Offer To Exchange Certain Outstanding Options Issued Under

Table of Contents Exhibit (a)(1) INTERLINK ELECTRONICS, INC. OFFER TO EXCHANGE CERTAIN OUTSTANDING OPTIONS ISSUED UNDER THE INTERLINK ELECTRONICS, INC. 1996 STOCK INCENTIVE PLAN HAVING AN EXERCISE PRICE PER SHARE EQUAL TO OR GREATER THAN $15.00 FOR NEW OPTIONS (THE "OFFER TO EXCHANGE") THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., PACIFIC TIME, ON AUGUST 7, 2002 UNLESS THE OFFER IS EXTENDED. Interlink Electronics, Inc. ("Interlink" or the "company") is offering to exchange eligible options held by eligible employees and directors for new options we will grant under the Interlink 1996 Stock Incentive Plan (the "Plan"). An "eligible option" is an option to purchase common stock of Interlink that has an exercise price equal to or greater than $15. An "eligible" employee or director is an employee or director of Interlink or one of its subsidiaries as of the date the offer commences and as of the date the tendered options are cancelled. We are making the offer upon the terms and conditions described in this Offer to Exchange (the "Offer to Exchange"), the Election Form and the Notice to Change Election From Accept to Reject (which together, as they may be amended from time to time, constitute the "offer" or "program"). The offer applies only to options currently exercisable at either $15 or $27 per share. The number of shares subject to the new options to be granted to each eligible employee or director will be equal to the number of shares subject to the options tendered by the eligible employee or director and accepted for exchange. Subject to the terms and conditions of this offer, we will grant the new options on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. You may only tender options that are currently exercisable for $15 per share or more. If you choose to tender an eligible option, you must tender all options with that exercise price. All tendered options accepted by us through the offer will be cancelled as promptly as practicable after 5:00 p.m., Pacific time, on the date the offer ends. The offer is currently scheduled to expire on August 7, 2002 (the "Expiration Date") and we expect to cancel options on August 8, 2002, or as soon as practicable thereafter (the "Cancellation Date"). The offer is not conditioned on a minimum number of options being tendered. Participation in the offer is completely voluntary. The offer is subject to conditions that we describe in Section 7 of this Offer to Exchange. You may participate in the offer if you are an eligible employee or director of Interlink or one of our subsidiaries. In order to receive a new option pursuant to this offer, you must continue to be an employee or a director as of the date on which the new options are granted, which will be at least six months and one day after the Cancellation Date. If you tender options for exchange as described in the offer, and we accept your tendered options, then, subject to the terms of this offer, we will grant you new options under the Plan. The exercise price per share of the new options will be the fair market value on the date of grant, which shall be the closing price of a share of our common stock on the Nasdaq National Market. Each new option will be exercisable for the same number of shares as remained outstanding under the tendered options. Each new option granted will vest in accordance with the vesting schedule of the cancelled options. Each new option granted will vest as follows:

