Electro Sensors Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Electro Sensors Inc. has filed its annual 10-K report for the fiscal year ending December 31, 2023.</b>

AI Summary

ELECTRO SENSORS INC (ELSE) filed a Annual Report (10-K) with the SEC on March 20, 2024. Electro Sensors Inc. filed its 2023 10-K report on March 20, 2024. The company is incorporated in Minnesota (MN) and operates in the Industrial Instruments sector. The filing covers the fiscal year ending December 31, 2023. The company's principal business address is in Minnetonka, MN. Electro Sensors Inc. is classified as a non-accelerated filer.

Why It Matters

For investors and stakeholders tracking ELECTRO SENSORS INC, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Electro Sensors Inc.'s financial performance, operations, and risk factors for the fiscal year 2023. Investors and analysts can use this report to assess the company's financial health, strategic direction, and potential risks, aiding in investment decisions.

Risk Assessment

Risk Level: low — ELECTRO SENSORS INC shows low risk based on this filing. The risk is low as this is a standard annual filing (10-K) providing routine financial and operational disclosures, with no immediate red flags or significant negative events indicated in the header information.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand Electro Sensors Inc.'s performance and outlook for 2023.

Key Numbers

• 20231231 — Fiscal Year End (CONFORMED PERIOD OF REPORT)
• 20240320 — Filing Date (FILED AS OF DATE)
• 0000351789 — Central Index Key (FILER)
• 3823 — SIC Code (STANDARD INDUSTRIAL CLASSIFICATION)

Key Players & Entities

• ELECTRO SENSORS INC (company) — FILER
• 0000351789 (company) — CENTRAL INDEX KEY
• MN (location) — STATE OF INCORPORATION
• 3823 (industry) — STANDARD INDUSTRIAL CLASSIFICATION
• MINNETONKA (location) — CITY
• 9529300100 (phone) — BUSINESS PHONE
• 20231231 (date) — CONFORMED PERIOD OF REPORT
• 20240320 (date) — FILED AS OF DATE

FAQ

Industry Context

Electro Sensors Inc. operates within the Industrial Instruments sector, focusing on measurement, display, and control devices.

Regulatory Implications

The filing is a standard 10-K annual report, adhering to SEC regulations for public companies.

What Investors Should Do

1. Analyze the 'Item 1. Business' section for detailed information on Electro Sensors Inc.'s products and services.
2. Examine the 'Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations' for insights into financial performance.
3. Review the 'Item 8. Financial Statements and Supplementary Data' for detailed financial figures and notes.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-03-20: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial 10-K filing for the period ending December 31, 2023, as indicated by the filing date of March 20, 2024.

Filing Documents

• else-20231231.htm (10-K) — 1420KB
• imgab7f386838b440e7ba06.jpg (GRAPHIC) — 5KB
• ex231_1.htm (EX-23.1) — 7KB
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• ex311_2.htm (EX-31.1) — 21KB
• ex321_3.htm (EX-32.1) — 10KB
• ex971_4.htm (EX-97.1) — 29KB
• ex991_5.htm (EX-99.1) — 10KB
• img9d31450c69024cabb8b8.jpg (GRAPHIC) — 3KB
• ex992_6.htm (EX-99.2) — 26KB
• 0000897101-24-000108.txt (&nbsp;) — 7693KB
• else-20231231_def.xml (EX-101.DEF) — 226KB
• else-20231231_pre.xml (EX-101.PRE) — 459KB
• else-20231231_cal.xml (EX-101.CAL) — 102KB
• else-20231231_lab.xml (EX-101.LAB) — 830KB
• else-20231231.xsd (EX-101.SCH) — 49KB
• else-20231231_htm.xml (XML) — 1235KB

Risk F actors

Item 1A. Risk F actors 11

Unr esolve d Staff Comments

Item 1B. Unr esolve d Staff Comments

Cybersecurity

Item 1C. Cybersecurity

Properties

Item 2. Properties 12

Legal Proceedings

Item 3. Legal Proceedings 12

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 12 PART II 12

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 12

[Reserved]

