such compensation for their services as directors as may be allowed by resolution of the Board. The Board may also provide that the Corporation shall reimburse each such director for any expense incurred by him on account of his attendance at any meetings of the Board or committees of the Board. Neither the payment of such compensation nor the reimbursement of such expenses shall be construed to preclude any director from serving the Corporation or its subsidiaries in any other capacity and receiving compensation therefor.

SECTION 3.14 Committees. The Board may, by resolution passed by a majority of the Board, designate one or more other committees, each such committee to consist of one or more of the directors of the Corporation. To the full extent permitted by law, any such committee shall have and may exercise such powers and authority as the Board may designate in such resolution. Vacancies in the membership of a committee shall be filled by the Board at a regular meeting or a special meeting for that purpose. Any such committee shall keep written minutes of its meetings and report the same to the Board when required. The provisions of Sections 3.8, 3.9, 3.10 and 3.11 of these Bylaws shall apply, mutatis mutandis, to any such committee of the Board.

SECTION 3.15 Rights of Inspection. Every director shall have the absolute right at any reasonable time to inspect and copy all books, records, and documents of every kind and to inspect the physical properties of the Corporation and also of its subsidiary corporations, domestic or foreign. Such inspection by a director may be made in person or by agent or attorney and includes the right to copy and obtain extracts.

SECTION 3.16 Limits on Liability. A director shall not be held personally liable for monetary damages for any action he or she has taken or any failure to take action, unless (a) the director has breached or failed to perform the duties of his office as defined by Nevada law, and (b) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. The provision of this Section 3.16, however, shall not apply to (i) the responsibility or liability of a director pursuant to a criminal statute, or (ii) the liability of a director for the payment of taxes pursuant to local, state or federal law.

ARTICLE IV

OFFICERS

SECTION 4.1 Officers. The officers of the Corporation shall be elected by the Board and may consist of: a Chairman of the Board, a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer and a Treasurer, Secretary and Controller and such other officers and agents with such titles and such duties as the Board may from time to time determine, each to have such authority, functions or duties as in these Bylaws provided or as the Board may from time to time determine, and each to hold office for such term as may be prescribed by the Board and until such person’s successor shall have been chosen and shall qualify, or until such person’s death or resignation, or until such person’s removal in the manner hereinafter provided. The Chairman of the Board shall be elected from among the directors. One person may hold the offices and perform the duties of any two or more of said officers; provided , however , that no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required by law, the Certificate or these Bylaws to be executed, acknowledged or verified by two or more officers. The Board may require any officer or agent to give security for the faithful performance of such person’s duties.

SECTION 4.2 Removal; Vacancies. Subject to the express provisions of a contract authorized by the Board, any officer may be removed, either with or without cause, at any time by the Board or by any officer upon whom such power of removal may be conferred by the Board. Any vacancy occurring in any office of the Corporation shall be filled by the Board.

SECTION 4.3 Chairman of the Board. The directors of the Corporation shall elect from their own number a chairman of the Board, who may or may not be an officer of the Corporation. The Chairman of the Board shall preside at all meetings of the shareholders and of the directors and shall have such other powers and duties as are provided in these By-laws and as may be prescribed from time to time by the Board of Directors or by applicable law. He shall be an ex- officio member of standing committees, if so provided in the resolutions of the Board appointing the members of such committees. If there is no Chief Executive Officer, the Chairman of the Board shall in addition be the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in Section 4.4. The Chairman of the Board shall be an officer of the Corporation, subject to the control of the Board, and shall report directly to the Board.

SECTION 4.4 Chief Executive Officer. The Chief Executive Officer, subject to the control of the Board, shall have general supervision, control and management of the business and affairs of the Corporation, and general charge and supervision of all officers, agents and employees of the Corporation; shall see that all orders and resolutions of the Board are carried into effect; in general shall exercise all powers and perform all duties usually vested in the office of chief executive officer of a corporation; and shall have such other powers and duties as may from time to time be assigned to him by the Board or as may be prescribed by these Bylaws or applicable law. The Chief Executive Officer may execute and deliver in the name of the Corporation all deeds, mortgages, bonds, contracts and other instruments, except where required by law or these Bylaws to be otherwise executed and delivered or when such execution and delivery shall be expressly delegated by him or the Board to some other officer or agent of the Corporation. In the absence of the Chairman of the Board, or if there is none, the Chief Executive Officer shall preside at all meetings of the stockholders and, if he is a director, the Board. He shall be an ex-officio member of all the standing committees, including the executive committee, if any.

SECTION 4.5 President. Subject to such supervisory powers, if any, as may be given by the Board or these Bylaws to the Chief Executive Officer or the Chairman of the Board, if there are such officers, the President shall, subject to the control of the Board, have the powers and duties prescribed for the President by the Chief Executive Officer or these Bylaws. In the absence of the Chairman of the Board and the Chief Executive Officer, or if there are none, the

President shall preside at all meetings of the stockholders and, if he is a director, the Board. If there is no Chief Executive Officer, the President shall in addition be the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in Section 4.5.

SECTION4.6 Chief Operating Officer. The Chief Operating Officer shall perform such senior duties in connection with the operations of the Corporation as the Board or the Chief Executive Officer shall from time to time determine, and shall report directly to the Chief Executive Officer. The Chief Operating Officer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as may be agreed with the Chief Executive Officer or as the Board may from time to time determine.

SECTION 4.7 Chief Financial Officer. The Chief Financial Officer shall perform all the powers and duties of the office of the chief financial officer and in general have overall supervision of the financial operations of the Corporation. The Chief Financial Officer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine. The Chief Financial Officer shall report directly to the Chief Executive Officer.

SECTION 4.8 Vice Presidents. Any Vice President shall have such powers and duties as shall be prescribed by his superior officer or the Board. A Vice President shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine. A Vice President need not be an officer of the Corporation and shall not be deemed an officer of the Corporation unless elected by the Board.

SECTION 4.9 Treasurer. The Treasurer, if one shall have been elected, shall supervise and be responsible for all the funds and securities of the Corporation; the deposit of all moneys and other valuables to the credit of the Corporation in depositories of the Corporation; borrowings and compliance with the provisions of all indentures, agreements and instruments governing such borrowings to which the Corporation is a party; the disbursement of funds of the Corporation and the investment of its funds; and in general shall perform all of the duties incident to the office of the Treasurer. The Treasurer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine.

SECTION 4.10 Secretary. It shall be the duty of the Secretary to act as secretary at all meetings of the Board, of the committees of the Board and of the stockholders and to record the proceedings of such meetings in a book or books to be kept for that purpose; the Secretary shall see that all notices required to be given by the Corporation are duly given and served; the Secretary shall be custodian of the seal of the Corporation and shall affix the seal or cause it to be affixed to all certificates of stock of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the

provisions of these Bylaws; the Secretary shall have charge of the books, records and papers of the Corporation and shall see that the reports, statements and other documents required by law to be kept and filed are properly kept and filed; and in general shall perform all of the duties incident to the office of Secretary. The Secretary shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine.

SECTION 4.11 Assistants. Any Assistant Treasurers, Assistant Controllers and Assistant Secretaries shall perform such duties as shall be assigned to them by the Board or by the Treasurer, Controller or Secretary, respectively, or by the Chief Executive Officer. An Assistant Treasurer, Assistant Controller or Assistant Secretary need not be an officer of the Corporation and shall not be deemed an officer of the Corporation unless elected by the Board.

. SECTION 4.12 Additional Matters . The Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer of the Corporation shall have the authority to designate employees of the Corporation to have the title of Vice President, Assistant Vice President, Assistant Treasurer, Assistant Controller or Assistant Secretary. Any employee so designated shall have the powers and duties determined by the officer making such designation. The persons upon whom such titles are conferred shall not be deemed officers of the Corporation unless elected by the Board.

ARTICLE V

INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

SECTION 5.1 Right to Indemnification . Each person (hereinafter in this Article V, a “Covered Person”) who was or is made a party to or is threatened to be made a party to or is otherwise subpoenaed in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter in this Article V, a “proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director (or a member of any committee) or officer of the Company or any of its subsidiaries or is or was serving at the request of the Company as a director (or a member of a committee of a board of directors), officer, employee, trustee, manager or agent of any other corporation or of any partnership, joint venture, limited liability company, trust or other enterprise including without limitation service with respect to any employee benefit plan or trust or any charitable foundation (hereinafter in this Article V, “another entity”), and who satisfies the applicable standard of conduct set forth in the Nevada Revised Statutes or other applicable law, shall be indemnified and held harmless by the Company to the fullest extent authorized by the Nevada Revised Statutes as the same exists or may hereafter be amended, against all expenses, judgments, fines and amounts paid in settlement (including, without limitation, attorneys’ fees and disbursements, ERISA excise taxes, penalties or interest related to any such obligations actually and reasonably incurred by the Covered Person in connection therewith), and such indemnification shall continue as to a Covered Person who has ceased to be a director or officer of the Company and shall inure to the

benefit of his or her heirs, executors and administrators; provided, however, that the Company shall not be obligated to indemnify any Covered Person for expenses incurred in connection with proceedings initiated or brought voluntarily by the Covered Person and not by way of defense, counterclaim or crossclaim, except (i) proceedings to enforce or interpret any rights of the Covered Person to indemnification or advancement of expenses, other than proceedings determined to have been frivolous or in bad faith, (ii) in specific cases if the board of directors of the Company has approved the initiation or bringing of the proceeding, and (iii) as may be required by law.

SECTION 5.2 Advancement of Expenses . The Company shall advance all expenses (including attorneys’ fees and disbursements) incurred by a Covered Person in defending or responding to any proceeding to which such person is a party or is threatened to be made a party or is otherwise subpoenaed in connection with, by reason of the fact that such Covered Person (or the person of whom he or she is the legal representative) is or was an officer or a director (or a member of any committee) of the Company or any of its subsidiaries or is or was serving at the request of the Company as a director (or a member of a committee of a board of directors), officer, employee, trustee, manager or agent of another entity upon receipt by the Company of an undertaking by such Covered Person, in form and substance satisfactory to the Company, to repay such amounts so advanced if it shall ultimately be determined that he or she is not entitled to be indemnified by the Company for such expenses under Article Seventh of the Restated Certificate of Incorporation, Article V of these Bylaws or otherwise.

SECTION 5.3 Claims . If a claim for indemnification or advancement of expenses under Article Seventh of the Restated Certificate of Incorporation or this Article V is not paid in full by or on behalf of the Company within 10 days after a written claim therefor by the Covered Person has been received by the Company, the Covered Person may file suit to recover the unpaid amount of such claim and shall be entitled to be paid by the Company an additional amount equal to the expense of prosecuting such claim to the fullest extent permitted by Section 5.1 of these Bylaws and applicable law. In any such action the Company shall have the burden of proving that the Covered Person was not entitled to the requested indemnification or payment of expenses under applicable law. Neither the failure of the Company (including its board or independent legal counsel) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Company (including its board, its independent legal counsel and its stockholders) that such Covered Person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such Covered Person is not so entitled.

SECTION 5.4 Nonexclusivity of Rights; Purchase of Insurance .

(a) The rights conferred on any Covered Person by this Article V shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, the Restated

Certificate of Incorporation, these Bylaws, any agreement, any vote of stockholders or disinterested directors or otherwise. Any amendment or repeal of any provision of this Article V shall not limit the right of any person to indemnity or advancement of expenses with respect to actions taken or omitted to be taken by such person prior to such amendment or repeal.

(b) The Company shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company or any of its subsidiaries, or is or was serving at the request of the Company as a director, officer, employee, trustee, manager or agent of another entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions of the Nevada Revised Statutes.

SECTION 5.5 Provisions Deemed a Contract . The provisions of Article Seventh of the Restated Certificate of Incorporation and this Article V shall constitute a contract between the Company, on the one hand, and each director and officer of the Company or any of its subsidiaries who serves in such capacity at any time while either of Article Seventh of the Restated Certificate of Incorporation and this Article V is in effect and any other person entitled to indemnification hereunder, on the other hand, pursuant to which the Company and each such Covered Person intend to be, and shall be, legally bound.

SECTION 5.6 Conclusive Presumption . For purposes of this Article V, any director or officer of the Company serving in any capacity (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Company or (b) any employee benefit plan or trust of the Company or any corporation referred to in clause (a), shall in either case be conclusively presumed to be doing so at the request of the Company.

SECTION 5.7 Severability . If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each director or officer of the Company or any of its subsidiaries as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company or any of its subsidiaries, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law.”

ARTICLE VI

CERTIFICATES FOR SHARES AND THEIR TRANSFER

SECTION 6.1 Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chairman or Chief Executive Officer or President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any of or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, any such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the shares represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.4.

SECTION 6.2 Transfers of Stock. Transfers of shares of stock of the Corporation shall be made on the books of the Corporation by the registered holder thereof, or by his attorney thereupon authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or transfer agent appointed as provided in Section 6.3, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

SECTION 6.3 Transfer Agent. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. The Board may also from time to time appoint one or more transfer agents and one or more registrars for the shares of the corporation, with such powers and duties as the Board of Directors shall determine by resolution.

SECTION 6.4 Lost, Stolen, Destroyed and Mutilated Certificates. In any case of loss, theft, destruction or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board, the Chief Executive Officer, or the President may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, the Chief Executive Officer, or the President, it is proper so do to.

SECTION 6.5 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders the Board shall not fix such a record date, the record date for determining stockholders for such purpose shall be the close of business on the day on which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

ARTICLE VII

CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

SECTION 7.1 Checks, Drafts, Etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness payable by the Corporation shall be signed by the Chief Executive Officer, the President, the Treasurer, and/or by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board.

SECTION 7.2 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the Chief Executive Officer, the President, any Vice President or the Treasurer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by

the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation.

SECTION 7.3 General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.

ARTICLE VIII

APPROVAL OF INSIDER TRANSACTIONS

SECTION 8.1 Any transaction, agreement or understanding between the Corporation or any of its subsidiaries and any of the officers and directors of the Corporation, or any entity in which such officer or director has a material financial interest, which is material to the business of the Corporation, or the applicable subsidiary, must be approved by a majority of the directors of the Corporation who have no interest in such transaction, agreement or understanding. The interested director may be present at the meeting, if any, at which such transaction, agreement or underwriting is approved.

ARTICLE I X

MISCELLANEOUS

SECTION 9.1 Seal. The Board shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Nevada and the year of incorporation.

SECTION 9.2 Waiver of Notices. Whenever notice is required to be given by these Bylaws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice orally or in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice.

SECTION 9.3 Amendments. Subject to the provisions of the Certificate of Incorporation, these Bylaws and applicable law, these Bylaws or any of them may be amended or repealed and new Bylaws may be adopted (a) by the Board, by vote of a majority of the number of directors then in office or (b) by the vote of the holders of not less than a majority of

the total voting power of all outstanding shares of voting stock of the Corporation at an annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, repeal or adoption is given in the notice of special meeting. Subject to the provisions of the Certificate of Incorporation, any Bylaws adopted or amended by the stockholders may be amended or repealed by the Board or the stockholders.

SECTION 9.4 Voting Stock. Unless otherwise ordered by the Board, the Chief Executive Officer shall have full power and authority on behalf of the Corporation to attend and to act and vote at any meeting of the stockholders of any corporation in which the Corporation may hold stock and at any such meeting shall possess and may exercise any and all rights and powers which are incident to the ownership of such stock and which as the owner thereof the Corporation might have possessed and exercised if present. The Board by resolution from time to time may confer like powers upon any other person or persons.

SECTION 9.5. Severability . Any determination that any provision of these Bylaws is for any reason inapplicable, invalid, illegal or otherwise ineffective shall not affect or invalidate any other provision of these Bylaws.

SECTION 9.6 Evidence Of Authority . A certificate by the Secretary or an Assistant Secretary as to any action taken by the stockholders, directors, any committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

CERTIFICATE OF SECRETARY

I, the undersigned, hereby certify that:

1. I am the duly elected, qualified and acting Secretary of Interlink Electronics, Inc., a Nevada corporation.

2. The foregoing By-Laws of said corporation were duly adopted as the By-Laws thereof by a Written Consent of the Board of Directors of said corporation, of even date herewith, and that the same do now constitute the By-Laws of said corporation.

Executed as of June 29, 2012.

	/s/ Steven N. Bronson
	Steven N. Bronson, Secretary

Exhibit 3.3

AMENDMENT TO THE BYLAWS
OF
INTERLINK ELECTRONICS, INC.
(a Nevada Corporation)

THIS AMENDMENT TO THE BYLAWS of INTERLINK ELECTRONICS, INC., a Nevada corporation (the “Corporation”) evidences the action of the Board of Directors of the Corporation taken by Unanimous Written Consent, dated January 18, 2016 to amend Sections 6.1 and 6.2 of Article VI of the Bylaws of the Corporation to read in their entirety as follows:

Section 6.1. Certificates for Stock . Shares of stock of the Corporation may but need not be represented by certificates. The rights and obligations of stockholders shall be identical whether or not their shares are represented by certificates. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. If shares are represented by certificates, such certificates shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chairman or Chief Executive Officer or President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any of or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, any such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the shares represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.4.