Table of Contents ? any shares that were fully vested on the date that the offer expires will be fully vested; ? all unvested options on the date the offer expires that would have been fully vested on the date the new options are granted (at least six months and one day from the date this offer expires) will be fully vested; and ? all remaining unvested options will have a vesting schedule that is equivalent to what would have been in place had the cancelled option remained in effect. For example: ? An employee cancels an option that is 20 / 48 th vested at the time of cancellation. ? The new grant occurs 6 months and one day after cancellation. ? The replacement option will be 26 / 48 th (plus one day) vested at the time of grant. Neither we nor our Board of Directors makes any recommendation as to whether you should tender or not tender your options for exchange. You must make your own decision whether or not to tender your options. Interlink's common stock is traded on the Nasdaq National Market under the symbol "LINK." On July 3, 2002, the closing price of our common stock reported on the Nasdaq National Market was $3.40 per share. However, since January 1, 2000, our common stock has traded as high as $67.68 and as low as $2.82 per share (adjusted for a stock split on March 20, 2000). Management makes no prediction as to the likely stock price on the day on which replacement options are granted. IF YOUR EMPLOYMENT TERMINATES FOR ANY REASON, INCLUDING DEATH OR DISABILITY, PRIOR TO THE GRANT OF THE REPLACEMENT OPTION, YOU WILL RECEIVE NEITHER A REPLACEMENT OPTION NOR THE RETURN OF YOUR CANCELLED OPTION. WE RECOMMEND THAT YOU EVALUATE CURRENT MARKET QUOTES FOR SHARES OF OUR COMMON STOCK, AMONG OTHER FACTORS, BEFORE DECIDING WHETHER OR NOT TO TENDER YOUR OPTIONS. THIS OFFER TO EXCHANGE HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFER TO EXCHANGE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should direct questions about the offer or requests for assistance or for additional copies of this Offer to Exchange, the Election Form and the Notice to Change Election From Accept to Reject to Michelle Lockard. Information regarding your current outstanding options is available from Ms. Lockard. Ms. Lockard can be reached by telephone at (805) 484-8855.

ii Table of Contents IMPORTANT If you wish to tender your options for exchange, you must complete and sign the Election Form in accordance with its instructions, and fax or hand deliver it and any other required documents to Michelle Lockard. We are not making the offer to, and we will not accept any tender of options from or on behalf of, option holders in any jurisdiction in which the offer or the acceptance of any tender of options would not be in compliance with the laws of that jurisdiction. However, we may, at our discretion, take any actions necessary for us to make the offer to option holders in any of these jurisdictions. We have not authorized any person to make any recommendation on our behalf as to whether you should tender or not tender your options through the Offer. You should rely only on the information in this document or to which we have referred you. We have not authorized anyone to give you any information or to make any representation in connection with the Offer other than the information and representations contained in this document, election form and notice to change election from accept to reject. If anyone makes any recommendation or representation to you or gives you any information, you must not rely upon that recommendation, representation or information as having been authorized by us.

iii Table of Contents TABLE OF CONTENTS Page SUMMARY TERM SHEET 1 INTRODUCTION 7 THE OFFER 7 1. ELIGIBILITY 7 2. NUMBER OF OPTIONS; EXPIRATION DATE 7 3. PURPOSE OF THE OFFER 8 4. PROCEDURES FOR TENDERING OPTIONS 10 5. WITHDRAWAL RIGHTS AND CHANGE OF ELECTION 10 6. ACCEPTANCE OF OPTIONS FOR EXCHANGE AND ISSUANCE OF NEW OPTIONS 11 7. CONDITIONS OF THE OFFER 12 8. PRICE RANGE OF SHARES UNDERLYING THE OPTIONS 13 9. SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF NEW OPTIONS 13 10. INFORMATION CONCERNING INTERLINK 17 11. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OPTIONS 18 12. STATUS OF OPTIONS ACQUIRED BY US IN THE OFFER; ACCOUNTING CONSEQUENCES OF THE OFFER 19 13. LEGAL MATTERS; REGULATORY APPROVALS 19 14. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES 19 15. EXTENSION OF OFFER; TERMINATION; AMENDMENT 20 16. FEES AND EXPENSES 21 17. ADDITIONAL INFORMATION 21 18. MISCELLANEOUS 22

