Subsequent Event	3 Months Ended
Mar. 31, 2026
Subsequent Events
Subsequent Events	Note 8. Subsequent Event On April 20, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with steute Industrial Controls, Inc., a Connecticut corporation (“Parent”) and Steute Burwell, Inc., a Minnesota corporation and a wholly owned subsidiary of Parent (“Merger Sub”). The Merger will become effective as such time as the Certificate of Merger has been filed and accepted by the Secretary of State of the State of Minnesota or at such other time as agreed upon by the Company and Parent in writing (the “Effective Time”). The Merger is structured as a statutory reverse triangular merger under Connecticut and Minnesota law, and pursuant to the Merger Agreement, the Merger Sub will merge with and into the Company, with the Company surviving the merger and becoming a wholly owned subsidiary of Parent. At the Effective Time, by virtue of the Merger and without any further action on the part of the Company, Merger Sub, Parent, or any holder of shares of common stock of the Company or Merger Sub, each share of common stock of the Company that is issued and outstanding immediately prior to the Effective Time (other than dissenting shares and the shares held by the Company, Parent, or Merger Sub) will be converted into the right to receive $7.75 in cash, subject to any required tax withholding. It is anticipated that, immediately after the Merger, the Company will be a wholly owned subsidiary of Parent and will be a privately held company. At such time, it is anticipated that the Company would file a Form 25 with the SEC to delist and deregister our common stock and a Form 15 with the SEC to suspend our public reporting obligations. At the Effective Time, outstanding stock options to purchase shares of common stock of the Company will be accelerated and fully vested and will, automatically and without any required action on the part of the holder thereof, be cancelled and will become entitled to receive an amount of cash equal to $7.75 per share less the applicable exercise price, subject to any required tax withholding. At the Effective Time, outstanding restricted stock units (“RSU”) will be accelerated and fully vested and will, automatically and without any required action on the part of the holder, thereof, be cancelled and converted into the right to receive an amount in cash equal to the product of the total number of shares of Company common stock underlying the RSU multiplied by $7.75, subject to any required tax withholding. Our board of directors (the “Board”) has approved and declared the Merger Agreement advisable and resolved to recommend that our shareholders approve the Merger Agreement and related matters at a special meeting of shareholders (“Special Meeting”). We expect the Merger to be consummated after obtaining the required approval by our stockholders and the satisfaction of certain other customary closing conditions. The Company currently expects the Merger to close in the second quarter of 2026. The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, among other matters the approval by the Company’s shareholders of the Merger at a Special Meeting. In connection with the execution of the Merger Agreement, the Company's directors, officers, and certain major shareholders, who collectively own a majority of the Company's outstanding shares of common stock, have entered into voting and support agreements (“Support Agreements”) agreeing to vote all of their shares of the Company’s common stock in favor of the various proposals related to the Merger Agreement and any other matters necessary for consummation of the Merger and against any action reasonably expected to impede, delay or materially and adversely affect the Merger at the Special Meeting. No written consents have been granted nor have any votes been cast yet with respect to the approval of the Merger by the shareholders of the Company. The Support Agreements may be terminated in connection with a termination of the Merger Agreement. The Merger Agreement contains customary termination rights in favor of each of the Company and Parent. If the Company terminates the Merger Agreement, the Company will be required to pay Parent a termination fee of $1,000, plus reimbursement of Parent’s expenses up to $300 under certain circumstances, including if the Merger Agreement is terminated due to a Recommendation Change by the Company’s Board of Directors or if the Company enters into or consummates an alternative acquisition transaction following termination under certain circumstances. If Parent terminates the Merger Agreement, Parent will be required to pay the Company a termination fee of $1,000. As a condition to the completion of the Merger, the Company is required to maintain at least $10,250 of unrestricted cash and cash equivalents at closing and for a period of 10 days prior to closing, subject to reduction for certain approved transaction expenses. If the Company’s unrestricted cash and cash equivalents are below this required amount during the period, the Company could be in breach of certain representations, warranties, or covenants under the Merger Agreement, which could permit Parent to assert remedies under the Merger Agreement, including, under certain circumstances, termination rights. Any unrestricted cash and cash equivalents in excess of the required amount at closing will remain with the surviving company following completion of the Merger. A full description of the terms of the Merger Agreement and all matters related thereto will be included in a Proxy Statement f (the “Merger Proxy Statement”) to be filed with the SEC. The Company urges investors, shareholders, and other interested persons to read, when available, the Merger Proxy Statement as well as other documents filed with the SEC by the Company because these documents will contain important information about the Company and Parent , and the proposed transaction. The definitive Merger Proxy Statement will be mailed to the Company’s shareholders as of a record date to be established for voting on the proposed transaction. Shareholders will also be able to obtain a copy of the definitive Merger Proxy Statement (when available), without charge, by directing a request to: Electro-Sensors, Inc., 6111 Blue Circle Drive, Minnetonka MN 55343. The preliminary and definitive Merger Proxy Statement, once available, can also be obtained, without charge, at the SEC’s website (www.sec.gov).