Section 6.2. Transfers of Stock . Transfers of shares of stock of the Corporation shall be made on the books of the Corporation by the registered holder thereof, or by his attorney thereupon authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or transfer agent appointed as provided in Section 6.3, and (i) upon the surrender of the certificate therefor, which shall be cancelled before a new certificate shall be issued, if such shares are represented by a certificate of stock or (ii) by delivery to the Corporation of such evidence of transfer as may be required by the Corporation if such shares are not represented by certificates. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall

be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

IN WITNESS WHEREOF, the undersigned has hereby subscribed his name as of this 18 th day of January, 2016.


	/s/ Tracy Kern
	Name:	Tracy Kern
	Title:	Secretary

Exhibit 4.1

016570| 003590|127C|RESTRICTED||4|057-423 . COMMON STOCK PAR VALUE $0.001 COMMON STOCK THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA AND NEW YORK, NY Shares * * 000000 * * * * * * * * * 000000 * * * * * * * * * 000000 * * * * * * * * * 000000* * * * * * * * * 000000* * Certificate Number ZQ 000000 INTERLINK ELECTRONICS INC INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David THIS CERTIFIES THAT MR. SAMPLE & MRS. SAMPLE & Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David David Sample ***M* Mr. ARlexand.er DSavid SAampleM**** MPr. AlexLandeEr David &Sample M**** Mr.RAlexaSnder D.avidSampAle ****MMr. AlPexandLer DaEvid Sample **** Mr. Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander SEE REVERSE FOR CERTAIN DEFINITIONS Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample is the owner of **000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares*** *000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares**** 00000*0***Sha*res*Z***000E000**SRhares*O***000000H**ShareUs****00N0000**DSharesR****000E000**SDhares****0T00000H**SharOes****00U0000**ShareAs****00N0000**DShares****0 00000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00 0000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000 000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0000 **ShareZs****0E00000*R*ShareOs****00000H0**ShaUres****0N00000D**ShareRs****00E0000**DShares***A*0000N00**ShaDres****00Z0000**EShareRs****00O0000**S*hare*s****000000* 00**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00000 0**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000 *Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000** Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**S FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF INTERLINK ELECTRONICS INC (hereinafter called the “Company”), transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. DATED <<Month Day, Year>> COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, CEO and Chairman By Secretary AUTHORIZED SIGNATURE CUSIP Holder ID Insurance Value Number of Shares DTC Certificate Numbers 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Total Transaction XXXXXX XX X XXXXXXXXXX 1,000,000.00 123456 12345678 123456789012345 PO BOX 43004, Providence, RI 02940-3004 Num/No. Denom. Total 1 2 3 4 5 6 7 1 2 3 4 5 6 1 2 3 4 5 6 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 CUSIP 458751 30 2

. INTERLINK ELECTRONICS INC THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE ARTICLES OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE. (Cust) (Minor) (State) (Cust) and not as tenants in common (Minor) (State) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE For value received, hereby sell, assign and transfer unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated: 20 Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - ............................................Custodian ................................................ TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act......................................................... JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT - ............................................Custodian (until age ................................) .............................under Uniform Transfers to Minors Act ................... Additional abbreviations may also be used though not in the above list.

Exhibit 10.1

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “ Agreement ”) is made and entered into as of , 20 by and between Interlink Electronics, Inc., a Nevada corporation (the “ Company ”), and (“ Indemnitee ”).

WITNESSETH THAT:

WHEREAS, highly competent persons have become more reluctant to serve corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “ Board ”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The articles of incorporation and the bylaws of the Company may require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to Chapter 78 of the Nevada Revised Statutes (“ NRS ”). The NRS expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and in furtherance of the articles of incorporation and the bylaws of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

WHEREAS, Indemnitee does not regard the protection available under the Company’s articles of incorporation, bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as a director and/or officer without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified.

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director and/or officer from and after the date hereof, the parties hereto agree as follows:

1. Indemnity of Indemnitee . The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a) Proceedings Other Than Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, as well as amounts paid in settlement, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses or settlement shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged by a court of competent jurisdiction to be liable to the Company with respect to the matter claimed for indemnification, after exhaustion of all appeals therefrom, unless and to the extent that any court of the State of Nevada or the court in which such action or suit was brought shall determine that such indemnification may be made.

(c) Indemnification for Expenses of a Party Who is Successful on the Merits or Otherwise . Notwithstanding and in addition to any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably

incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with the defense. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2. Additional Indemnity . In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including, without limitation, a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 of this Agreement) to be unlawful.

3. Contribution .

(a) Whether or not the indemnification provided in Sections 1 and 2 of this Agreement is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of expenses (including, without limitation, attorneys’ fees and disbursements), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are

jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

4. Indemnification for Expenses of a Witness or in Response to a Discovery Request . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee, by reason of Indemnitee’s Corporate Status, is a witness, or is made (or asked) to respond to a discovery request for documents or information, in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses paid or incurred by Indemnitee in connection therewith in the manner set forth in this Agreement, without an undertaking.

5. Advancement of Expenses . Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee, without requiring Indemnitee or his counsel to waive any attorney client privilege or work product protection, and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free and made without regard to Indemnitee’s ability to repay such advances.

6. Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the NRS and public policy of the State of Nevada. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification, without requiring Indemnitee or his counsel to waive any attorney client privilege or work product protection. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) of this Agreement, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (1) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum, (2) by a majority vote of a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (3) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel (as hereinafter defined) in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company. Notwithstanding the above, if there has been a Change in Control, then the Board shall order that determination shall be made by Independent Counsel.

(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) of this Agreement, the Independent Counsel shall be selected as provided in this Section 6(c) . The Independent Counsel shall be selected by the Company. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the law firm, or member of a law firm, so selected shall act as Independent Counsel. If a written objection is made, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) of this Agreement, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition any Court in the State of Nevada or other court of competent jurisdiction for resolution

of any objection which shall have been made by Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) of this Agreement. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) of this Agreement, and the Company shall pay all reasonable fees and expenses of Indemnitee and Independent Counsel incident to the procedures of this Section 6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.

(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on: (i) the records or books of account of the Enterprise (as hereinafter defined) (including, without limitation, financial statements); (ii) information supplied to Indemnitee by the officers of the Enterprise in the course of their duties; (iii) the advice of legal counsel for the Enterprise; or (iv) information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise, or the Enterprise itself, shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(f) If the person, persons or entity empowered or selected under this Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in

good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to item (4) of Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

(g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including, without limitation, attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

7. Remedies of Indemnitee .

(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii)

advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Nevada, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking adjudication within one (1) year following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a) . The Company shall not oppose Indemnitee’s right to seek any such adjudication.

(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b) of this Agreement.

(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) In the event that Indemnitee, pursuant to this Section 7 , seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

8. Non-Exclusivity; Survival of Rights; Insurance; Subrogation .

(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the articles of incorporation and the bylaws of the Company, any agreement, a vote of stockholders, a resolution of the Board or otherwise. No amendment, alteration or repeal of this Agreement or of any provision of this Agreement shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the NRS, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the articles of incorporation, the bylaws of the Company and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, the Company shall obtain coverage for Indemnitee under such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms of this Agreement, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy purchased by the Company, or contract or agreement to which the Company is a party.

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

9. Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of Company securities pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or similar provisions of state statutory law or common law; or

(c) subject to Section 7(d), in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee (including, without limitation, any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees), unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

10. Duration of Agreement . All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director and/or officer of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter for (i) an additional three (3) years or (ii) so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 of this Agreement) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement, whichever such additional term is longer. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including, without limitation, any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

11. Security . To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

12. Enforcement .

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director and/or officer of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter of this Agreement.

13. Information Sharing . If Indemnitee is the subject of or is implicated in any investigation, whether formal or informal, by a governmental or regulatory entity or agency, the Company shall, to the extent permitted by law or the rules of such governmental or regulatory entity or agency, provide to Indemnitee any factual written information provided to the investigating entity concerning the investigation; provided, that by executing this Agreement, Indemnitee agrees to use such information solely in connection with the defense of such investigation and, if Indemnitee is not then serving the Company as an officer or director, shall execute a confidentiality agreement.

14. Definitions . For purposes of this Agreement:

(i) A “ Change in Control ” shall be deemed to have occurred if (i) any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing a majority of the total voting power represented by the Company’s then outstanding voting securities, (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board, together with any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination was previously so approved, cease for any reason to constitute a majority of the Board, (iii) the stockholders of the Company approve a merger or consolidation or a sale of all or substantially all of the Company’s assets with or to another entity, other than a merger, consolidation or asset sale that would result in the holders of the Company’s outstanding voting securities immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least a majority of the total voting power represented by the voting securities of the Company or such surviving or successor entity outstanding immediately thereafter, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company.

(b) “ Corporate Status ” means the status of a person who is or was a director, officer, employee, agent or fiduciary of or consultant to the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.

(c) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d) “ Enterprise ” means the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

(e) “ Expenses ” means all reasonable and documented attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery, documents, or information in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses shall also include any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(f) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(g) “ Proceeding ” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer,

employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding any such proceeding initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

15. Severability . The invalidity or unenforceability of any provision of this Agreement shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision of this Agreement conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

16. Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar) nor shall such waiver constitute a continuing waiver.

17. Notice by Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

18. Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

(a) To Indemnitee at the address set forth on the signature page hereto.

(b) To the Company at:

Interlink Electronics, Inc.
31248 Oak Crest Drive
Westlake Village, CA 91361
Attention: Chief Executive Officer

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

19. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile or other form of electronic transmission and in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

20. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

21. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to its conflict of laws rules. The parties hereto hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought in any court of the State of Nevada (the “ Nevada Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Nevada Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) irrevocably appoint, to the extent such party is not otherwise subject to service of process in the State of Nevada, the Company’s then current agent for service of process in Nevada as its agent in the State of Nevada for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Nevada, (iv) waive any objection to the laying of venue of any such action or proceeding in the Nevada Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Nevada Court has been brought in an improper or inconvenient forum. The Company shall ensure that its then current agent for service of process maintains a current mail and e-mail address for Indemnitee so it can promptly notify the Indemnitee of any action it undertakes on behalf of the Indemnitee under (iii) above. The Company shall bear the cost of engaging its then current agent for service of process to act as agent for service of process for Indemnitee and any related costs or expenses.

[Remainder of page intentionally left blank; signature page follows.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

	INTERLINK ELECTRONICS, INC.

	By:
	Name:	Steven Bronson
	Title:	Chief Executive Officer


	INDEMNITEE



	(Signature)


	(Print Name)

	Address:

Signature Page to Indemnification Agreement

Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of July 13, 2010, is entered into between Interlink Electronics, Inc., a Delaware corporation with principal offices located at 546 Flynn Road, Camarillo, CA 93012, (“Interlink Electronics” or the “Company”) and Steven N. Bronson, an individual residing at 78 10 Afton Villa Court Boca Raton, Florida 33433 (“Executive”)(each a “Party” and collectively, the “Parties”).

W I T N E S S E T H :

WHEREAS, Interlink Electronics desires to employ Executive, and Executive are willing to accept such employment on such terms and conditions as set forth below,

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, Interlink Electronics and Executive agree as follows:

1. Employment . Interlink Electronics hereby employs Executive as its Chairman and Chief Executive Officer, subject to the terms and conditions set forth in this Agreement.

2. Term . The term of this Agreement shall commence on July 15, 2010, and terminate on July 14, 2011 (the “Term”), subject to earlier termination pursuant to the provisions herein. The Term of this Agreement shall automatically renew for additional one year periods unless the Company or Executive provides written notice to the other party that the Agreement shall not be renewed at least thirty (30) days prior to the renewal date.

3. Duties . Executive shall serve as Chairman and Chief Executive Officer and shall perform all duties commensurate with his positions and as may be assigned to him by the Board of Directors of the Company. It is understood that Executive will not devote his full business time and energies to the business and affairs of the Company, however Executive shall use his best efforts, skills and abilities to promote the interests of the Company and to diligently and competently perform tl1e duties of his positions.

4. Compensation and Benefits .

4.1 Compensation . During the term of this Agreement, as compensation for the satisfactory performance of all duties to be performed by Executive hereunder, Interlink Electronics shall pay Executive guaranteed compensation of $200,000.00 per annum, through the issuance, on July 15, 2010, of the Company’s common stock, $.00001 par value, valued at $200,000.00 of based on the closing share price on July 14, 2010 (the “Shares”). The Shares shall vest at the rate of 1112th per month on the 15th day of each month during the Term of this Agreement commencing on August 15, 2010 and ending on July 15, 2011.

4.2 Residential and Travel Accommodations . The Company acknowledges that the Executive resides in Boca Raton, Florida and that he shall periodically commute to the Company’s principal offices in Camarillo, California. Accordingly, the Company shall provide Executive residential accommodations within the following California counties: Ventura, Los Angeles or Santa Barbara. Prior to securing residential accommodations the Executive shall advise the Company’s Compensation Committee of the cost of the residential accommodations. The Company shall also pay for all of Executive’s travel expenses in commuting to the Company’s principal office.

4.3 Bonus Compensation . Executive shall be entitled to earn and receive bonus compensation provided that certain performance goals are achieved by the Company. Bonuses shall be granted in accordance with a bonus plan to be adopted by the Company, the terms and conditions of which shall be determined by the Company’s Compensation Committee.

4.4 Executive Benefit Plans . The Executive shall be permitted during the Term to participate in the Company’s medical plans, life and long term disability insurance plans and retirement plans pursuant to their terms and conditions. Executive shall be entitled to participate in any other benefit plan offered by the Company to its executives during the Term of this Agreement.

5. Reimbursement of Business Expenses . During the term of this Agreement, upon submission of proper invoices, receipts or other supporting documentation satisfactory to Interlink Electronics and in specific accordance with such guidelines as may be established from time to time, Executive shall be reimbursed by Interlink Electronics for all reasonable business expenses actually and necessarily incurred by Executive on behalf of Interlink Electronics in connection with Executive’s performance of services under this Agreement.

6. Representations as to Employability .

6.1 Absence of prior restrictions . Executive represents and warrants that Executive is not party to, or bound by, any agreement or commitment, or subject to any restriction, including, but not limited to agreements related to previous employment containing confidentiality, non-solicitation, non-poaching or non-compete covenants, which would adversely affect the business of Interlink Electronics or Executive’s performance of duties under this Agreement.

6.2 Absence of third party proprietary information . Executive represents and warrants that Executive is not in possession of and will not bring onto the Company’s premises or access or utilize any proprietary information of any prior employer or other third-party that Executive is not permitted to have. Executive represents, further, that Executive will be able to fulfill Executive’s duties hereunder without such proprietary information by utilizing only information that is generally available in the public domain or the rightful property of Executive or the Company.

7. Confidentiality and Proprietary Information .

7.1 Non-Disclosure. During the course of Executive’s employment with Interlink Electronics, Executive will learn of Confidential Information (as defined below) and Executive may develop Confidential Information on behalf of lnterlink Electronics. Executive agrees that Executive will not use or disclose to any Person (except as required by applicable law or for the proper performance of Executive’s duties and responsibilities for Interlink Electronics) any Confidential Information obtained or created by Executive incident to Executive’s employment or any other association with Interlink Electronics. Executive understand that this restriction shall continue to apply after Executive’s employment terminates, regardless of the reason for such termination.

7.2 Protection of Information . All information, data, documents, records and files, in any kind of media, relating to the business (whether past, present or future) of Interlink Electronics (“Confidential Information”), whether or not prepared by Executive, shall be the sole and exclusive property of Interlink Electronics. Executive agrees to safeguard all Confidential Information and to surrender to Interlink Electronics, at the time Executive’s employment terminates or at such earlier time as requested, all tangible forms of Confidential Information of Interlink Electronics then in Executive’s possession or control, and to destroy or retrieve any copies, such that no Confidential Information which was at any time in Executive’s possession or control will exist in tangible form other than what Executive have turned over to Interlink Electronics or destroyed.

7.3. Work for Hire/ Assignment . Executive will promptly disclose to Interlink Electronics all designs, software, computer code, processes, inventions, improvements, discoveries and other information related in any way to the business of Interlink Electronics (collectively “Developments”) conceived, developed or acquired by Executive alone or with others during the term of this Agreement, whether or not conceived during regular working hours, through the use of Company time, material or facilities or otherwise. All such Developments shall be considered “work for hire” and Interlink Electronics shall be the sole and exclusive owner of such Developments. Additionally, Executive hereby agrees to assign, transfer, and convey to Interlink Electronics any and all rights and/or interest Executive may have in the Developments. The Parties acknowledge that the assignment under this Agreement does not apply to any development for which no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on Executive’s own time, and (a) which does not relate (i) directly to the business of Interlink Electronics or (ii) to its actual or demonstrably anticipated research or development; or (b) which does not result from any work performed by Executive for the Interlink Electronics.