iv Table of Contents SUMMARY TERM SHEET The following are answers to some of the questions that you may have about the offer. We urge you to read carefully the remainder of this Offer to Exchange, the Election Form and the Notice to Change Election From Accept to Reject because the information in this summary is not complete, and additional important information is contained in the remainder of this Offer to Exchange, the Election Form and the Notice to Change Election From Accept to Reject. WHAT OPTIONS ARE WE OFFERING TO EXCHANGE? We are offering to exchange new options that we will grant under the Plan for outstanding, unexercised options to purchase Interlink common stock held by eligible employees and directors if, but only if, the existing options have a current exercise price equal to or greater than $15 per share. The offer applies only to options currently exercisable at either $15 or $27 per share. WHO IS ELIGIBLE TO PARTICIPATE? Employees and directors are eligible to participate if they are employees or directors of Interlink or one of Interlink's subsidiaries as of the date the offer commences and the date on which the tendered options are cancelled. In order to receive a new option, you must remain an employee or a director as of the date the new options are granted, which will be at least six months and one day after the cancellation date of the accepted tendered options. If Interlink does not extend the offer, the new options will be granted on or about February 10, 2003. WHY ARE WE MAKING THE OFFER? We believe that granting stock options motivates high levels of performance and provides an effective means of recognizing employee contributions to the success of the company. The offer provides an opportunity for us to offer eligible employees a valuable incentive to stay with the company. Some of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our shares. By making this offer to exchange outstanding eligible options for new options that will have an exercise price equal to the market value of the shares on the grant date, we intend to provide our eligible employees with the benefit of owning options that over time may have a greater potential to increase in value, create better performance incentives for eligible employees and thereby maximize shareholder value. WHAT ARE THE CONDITIONS TO THE OFFER? The offer is not conditioned on a minimum number of options being tendered. However, we will not accept partial tenders of options. Therefore, if you tender an eligible option, you must tender all the options with that exercise price. Participation in the offer is completely voluntary. The conditions are described in Section 7 of this Offer to Exchange. ARE THERE ANY ELIGIBILITY REQUIREMENTS THAT YOU MUST SATISFY AFTER THE EXPIRATION DATE OF THE OFFER TO RECEIVE THE NEW OPTIONS? To receive a grant of new options through the offer and under the terms of the Plan, you must be an employee or director of Interlink or one of its subsidiaries as of the date the new options are granted. As discussed below, subject to the terms of this offer, we will not grant the new options until on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. If, for any reason, you do not remain an employee or director of Interlink or one of its subsidiaries through the date we grant the new options for any reason, including death or disability, you will not receive any new options or other consideration in exchange for your tendered options that have been accepted for exchange.

Table of Contents HOW MANY NEW OPTIONS WILL YOU RECEIVE IN EXCHANGE FOR YOUR TENDERED OPTIONS? If you meet the eligibility requirements and subject to the terms of this offer, we will grant you new options to purchase the number of shares equal to the number of unexercised shares subject to the options you tender. New options will be granted under the Plan, unless prevented by law or applicable regulations. All new options will be subject to a new option agreement between you and us. WHEN WILL YOU RECEIVE YOUR NEW OPTIONS? We will not grant the new options until on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. Our Board of Directors will select the actual grant date for the new options. If we cancel tendered options on August 8, 2002, which is the scheduled date for the cancellation of the options (the day following the expiration date of the offer), the new options will not be granted until on or about February 10, 2003. You must be an employee or director of Interlink or one of its subsidiaries on the date we are granting the new options in order to be eligible to receive them. WHY WON'T YOU RECEIVE YOUR NEW OPTIONS IMMEDIATELY AFTER THE EXPIRATION DATE OF THE OFFER? If we were to grant the new options on any date which is earlier than six months and one day after the date we cancel the options accepted for exchange, we would be subject to onerous accounting charges. We would be required for financial reporting purposes to treat the new options as variable awards. This means that we would be required to record the non-cash accounting impact of decreases and increases in Interlink's share price as a compensation expense for the new options issued under this offer. We would have to continue this variable accounting for these new options until they were exercised, forfeited or terminated. The higher the market value of our shares, the greater the compensation expense we would have to record. By deferring the grant of the new options for at least six months and one day, we believe we will not have to treat the new options as variable awards. IF YOU TENDER OPTIONS IN THE OFFER, WILL YOU BE ELIGIBLE TO RECEIVE OTHER OPTION GRANTS BEFORE YOU RECEIVE YOUR NEW OPTIONS? No. If we accept options you tender in the offer, we will defer the grant of other options, such as annual, bonus or promotional options, for which you may otherwise be eligible until the grant date of your new options in order to avoid incurring a compensation expense against our earnings as a result of accounting rules that would apply to these interim grants as a result of the offer. WILL YOU BE REQUIRED TO GIVE UP ALL YOUR RIGHTS TO THE CANCELLED OPTIONS? Yes. Once we have accepted options tendered by you, your options will be cancelled and you will no longer have any rights under those options. WHAT WILL THE EXERCISE PRICE OF THE NEW OPTIONS BE? The exercise price per share of the new options will be the fair market value on the date of grant, which shall be the closing price of a share of our common stock on the Nasdaq National Market. Accordingly, we cannot predict the exercise price of the new options. Because we will not grant new options until on or about the first business day that is at least six months and one day after the date we cancel the options accepted for exchange, the new options may have a higher exercise price than some or all of your current options. We recommend that you evaluate current market quotes for our shares, among other factors, before deciding whether or not to tender your options.

