Interlink Electronics (LINK) 8-K Interlink Electronics Reports 2007 Second Quarter

Exhibit 99.1

Interlink Electronics Reports 2007 Second Quarter

Financial Results

Camarillo, California, August 15, 2007—Interlink Electronics, Inc. [OTC:LINK.PK], a global leader in the design, development and manufacture of human interface products and technologies, today announced financial results for the quarter and six months ended June 30, 2007.

Revenues in the second quarter of 2007 were $8.0 million, down 6% from the 2006 second quarter. Gross profit was $2.6 million, or 32% of revenues, compared to $2.0 million, or 23% of revenues, in 2006. The net loss in the quarter was $2.2 million with a loss per share of $0.16, compared to a net loss of $3.6 million and a loss per share of $0.26 in the same quarter last year. Second quarter results for 2007 and 2006 included $793,000 and $1,074,000 in non-cash stock based compensation expense, respectively.

Revenues in the first six months of 2007 were $16.9 million, down 1% from the same period in 2006. Gross profit was $5.2 million, or 31% of revenues, compared to $5.6 million, or 33% of revenues, in 2006. The net loss in the six month period was $4.7 million with a loss per share of $0.34, compared to a net loss of $6.2 million and a loss per share of $0.45 in the same period last year. These results in 2007 and 2006 included $1.8 million and $2.1 million in non-cash stock based compensation expense, respectively.

“Our performance in the quarter and the first six months of 2007 was in line with previous guidance,” said E. Michael Thoben, Interlink Electronics’ Chairman, Chief Executive Officer and President. “Revenue from the Specialty Components business again showed solid progress, growing 13% from the 2006 second quarter and 42% from the first six months of last year. This growth was a direct result of the expansion of our MicroNav Technology customer base into the cell phone and personal device markets.”

Thoben continued, saying, “Although slightly down from a strong 2006 second quarter, our E transactions revenues grew 12% in the first six months of 2007, and we believe this segment will continue to show solid growth in the second half of the year. Our Branded Business was up nicely in both the 2007 second quarter and six-month period. Revenues from OEM Remotes continued their expected decline as we manage this business to a lower percentage of overall sales.”

“We are making progress on the bottom-line,” Thoben concluded. “This trend should continue with increasing revenues from our strategic businesses and additional initiatives to control operating costs.”

Interlink plans to announce the date of an investor conference call to discuss its 2007 second quarter financial results as well as its future growth plans within the next few days.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Month Period Ended June 30,						Six Month Period Ended June 30,
(IN THOUSANDS, EXCEPT PER SHARE DATA)	2007			2006			2007			2006
Revenues	$	8,006		$	8,517		$	16,891			17,048
Cost of revenues		5,440			6,553			11,655			11,402
Gross profit		2,566			1,964			5,236			5,646
Operating expenses:
Product development and research		1,052			1,424			2,294			2,839
Selling, general and administrative		3,679			4,247			7,568			9,147
Total operating expenses		4,731			5,671			9,862			11,986
Operating loss		(2,165	)(a)		(3,707	)(a)		(4,626	)(a)		(6,340	)(a)
Other income (expense):
Interest income , net		(24	)		107			(8	)		234
Other expense, net		10			(23	)		(12	)		(39	)
Total other income (expense), net		(14	)		84			(20	)		195
Loss before provision for income taxes		(2,179	)		(3,623	)		(4,646	)		(6,145	)
Provision for income taxes		—			8			52			79
Net loss	$	(2,179	)	$	(3,631	)	$	(4,698	)	$	(6,224	)
Loss per share – basic and diluted	$	(0.16	)	$	(0.26	)	$	(0.34	)	$	(0.45	)
Weighted average shares – basic and diluted		13,749			13,765			13,749			13,760
(a)    Operating losses for the three and six months ended June 30, 2007 and 2006 include share-based compensation expense pursuant to FAS123(R) of $793 and $1,074 and $1,769 and $2,144, respectively. Such expense is included in the statement of operations as follows:
Cost of revenues	$	133		$	201		$	311		$	404
Product development and research		172			225			381			448
Selling, general and administrative		488			648			1,077			1,292
Total	$	793		$	1,074		$	1,769		$	2,144

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(IN THOUSANDS)	June 30, 2007			December 31, 2006
Assets
Current assets:
Cash and cash equivalents	$	1,983		$	1,344
Short-term investments, available for sale		—			1,600
Accounts receivable, less allowance for doubtful accounts of $540 and $1,131 at June 30, 2007 and December 31, 2006		5,950			8,034
Inventories, net		9,724			10,706
Prepaid expenses and other current assets		660			560
Total current assets		18,317			22,244
Property and equipment, net		1,576			1,594
Patents and trademarks, net		213			272
Other assets		244			245
Total assets	$	20,350		$	24,355
Liabilities and Stockholders’ Equity
Current liabilities:
Note payable	$	73		$	152
Short term borrowings		1,500			—
Accounts payable and accrued liabilities		2,243			4,331
Accrued payroll and related expenses		2,513			2,243
Deferred revenue		124			765
Total current liabilities		6,453			7,491
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $5.00 par value (100 shares authorized, none issued and outstanding)		—			—
Common stock, $0.00001 par value (50,000 shares authorized, 13,749 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively		56,715			54,946
Accumulated other comprehensive loss		(543	)		(505	)
Accumulated deficit		(42,275	)		(37,577	)
Total stockholders’ equity		13,897			16,864
Total liabilities and stockholders’ equity	$	20,350		$	24,355

About Interlink Electronics, Inc.

Interlink Electronics, Inc. (OTC: LINK.PK), is a global leader in the design, development and manufacture of intuitive human interface products and technologies. Setting tomorrow’s standards for electronic signature and e-notarization products, advanced remote controls and consumer electronics interface solutions, Interlink has established itself as one of the world’s leading innovators of intuitive interface design. With more than 80 patents around the world protecting its technologies and products, Interlink Electronics serves a world-class customer-base from its corporate headquarters in Camarillo, California and offices in Japan, Taiwan, Hong Kong and China. For more information, seehttp://www.interlinkelectronics.com.

This release contains forward-looking statements that involve a number of risks and uncertainties. The following are among the factors that could cause actual results to differ materially from the forward-looking statements: the sufficiency of cash, credit lines and other sources to finance our operations; the results of pending litigation; business conditions and growth in the electronics industry and general economies, both domestic and international; lower than expected customer orders; delays in receipt of orders or cancellation of orders; competitive factors, including increased competition, new product offerings by competitors and price pressures; the availability of third party parts and supplies at reasonable prices; changes in, and acceptance by our market of, our product mix; significant quarterly performance fluctuations due to the receipt of a significant portion of customer orders and product shipments in the last month of each quarter; and product shipment interruptions due to manufacturing problems. The forward-looking statements contained in this document regarding Interlink’s financial results, industry and revenue trends, the filing of reports with the Securities and Exchange Commission and future business activities should be considered in light of these factors.

Contact:

Investor Relations Contact: Michelle Lockard

mlockard@interlinkelectronics.com; 805-484-8855 ext. 114

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