8. Application of IRC Section 409A .

a. If Executive is a “specified employee” within the meaning of Internal Revenue Code (“IRC”) Section 409A(a)(2)(B)(i) and any payment required to be made or benefit required to be provided pursuant to this Agreement is subject to IRC Section 409A and not exempt from those requirements under any applicable regulations

or other guidance of general applicability, then any such payment otherwise payable on account of Employee’s separation from service during the period service ending on the date that is six (6) months after the separation from service shall be paid in a lump sum on the date that is six (6) months after Executive’s separation from service instead of the date on which it would otherwise be paid; provided, however, that deferred compensation to which Executive is entitled under this Agreement need not be delayed under this subparagraph to the extent those payments would comply with the requirements of Treasury Regulations Section 1.409A-l(b)(9)(iii), which generally requires that the total of such payments not exceed two (2) times the lesser of (1) Executive’s annualized compensation based on his annual rate of pay in the year before the Executive’s separation from service or (2) the Code Section 401(a)(l 7) limit applicable to qualified plans during the year of Executive’s separation from service, In determining whether Executive is a “specified employee” Interlink Electronics (or its delegate) may, but need not, elect in writing, subject to applicable limitations under IRC Section 409A, any of the special effective rules prescribed in Treasury Regulation Section 1.409A-l(i).

b. To the extent applicable, it is intended that this Agreement comply with the provisions of IRC Section 409A, so as to prevent inclusion in gross income of any amounts payable or benefits provided hereunder in a taxable year that is prior to the taxable year or years in which such amounts or benefits would otherwise actually be distributed, provided or otherwise made available to Executive. This Agreement shall be construed, administered, and governed in a manner consistent with this intent and the following provisions of this paragraph shall control over any contrary provisions of this Agreement.

c. Payments and benefits under this Agreement payable upon Executive’s termination or severance of employment with Interlink Electronics that constitute deferred compensation under IRC Section 409A shall not be paid or provided prior to Executive’s “separation from service” within the meaning of lRC Section 409A.

d. For purposes of lRC Section 409A, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments so that each payment is designated as a separate payment for purposes of IRC Section 409A.

e. References in this Agreement to IRC Section 409A include both that Section of the IRC itself and any guidance promulgated thereunder.

f. Interlink Electronics makes no representation or warranty and shall have no liability to Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to IRC Section 409A but do not satisfy an exemption from, or the conditions of, such Section.

9. Termination . This Agreement may be terminated prior to the expiration of the Term set forth in Section 2 upon the occurrence of any of the events set forth in, and subject to the terms of, this Section 9.

9.1 Voluntarily. Executive may terminate this Agreement at any time by giving no less than thirty (30) days written notice to Interlink Electronics

9.2 Death . This Agreement will terminate immediately and automatically upon Executive’s death.

9.3 Disability . This Agreement may be terminated at Interlink Electronics’ option, immediately upon notice to the Executive, if Executive shall suffer a permanent disability. For the purposes of this Agreement, the term “permanent disability” shall mean Executive’s inability to perform Executive’s duties under this Agreement for a period of ninety (90) consecutive days due to illness, accident or any other physical or mental incapacity, as determined by the Board of Directors of Interlink Electronics. In the event that a dispute arises with respect to Executive’s disability, the parties shall each select a duly licensed medical doctor to make such a determination. If the two doctors so selected cannot agree on a determination, they will mutually select a third duly licensed medical doctor and the decision of the majority of the three doctors will be binding.

9.4 Termination by Interlink Electronics for Cause . Interlink Electronics may terminate this Agreement upon thirty (30) days written notice to Executive for “Cause,” as defined below. “Cause” shall mean (i) the willful and material breach or the material failure by Executive to perform Executive’s duties and obligations under this Agreement, provided Executive does not cure such breach within thirty (30) days of Executive’s receipt of written notice of such breach, (ii) Executive’s commission of a material act of dishonesty or gross negligence in the performance of Executive’s duties hereunder, including but not limited to making any material misrepresentations to the Company (iii) Executive willfully engaging in conduct materially detrimental to the business of Interlink Electronics or (iv) Executive being convicted of a crime involving moral turpitude.

9.5 Termination by Executive for Good Reason . Executive may terminate his employment by written notice to Interlink Electronics for “Good Reason,” as defined below. “Good Reason” means one or more of the following: (1) Executive’s assignment by Interlink Electronics, without Executive’s written consent, to duties or responsibilities which are not consistent with that of duties and responsibilities as set forth herein; (2) reduction by Interlink Electronics, without Executive’s written consent, of Executive’s salary and bonus pursuant to Section 4.1 and Section 4.3, above; or (3) Interlink Electronics’ material breach of its obligations under this Agreement, which breach has continued uncured for a period of thirty days after its receipt of written notice from Executive.

9.6 Compensation in Event of Termination .

a. Voluntary Termination . Upon Executive’s voluntary termination of this Agreement pursuant to Section 9.1, Executive shall be entitled to receive the compensation, as set forth in paragraph 4 above, up to the date of termination, and after such date shall not be entitled to any Compensation under this Agreement, and Executive will no longer

continue any vesting but instead will retain any equity that has vested as of the date of termination.

b. Termination for Death or Disability. If Executive’s employment is terminated due to the Executive’s Death or Disability pursuant to Sections 9.2 or 9.3, then Executive or his beneficiaries will be entitled to receive: (i) Executive’s Compensation, as set forth in Section 4, above, to the end of the monthly pay period immediately following Executive’s date of termination, (ii) accrued Bonus Payments payable to the Executive under the Management Bonus Plan and (iii) all equity and/or options issued to Executive by Interlink Electronics but not yet vested shall is immediately fully vest.

c. Termination for Cause . Upon the termination of this Agreement pursuant to Section 9.4, the Executive shall be entitled to receive his Compensation, as set forth in paragraph 4, above, to the date of termination, and after such date shall not be entitled to any Compensation, benefits or other rights granted herein to the Executive.

d. Termination by Executive for Good Reason or by Interlink Electronics Without Cause. If executive’s employment is terminated by the Executive for Good Reason pursuant to Section 9.5, or by Interlink Electronics without cause, then Executive will be entitled to receive: (1) Executive’s Compensation, as set forth in Section 4, above, to the date of termination; (2) a severance payment equal to twelve (12) months of Executive’s Compensation, as set forth in Section 4, above; (3) bonus compensation earned by Executive pursuant to paragraph 4.3, above; (4) benefits, pursuant to paragraph 4.4, above, for twelve (12) months following the date of termination; (5) any vested company match 401k or other retirement contribution; and (6) all equity or options issued to Executive by Interlink Electronics but not yet vested shall is immediately fully vest.

9.7 Release . In no event shall the Executive be entitled to receive any payments, amounts, rights, or benefits under this Section 9 unless Executive executes a release concerning any claims Executive may have against Interlink Electronics in a form reasonably acceptable to Interlink Electronics.

10. Change In Control Provision . In the event there occurs a change in control with respect to Interlink Electronics then the Executive shall be entitled to receive a change in control payment in an amount equal to one (1) times the Executive’s then annual salary, payable upon the date the “change in control” occurs. Additionally, upon a Change in Control any equity securities or options held by the Executive that are subject to a vesting period, shall immediately fully vest. For the purposes of this Section “Change In Control” shall mean the consummation of any of the following transactions effecting a change in ownership or control of the Company: (i) a merger, consolidation or reorganization, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the

same proportion, by the persons who beneficially owned the Company’s outstanding voting securities immediately prior to such transaction; or (ii) any transfer, sale or other disposition of all or substantially all of the Company’s assets; or (iii) the acquisition, directly or indirectly by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s beneficial holders. In no event, however, shall a Change in Control be deemed to occur in connection with (i) a merger of the Company, the sole purpose of which is to reincorporate the Company in another jurisdiction, or (ii) any public offering of Common Stock, the primary purpose of which is to raise capital; or (iii) an increase or decrease of the Executive’s beneficial ownership in the Company.

11. Miscellaneous .

11.1 Survival . The provisions of Sections 7, 8 and 9 shall survive the termination of this Agreement.

11.2 Entire Agreement . This Agreement sets forth the entire understanding of the Parties relating to the Executive’s employment with Interlink Electronics and merges and supersedes any prior or contemporaneous agreements between the Parties pertaining to the subject matter hereof.

11.3 Modification . This Agreement may not be modified unless in writing and signed by the Party against whom the same is sought to be enforced.

11.4 Waiver . Failure of a Party to enforce one or more of the provisions of this Agreement or to require at any time performance of any of the obligations hereof shall not be construed to be a waiver of such provisions by such Party nor to in any way affect the validity of this Agreement or such Party’s right thereafter to enforce any provision of this Agreement, nor to preclude such Party from taking any other action at any time which it would legally be entitled to take.

11.5 Assignment . This Agreement and all any rights or obligations hereunder are not assignable by Executive, but may be assigned by Interlink Electronics upon the sale of substantially all of its assets.

11.6 Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and transmitted via email, and shall be deemed to have been given at the time of transmittal, as follows:

To Interlink Electronics:	Interlink Electronics Inc.
	546 Flynn Road
	Camarillo, CA 93012, USA
Attn. :	Lorin E. Krueger, Chairman
	Compensation Committee
	of Interlink Electronics, Inc.

To Executive:	Steven N. Bronson
	7810 Afton Villa Court
	Boca Raton, Florida 33433

11.7 Severability . If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity and enforceability of the other provisions of this Agreement, and the provision held to be invalid or unenforceable shall be modified so as to be enforced as nearly as possible according to its original terms and intent but only to the extent necessary to eliminate such invalidity or 1menforceability.

11.8. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California.

11.9 Counterparts . This Agreement may be executed in any number of counterparts, including facsimile and email pdf signatures which shall be deemed as original signatures. All executed counterparts shall constitute one agreement, notwithstanding that all signatories are not signatories to the original or the same counterpart.

IN WITNESS WHEREOF, each Party hereto has duly executed this Agreement as of the date set forth above.

Interlink Electronics Inc.		Steven N. Bronson

/s/ Lorin E. Krueger		/s/ Steven N. Bronson

Lorin E. Kreuger, Chairman
Compensation Committee
of Interlink Electronics, Inc.

Exhibit 10.3

May 19, 2015

Tracy A. Kern

255 Alto Drive

Oak View, CA 93022

Dear Tracy,

Interlink Electronics, Inc. is pleased to extend you this offer of employment for the position of Chief Financial Officer of Interlink Electronics, Inc. The start date of your employment shall be June 1, 2015. You understand that you shall be an “at will” employee and that you have not been offered employment for any specified term.

Should you accept our offer, your starting annual base salary will be $160,000 through December 31, 2015. Beginning January 1, 2016 your annual base salary will be $180,000. Your salary, less all customary deductions, shall be paid on a bi-weekly basis.

1. Your title at Interlink Electronics, Inc. will be Chief Financial Officer

2. Your position will report to the CEO

3. Your starting salary will be $160,000 annually with a guaranteed increase to $180,000 effective January 1, 2016.

4. Reserved only for key members of the management team, you will be a participant in a restricted stock option of 5,000 units of Interlink Electronics, Inc. which will vest as follows: (a) 50% of the shares vest after 4 years; and (b) the balance of the shares after 5 years. *Subject to Board approval*

5. Your annual paid time off accrual will be 15 days

6. First of the month following employment, you will be eligible for all benefits available to employees of Interlink Electronics. Those benefits include:

a. Medical Benefits: BlueShield of California HMO or PPO Plan Options

b. Dental: Guardian DHMO or PPO Options

c. Vision: Guardian Vision using the Davis 185

d. Life and AD& D: Sun Life Financials

e. 401(k) Savings and Retirement Plan: Employees can pay up to 16% of their salaries as pre-tax dollars into their 401(k) retirement account. Interlink will match these contribution 50 cents on the dollar up to a total annual contribution of $500.00 All contributions are vested immediately.

f. All benefits mentioned in the above will be paid 100% by Interlink Electronics, Inc.

Our offer to you is contingent upon execution of our Proprietary Information and Non- Disclosure Agreement and all other required tax and employment forms.

Interlink Electronics, Inc. ©

546 Flynn Road · Camarillo, California 93012

Phone +1(805)484-8855 · Fax +1(805)484-9457

If you agree to the above terms, please sign and return this letter to the undersigned as well as the information requested above. By signing this offer letter, you represent that you have no restrictions from a previous employer that would prohibit you from accepting a position with Interlink Electronics, Inc. We look forward to hearing from you in the near future and having you join us. In the meantime, if you have any questions about this offer or Interlink Electronics, Inc., please feel free to contact the undersigned at your earliest convenience.

		Sincerely,


		/s/Steven N. Bronson
		Steven N. Bronson, CEO


Agreed to and Accepted by


/s/ Tracy A. Kern
Tracy A. Kern

*** Proprietary and Confidential ***

Exhibit 10.4

THIS EMPLOYMENT CONTRACT is made and entered into on the 31 st day of January 2014.

BETWEEN

Interlink Electronics Singapore Private Limited (UEN: 201402919M), a company incorporated under the laws of Singapore and having its registered address at 10 Collyer Quay, #10-01, Ocean Financial Centre, Singapore 049315 (hereinafter referred to as the “ Employer ”); and

Albert Lu Chee Wai, Ph.D., a Malaysian citizen, holder of Singapore Identity Card No: S7161466B, of 205 Balestier Road, #21-02, Singapore 329682 (hereinafter referred to as the “ Employee ”).

(each a “ Party ” and collectively the “ Parties ”)

WHEREAS the Employer wishes to engage the Employee, and the Employee agrees to be engaged as a Chief Technical Officer on the terms and conditions of this agreement (hereinafter referred to as “ this Agreement ”);

NOW, THEREFORE , the Parties hereto hereby agree as follows:

1. Definitions and Interpretation

1.1 The definitions and rules of interpretation shall apply in this Agreement.

(a) “ Business ” means the business of designing, manufacturing and/or supplying human-machine interface solutions, including the Force-Sensing Resistor ® technology, and any other businesses established and operated by the Employer and its Affiliates, from time to time.

(b) “ Employment ” means the Employee’s employment with the Employer on the terms of this Agreement.

(d) “ Affiliates ” means any person or entity directly or indirectly controlling or controlled by or under direct or indirect common control with another person or entity. For the purposes of the definition of Affiliates, “control” when used with respect to a person or entity shall mean the power to direct the management and policies of such person or entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. The terms “controlled” and “controlling” shall have meanings correlative to the foregoing. For avoidance of doubt, Affiliates shall include Interlink Electronics, Inc., Interlink Electronics Europe Limited, Interlink Electronics (China) Limited, and Interlink Electronics Asia Pacific Limited.

1.2 The headings in this Agreement are inserted for convenience only and shall not affect its construction.

1.3 References to the masculine gender include the feminine gender and neuter gender and vice-versa and references to the singular include the plural.

1.4 References to clauses shall be construed as references to the Clauses of this Agreement.

2. Commencement of Services

2.1 This Agreement shall commence on 3 rd February 2014 and continue indefinitely, unless or until termination of this Agreement.

3. Duties and Responsibilities

3.1 The Employer will employ the Employee and the Employee will serve as Chief Technical Officer, or in any other comparable capacity required by the Employer on the terms of this Agreement.

3.2 The Employee will report directly (i.e. direct (solid-line) reporting) to the President of Interlink Electronics, Inc. The President will provide primary guidance to the Employee, control the major financial resources that the Employee relies on to perform his work, conduct performance reviews with the Employee, and provide all other direct supervision. The Employee will report indirectly (i.e. indirect (dotted-line) reporting) to the Chief Executive Officer of Interlink Electronics, Inc. The Chief Executive Officer will provide additional oversight and guidance to the employee in the execution of his work, and will provide input regarding the Employee’s performance to the President for inclusion in the Employee’s annual performance review.

3.3 The Employee agrees to perform all the usual duties and assume all the usual responsibilities of a Chief Technical Officer in order to support the Employer’s needs, and to ensure the smooth operation of the Business. In particular, the Employee will be expected to carry out some or all of the following duties:

(a) lead the strategic planning of research and development (“ R&D ”) and application development roadmaps, in alignment with senior management;

(b) build, manage, and maintain a world-class R&D and product development engineering team;

(d) manage and commercialise multi-disciplinary intellectual property portfolio and technology platforms;

(e) plan and execute strategic industry partnerships and collaborations with corporations, industry consortiums, universities, research organisations, and government agencies, with a focus on technology/product alignment and securing potential funding/investment opportunities;

(f) provide visible leadership for the Employer within the printed electronics and human-machine interface communities and ensure that the Employer is viewed as the trusted advisor;

(g) identify potential acquisition targets and provide technical assessments for senior management;

(h) anticipate and react to major technology changes to ensure the maintenance of company leadership in the competitive landscape;

(i) establish technical standards and ensure adherence to them for product development and company operations; and

(j) support the R&D needs, and take responsibility for any other matters as may be required from time to time, of any of the Employer’s Affiliates or other entities that the Employer may so specify.