2 Table of Contents WHEN WILL THE NEW OPTIONS VEST? The vesting of the newly issued options will be in accordance with the vesting schedule of the cancelled options. You will receive credit for vesting accrued prior to the cancellation of the tendered options and will receive credit for the period between the cancellation of the tendered options and the grant of the new options. Each new option granted will vest as follows: ? any shares that were fully vested on the date that the offer expires will be fully vested; ? all unvested options on the date the offer expires that would have been fully vested on the date the new options are granted (at least six months and one day from the date this offer expires) will be fully vested; and ? all remaining unvested options will have a vesting schedule that is equivalent to what would have been in place had the cancelled option remained in effect. For example: ? An employee cancels an option that is 20 / 48 th vested at the time of cancellation. ? The new grant occurs 6 months and one day after cancellation. ? The replacement option will be 26 / 48 th (plus one day) vested at the time of grant. WHAT IF WE ENTER INTO A MERGER OR OTHER SIMILAR TRANSACTION? It is possible that, prior to the grant of new options, we might effect or enter into an agreement such as a merger or other similar transaction. As promptly as practicable after we accept and cancel options tendered for exchange, we will issue to you a Promise to Grant Stock Option(s), by which we will commit to grant stock options to you on a date no earlier than February 10, 2003, covering the same number of shares as the options cancelled pursuant to this offer, provided that you remain an eligible employee or director on the date on which the grant is made. The Promise to Grant Stock Option(s) which we will give you is a binding commitment, and any successor to our company will be required to honor that commitment. You should be aware that these types of transactions could have substantial effects on our share price, including potentially substantial appreciation in the price of our shares. Depending on the structure of this type of transaction, tendering option holders might be deprived of any further price appreciation in the shares associated with the new options. For example, if our shares were acquired in a cash merger, the fair market value of our shares, and hence the price at which we grant the new options, would likely be a price at or near the cash price being paid for the shares in the transaction, yielding limited or no financial benefit to a recipient of the new options for that transaction. In addition, in the event of an acquisition of our company for stock, tendering option holders might receive options to purchase shares of a different issuer. ARE THERE CIRCUMSTANCES WHERE YOU WOULD NOT BE GRANTED NEW OPTIONS? Yes. Even if we accept your tendered options, we will not grant new options to you if we are prohibited by applicable law or regulations from doing so. We will use reasonable efforts to avoid the prohibition, but if it is applicable throughout the period from the first business day that is at least six months and one day after we cancel the options accepted for exchange, you will not be granted a new option. Also, if you are no longer an employee or director of Interlink or one of its subsidiaries on the date we grant new options, you will not receive any new options.