Item 6. [Reserved] 12

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 13

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 18

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 19

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 41

Controls and Procedures

Item 9A Controls and Procedures 41

Other Information

Item 9B. Other Information 42

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 42 PART III 43

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 43

Executive Compensation

Item 11. Executive Compensation 43

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 43

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 44

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 44 PART IV 45

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 45

Form 10-K - Summary

Item 16. Form 10-K - Summary 46

SIGNATURES

SIGNATURES 47 3 PART I

. B usiness

Item 1 . B usiness . Introduction Electro-Sensors, Inc. ("we," "us," "our," the "Company" or "ESI") manufactures and sells industrial production monitoring and process control systems. In addition, we may periodically make strategic investments in other businesses and companies, including investments that we believe would facilitate the development of technology complementary to our existing products or investments that we believe present good opportunities for the Company and its shareholders. ESI was incorporated in Minnesota in July 1968. Our executive offices are located at 6111 Blue Circle Drive, Minnetonka, Minnesota, 55343 - 9108 . Our telephone number is ( 952 ) 930 - 0100 . Products We manufacture a complete line of monitoring and control systems for a wide range of industrial machine applications. The systems measure machine production and operation rates, as well as regulate the speed of related machines in production processes. Our goal is to develop meaningful annual updates to our standard products. We have a sales agreement with Motrona GmbH, a German control and interface devices manufacturer, under which we have the right to distribute Motrona products in the United States. These products interface with our products on various applications for motion monitoring. Speed Monitoring Systems Our speed monitoring systems compare revolutions per minute or speed against acceptable rates as determined by our customers. These systems vary in complexity, from simple systems that detect slow-downs or stoppages, to sophisticated systems that warn of deviations from precise tolerances and that permit various subsidiary operations to be determined through monitoring shaft speed. Our speed monitoring systems also include a line of products that measure production counts or rates, such as number of parts, gallons per minute, or board feet. These speed monitoring systems include alarm systems, tachometers, and other devices that translate impuls

Forward-Looking Statements

Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. We have made, and may continue to make, forward-looking statements with respect to our business and financial matters, including statements contained in this document, other filings with the Securities and Exchange Commission, and reports to shareholders. Forward-looking statements generally include discussion of current expectations or forecasts of future events and can be identified by the use of terminology such as "believe," "estimate," "expect," "intend," "may," "could," "will," and similar words or expressions. Any statement that does not relate solely to historical fact should be considered forward-looking. 9 Our forward-looking statements generally relate to our growth strategy, future financial results, product development and sales efforts. We make forward-looking statements throughout this Annual Report, but primarily in this Item 1 and Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations. These include statements relating to our beliefs and expectations and intentions with respect to (i) our growth and profitability, (ii) our marketing and product development, (iii) our ability to continue to obtain parts and materials for our products from various manufacturers and distributors in a timely manner and at reasonable prices, (iv) the value of our intellectual property, (v) our competitive position in the marketplace, (vi) the effect of governmental regulations on our business, (vii) our employee relations, (viii) the adequacy of our facilities, (ix) our intention to develop new products, (x) the possibility of us acquiring compatible businesses or product lines as part of our growth strategy, and (xi) our future cash requirements and use of cash. Forward-looking statements cannot be guaranteed and our actual results may vary materially due to the

A. Risk Factors

Item 1 A. Risk Factors. This item is not required for smaller reporting companies, but above under " Forward-Looking Statements ," we discuss some of the risk factors that are relevant to our business and operating results.

B. Unr esolved S taff Com ments

Item 1 B. Unr esolved S taff Com ments . None

C. Cyb ersec urity

Item 1 C. Cyb ersec urity . Electro-Sensors recognizes the critical importance of cybersecurity in safeguarding sensitive information, protecting our stakeholders, and maintaining customer trust. Our approach to managing cybersecurity risks includes implementing and overseeing governance practices and policies, periodic risk assessment, an incident response plan, ongoing training and awareness programs, and a commitment to continuous improvement. Electro-Sensors' information security is managed by our President and managers within the company. They are collectively responsible for cybersecurity strategy, policy, standards, and processes. Our Board of Directors rely on management to bring significant cybersecurity matters impacting the Company to its attention, including with respect to material risks from cybersecurity threats. The Board is informed of cybersecurity matters on a quarterly basis and more often, as required. A reputable firm for managed IT services provides managed IT services to Electro-Sensors. Services provided include managed device and network monitoring, patch management, security services including endpoint security and firewall management, secure email gateway and antispam, backup and recovery services, and 24/7 managed support. The Company's external network access and email are secured with Multi-Factor Authentication. All access control requests are documented and executed by trained, authorized personnel. Recovery data is kept offsite, and credentials are not kept within the client network. All security solutions managed by the managed service provider send critical alerts to an external ticketing system, and all critical alerts are responded to by trained personnel. In the event of a cybersecurity incident, we have an incident response plan in place. This plan includes detection, response, and communication with stakeholders. Incident response is supported by appropriate third-party experts to address, assess, and respond to the

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View this 10-K filing on SEC EDGAR