3.4 During the Employment the Employee shall:

(a) act as a director of the Company and carry out duties on behalf of any other Affiliates including, if so required by the Company, acting as an officer or consultant of any such Affiliate;

(b) comply with the articles of association (as amended from time to time) of any Affiliates of which he is a director;

(d) unless prevented by Incapacity, devote the whole of his time, attention and abilities to the business of the Company and any Affiliate

(e) diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Company and any Affiliate;

(f) comply with all reasonable and lawful directions given to him by the Company and any Affiliate;

(g) promptly make such reports to the President in connection with the affairs of the Company and any Affiliates on such matters and at such times as are reasonably required;

(h) report his own wrongdoing and any wrongdoing or proposed wrongdoing of any other employee or director of the Company or any Affiliates to the President immediately on becoming aware of it;

(i) use his best endeavours to promote, protect, develop and extend the business of the Company or any Affiliate; and

(j) consent to the Company monitoring and recording any use that he makes of the Company’s electronic communications systems for the purpose of ensuring that the Company’s rules are being complied with and for legitimate business purposes

3.5 .In addition to the normal duties associated with the Employee’s post and the particular duties of the Employee as listed in clauses 3.3 and 3.4 above, the Employee may be required to carry out additional or alternative tasks as requested from time to time by the Employer.

4. Undertakings by Employee

4.1 During the term of this Agreement, the Employee hereby undertakes:

(a) to observe and obey the orders of management, conform to and comply with any existing or new directions, regulations and standing orders of the Employer together with any variations thereof, as may be issued by the Employer from time to time;

(b) to act and conduct himself properly towards the directors, management, employees and customers of the Employer, observing all applicable rules of etiquette and behaving with due decorum both during the operating hours of the Business and at all other times;

(d) to devote all his time, skill and attention to the Business and to faithfully and diligently serve the Employer and perform his duties to the best of his skills and ability;

(e) to avoid any practice which in the opinion of the Employer is or would be likely to jeopardise the Business and interests or which would be prejudicial and detrimental to the good name, image or concern of the Employer;

(f) to report his own wrongdoing and any wrongdoing or proposed wrongdoing of any other employee of the Employer immediately upon becoming aware of it;

(g) to use his best endeavours to promote the Business and serve the best interests of the Employer and not without the consent of the Employer to be employed in any way or for any purposes whatsoever by any person, firm or company other than the Employer including his time outside the operating hours of the Business;

(h) not to engage or be interested either directly or indirectly in any capacity in any trade, business or occupation whatsoever other than the Business of the Employer, save as allowed with the prior written consent of the Employer for the duration of this Agreement. In this clause the expression “ occupation ” shall include public or private work which in the opinion of the Employer may hinder or otherwise interfere with the performance by Employee of his duties under this Agreement; and

(i) not to give or accept directly or indirectly, any payment, gratuity, commission or benefit in kind from any person or company supplying goods or services to the Employer or any Business related to the Employer.

4.2 The Employee warrants that he will not be in breach of any express or implied obligation to any previous employer or any other third party by entering into this Agreement or performing his duties under this Agreement. The Employee acknowledges that, in entering into this Agreement, the Employer has relied on the Employee’s warranty in this clause. The Employer may terminate this Agreement with immediate effect, and the Employee shall have no remedies whatsoever, if any warranty given by the Employee is false.

4.3 The Employee warrants that he has no undisclosed medical condition(s) that could materially affect his fitness for employment.

4.4 The Employee warrants that he holds the qualifications and has undertaken the previous work experience disclosed to the Employer, and that all information as supplied by the Employee to the Employer during interviews or in terms of any application, curriculum vitae or letter, is correct and accurate and is not misleading in any way.

5. Hours of Work

5.1 The Employee shall work during the normal operating hours of the Business which shall be 9.00 a.m. to 6.00 p.m. (Monday to Friday), inclusive of a lunch break of one hour.

5.2 Notwithstanding clause 5.1 above, the Employee agrees that he may be required by the Employer to work such other hours as may be directed by the Employer without any additional remuneration, including on gazetted public holidays.

6. Place of Work

6.1 The Employee will be based at 12 Marina View, #23-01 Asia Square Tower 2, Singapore 018961 or at such other place within Singapore as the Employer may reasonably determine.

6.2 The Employer reserves the right to change the Employee’s place of work to another location within Singapore, or such other office or location as the Employer may in its sole discretion determine.

6.3 The Employee may be required to travel both throughout and outside Singapore, in connection with his employment.

7. Remuneration

7.1. The Employer shall pay the Employee SGD 206,250 per year (before employee deductions, such as Central Provident Fund (“ CPF ”) contributions), pro-rated and paid monthly at the end of each calendar month (in arrears) after commencement of this Agreement, or such sum proportionate thereto for any period less than 1 calendar month (“ Base Salary ” or “ remuneration ”).

7.2. After the first calendar year of employment, the Employer may review the Employee’s Base Salary by the end of the first quarter of each year. The Employer is under no obligation to award an increase following a salary review. Salary adjustments will be dependent on the Employee’s work performance.

7.3. Where eligible under law, the Employee will be entitled to CPF contribution from the Company in accordance with the existing relevant regulations.

7.4. The Employee will be reimbursed for the premium of any private health insurance policy he decides to take out in his name during the course of the Employment, subject to:

(a) him providing such receipts or other appropriate evidence as the Company may require;

(b) the rules or insurance policy of the relevant insurance provider, as amended from time to time;

(c) the Employee satisfying the normal underwriting requirements of the relevant insurance provider of the private medical insurance and the premium being at a rate which the Company considers reasonable.

7.5. If the insurance provider refuses for any reason to provide private medical insurance benefit to the Employee, the Company shall not be liable to pay the Employee anything or provide him with any replacement benefit of the same or similar kind or pay any compensation in lieu of such benefit.

7.6. The Company shall not cover the cost of any out of pocket expenses of any such private medical insurance.

7.7. In the event that the Company decides, in its sole discretion, to introduce a company private medical insurance scheme, the Employee shall be entitled to join that scheme, subject to the terms of the scheme from time to time, and the shall be required to contribute, along with the Company, to the premium.

7.8. At any time, the Employer may deduct from the Employee’s remuneration any amounts which the Employee owes to the Employer including, but not limited to, any outstanding loans, advances, the cost of repairing any damage or loss to the Employer’s property caused by him or salary paid in respect of excess paid annual leave taken as at the Termination Date.

7.9. The Employer shall deduct from the Employee’s remuneration all such sums it is authorised to deduct under the laws of Singapore, whether for payment of CPF contributions, withholding tax or otherwise.

8. Bonus

8.1 The Employee may receive an annual bonus of up to 20 per cent of his Base Salary. The quantum of the bonus shall be determined entirely at the Employer’s discretion and the bonus will be paid to the Employee at the end of each completed year of employment or at such intervals as the Employer may in its sole discretion determine.

8.2 The Employee agrees that 50 per cent of the bonus will be tied to Interlink Electronics Singapore Private Limited’s performance for the year and 50 per cent of the bonus will be tied to individual objectives that the Employer may, in its sole and absolute discretion, set for the Employee for the year. The Employer reserves the right, in its sole and absolute discretion, to assess the abovementioned factors to determine the quantum of bonus to be paid. All such determination as to the quantum of bonus shall be final, and the Employee agrees not to object to or challenge any such determination.

8.3 The Employee agrees that he will not receive a bonus if he is under notice (whether served by the Employee or the Employer) at the time when the bonus is to be paid.

8.4 The Employee acknowledges and agrees that he has no right, entitlement, expectation or otherwise of any nature whatsoever, either to be eligible to participate in any bonus arrangements, or as to the level or amount of any payment made to him, and that no such right, entitlement or expectation shall arise by virtue of having received from the Employer any payment of bonus in respect of any previous year or previous period or on account of any current year or period.

9. Employee Share Scheme

9.1. The Employee shall be entitled to participate in a restricted stock option scheme consisting of 8,000 shares of Interlink Electronics, Inc. Subject to the approval of the Board of Directors of Interlink Electronics, Inc., the shares will vest with the Employee as follows:

(a) 50 per cent of the shares will vest in the Employee four years after the commencement of this Agreement; and

(b) 50 per cent of the shares will vest in the Employee five years after the commencement of this Agreement.

10. Expenses

10.1. The Employer shall reimburse the Employee for all reasonable business expenses which he incurs properly in the course of his employment, subject to the Employer’s prior approval being obtained for such expenses, and provided satisfactory documentary proof and receipts are promptly provided to the Employer. All reimbursements shall be made in accordance with the Employer’s policies and procedures.

11. Taxation

11.1. All personal income tax and all other forms of taxes on the Employee’s salary, benefits, entitlements, reimbursements and/or allowances (as may be applicable) shall be borne solely by the Employee.

12. Leave Entitlements

12.1. Annual Leave

(a) The Employee shall be entitled to fifteen (15) days’ paid annual leave in each calendar year together with the usual public holidays in Singapore. If the Employment commences or terminates part way through a calendar year, the Employee’s entitlement during that calendar year shall be calculated on a pro-rata basis. The 15 days’ paid annual leave time begins to accrue with the employee’s first day of employment as a regular full-time employee.

(b) All annual leave applications must be made in writing to the President and Chief Operating Officer of Interlink Electronics, Inc., Howard Goldberg, at least two to four weeks in advance and shall be approved at the sole and absolute discretion of the aforementioned individual.

(c) Where notice is served (whether by the Employee or the Employer), the Employer may, in its sole and absolute discretion, elect to:

(i) require the Employee to use any accrued annual leave not already taken, during the notice period; or

(ii) pay the Employee in lieu of accrued annual leave not taken,

except where the employment is terminated immediately without notice under clause 14.4, in which case, any accrued annual leave will be immediately forfeited.

(d) If, by the Termination Date, the Employee has taken more annual leave than the Employee has accrued to him, the Employer may require the Employee to repay the salary he has received for those excess days. The Employee agrees that the relevant amount of salary may be deducted from current or future payments due to the Employee from the Employer.

(e) The Employee shall be entitled to carry forward any unconsumed annual leave to the next year. However, an employee may accrue no more than twice (2x’s) the paid annual leave time day allotted per year. (i.e.: the Employee may only accrue up to thirty (30) days at any one time.) If an employee reaches the maximum amount of paid annual leave time accrual allowed, accrual will be suspended until the paid annual leave accrual balance has been reduced. At no time will a paid annual leave balance exceed two times the paid annual leave time accrual amount.

12.2. Sick Leave

(a) Subject to the Employee’s compliance with this agreement and the Company’s sickness absence procedures (as set out in clauses 12.2(a), 12.2 (b), 12.2 (c) and 12.2 (d) below and as amended from time to time), and subject to clause 12.2 (e), the Employee shall continue to receive his full salary and contractual benefits during any period of absence due to Sick Leave by using any available paid annual leave time accrual balance. Such payment shall be inclusive of any statutory sick pay due in accordance with applicable legislation. If the Employee chooses not to use accrued paid annual leave time or has exhausted accrued paid annual leave time during the period of Sick Leave, the Employee shall receive statutory sick pay during the period, or any remaining period, of Sick Leave in accordance with applicable legislation.

(b) If the Employee is absent from work due to Sick Leave, he must notify his supervisor and/or Human Resources of the reason for the absence as soon as possible. The Employee must speak to Human Resources if he is absent due to Sick Leave for more than five consecutive days.

(c) For any period of Sick Leave, the Employee’s supervisor may request a doctor’s certificate. Additionally, if the Employee’s absence lasts for more than three consecutive days, a doctor’s certificate stating the reason for absence must be obtained and supplied to his supervisor. Further certificates must be obtained if the absence continues for longer than the period of the original certificate.

(d) The Employee agrees to consent to medical examinations (at the Company’s expense) by a doctor nominated by the Company should the Company so require. The Employee agrees that any report produced in connection with any such examination may be disclosed to the Company and the Company may discuss the contents of the report with the relevant doctor.

(e) If the Sick Leave is or appears to be occasioned by actionable negligence, nuisance or breach of any statutory duty on the part of a third party in respect of which damages are or may be recoverable, the Employee shall immediately notify the Company of that fact and of any claim, compromise, settlement or judgment made or awarded in connection with it and all relevant particulars that the Company may reasonably require. The Employee shall if required by the Company, refund to the Company that part of any damages or compensation recovered by him relating to the loss of earnings for the period of the Sick Leave as the Company may reasonably determine less any costs borne by him in connection with the recovery of such damages or compensation, provided that the amount to be refunded shall not exceed the total amount paid to the Employee by the Company in respect of the period of Sick Leave.

(f) The rights of the Company to terminate the Employment under the terms of this agreement apply even when such termination would or might cause the Employee to forfeit any entitlement to sick pay or other benefits.

12.3. Paternity Leave

(a) In accordance with applicable laws, the Employee shall be entitled to 1 week of paternity leave, to be taken within 16 weeks after the birth of the child , provided the following eligibility criteria are satisfied:

(i) the child is a citizen of Singapore;

(ii) the employee is lawfully married to the child’s mother; and

(iii) the employee has been employed by the Employer for at least 3 consecutive calendar months as at the date immediately preceding the child’s birth.

(b) This clause shall be amended in accordance with any changes to the applicable laws, as may be revised from time to time.

12.4. Childcare Leave

(a) In accordance with applicable laws, the Employee is entitled to 6 days of childcare leave per calendar year, provided the following eligibility criteria are satisfied:

(i) the child is below 7 years of age;

(ii) the child is a Singapore citizen; and

(iii) the Employee has been employed by the Employer for at least 3 consecutive calendar months.

(b) In accordance with applicable laws, the Employee is entitled to 2 days of extended childcare leave per calendar year, provided the following eligibility criteria are satisfied:

(i) the child is aged 7 — 12 years (inclusive);

(ii) the child is a Singapore citizen; and

(iii) the Employee has been employed by the Employer for at least 3 consecutive calendar months.

(c) Childcare leave is granted on a per parent basis regardless of the number of children that the Employee has. If the Employee has children in both age groups, i.e., those below 7 years as well as between 7 and 12 years of age, the Employee will be eligible for a total of 6 days per calendar year.

(d) This clause shall be amended in accordance with any changes to the applicable laws, as may be revised from time to time.

12.5. Extended Sick Leave

(a) The Employee will be allowed to go on extended unpaid sick leave for 12 weeks every calendar year, for the care of a child, parent or spouse with a serious health condition or for his own serious health condition, provided that he has served the Employer for at least 12 months, and has worked at least 1,250 hours during the 12 month period immediately prior to the date of the extended sick leave.

(b) If the Employee cites his own serious health condition as a reason for unpaid sick leave, the Employee must provide a certification from the health care provider stating the date of commencement of the serious health condition, the probable duration of the condition, and the inability of the Employee to work at all or perform any one or more of the essential functions of his position because of the serious health condition. The Employer may require, at its expense, a second opinion from a health care provider that the Employer chooses. The health care provider designated to give a second opinion will not be one who is employed on a regular basis by the Employer. If the second opinion differs from the first opinion, the Employer may require, at its expense, the Employee to obtain the opinion of a third health care provider designated or approved jointly by the Employer and the Employee. The opinion of the third health care provider shall be considered final and binding on the Employer and the Employee.

(c) If unpaid sick leave is needed to care for a sick child, spouse, or parent, the Employee must provide a certification from the health care provider stating the date of commencement of the serious health condition, the probable duration of the condition, the estimated amount of time for care by the health care provider, and confirmation that the serious health condition warrants the participation of the Employee.

(d) Unpaid sick leave that remains unconsumed within the year cannot be carried over to the following year.

12.6. Compassionate Leave

(a) Paid compassionate leave may be taken by the Employee in the event of the death of an immediate family member. An immediate family is considered to be a parent, child, spouse, sibling, grandparent, grandchild or relative normally residing in the Employee’s home. The family member may be biological, adoptive, foster, step, or in-law. The Employer may request documentation to evidence any such relationship, if necessary.

(b) The Employee will be entitled to a maximum of 3 days of compassionate leave in each calendar year.

13. Ceasing to be a director

13.1. Except with the prior approval of the Company, or as provided in the articles of association of the Company or any Affiliates of which he is a director, the Employee shall not resign as a director of the Company or any Affiliate.

13.2. If during the Employment the Employee ceases to be a director of the Company or any Affiliates (otherwise than by reason of his death, resignation or disqualification pursuant to the articles of association of the Company or the relevant Affiliate, as amended from time to time, or by statute or court order) the Employment shall continue with the Employee as an employee only and the terms of this agreement (other than those relating to the holding of the office of director) shall continue in full force and effect. The Employee shall have no claims in respect of such cessation of office.

14. Termination

14.1. This Agreement may be terminated by either Party at any time by giving the other Party one month’s written notice and may also be terminated for any reason allowed by law.

14.2. Either Party may pay the other Party one month’s salary in lieu of all of or any part of any period of notice.

14.3. The Employer shall be under no obligation to provide the Employee with any work during any period of notice given either by the Employer or the Employee to terminate this Agreement. The Employer may at any time during the said period suspend the Employee from his employment or exclude him from the premises of the Employer. During such period, the Employee shall continue to receive salary and all other contractual benefits provided hereunder.