3 Table of Contents IF YOU CHOOSE TO TENDER OPTIONS THAT ARE ELIGIBLE FOR EXCHANGE, DO YOU HAVE TO TENDER ALL OF YOUR OPTIONS THAT ARE ELIGIBLE FOR EXCHANGE? No. If you hold options exercisable at $15 per share and $27 per share, you may chose to exchange one or the other or both. However, if you do decide to exchange options exercisable at a certain price, you must tender all of the options exercisable at that price. For example, if you choose to exchange only your $27 options, you do not need to submit your $15 options to us for cancellation unless you choose to do so. In this scenario, however, you cannot submit only a portion of your $27 options; you must exchange all of them. CAN I SELECT ONE PART OF AN OPTION TO CANCEL, OR CANCEL AN OPTION ONLY AS TO CERTAIN SHARES? No. You cannot partially cancel an outstanding option. Therefore, if you tender an eligible option, you must tender the entire option. HOW DO YOU KNOW WHAT THE CURRENT EXERCISE PRICE OF YOUR OPTIONS IS? Options granted after March 20, 2000, are exercisable to purchase the number of shares at the exercise price in each case as stated in the option certificate. Because of the three-for-two stock split that occurred on March 20, 2000, options granted prior to that date are exercisable to purchase 150% of the number of shares stated in the option certificate and the exercise price per share is 66 2 / 3 % of the exercise price stated in the option certificate. For example, if you have an option certificate dated prior to March 20, 2000 that states that you are entitled to purchase 200 shares for $30 per share, that option is currently exercisable to purchase 300 shares for $20 per share. WHAT HAPPENS TO OPTIONS THAT YOU CHOOSE NOT TO TENDER OR THAT ARE NOT ACCEPTED FOR EXCHANGE? Nothing. Options that you choose not to tender for exchange or that we do not accept for exchange remain outstanding until they expire by their terms and retain their current exercise price and current vesting schedule. WILL YOU HAVE TO PAY TAXES IF YOU EXCHANGE YOUR OPTIONS IN THE OFFER? If you exchange your current options for new options, we believe you will not be required under current law to recognize income for U.S. federal income tax purposes at the time of the exchange. Further, at the grant date of the new options, you will not be required under current law to recognize income for U.S. federal income tax purposes. The grant of options does not result in the recognition of taxable income. We know of no adverse tax consequences that will affect any employee in the United States with respect to options exchanged under this program. However, we recommend that you consult with your own tax advisor to determine the tax consequences of electing to exchange options pursuant to the offer. IF YOUR CURRENT OPTIONS ARE INCENTIVE STOCK OPTIONS, WILL YOUR NEW OPTIONS BE INCENTIVE STOCK OPTIONS? If your current options are incentive stock options, your new options will be granted as incentive stock options to the maximum extent they qualify as incentive stock options under the tax laws on the date of the grant. For options to qualify as incentive stock options under the current tax laws, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the option exercise price. The excess value is deemed to be a non-qualified stock option, which is an option that is not qualified to be an incentive stock option under the current tax laws. WHEN WILL YOUR NEW OPTIONS EXPIRE? Your new options will expire on the same expiration date as the options for which they are exchanged and will be subject to the same forfeiture provisions as the exchanged options. For example, if you exchange options that currently expire on December 31, 2003, the new options will also expire on that date. However, if you should terminate your employment or directorship prior to that date, the new options will expire earlier in the same manner as the exchanged options would have expired.