Subsequent Event

3 Months Ended

Mar. 31, 2026

Note 8. Subsequent Event

On April 20, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with steute Industrial Controls, Inc., a Connecticut corporation (“Parent”) and Steute Burwell, Inc., a Minnesota corporation and a wholly owned subsidiary of Parent (“Merger Sub”). The Merger will become effective as such time as the Certificate of Merger has been filed and accepted by the Secretary of State of the State of Minnesota or at such other time as agreed upon by the Company and Parent in writing (the “Effective Time”).

The Merger is structured as a statutory reverse triangular merger under Connecticut and Minnesota law, and pursuant to the Merger Agreement, the Merger Sub will merge with and into the Company, with the Company surviving the merger and becoming a wholly owned subsidiary of Parent. At the Effective Time, by virtue of the Merger and without any further action on the part of the Company, Merger Sub, Parent, or any holder of shares of common stock of the Company or Merger Sub, each share of common stock of the Company that is issued and outstanding immediately prior to the Effective Time (other than dissenting shares and the shares held by the Company, Parent, or Merger Sub) will be converted into the right to receive $7.75 in cash, subject to any required tax withholding.

It is anticipated that, immediately after the Merger, the Company will be a wholly owned subsidiary of Parent and will be a privately held company. At such time, it is anticipated that the Company would file a Form 25 with the SEC to delist and deregister our common stock and a Form 15 with the SEC to suspend our public reporting obligations.

At the Effective Time, outstanding stock options to purchase shares of common stock of the Company will be accelerated and fully vested and will, automatically and without any required action on the part of the holder thereof, be cancelled and will become entitled to receive an amount of cash equal to $7.75 per share less the applicable exercise price, subject to any required tax withholding.

At the Effective Time, outstanding restricted stock units (“RSU”) will be accelerated and fully vested and will, automatically and without any required action on the part of the holder, thereof, be cancelled and converted into the right to receive an amount in cash equal to the product of the total number of shares of Company common stock underlying the RSU multiplied by $7.75, subject to any required tax withholding.

Our board of directors (the “Board”) has approved and declared the Merger Agreement advisable and resolved to recommend that our shareholders approve the Merger Agreement and related matters at a special meeting of shareholders (“Special Meeting”). We expect the Merger to be consummated after obtaining the required approval by our stockholders and the satisfaction of certain other customary closing conditions. The Company currently expects the Merger to close in the second quarter of 2026. The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, among other matters the approval by the Company’s shareholders of the Merger at a Special Meeting.

In connection with the execution of the Merger Agreement, the Company's directors, officers, and certain major shareholders, who collectively own a majority of the Company's outstanding shares of common stock, have entered into voting and support agreements (“Support Agreements”) agreeing to vote all of their shares of the Company’s common stock in favor of the various proposals related to the Merger Agreement and any other matters necessary for consummation of the Merger and against any action reasonably expected to impede, delay or materially and adversely affect the Merger at the Special Meeting. No written consents have been granted nor have any votes been cast yet with respect to the approval of the Merger by the shareholders of the Company. The Support Agreements may be terminated in connection with a termination of the Merger Agreement.

The Merger Agreement contains customary termination rights in favor of each of the Company and Parent. If the Company terminates the Merger Agreement, the Company will be required to pay Parent a termination fee of $1,000, plus reimbursement of Parent’s expenses up to $300 under certain circumstances, including if the Merger Agreement is terminated due to a Recommendation Change by the Company’s Board of Directors or if the Company enters into or consummates an alternative acquisition transaction following termination under certain circumstances. If Parent terminates the Merger Agreement, Parent will be required to pay the Company a termination fee of $1,000.

As a condition to the completion of the Merger, the Company is required to maintain at least $10,250 of unrestricted cash and cash equivalents at closing and for a period of 10 days prior to closing, subject to reduction for certain approved transaction expenses. If the Company’s unrestricted cash and cash equivalents are below this required amount during the period, the Company could be in breach of certain representations, warranties, or covenants under the Merger Agreement, which could permit Parent to assert remedies under the Merger Agreement, including, under certain circumstances, termination rights. Any unrestricted cash and cash equivalents in excess of the required amount at closing will remain with the surviving company following completion of the Merger.

A full description of the terms of the Merger Agreement and all matters related thereto will be included in a Proxy Statement f (the “Merger Proxy Statement”) to be filed with the SEC. The Company urges investors, shareholders, and other interested persons to read, when available, the Merger Proxy Statement as well as other documents filed with the SEC by the Company because these documents will contain important information about the Company and Parent , and the proposed transaction. The definitive Merger Proxy Statement will be mailed to the Company’s shareholders as of a record date to be established for voting on the proposed transaction. Shareholders will also be able to obtain a copy of the definitive Merger Proxy Statement (when available), without charge, by directing a request to: Electro-Sensors, Inc., 6111 Blue Circle Drive, Minnetonka MN 55343. The preliminary and definitive Merger Proxy Statement, once available, can also be obtained, without charge, at the SEC’s website (www.sec.gov).