14.4. Notwithstanding any provision in this Agreement, the Employer may (without prejudice to, and in addition to, any other remedy) terminate this Agreement immediately, without notice, or payment in lieu of notice or payment of any compensation, bonus, allowance or incentive, if the Employee:

(a) is disqualified from acting as a director or resigns as a director from the Company or any Affiliate without the prior written approval of the Company;

(b) is absent from work or takes annual leave for more than 2 consecutive days without prior approval from the Employer;

(d) becomes bankrupt or enters into any arrangement or composition with his creditors;

(e) is convicted of any criminal offence (other than an offence under road traffic legislation in Singapore or elsewhere for which a fine or non-custodial penalty is imposed);

(f) neglects or refuses to perform all or any of his duties under this Agreement, breaches any of the provisions of this Agreement, or refuses to comply with any lawful directive of the Employer;

(g) is guilty of any dishonesty, fraud, embezzlement, or other gross default or gross misconduct, gross incompetence, gross negligence of duty in connection with or affecting the Business;

(h) ceases to be eligible to work in Singapore;

(i) refuses to work reasonable overtime;

(j) interferes with another employee’s ability to perform his/her work;

(k) leaves the Employer’s premises during working hours without notifying the Employer;

(l) engages in unauthorised solicitation during working hours, including distributing non-work related materials;

(m) disregards safety regulations;

(n) fights on the Employer’s premises, threatens violence or harm to another individual or to the Employer, or intimidates, coerces or extorts from other employees;

(o) engages in theft of or wilful damage to property belonging to the Employer, another employee, or any individual on the Employer’s premises, or removes the Employer’s property without authorisation;

(p) possesses or brings weapons, illegal drugs, controlled medication (without authorisation) or alcohol onto the Employer’s premises;

(q) reports to work under the influence of drugs or alcohol;

(r) drives an Employer vehicle under the influence of alcohol or drugs (whether illegal or prescribed) or without a current and valid driver’s licence;

(s) engages in discrimination or harassment of any type;

(t) removes or posts materials on the Employee’s walls, bulletin boards, etc. without proper authorisation; or

(u) breaches any of the Employee’s rules, regulations or policies.

14.5. The Employee shall not, at any time after the termination of this Agreement, represent himself as being in any way connected with or interested in the Business or the Employer.

15. Retirement

15.1. This Agreement and the Employee’s employment will, in any event, terminate on the date on which the Employee reaches 62 years of age, which constitutes the normal retirement age, or such minimum age as may be required by law.

15.2. Thereafter, if the Employee is assessed by the Employer to have at least satisfactory work performance, and is medically fit to continue working, the Employer will re-employ the Employee until the Employee reaches the age of 65 in accordance with all applicable laws and regulations, including the Retirement and Re-employment Act (Cap. 274A).

16. Non-compete

16.1. The Employee agrees to be bound by the terms of the Non-Disclosure Agreement contained in Annex A of this Agreement.

17. Confidentiality

17.1. The Employee agrees to be bound by the terms of the Proprietary Information Agreement as contained in Annex B of this Agreement.

18. Inconsistency

18.1. In the event of any inconsistency or conflict among the terms and conditions of this Agreement, the Non-Disclosure Agreement and the Proprietary Information Agreement, the terms and conditions of this Agreement shall take precedence in resolving such inconsistency or conflict.

19. Personal Data Protection

19.1. The Employee consents to his Personal Data being collected, used and/or disclosed by the Employer for the following purposes:

(a) performing obligations under and/or in connection with the Employee’s contract of employment (including payment of remuneration and tax);

(b) all human resources related matters conducted by the Employer, including administering payroll, performance management, assessing training needs, developing and/or implementing human resource policies or strategies, investigating or auditing on acts or defaults (or suspected acts/defaults), management forecasting, planning and negotiations concerning the legitimate business interests of the Employer;

(d) transmission to any of the Employer’s Affiliates or related companies and/or third party service providers of the Employer or its affiliated or related companies (some of which are outside of Singapore) for the above purposes.

“ Personal Data ”, includes, without limitation, the Employee’s:

(a) resume, educational qualifications/certifications and employment references;

(b) salary information, bank account details and terms governing your employment with the Employer;

(d) records on leave of absence from work;

(e) photograph;

(f) employment and training history; and

(g) performance assessments and disciplinary records (if any).

19.2. If the Employer needs to collect, use and/or disclose your Personal Data for purposes other than that listed above, the Employer will obtain your written consent first, unless such consent is deemed given under the Personal Data Protection Act 2012 (No. 26 of 2012) (“ PDPA ”) or one of the exceptions in the PDPA applies.

20. Change of Terms of Employment

20.1. The Employer reserves the right to make reasonable changes to any of the terms of the Employee’s employment. The Employee shall be notified in writing of any change as soon as possible and in any event within 3 business days of the change.

21. Notices

21.1. Any notice to be given under this Agreement must be given in writing. Notice given to the Employer must be delivered by hand or by post addressed to Interlink Electronics, Inc. at 546 Flynn Road, Camarillo, California, 93012, USA or by email to hgoldberg@iefsr.com.

21.2. Any notice given to the Employee shall be given to him personally or sent by post to his last known address, or shall be emailed to him at [insert email address].

21.3. Notices served by post will be deemed to be served on the second business day after the date of posting.

22. Miscellaneous

22.1. The termination of this Agreement howsoever arising shall be without prejudice to any right of action already accruing to either Party in respect of any breach of this Agreement by the other Party.

22.2. The Employee shall have no claim against the Employer if his employment is terminated by the liquidation of the Employer, or for the purposes of amalgamation or reconstruction of the Employer.

22.3. If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect by any court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

22.4. This Agreement and the documents expressly referenced herein contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements and understandings between the Parties, including any previous contract of employment between the Parties, and may not be modified except in the manner described therein or by an instrument in writing signed by the duly authorised representatives of the Parties.

23. Third Parties

23.1. With the exception of the Employer’s Affiliates a person who is not a Party to this Agreement shall have no rights under the Contracts (Rights of Third Parties) Act (Cap. 53B) to enforce any of its terms.

24. Governing Law

24.1. This Agreement and the relationship between the Parties shall be governed by and construed in all respects in accordance with the laws of Singapore and the Parties agree to submit to the jurisdiction of the Singapore courts.

IN WITNESS WHEREOF the Parties have set their hands the day and year first above written:

SIGNED	)
for and on behalf of	)
Interlink Electronics Singapore Private Limited)
by:	)


/s/ Howard D. Goldberg
Name: Howard D. Goldberg
Title: President & COO, Interlink Electronics Inc.


Agreed to and accepted by:	)


/s/ Albert Lu Chee Wai
Name: Albert Lu Chee Wai, Ph.D
Identity Card No: S7161466B

Annex A

Non-Compete and Non-Solicitation Agreement

Interlink Electronics Singapore Private Limited

10 Collyer Quay, #10-01, Ocean Financial Centre, Singapore 049315

COVENANT NOT TO COMPETE

AND

NON-SOLICITATION AGREEMENT

In consideration of my employment by Interlink Electronics Singapore Private Limited (the “Company”) as Chief Technical Officer, and the compensation now and hereafter paid to me, I, Dr Lu Chee Wai Albert, hereby agree as follows:

1. Definition

“Affiliate” shall mean any person or entity directly or indirectly controlling or controlled by or under direct or indirect common control with another person or entity. For the purposes of the definition of Affiliate, “control” when used with respect to a person or entity shall mean the power to direct the management and policies of such person or entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. The terms “controlled” and “controlling” shall have meanings correlative to the foregoing. For avoidance of doubt, Affiliate shall include Interlink Electronics, Inc., Interlink Electronics UK Limited, Interlink Electronics (China) Limited, Interlink Electronics Asia Pacific Limited, and N2Power a division of Qualstar Corporation.

2. Non-competition .

(a) While I am employed by the Company and for a period of one (1) year after the termination of my employment with the Company, I will not, in the countries where the Company or its Affiliates have carried on business activities during the twelve (12) months period immediately prior to the termination of my employment, whether as an employee, independent contractor or otherwise, provide advice or services to any company engaged in the same or similar business activities of the Company or its Affiliates, nor will I directly or indirectly, whether alone or with others, establish, own, finance, operate, provide services

to, participate in, represent or otherwise be associated with, any business that has one or more products or services, existing or in planning, that compete with any products or services of the Company or its Affiliates

(b) I agree that for a period of twelve (12) months following my termination, for any reason, I will not work for any existing, former or prospective clients, provided such prospective clients have requested a proposal from the Company or its Affiliates or have received a proposal from the Company or its Affiliates during the period of my employment. In the event that I violate this covenant, then I agree to pay the Company liquidated damages in an amount equal to two (2) times my annual base salary as set out in my employment contract with the Company

3. Non-poaching . I agree that while I am employed by the Company and for a period of twelve (12) months thereafter, I will not solicit or recruit any of the Company’s or its Affiliates’ employees or independent contractors providing services to the Company or its Affiliates.

4. Non-solicitation . I agree that while I am employed by the Company and for a period of twelve (12) months thereafter, I will not solicit or attempt to interfere with the Company’s or its Affiliates’ relationship with any of its existing, former or prospective clients, provided such prospective clients have either requested a proposal from the Company or its Affiliates, or received a proposal from the Company or its Affiliates during the period of my employment.

5. Non- Disparagement . I agree that during my employment with the Company or its Affiliates and for a period of twelve (12) months after the date of termination of employment, for any reason, I will not make any disparaging statements about the Company or its Affiliates or the management team of the Company or its Affiliates to any person or entity, except to my legal advisors, if any, or as compelled by legal process and then in such instance only under oath.

6. Reasonable . I agree and acknowledge that the time limitation and the geographic scope on the restrictions in Paragraphs 2 to 5 above, and their subparts are reasonable. I also acknowledge and agree that the limitation in Paragraphs 2 to 5 above, and their subparts are reasonably necessary for the protection of the Company and its Affiliates, that through my employment with the Company I shall receive adequate consideration for any loss of opportunity associated with the provisions herein, and that these provisions provide a reasonable way of protecting the Company’s and its Affiliates’ business value and good will which was imparted to me.

7. Legal and Equitable Remedies. In view of the nature of the rights in goodwill, customer relations, employee relations, trade secrets, and business reputation and prospects of the Company and its Affiliates to be protected under this Agreement, I understand and agree that the Company and its Affiliates cannot be reasonably or adequately compensated in damages in an action at law for my breach of my obligations (whether individually or together) hereunder. Accordingly, I specifically acknowledge and consent that the Company and its Affiliates shall be entitled to temporary and permanent injunctive relief, specific performance, and other equitable relief to enforce the provisions of Paragraphs 2 to 5 above, and that such relief may be granted without the necessity of proving actual damages, and without bond. I acknowledge and agree that the provisions in Paragraphs 2 to 5 above, and their subparts are essential and material to this Agreement, and that upon breach of Paragraph 2 to 5 above, by me, the Company and its Affiliates are entitled, where applicable, to: (a) withhold providing payments or consideration; (b) equitable relief to prevent continued breach; (c) recover damages; and (d) seek any other remedies available to the Company and its Affiliates. This provision with respect to injunctive relief shall not, however, diminish the right of the Company and its Affiliates to claim and recover damages or other remedies in addition to equitable relief.

8. Extension of Time. In the event that I breach any covenant, obligation or duty in Paragraphs 2 to 5 above, and their subparts, any such duty, obligation, or covenants to which the parties agreed by Paragraphs 2 to 5 above, and their subparts shall automatically toll from the date of the first breach, and all subsequent breaches, until the resolution of the breach through private settlement, judicial or other action, including all appeals. The duration and length of my duties and obligations as agreed by this Agreement shall continue upon the effective date of any such settlement, or judicial or other resolution.

9. Severability. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

10. Notices. Any notice to be given under this Agreement must be given in writing. All notices shall be given in accordance with the processes set out in the Employment Contract.

11. Governing Law/Jurisdiction . This Agreement shall be governed by and construed in accordance with the laws of Singapore, and each party to this Agreement hereby irrevocably submits to the exclusive jurisdiction of the courts of Singapore for the adjudication of any dispute hereunder, and irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.

12. Third Parties . With the exception of the Company’s Affiliates, a person who is not a party to this Agreement shall have no rights under the Contracts (Rights of Third Parties) Act (Cap. 53B) to enforce any of its terms.

This Agreement shall be effective as of date set forth below.

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I FRE ELY AGREE TO BE BOUND BY THE TERMS OF THIS AGREEMENT.

Dated: February 1, 2014

EMPLOYEE

/s/ Albert Lu Chee Wai
(Employee
Signature)
Albert Lu Chee Wai
(Printed
Name)
205 Balestier Road, #21-02
(Address)
Singapore 329682
+6597639076
(Telephone No.)


ACCEPTED BY:
INTERLINK ELECTRONICS SINGAPORE PRIVATE LIMITED

By:	/s/ Howard D. Goldberg
Name:			Howard D. Goldberg
Title:		President & COO Of Interlink Electronics, Inc.
Dated:			January 31, 2014

Annex B

Proprietary Information Agreement

Interlink Electronics, Inc.

546 Flynn Road

Camarillo, California 93012

EMPLOYEE PROPRIETARY INFORMATION

AND INVENTIONS AGREEMENT

In consideration of my employment or continued employment by INTERLINK ELECTRONICS, INC. (the “ Company ”), and the compensation now and hereafter paid to me, I hereby agree (the “ Agreement ”) as follows:

1. NONDISCLOSURE.

1.1 Recognition of Company’s Rights; Nondisclosure. At all times during my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Proprietary Information (defined below), except as such disclosure, use or publication may be required in connection with my work for the Company, or unless an officer of the Company expressly authorizes such disclosure in writing. I will obtain the Company’s written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that relates to my work at the Company and/or incorporates any Proprietary Information. I hereby assign to the Company any rights I may have or acquire in such Proprietary Information and recognize that all Proprietary Information shall be the sole property of the Company and its assigns.

1.2 Proprietary Information. The term “ Proprietary Information ” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company. By way of illustration but not limitation, Proprietary Information includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “ Inventions ”); and (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (c) information regarding the skills and compensation of other employees of the Company. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use information which is generally known in the trade or industry, which is not gained as result of a breach of this Agreement , and my own, skill, knowledge, know-how and experience to whatever extent and in whichever way I wish.

1.3 Third Party Information. I understand that the Company has received and in the future will receive confidential and/or proprietary information from third parties (“ Third Party Information ”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for the Company) or use, except in connection with my work for the Company, Third Party Information unless expressly authorized by an officer of the Company in writing.

1.4 No Improper Use of Information of Prior Employers and Others. During my employment by the Company I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person. I will use in the performance of my duties only information which is generally known and used by persons with training and experience comparable to my own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company.

1.5 Request for Disclosure. If I am requested to or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand, other process, or an order issued by a court or by a local, state or federal regulatory or administrative body) to disclose Proprietary Information, I agree to immediately notify the Company of the existence, terms and circumstances surrounding such request or order; consult with Company on the availability and advisability of the Company taking steps to resist or narrow such request or order; and refrain from opposing any action by Company to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Proprietary Information.

2. ASSIGNMENT OF INVENTIONS.

2.1 Proprietary Rights. For the purposes of this Agreement the term “ Proprietary Rights ” shall mean all trade secret, patent, copyright, mask work and other intellectual property rights throughout the world.

2.2 Prior Inventions. Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement . To preclude any possible uncertainty, I have set forth on Exhibit A (Previous Inventions) attached hereto a complete list of all Inventions that I have, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement (collectively referred to as “ Prior Inventions ”). If disclosure of any such Prior Invention would cause me to violate any prior confidentiality agreement, I understand that I am not to list such Prior Inventions in Exhibit A but am only to disclose a cursory name for each such invention, a listing of the party(ies) to whom it belongs and the fact that full disclosure as to such inventions has not been made for that reason. A space is provided on Exhibit A for such purpose. If no such disclosure is attached, I represent that there are no Prior Inventions. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company product, process or machine, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use and sell such Prior Invention. Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions without the Company’s prior written consent.

2.3 Assignment of Inventions. Subject to Sections 2.4, and 2.6, I hereby assign and agree to assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to the Company all my right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company. Inventions assigned to the Company, or to a third party as directed by the Company pursuant to this Section 2, are hereinafter referred to as “ Company Inventions .”

2.4 Unrelated Inventions. This Agreement will not be deemed to require assignment of any invention which was developed entirely on my own time without using the Company’s equipment, supplies, facilities, or trade secrets and neither related to the Company’s actual or anticipated business, research or development, nor resulted from work performed by me for the Company.

2.5 Obligation to Keep Company Informed. During the period of my employment and for one (1) year after termination of my employment with the Company for any reason, I will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by me, either alone or jointly with others that embody a conflicting product or service. In addition, I will promptly disclose to the Company all patent applications filed by me or on my behalf within a year after termination of employment. At the time of each such disclosure, I will advise the Company in writing of any Inventions that I believe fully qualify for protection under the provisions of a Specific Inventions Law; and I will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under a Specific Inventions Law. I will preserve the confidentiality of any Invention that does not fully qualify for protection under a Specific Inventions Law.