4 Table of Contents WHEN DOES THE OFFER EXPIRE? CAN THE OFFER BE EXTENDED, AND IF SO, HOW WILL YOU BE NOTIFIED IF IT IS EXTENDED? The offer expires on August 7, 2002, at 5:00 p.m., Pacific time, unless it is extended by us. We may, in our discretion, extend the offer at any time, but we cannot assure you that the offer will be extended or, if extended, for how long. If the offer is extended, we will make a public announcement of the extension no later than 6:00 a.m., Pacific time, on the next business day following the previously scheduled expiration of the offer period. HOW DO YOU TENDER YOUR OPTIONS? If you decide to tender your options, you must deliver, before 5:00 p.m., Pacific time, on August 7, 2002 (or such later date and time if we extend the expiration of the offer), a properly completed and executed Election Form and any other documents required by the Election Form via facsimile (fax # (805) 484-8989) or hand delivery to Michelle Lockard. This is a one-time offer, and we will strictly enforce the tender offer period. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept all properly tendered options promptly after the expiration of the offer. DURING WHAT PERIOD OF TIME MAY YOU WITHDRAW PREVIOUSLY TENDERED OPTIONS? You may withdraw your tendered options at any time before the offer expires at 5:00 p.m., Pacific time, on August 7, 2002. If we extend the offer beyond that time, you may withdraw your tendered options at any time until the extended expiration of the offer. In addition, although we currently intend to accept validly tendered options promptly after the expiration of this offer, if we have not accepted your tendered options by September 3, 2002, you may withdraw your tendered options at any time after September 3, 2002. To withdraw tendered options, you must deliver to us via facsimile (fax # (805) 484-8989) or hand delivery to Michelle Lockard a signed Notice to Change Election From Accept to Reject, with the required information while you still have the right to withdraw the tendered options. Once you have withdrawn options, you may re-tender options only by again following the delivery procedures described above. CAN YOU CHANGE YOUR ELECTION REGARDING PARTICULAR TENDERED OPTIONS? Yes, you may change your election regarding particular tendered options at any time before the offer expires at 5:00 p.m., Pacific time, on August 7, 2002. If we extend the offer beyond that time, you may change your election regarding particular tendered options at any time until the extended expiration of the offer. In order to change your election, you must deliver to us via facsimile (fax # (805) 484-8989) or hand delivery to Michelle Lockard a new Election Form, which includes the information regarding your new election, and is clearly dated after your original Election Form. WHAT DO WE AND OUR BOARD OF DIRECTORS THINK OF THE OFFER? Neither we nor our Board of Directors makes any recommendation as to whether you should tender or not tender your options. You must make your own decision whether or not to tender options. For questions regarding tax implications or other investment-related questions, you should talk to your own legal counsel, accountant and/or financial advisor. ARE THERE ANY RISKS ASSOCIATED WITH PARTICIPATING IN THE OFFER? We understand that this will be a challenging decision for many option holders. The program does carry considerable risk, and there are no guarantees of our future stock performance. So, the decision to participate must be each individual option holder's personal decision, and it will depend largely on each option holder's assumptions about the future overall economic environment, the performance of the overall market and companies in our sector, and our own business and stock price. It is possible, for example, that the stock price could increase after the date your tendered options are cancelled, in which case your cancelled options might have been worth more than the replacement options you have received in exchange for them. Another risk is that if your employment terminates for

5 Table of Contents any reason, including death or disability, prior to the grant of the replacement option, you will receive neither a replacement option nor the return of your cancelled option. The examples just given are by no means the only risks associated with participating in the offer and careful consideration must be to these and other risks before the decision to participate is made. WHOM CAN YOU TALK TO IF YOU HAVE QUESTIONS ABOUT THE OFFER? For additional information or assistance, you should contact Paul Meyer or Michelle Lockard at (805) 484-8855.

6 Table of Contents INTRODUCTION Interlink is offering to exchange certain eligible options held by eligible employees and directors for new options we will grant under the Plan. An "eligible option" is an option to purchase common stock of Interlink that has an exercise price equal to or greater than $15. An "eligible" employee and director is an employee or director of Interlink or one of its subsidiaries as of the date the offer commences and as of the date the tendered options are cancelled. We are making the offer upon the terms and the conditions described in this Offer to Exchange, the Election Form and the Notice to Change Election from Accept to Reject (which together, as they may be amended from time to time, constitute the "offer"). The offer applies only to options currently exercisable at either $15 or $27 per share. The number of shares subject to the new options to be granted to each eligible employee or director will be equal to the number of shares subject to the options tendered by the eligible employee or director and accepted for exchange. Subject to the terms and conditions of this offer, we will grant the new options on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. The earliest grant date for ...