2.6 Government or Third Party. I also agree to assign all my right, title and interest in and to any particular Company Invention to a third party, including without limitation the United States, as directed by the Company.

2.7 Works for Hire. I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101).

2.8 Enforcement of Proprietary Rights. I will assist the Company in every proper way to obtain, and from time to time enforce, United States and foreign Proprietary Rights relating to Company Inventions in any and all countries. To that end I will execute, verify and deliver such documents and

perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof. In addition, I will execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee. My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries shall continue beyond the termination of my employment, to the extent such assistance is not unreasonably burdensome to me, but the Company shall compensate me at a reasonable rate after my termination for the time actually spent by me at the Company’s request on such assistance.

In the event the Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in the preceding paragraph, I hereby designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and in my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by me. I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.

3. RECORDS.

I agree to keep and maintain adequate and current records(in the form of notes, sketches, drawings and in any other form that may be required by the Company) of all Proprietary Information developed by me and all Inventions made by me during the period of my employment at the Company, which records shall be available to and remain the sole property of the Company at all times.

4. OUTSIDE ACTIVITIES.

I agree that during the period of my employment by the Company I will not, without the Company’s express written consent, engage in any employment or business activity which is competitive with, or would otherwise conflict with, my employment by the Company.

5. NO CONFLICTING OBLIGATION.

I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith. This Agreement shall not prevent me from engaging in other non-competitive and non-conflicting business activities, provided that such activities do not require a material amount of my time during business hours.

6. RETURN OF COMPANY DOCUMENTS.

When I leave the employ of the Company, I will deliver to the Company any and all drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any material containing or disclosing any Company Inventions, Third Party Information or Proprietary Information of the Company. I further agree that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. Prior to leaving, I will cooperate with the Company in completing and signing a termination agreement in the form attached hereto as Exhibit B..

7. LEGAL AND EQUITABLE REMEDIES.

Because my services are personal and unique and because I may have access to and become acquainted with the Proprietary Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement .

8. NOTICES.

Any notices required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Such notice shall be deemed given upon personal delivery to the appropriate address or if sent by recognized overnight courier one (1) day after the date of mailing or if sent by certified or registered mail, three (3) days after the date of mailing.

9. NOTIFICATION OF NEW EMPLOYER.

In the event that I leave the employ of the Company, I agree to promptly notify the Company of the name, address and telephone number of my new employer and I hereby consent to the Company notifying my new

employer of my rights and obligations under this Agreement .

10. GENERAL PROVISIONS.

10.1 Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by and construed according to the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents. I hereby expressly consent to the personal jurisdiction of the state and federal courts located in Ventura County, California for any lawsuit arising from or related to this Agreement.

10.2 Severability. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

10.3 Successors and Assigns. I understand and agree that this Agreement shall by assignable by the Company. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

10.4 Survival. The provisions of this Agreement shall survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.

10.5 Employment. I agree and understand that nothing in this Agreement shall confer any right with respect to continuation of employment by the Company, nor shall it interfere in any way with my right or the Company’s right to terminate my employment at any time, with or without cause.

10.6 Waiver. No waiver by the Company of any breach of this Agreement shall be a waiver of any preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall be construed as a waiver of any other right. The Company shall not be required to give notice to enforce strict adherence to all terms of this Agreement .

10.7 Entire Agreement. The obligations pursuant to Sections 1 and 2 of this Agreement shall apply to any time during which I was previously employed, or am in the future employed, by the Company as a consultant if no other agreement governs nondisclosure and assignment of inventions during such period. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between us. No modification of or amendment to this Agreement , nor any waiver of any rights under this Agreement , will be effective unless in writing and signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement .

This Agreement shall be effective on the date written below

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

Dated: February 1, 2014

EMPLOYEE

/S/ ALBERT LU CHEE WAI
(Signature)

Albert Lu Chee Wai
(Printed Name)


205 Balestier Road, #21-01
(Address)


Singapore 329682


ACCEPTED AND AGREED TO:

INTERLINK ELECTRONICS, INC.


By:	/s/ Howard D. Goldberg

Title: President and COO, Interlink Electronics, Inc.


Dated:	January 31, 2014

FINAL

Exhibit 10.5

STANDARD MULTI-TENANT OFFICE LEASE - GROSS

AIR COMMERCIAL REAL ESTATE ASSOCIATION

1. Basic Provisions (“Basic Provisions”) .

1.1 Parties : This Lease (“ Lease ”), dated for reference purposes only December 8, 2014, is made by and between K-Swiss Inc., a Delaware corporation (“ Lessor ”) and Interlink Electronics, Inc., a Nevada corporation (“ Lessee ”), (collectively the “ Parties ”, or individually a “ Party ”).

1.2(a) Premises: That certain portion of the Project (as defined below), known as Suite Numbers(s) 210, 2nd floor(s), consisting of approximately 2,928 rentable square feet (“ Premises”) . The Premises are located at: 31248 Oak Crest Drive, in the City of Westlake Village, County of Los Angeles, State of California, with zip code 91361. In addition to Lessee’s rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, the exterior walls, the area above the dropped ceilings, or the utility raceways of the building containing the Premises (“ Building ”) or to any other buildings in the Project. The Premises, the Building, the Common Areas, the land upon which they are located, along with all other buildings and improvements thereon, are herein collectively referred to as the “ Project .” The Project consists of approximately 53,236 rentable square feet. (See also Paragraph 2)

1.2(b) Parking : Eleven (11) unreserved parking spaces at a monthly cost of $0.00 per unreserved space (See Paragraph 2.6)

1.3 Term : Five (5) years and zero (0) months (“ Original Term ”) commencing February 1, 2015 (“ Commencement Date ”) and ending January 31, 2021 (“ Expiration Date ”). (See also Paragraph 3)

1.4 Early Possession : If the Premises are available Lessee may have non-exclusive possession of the Premises commencing upon mutual lease execution (“ Early Possession Date ”). (See also Paragraphs 3.2 and 3.3)

1.5 Base Rent : $5,416.80 per month (“ Base Rent )”, payable on the first (1st) day of each month commencing February 1, 2015. (See also Paragraph 4 and addendum Paragraph 51)

o If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph four and addendum paragraph 51.

1.6 Lessee’s Share of Operating Expense Increase : Five point five three percent (5.53%) (“ Lessee’s Share ”). In the event that that size of the Premises and/or the Project are modified during the term of this Lease, Lessor shall recalculate Lessee’s Share to reflect such modification.

1.7 Base Rent and Other Monies Paid Upon Execution :

(a) Base Rent : $5,416.80 for the period February 2015.

(b) Security Deposit : $6,096.07 (“ Security Deposit ”). (See also Paragraph 5)

(d) Total Due Upon Execution of this Lease : $11,513.46.

1.8 Agreed Use : General office use. (See also Paragraph 6)

1.9 Base Year; Insuring Party . The Base Year is 2015. Lessor is the “ Insuring Party ”. (See also Paragraphs 4.2 and 8)

1.10 Real Estate Brokers : (See also Paragraph 15 and 25)

(a) Representation : The following real estate brokers (the “ Brokers ”) and brokerage relationships exist in this transaction (check applicable boxes):

o represents Lessor exclusively (“ Lessor’s Broker ”);

o represents Lessee exclusively (“ Lessee’s Broker ”); or

o Lee & Associates- LA North/Ventura, Inc. represents both Lessor and Lessee (“ Dual Agency ”).

(b) Payment to Brokers : Within fifteen (15) days Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers the sum of $23,019.62 for the brokerage services rendered by the Brokers.

1.11 Business Hours for the Building: 8:00 a.m. to 6:00 p.m., Mondays through Fridays (except Building Holidays) and 8:00 a.m. to 1:00 p.m. on Saturdays (except Building Holidays). “ Building Holidays ” shall mean the dates of observation of New Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day.

1.12 Lessor Supplied Services . Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT obligated to provide the following


INITIALS		INITIALS

FORM OFG-14-07/14E

within the Premises:

o Janitorial services

o Electricity

o Other (specify):

1.13 Attachments . Attached hereto are the following, all of which constitute a part of this Lease:

o an Addendum consisting of Paragraphs 51 through 54;

o a plot plan depicting the Premises;

o a current set of the Rules and Regulations;

o a Work Letter;

o a janitorial schedule;

o other (specify):

2. Premises .

2.1 Letting . Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease. While the approximate square footage of the Premises may have been used in the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment should the actual size be determined to be different. Note: Lessee is advised to verify the actual size prior to executing this Lease.

2.2 Condition . Lessor shall deliver the Premises to Lessee in a clean condition on the Commencement Date or the Early Possession Date, whichever first occurs (“ Start Date ”), and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems (“ HVAC ”), and all other items which the Lessor is obligated to construct pursuant to the Work Letter attached hereto, if any, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing walls and foundation of the Unit shall be free of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law. Lessor also warrants, that unless otherwise specified in writing, Lessor is unaware of (I) any recorded Notices of Default affecting the Premise; (ii) any delinquent amounts due under any loan secured by the Premises; and (iii) any bankruptcy proceeding affecting the Premises.

2.3 Compliance . Lessor warrants that to the best of its knowledge the improvements on the Premises and the Common Areas comply with the building codes applicable laws, covenants or restrictions of record, regulations, and ordinances ( “Applicable Requirements” ) that were in effect at the time that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee’s use (see Paragraph 49), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the zoning and other Applicable Requirements are appropriate for Lessee’s intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Premises (“ Capital Expenditure ”), Lessor and Lessee shall allocate the cost of such work as follows:

(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months’ Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee’s termination notice that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months’ Base Rent. If Lessee elect’s termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.

(b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days’ prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor’s termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor’s share of such costs have been fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days’ written notice to Lessor.

(c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to no voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not have any right to terminate this Lease.

2.4 Acknowledgements . Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) Lessee has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements), and their suitability for Lessee’s intended use, (c) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) it is not relying on any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee’s decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.

2.5 Lessee as Prior Owner/Occupant . The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date, Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.

2.6 Vehicle Parking . So long as Lessee is not in default, and subject to the Rules and Regulations attached hereto, and as established by Lessor from time to time, Lessee shall be entitled to rent and use the number of parking spaces specified in Paragraph 1.2(b) at the rental rate applicable from time to time for monthly parking as set by Lessor and/or its licensee.

(a) If Lessee commits, permits or allows any of the prohibited activities described in the Lease or the rules then in effect, then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

2.7 Common Areas - Definition . The term “ Common Areas ” is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Project and interior utility raceways and installations within the Premises that are provided and designated by the Lessor from time to time for the general nonexclusive use of Lessor, Lessee and other tenants of the Project and their respective employees, suppliers, shippers, customers, contractors and invitees, including, but not limited to, common entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas.

2.8 Common Areas - Lessee’s Rights . Lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease, the nonexclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Project. Under no circumstances shall the right herein granted to use the


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Common Areas be deemed to include the right to store any property, temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor’s designated agent, which consent may be revoked at any time. In the event that any unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

2.9 Common Areas - Rules and Regulations . Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to adopt, modify, amend and enforce reasonable rules and regulations (“ Rules and Regulations ”) for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building and the Project and their invitees. The Lessee agrees to abide by and conform to all such Rules and Regulations, and shall use its best efforts to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the noncompliance with said Rules and Regulations by other tenants of the Project.

2.10 Common Areas - Changes . Lessor shall have the right, in Lessor’s sole discretion, from time to time:

(a) To make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of the lobbies, windows, stairways, air shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways;

(b) To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available; portion thereof; and

(d) To add additional buildings and improvements to the Common Areas;

(e) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any

(f) To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Lessor may, in the exercise of sound business judgment, deem to be appropriate.

3. Term .

3.1 Term . The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.

3.2 Early Possession . Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to pay Lessee’s Share of the Operating Expense Increase) shall be in effect during such period. Any such Early Possession shall not affect the Expiration Date.

3.3 Delay In Possession . Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered within 60 days after the Commencement Date, as the same may be extended under the terms of any Work Letter executed by Parties, Lessee may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10-day period, Lessee’s right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing.

3.4 Lessee Compliance . Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor’s election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.

4. Rent .

4.1. Rent Defined . All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent (“ Rent ”).

4.2 Operating Expense Increase. Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee’s Share of the amount by which all Operating Expenses for each Comparison Year exceeds the amount of all Operating Expenses for the Base Year, such excess being hereinafter referred to as the “Operating Expense Increase” , in accordance with the following provisions:

(a) “ Base Year ” is as specified in Paragraph 1.9.

(b) “ Comparison Year ” is defined as each calendar year during the term of this Lease subsequent to the Base Year; provided, however, Lessee shall have no obligation to pay a share of the Operating Expense Increase applicable to the first 12 months of the Lease Term (other than such as are mandated by a governmental authority, as to which government mandated expenses Lessee shall pay Lessee’s Share, notwithstanding they occur during the first twelve (12) months). Lessee’s Share of the Operating Expense Increase for the first and last Comparison Years of the Lease Term shall be prorated according to that portion of such Comparison Year as to which Lessee is responsible for a share of such increase.

(c) The following costs relating to the ownership and operation of the Project, calculated as if the Project was at least 95% occupied, are defined as “ Operating Expenses ”:

(i) Costs relating to the operation, repair, and maintenance in neat, clean, safe, good order and condition, but not the replacement (see subparagraph (g)), of the following:

(aa) The Common Areas, including their surfaces, coverings, decorative items, carpets, drapes and window coverings, and including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area lighting facilities, building exteriors and roofs, fences and gates;

(bb) All heating, air conditioning, plumbing, electrical systems, life safety equipment, communication systems and other equipment used in common by, or for the benefit of, tenants or occupants of the Project, including elevators and escalators, tenant directories, fire detection systems including sprinkler system maintenance and repair.

(cc) All other areas and improvements that are within the exterior boundaries of the Project but outside of the Premises and/or any other space occupied by a tenant.

(ii) The cost of trash disposal, janitorial and security services, pest control services, and the costs of any environmental inspections; “Operating Expense”;

(iii) The cost of any other service to be provided by Lessor that is elsewhere in this Lease stated to be an “Operating Expense”;

(iv) The cost of the premiums for the insurance policies maintained by Lessor pursuant to paragraph 8 and any deductible portion of an insured loss concerning the Building or the Common Areas;

(v) The amount of the Real Property Taxes payable by Lessor pursuant to paragraph 10;

(vi) The cost of water, sewer, gas, electricity, and other publicly mandated services not separately metered;

(vii) Labor, salaries, and applicable fringe benefits and costs, materials, supplies and tools, used in maintaining and/or cleaning the Project and accounting and management fees attributable to the operation of the Project;

(viii) The cost of any capital improvement to the Building or the Project not covered under the provisions of Paragraph 2.3 provided; however, that Lessor shall allocate the cost of any such capital improvement over a 12 year period and Lessee shall not be required to pay more than Lessee’s Share of 1/144th of the cost of such Capital Expenditure in any given month;

(ix) The cost to replace equipment or improvements that have a useful life for accounting purposes of 5 years or less.

(x) Reserves set aside for maintenance, repair and/or replacement of Common Area improvements and equipment.

(d) Any item of Operating Expense that is specifically attributable to the Premises, the Building or to any other building in the Project or to the operation, repair and maintenance thereof, shall be allocated entirely to such Premises, Building, or other building. However, any such item that is not specifically attributable to the Building or to any other building or to the operation, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings in the Project.

(e) The inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(c) shall not be deemed to impose an obligation upon Lessor to either have said improvements or facilities or to provide those services unless the Project already has the same, Lessor


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already provides the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of them.

(f) Lessee’s Share of Operating Expense Increase is payable monthly on the same day as the Base Rent is due hereunder. The amount of such payments shall be based on Lessor’s estimate of the Operating Expense Expenses. Within 60 days after written request (but not more than once each year) Lessor shall deliver to Lessee a reasonably detailed statement showing Lessee’s Share of the actual Common Area Operating Expenses for the preceding year. If Lessee’s payments during such Year exceed Lessee’s Share, Lessee shall credit the amount of such over-payment against Lessee’s future payments. If Lessee’s payments during such Year were less than Lessee’s Share, Lessee shall pay to Lessor the amount of the deficiency within 10 days after delivery by Lessor to Lessee of said statement. Lessor and Lessee shall forthwith adjust between them by cash payment any balance determined to exist with respect to that portion of the last Comparison Year for which Lessee is responsible as to Operating Expense Increases, notwithstanding that the Lease term may have terminated before the end of such Comparison Year.

(g) Operating Expenses shall not include the costs of replacement for equipment or capital components such as the roof, foundations, exterior walls or a Common Area capital improvement, such as the parking lot paving, elevators, fences that have a useful life for accounting purposes of 5 years or more.

(h) Operating Expenses shall not include any expenses paid by any tenant directly to third parties, or as to which Lessor is otherwise reimbursed by any third party, other tenant, or by insurance proceeds.

4.3 Payment . Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States on or before the day on which it is due, without offset or deduction (except as specifically permitted in this Lease). All monetary amounts shall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by cashier’s check. Payments will be applied first to accrued late charges and attorney’s fees, second to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount to any other outstanding charges or costs.

5. Security Deposit . Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor’s reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessor’s reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 30 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.

6. Use .

6.1 Use . Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements of the Building, will not adversely affect the mechanical, electrical, HVAC, and other systems of the Building, and/or will not affect the exterior appearance of the Building. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor’s objections to the change in the Agreed Use.

6.2 Hazardous Substances .

(a) Reportable Uses Require Consent . The term “ Hazardous Substance ” as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (I) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, byproducts or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee’s expense) with all Applicable Requirements. “ Reportable Use ” shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use such as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit.

(b) Duty to Inform Lessor . If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance.

(c) Lessee Remediation . Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party.

(d) Lessee Indemnification . Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed to by Lessee). Lessee’s obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.

(e) Lessor Indemnification . Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.


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(f) Investigations and Remediations . Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy, unless such remediation measure is required as a result of Lessee’s use (including “Alterations”, as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor’s investigative and remedial responsibilities.

(g) Lessor Termination Option . If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor’s rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.

6.3 Lessee’s Compliance with Applicable Requirements . Except as otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants which relate in any manner to the Premises, without regard to whether said requirements are now in effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor’s written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee’s compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises.

6.4 Inspection; Compliance . Lessor and Lessor’s “ Lender ” (as defined in Paragraph 30) and consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times, after reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1e) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets ( MSDS ) to Lessor within 10 days of the receipt of written request therefor.

7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations .

7.1 Lessee’s Obligations . Notwithstanding Lessor’s obligation to keep the Premises in good condition and repair, Lessee shall be responsible for payment of the cost thereof to Lessor as additional rent for that portion of the cost of any maintenance and repair of the Premises, or any equipment (wherever located) that serves only Lessee or the Premises, to the extent such cost is attributable to abuse or misuse. In addition, Lessee rather than the Lessor shall be responsible for the cost of painting, repairing or replacing wall coverings, and to repair or replace any similar improvements within the Premises. Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any particular such maintenance or repairs the cost of which is otherwise Lessee’s responsibility hereunder.”

7.2 Lessor’s Obligations . Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke detection systems, fire hydrants, and the Common Areas. Lessee expressly waives the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

7.3 Utility Installations; Trade Fixtures; Alterations .

(a) Definitions . The term “ Utility Installations ” refers to all floor and window coverings, air lines, vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, and plumbing in or on the Premises. The term “ Trade Fixtures ” shall mean Lessee’s machinery and equipment that can be removed without doing material damage to the Premises. The term “ Alterations ” shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. “ Lessee Owned Alterations and/or Utility Installations ” are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

(b) Consent . Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor’s prior written consent. Lessee may, however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof, ceilings, floors or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended does not exceed $2000. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as built plans and specifications. For work which costs an amount in excess of one month’s Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee’s posting an additional Security Deposit with Lessor.

(c) Liens; Bonds . Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days’ notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor’s attorneys’ fees and costs.

7.4 Ownership; Removal; Surrender; and Restoration .

(a) Ownership . Subject to Lessor’s right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises.

(b) Removal . By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.

(c) Surrender; Restoration . Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall also remove from the Premises any and all Hazardous Substances brought onto the Premises by or for


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Lessee, or any third party (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises) to the level specified in Applicable Requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below.

8. Insurance; Indemnity .

8.1 Insurance Premiums . The cost of the premiums for the insurance policies maintained by Lessor pursuant to paragraph 8 are included as Operating Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in the premiums resulting from additional coverage related to requirements of the holder of a mortgage or deed of trust covering the Premises, Building and/or Project, increased valuation of the Premises, Building and/or Project, and/or a general premium rate increase. Said costs shall not, however, include any premium increases resulting from the nature of the occupancy of any other tenant of the Building. If the Project was not insured for the entirety of the Base Year, then the base premium shall be the lowest annual premium reasonably obtainable for the required insurance as of the Start Date, assuming the most nominal use possible of the Building and/or Project. In no event, however, shall Lessee be responsible for any portion of the premium cost attributable to liability insurance coverage in excess of $2,000,000 procured under Paragraph 8.2(b).

8.2 Liability Insurance .

(a) Carried by Lessee . Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization’s “Additional Insured-Managers or Lessors of Premises” Endorsement and coverage shall also be extended to include damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “ insured contract ” for the performance of Lessee’s indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only.

(b) Carried by Lessor . Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein.

8.3 Property Insurance - Building, Improvements and Rental Value .

(a) Building and Improvements . Lessor shall obtain and keep in force a policy or policies of insurance in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Building and/or Project. The amount of such insurance shall be equal to the full insurable replacement cost of the Building and/or Project, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee not by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence.

(b) Rental Value . Lessor shall also obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental Value insurance”). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period.

(c) Adjacent Premises . Lessee shall pay for any increase in the premiums for the property insurance of the Building and for the Common Areas or other buildings in the Project if said increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises.

(d) Lessee’s Improvements . Since Lessor is the Insuring Party, Lessor shall not be required to insure Lessee Owned Alterations and Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease.

8.4 Lessee’s Property; Business Interruption Insurance; Worker’s Compensation Insurance.

(a) Property Damage . Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations.

(b) Worker’s Compensation Insurance. Lessee shall obtain and maintain Worker’s Compensation Insurance in such amount as may be required by Applicable Requirements. Such policy shall include a ‘Waiver of Subrogation’ endorsement. Lessee shall provide Lessor with a copy of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5.

(c) Business Interruption . Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils.

(d) No Representation of Adequate Coverage . Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business operations or obligations under this Lease.

8.5 Insurance Policies . Insurance required herein shall be by companies maintaining during the policy term a “General Policyholders Rating” of at least A-, VII, as set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 10 days prior written notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.

8.6 Waiver of Subrogation . Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby.

8.7 Indemnity . Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.

8.8 Exemption of Lessor and its Agents from Liability . Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, or (iii) injury to Lessee’s business or for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.

8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely


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difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease.

9. Damage or Destruction .

9.1 Definitions .

(a) “ Premises Partial Damage ” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 3 months or less from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

(b) “ Premises Total Destruction ” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 3 months or less from the date of the damage or destruction and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.

(c) ) “ Insured Loss ” shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved.

(d) “ Replacement Cost ” shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation.

(e) “ Hazardous Substance Condition ” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance, in, on, or under the Premises which requires restoration.

9.2 Partial Damage - Insured Loss . If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s election, make the repair of any damage or destruction the total cost to repair of which is $5,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.

9.3 Partial Damage - Uninsured Loss . If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor’s expense (subject to reimbursement pursuant to Paragraph 4.2), in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee’s commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.

9.4 Total Destruction . Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.

9.5 Damage Near End of Term . If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month’s Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee’s receipt of Lessor’s written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished.

9.6 Abatement of Rent; Lessee’s Remedies .

(a) Abatement . In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.

(b) Remedies . If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee’s election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect. “Commence” shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.

9.7 Termination; Advance Payments . Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.

10. Real Property Taxes .

10.1 Definitions . As used herein, the term “ Real Property Taxes ” shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Project, Lessor’s right to other income therefrom, and/or Lessor’s business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Project address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Project is located. “Real Property Taxes” shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Project, (ii) a change in the improvements thereon, and/or (iii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease.

10.2 Payment of Taxes . Except as otherwise provided in Paragraph 10.3, Lessor shall pay the Real Property Taxes applicable to the Project, and said payments shall be included in the calculation of Operating Expenses in accordance with the provisions of Paragraph 4.2.

10.3 Additional Improvements . Operating Expenses shall not include Real Property Taxes specified in the tax assessor’s records and work sheets as being caused by additional improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such


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other lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee’s request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution of this Lease by the Parties.

10.4 Joint Assessment . If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available. Lessor’s reasonable determination thereof, in good faith, shall be conclusive.

10.5 Personal Property Taxes . Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee’s property.

11. Utilities and Services .

11.1 Services Provided by Lessor. Lessor shall provide heating, ventilation, air conditioning, reasonable amounts of electricity for normal lighting and office machines, water for reasonable and normal drinking and lavatory use in connection with an office, and replacement light bulbs and/or fluorescent tubes and ballasts for standard overhead fixtures. Lessor shall also provide janitorial services to the Premises and Common Areas 5 times per week, excluding Building Holidays, or pursuant to the attached janitorial schedule, if any. Lessor shall not, however, be required to provide janitorial services to kitchens or storage areas included within the Premises.

11.2 Services Exclusive to Lessee. Notwithstanding the provisions of paragraph 11.1, Lessee shall pay for all water, gas, light, power, telephone and other utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Lessee, together with any taxes thereon. If a service is deleted by Paragraph 1.13 and such service is not separately metered to the Premises, Lessee shall pay at Lessor’s option, either Lessee’s Share or a reasonable proportion to be determined by Lessor of all charges for such jointly metered service.

11.3 Hours of Service. Said services and utilities shall be provided during times set forth in Paragraph 1.12. Utilities and services required at other times shall be subject to advance request and reimbursement by Lessee to Lessor of the cost thereof.

11.4 Excess Usage by Lessee. Lessee shall not make connection to the utilities except by or through existing outlets and shall not install or use machinery or equipment in or about the Premises that uses excess water, lighting or power, or suffer or permit any act that causes extra burden upon the utilities or services, including but not limited to security and trash services, over standard office usage for the Project. Lessor shall require Lessee to reimburse Lessor for any excess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Lessor may, in its sole discretion, install at Lessee’s expense supplemental equipment and/or separate metering applicable to Lessee’s excess usage or loading.

11.5 Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in cooperation with governmental request or directions.

12. Assignment and Subletting .

12.1 Lessor’s Consent Required .

(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, “ assign or assignment ”) or sublet all or any part of Lessee’s interest in this Lease or in the Premises without Lessor’s prior written consent. Lessee shall have the right without Lessor’s consent to sublet up to 15% of the Premises to an affiliated Entity provided the affiliated Entity’s use is compatible with other uses in the building and are generally accepted uses.

(b) Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control for this purpose.

(c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buyout or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee’s assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. “ Net Worth of Lessee ” shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.

(d) An assignment or subletting without consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(d), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the event of such Breach and rental adjustment, (i) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent.

(e) Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief.

(f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.

(g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, i e. 20 square feet or less, to be used by a third party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting.

12.2 Terms and Conditions Applicable to Assignment and Subletting .

(a) Regardless of Lessor’s consent, no assignment or subletting shall: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.

(b) Lessor may accept Rent or performance of Lessee’s obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.

(c) Lessor’s consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.

(d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee’s obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor’s remedies against any other person or entity responsible therefore to Lessor, or any security held by Lessor.

(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor’s considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (See also Paragraph 36)

(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing.

(g) Lessor’s consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2)

12.3 Additional Terms and Conditions Applicable to Subletting . The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:

(a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee’s then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists,


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notwithstanding any claim from Lessee to the contrary.

(b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.

(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor’s prior written consent.

(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee.

13. Default; Breach; Remedies .

13.1 Default; Breach . A “ Default ” is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A “ Breach ” is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:

(a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism.

(b) The failure of Lessee to make any payment of Rent beyond five (5) days from when due or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS, INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.

(c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee. In the event that Lessee commits waste, a nuisance or an illegal activity a second time then, the Lessor may elect to treat such conduct as a non-curable Breach rather than a Default.

(d) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41, (viii) material data safety sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee.

(e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion.

(f) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a “ debtor ” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.

(g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.

(h) If the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of its guaranty obligation on an anticipatory basis, and Lessee’s failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.

13.2 Remedies . If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:

(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right to recover any damages to which Lessor is otherwise entitled. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.

(b) Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s interests, shall not constitute a termination of the Lessee’s right to possession.

(c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee’s occupancy of the Premises.

13.3 Inducement Recapture . Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee’s entering into this Lease, all of which concessions are hereinafter referred to as “ Inducement Provisions ”, shall be deemed conditioned upon Lessee’s full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.

13.4 Late Charges . Notwithstanding the following, Lessor shall waive one late charge per 12 month period. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor


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will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor’s option, become due and payable quarterly in advance.

13.5 Interest . Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due shall bear interest from the 31st day after it was due. The interest (“ Interest ”) charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.

13.6 Breach by Lessor .

(a) Notice of Breach . Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that more than 30 days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion.

(b) Performance by Lessee on Behalf of Lessor . In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall not exceed an amount equal to the greater of one month’s Base Rent or the Security Deposit, reserving Lessee’s right to seek reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost of said cure and supply said documentation to Lessor.

14. Condemnation . If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively “ Condemnation ”), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 10% of the rentable floor area of the Premises, or more than 25% of Lessee’s Reserved Parking Spaces, if any, are taken by Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee’s relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation.

15. Brokerage Fees .

15.1 Additional Commission . In addition to the payments owed pursuant to Paragraph 1.10 above, and unless Lessor and the Brokers otherwise agree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises or other premises owned by Lessor and located within the Project, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was executed.

15.2 Assumption of Obligations . Any buyer or transferee of Lessor’s interest in this Lease shall be deemed to have assumed Lessor’s obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.

15.3 Representations and Indemnities of Broker Relationships . Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.

16. Estoppel Certificates .

(a) Each Party (as “ Responding Party ”) shall within 10 days after written notice from the other Party (the “ Requesting Party ”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current “ Estoppel Certificate ” form published by the AIRCommercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party.

(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance, and (iii) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel Certificate will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel Certificate in a timely fashion the monthly Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater for remainder of the Lease. The Parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to provide the Estoppel Certificate. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to the failure to provide the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder.

(c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

17. Definition of Lessor . The term “ Lessor ” as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior lease. In the event of a transfer of Lessor’s title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.

18. Severability . The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

19. Days . Unless otherwise specifically indicated to the contrary, the word “ days ” as used in this Lease shall mean and refer to calendar days.

20. Limitation on Liability . The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Project, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor’s partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction.

21. Time of Essence . Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.

22. No Prior or Other Agreements; Broker Disclaimer . This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party.


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23. Notices .

23.1 Notice Requirements . All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, or by email, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee’s taking possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.

23.2 Date of Notice . Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices delivered by hand, or transmitted by facsimile transmission or by email shall be deemed delivered upon actual receipt. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

24. Waivers .

(a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent.

(b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.

25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.

(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows:

(i) Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor acts as the agent for the Lessor only. A Lessor’s agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.

(ii) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not the Lessor’s agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.

(iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lesser or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advise is desired, consult a competent professional.

(b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys’ fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker.

(c) Lessor and Lessee agree to identify to Brokers as “Confidential” any communication or information given Brokers that is considered by such Party to be confidential.

26. No Right To Holdover . Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Holdover Base Rent shall be calculated on a monthly bases. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. Notwithstanding the foregoing, Lessee shall, provided Lessee notifies Lessor in writing at least six (6) months prior to the Lease expiration, be permitted to remain in the Premises for a period of up to two (2) months under the same terms and conditions of the Lease.

27. Cumulative Remedies . No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

28. Covenants and Conditions; Construction of Agreement . All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.

29. Binding Effect; Choice of Law . This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.

30. Subordination; Attornment; Non-Disturbance .

30.1 Subordination . This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, “ Security Device ”), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as “ Lender ”) shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.

30.2 Attornment . In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor’s obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner.

30.3 Non-Disturbance . With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a “ Non-Disturbance Agreement ”) from the Lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options to extend


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the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.

30.4 Self-Executing . The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein.

31. Attorneys’ Fees . If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, “ Prevailing Party ” shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred. In addition, Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).

32. Lessor’s Access; Showing Premises; Repairs . Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect on Lessee’s use of the Premises. All such activities shall be without abatement of rent or liability to Lessee.

33. Auctions . Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

34. Signs . Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the last 6 months of the term hereof. Lessor may not place any sign on the exterior of the Building that covers any of the windows of the Premises. Except for ordinary “For Sublease” signs which may be placed only on the Premises, Lessee shall not place any sign upon the Project without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.

35. Termination; Merger . Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor’s failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor’s election to have such event constitute the termination of such interest.

36. Consents . Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor’s actual reasonable costs and expenses (including but not limited to architects’, attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor. Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor’s consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request.

37. Guarantor .

37.1 Execution . The Guarantors, if any, shall each execute a guaranty in the form most recently published by the AIR Commercial Real Estate Association.

37.2 Default . It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.

38. Quiet Possession . Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee’s part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.

39. Options . If Lessee is granted any Option, as defined below, then the following provisions shall apply.

39.1 Definition . “ Option ” shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor.

39.2 Options Personal To Original Lessee . Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.

39.3 Multiple Options . In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised.

39.4 Effect of Default on Options .

(a) Lessee shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.

(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise an Option because of the provisions of Paragraph 39.4(a).

(c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breach of this Lease.

40. Security Measures . Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. In the event, however, that Lessor should elect to provide security services, then the cost thereof shall be an Operating Expense.

41. Reservations .

(a) Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to cause the recordation of parcel maps and restrictions, (iii) to create and/or install new utility raceways, so long as such easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessor may also: change the name, address or title of the Building or Project upon at least 90 days prior written notice; provide and install, at Lessee’s expense, Building standard graphics on the door of the Premises and such portions of the Common Areas as Lessor shall reasonably deem appropriate; grant to any lessee the exclusive right to conduct any business as long as such exclusive right does not conflict with any rights expressly given herein; and to place such signs, notices or displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the Building or the Project or on signs in the Common Areas. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate such rights. The obstruction of Lessee’s view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor or third parties, shall in no way affect this Lease or impose any liability upon Lessor.

(b) Lessor also reserves the right to move Lessee to other space of comparable size in the Building or Project. Lessor must provide at least 45 days prior written notice of such move, and the new space must contain improvements of comparable quality to those contained within the Premises. Lessor shall pay the reasonable out of pocket costs that Lessee incurs with regard to such relocation, including the expenses of moving and necessary stationary revision costs. In no event, however, shall Lessor be required to pay an amount in excess of two months Base Rent. Lessee may not be relocated more than once during the term of this Lease.


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(c) Lessee shall not: (i) use a representation (photographic or otherwise) of the Building or Project or their name(s) in connection with Lessee’s business; or (ii) suffer or permit anyone, except in emergency, to go upon the roof of the Building.

42. Performance Under Protest . If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay. A Party who does not initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed to have waived its right to protest such payment.

43. Authority; Multiple Parties; Execution

(a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority.

(b) If this Lease is executed by more than one person or entity as “Lessee”, each such person or entity shall be jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such document.

(c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

44. Conflict . Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.

45. Offer . Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.

46. Amendments . This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable nonmonetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.

47. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

48. Arbitration of Disputes . An Addendum requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease o is x is not attached to this Lease.

49. Accessibility; Americans with Disabilities Act .

(a) The Premises: o have not undergone an inspection by a Certified Access Specialist (CASp). o have undergone an inspection by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction-related accessibility standards pursuant to California Civil Code §55.51 et seq. o have undergone an inspection by a Certified Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility standards pursuant to California Civil Code §55.51 et seq.

(b) Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee’s specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s expense.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.

WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.

The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.

Executed at:		Westlake Village, CA		Executed at:		Simi Valley, CA

On:	12-29-14			On:	12-23-14


By LESSOR:				By LESSEE:

K-Swiss Inc., a Delaware corporation				Interlink Electronics, Inc., a Nevada corporation


By:			/s/ Joseph Gabaldon	By:			/s/ Steven N. Bronson
Name Printed:				Name Printed:
Title:			VP Operations	Title:			President & CEO


By:				By:
Name Printed:				Name Printed:
Title:				Title:
Address:				Address:


Telephone:( )				Telephone:( )
Facsimile:( )				Facsimile:( )
Email:				Email:
Email:				Emai:
Federal ID No.				Federal ID No.


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LESSOR’S BROKER:				LESSEE’S BROKER:

Lee & Associates-LA North/Ventura, Inc.				Lee & Associates- LA North/Ventura, Inc.

Attn:	Mark Spellman Joe Jusko			Attn:	Mark Leonard
Address:	26050 Mureau Road, Suite 101			Address:	26050 Mureau Road, Suite 101
	Calabasas, CA 91302				Calabasas, CA 91302

Telephone:		(818) 223-4388		Telephone:		(818) 223-4388
Facsimile:		(818) 591-1450		Facsimile:		(818) 591-1450
Email:		mspellman@lee-re.com jjusko@lee-re.com		Email:		mleonard@lee-re.com
Broker/Agent BRE License #:			01039995 00875413	Broker/Agent BRE License #:			01031863

NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 500 N Brand Blvd, Suite 900, Glendale, CA 91203.

Telephone No. (213) 687-8777. Fax No.: (213) 687-8616.

No part of these works may be reproduced in any form without permission in writing.


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ADDENDUM TO STANDARD MULTI-TENANT OFFICE LEASE — GROSS

DATED DECEMBER 8, 2014 BY AND BETWEEN K-Swiss Inc., a Delaware

corporation, AS LESSOR, AND INTERLINK ELECTRONICS Inc., a Nevada

corporation AS LESSEE, FOR

THE PROPERTY COMMONLY KNOWN AS 31248 Oak Crest Dr, Westlake

Village, CA.

The terms, covenants and conditions set forth herein are intended to and shall have the same force and effect as if set forth at length in the body of the Lease. To the extent that the provisions of this Addendum are inconsistent with any provisions of the Lease, the provisions of this Addendum shall supersede and control. All capitalized terms used but not defined herein shall be defined as set forth in the Lease.

51. Monthly Base Rent Schedule

Notwithstanding anything in Paragraph 1.5 and 4 to the contrary, the Monthly Base Rent shall be as follows:

Month(s)	Monthly Base Rent

February 1, 2015- February 28, 2015	$	5,416.80
March 1, 2015-August 31, 2015	$	2,708.40
September 1, 2015- January 31, 2016	$	5,416.80
February 1, 2016-January 31, 2017	$	5,579.30
February 1, 2017-January 31, 2018	$	5,746.68
February 1, 2018-January 31, 2019	$	5,919.08
February 1, 2019-January 31, 2020	$	6,096.66

52. Signage

Subject to Lessor’s review and approval (not to be unreasonably withheld) and all municipal codes, Lessor will allow Lessee to install its signage in the following locations at Lessee’s expense in accordance with Lessee’s name, logo, font, color and style (which shall be attached to the Lease as an exhibit).

Monument Signage: Monument Signage. Lessor is considering erecting a monument sign at the project to be shared with other Lessees. Lessee shall have the right to a portion of the monument. Lessee shall reimburse Lessor for one-third of Lessor’s costs incurred in the design and construction of the Monument Sign. There shall be no more than two names other than Lessee’s on the Monument Sign. The location of Lessee’s and others’ names from the lowest to the highest position on the Monument Sign shall be in ascending order of the amount of space occupied in the Building.

Suite Entry: Building standard signage adjacent to all suite doors on any multi-tenant floors.

Directory Board : Lessee’s name on the Building’s directory.

53. TENANT IMPROVEMENTS: Lessor agrees to, at Lessor’s sole cost and expense improve the Premises using Building-standard materials and quantities as follows:

1) Repaint and install new carpet (VCT in Break Area) per Lessee’s choice utilizing Building-standard materials.

2) Repair and damaged ceiling tiles and deliver space with all electrical, HVAC and lighting in working order

3) Provide up to $2,000.00 towards Break Area renovation.

54. Outdoor Patio:

Lessee shall have the right to utilize the Building’s Common Area Outdoor Patio during the Lease Term and any Options to Extend this Lease at no additional cost. It is understood that Lessor and other Lessees use the patio area occasionally for breaks, special occasions and work related parties

IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum as of the respective dates set forth below.

LESSOR:		LESSEE:
K-Swiss Inc., a Delaware corporation		Interlink Electronics Inc., a Nevada corporation

By:	/s/ Joseph Gabaldon	By:	/s/ Steven N. Bronson

Name: Joseph Gabaldon		Name: Steven N. Bronson

Title: VP Operations KSGB		Title: President and CEO

Date: 12/29/2014		Date: 12/23/2014

OPTION(S) TO EXTEND

STANDARD LEASE ADDENDUM

Dated	December 8, 2014

By and Between (Lessor)			K-Swiss Inc., a Delaware corporation

By and Between (Lessee)			Interlink Electronics, Inc., a Nevada corporation

Address of Premises:		31248 Oak Crest Drive, Suite 210
		Westlake Village, CA 91361

Paragraph 50

A. OPTION(S) TO EXTEND:

Lessor hereby grants to Lessee the option to extend the term of this Lease for one (1) additional sixty (60) month period(s) commencing when the prior term expires upon each and all of the following terms and conditions:

(i) In order to exercise an option to extend, Lessee must give written notice of such election to Lessor and Lessor must receive the same at least nine (9) months prior to the date that the option period would commence, time being of the essence. If proper notification of the exercise of an option is not given and/or received, such option shall automatically expire. Options (if there are more than one) may only be exercised consecutively.

(ii) The provisions of paragraph 39, including those relating to Lessee’s Default set forth in paragraph 39.4 of this Lease, are conditions of this Option.

(iii) Except for the provisions of this Lease granting an option or options to extend the term, all of the terms and conditions of this Lease except where specifically modified by this option shall apply.

(iv) This Option is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and without the intention of thereafter assigning or subletting.

(v) The monthly rent for each month of the option period shall be calculated as follows, using the method(s) indicated below: (Check Method(s) to be Used and Fill in Appropriately)

x II. Market Rental Value Adjustment(s) (MRV)

a. On (Fill in MRV Adjustment Date(s)) February 1, 2021 the Base Rent shall be adjusted to the “Market Rental Value” of the property as follows:

1) Four months prior to each Market Rental Value Adjustment Date described above, the Parties shall attempt to agree upon what the new MRV will be on the adjustment date. If agreement cannot be reached, within thirty days, then:

(a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establish the new MRV within the next 30 days. Any associated costs will be split equally between the Parties, or

(b) Both Lessor and Lessee shall each immediately make a reasonable determination of the MRV and submit such determination, in


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FORM OE-4-04/14E

writing, to arbitration in accordance with the following provisions:

(i) Within 15 days thereafter, Lessor and Lessee shall each select an o appraiser or o broker ( “Consultant” - check one) of their choice to act as an arbitrator. The two arbitrators so appointed shall immediately select a third mutually acceptable Consultant to act as a third arbitrator.

(ii) The 3 arbitrators shall within 30 days of the appointment of the third arbitrator reach a decision as to what the actual MRV for the Premises is, and whether Lessor’s or Lessee’s submitted MRV is the closest thereto. The decision of a majority of the arbitrators shall be binding on the Parties. The submitted MRV which is determined to be the closest to the actual MRV shall thereafter be used by the Parties.

(iii) If either of the Parties fails to appoint an arbitrator within the specified 15 days, the arbitrator timely appointed by one of them shall reach a decision on his or her own, and said decision shall be binding on the Parties.

(iv) The entire cost of such arbitration shall be paid by the party whose submitted MRV is not selected, ie. the one that is NOT the closest to the actual MRV.

2) When determining MRV, the Lessor, Lessee and Consultants shall consider the terms of comparable market transactions which shall include, but no limited to, rent, rental adjustments, abated rent, lease term and financial condition of tenants.

3) Notwithstanding the foregoing, the new Base Rent shall not be less than the rent payable for the month immediately preceding the rent adjustment.

b. Upon the establishment of each New Market Rental Value:

1) the new MRV will become the new “Base Rent” for the purpose of calculating any further Adjustments, and

2) the first month of each Market Rental Value term shall become the new “Base Month” for the purpose of calculating any further Adjustments.

B. NOTICE:

Unless specified otherwise herein, notice of any rental adjustments, other than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of the Lease.

Telephone No. (213) 687-8777. Fax No.: (213) 687-8616.


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RULES AND REGULATIONS FOR
STANDARD OFFICE LEASE

Dated: December 8, 2014

By and Between K-Swiss Inc., a Delaware corporation (“Lessor”) and Interlink Electronics, Inc., a Nevada corporation (“Lessee”)

GENERAL RULES

1. Lessee shall not suffer or permit the obstruction of any Common Areas, including driveways, walkways and stairways.

2. Lessor reserves the right to refuse access to any persons Lessor in good faith judges to be a threat to the safety and reputation of the Project and its occupants.

3. Lessee shall not make or permit any noise or odors that annoy or interfere with other lessees or persons having business within the Project.

4. Lessee shall not keep animals or birds within the Project, and shall not bring bicycles, motorcycles or other vehicles into areas not designated as authorized for same.

5. Lessee shall not make, suffer or permit litter except in appropriate receptacles for that purpose.

6. Lessee shall not alter any lock or install new or additional locks or bolts.

7. Lessee shall be responsible for the inappropriate use of any toilet rooms, plumbing or other utilities. No foreign substances of any kind are to be inserted therein.

8. Lessee shall not deface the walls, partitions or other surfaces of the Premises or Project.

9. Lessee shall not suffer or permit anything in or around the Premises or Building that causes excessive vibration or floor loading in any part of the Project.

10. Furniture, significant freight and equipment shall be moved into or out of the building only with the Lessor’s knowledge and consent, and subject to such reasonable limitations, techniques and timing, as may be designated by Lessor. Lessee shall be responsible for any damage to the Office Building Project arising from any such activity.

11. Lessee shall not employ any service or contractor for services or work to be performed in the Building, except as approved by Lessor.

12. Lessor reserves the right to close and lock the Building on Saturdays, Sundays and Building Holidays, and on other days between the hours of 6:00 P.M. and 8:00 A.M. of the following day. If Lessee uses the Premises during such periods, Lessee shall be responsible for securely locking any doors it may have opened for entry.

13. Lessee shall return all keys at the termination of its tenancy and shall be responsible for the cost of replacing any keys that are lost.

14. No window coverings, shades or awnings shall be installed or used by Lessee.

15. No Lessee, employee or invitee shall go upon the roof of the Building.

16. Lessee shall not suffer or permit smoking or carrying of lighted cigars or cigarettes in areas reasonably designated by Lessor or by applicable governmental agencies as non-smoking areas.

17. Lessee shall not use any method of heating or air conditioning other than as provided by Lessor.

18. Lessee shall not install, maintain or operate any vending machines upon the Premises without Lessor’s written consent.

19. The Premises shall not be used for lodging or manufacturing, cooking or food preparation.

20. Lessee shall comply with all safety, fire protection and evacuation regulations established by Lessor or any applicable governmental agency.

21. Lessor reserves the right to waive any one of these rules or regulations, and/or as to any particular Lessee, and any such waiver shall not constitute a waiver of any other rule or regulation or any subsequent application thereof to such Lessee.

22. Lessee assumes all risks from theft or vandalism and agrees to keep its Premises locked as may be required.

23. Lessor reserves the right to make such other reasonable rules and regulations as it may from time to time deem necessary for the appropriate operation and safety of the Project and its occupants. Lessee agrees to abide by these and such rules and regulations.

PARKING RULES

1. Parking areas shall be used only for parking by vehicles no longer than full size, passenger automobiles herein called “Permitted Size Vehicles.” Vehicles other than Permitted Size Vehicles are herein referred to as “Oversized Vehicles.”

2. Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee’s employees, suppliers, shippers, customers, or invitees to be loaded, unloaded, or parked in areas other than those designated by Lessor for such activities.

3. Parking stickers or identification devices shall be the property of Lessor and be returned to Lessor by the holder thereof upon termination of the holder’s parking privileges. Lessee will pay such replacement charge as is reasonably established by Lessor for the loss of such devices.

4. Lessor reserves the right to refuse the sale of monthly identification devices to any person or entity that willfully refuses to comply with the applicable rules, regulations, laws and/or agreements.

5. Lessor reserves the right to relocate all or a part of parking spaces from floor to floor, within one floor, and/or to reasonably adjacent offsite location(s), and to reasonably allocate them between compact and standard size spaces, as long as the same complies with applicable laws, ordinances and regulations.

6. Users of the parking area will obey all posted signs and park only in the areas designated for vehicle parking.

7. Unless otherwise instructed, every person using the parking area is required to park and lock his own vehicle. Lessor will not be responsible for any damage to vehicles, injury to persons or loss of property, all of which risks are assumed by the party using the parking area.

8. Validation, if established, will be permissible only by such method or methods as Lessor and/or its licensee may establish at rates generally applicable to visitor parking.

9. The maintenance, washing, waxing or cleaning of vehicles in the parking structure or Common Areas is prohibited.

10. Lessee shall be responsible for seeing that all of its employees, agents and invitees comply with the applicable parking rules, regulations, laws and agreements.

11. Lessor reserves the right to modify these rules and/or adopt such other reasonable and non-discriminatory rules and regulations as it may deem necessary for the proper operation of the parking area.

12. Such parking use as is herein provided is intended merely as a license only and no bailment is intended or shall be created hereby.

Telephone No. (213) 687-8777. Fax No.: (213) 687-8616.


INITIALS		INITIALS

FORM OFG-1-9/99E

Exhibit 16.1

January 20, 2016

Securities and Exchange Commission

Washington, D.C. 20549

We have read Interlink Electronics, Inc.’s statements included under Item 14 of Amendment No. 1 to the Registration Statement on Form 10 and we agree with such statements concerning our firm.

SingerLewak LLP

/s/ SingerLewak LLP

Exhibit 21.1

Name of Entity		State or Other Jurisdiction of Incorporation or Organization
Interlink Electronics Asia Pacific Limited		Hong Kong
Interlink Electronics (China) Co. Ltd.		China
Interlink Electronics Singapore Private Lmited		Singapore