What changed in this filing

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Item 9A. Controls and Procedures

2024-02-22 compared with 2023-02-22 · 254 added, 177 removed, 1186 unchanged (27% of the section changed)

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The following table lists the names, ages, and positions of all of the Company’s executive officers at the time of this report.

Officers are generally elected at the meeting of the Board of Directors following the annual meeting of shareholders.

Officers are generally elected at the meeting of the Board following the annual meeting of shareholders.

NAME AGE POSITION CURRENT POSITION HELD SINCE

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Information relating to directors appearing under the caption “Election of Directors” in the definitive Proxy Statement for 2024 Annual Meeting of Shareholders and filed with the Commission within 120 days after the Company’s fiscal year end, December 31, 2023 (the “Proxy Statement”), is hereby incorporated herein by reference.

No changes were made to the procedures by which shareholders may recommend nominees for the Board of Directors.

No changes were made to the procedures by which shareholders may recommend nominees for the Board.

Any information concerning compliance with Section 16(a) of the Securities and Exchange Act of 1934 that may appear under the caption “Delinquent Section 16 Reports” in the definitive Proxy Statement is hereby incorporated herein by reference.

Regulation S-K appearing under the caption “Corporate Governance – Audit Committee” in the definitive Proxy Statement is hereby incorporated herein by reference.

Information relating to the Company’s Audit Committee and concerning whether at least one member of the Audit Committee is an “audit committee financial expert” as that term is defined under Item 407(d)(5) of Regulation S-K appearing under the caption “Corporate Governance – Audit Committee” in the definitive Proxy Statement is hereby incorporated herein by reference.

The Company has adopted a Code of Ethics for Certain Senior Officers that applies to its principal executive officer, principal financial officer, and principal accounting officer.

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In light of that, the Compensation Committee has periodically reviewed base salaries for officers, including where officers rank compared to the Company's established peer group.

It was determined by the Compensation Committee that certain officer base salaries continue to trail the announced goal of base salaries at market median, in some instances base salaries significantly trailed the stated goal.

As such, in light of an improving outlook for the Company the ever-increasing competition for talent, the need to attract and retain management to fulfil the Company's strategic goals, desire for base salaries to approach market median, and the high level individual performances of officers, the Compensation Committee recommended to the Board and the Board approved certain changes in base salaries for 2023.

The Board, therefore, on February 16, 2023, approved the following base salaries for the CEO and named executive officers for 2023:

It was determined by the Compensation Committee that certain officer base salaries trail the announced goal of base salaries at market median.

As such, in light of the positive financial outlook for the Company the ever-increasing competition for talent, the need to attract and retain management to fulfil the Company's strategic goals, desire for base salaries to approach market median, and the high level individual performances of officers, the Compensation Committee recommended to the Board and the Board approved certain changes in base salaries for 2024, though such changes did not include the Company's President and CEO.

Downing requested no increase to his base salary in 2024.

In light of Mr.

Downing's continued excellent performance, and base salary, the Board approved increases to Mr.

Downing's annual and long term incentives, as disclosed herein.

The Board, on February 15, 2024, approved the following base salaries for the CEO and other named executive officers for 2024:

Executive Officer Position 2024 Base Salary 2023 Base Salary

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Amended and Restated Annual Incentive Performance-Based Bonus Plan

The Board of Directors previously approved the Amended and Restated Annual Incentive Performance-Based Bonus Plan (the "Annual Plan") to further emphasize performance-based compensation.

The Board previously approved the Amended and Restated Annual Incentive Performance-Based Bonus Plan (the "Annual Plan") to further emphasize performance-based compensation.

In lieu of participating in the profit-sharing bonus paid to all employees, the Annual Plan provides potential cash-based bonuses for officers based on the achievement of three key performance metrics:

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The Annual Plan covers certain officers, including named executive officers.

At the beginning of each year, the Compensation Committee reviews and approves a cash bonus target for each officer, as a percentage of base salary for the year.

The CEO may earn from 0% - 200% of base salary.

The non-CEO named executive officers may earn from 0% to 150% of their base salaries.

All performance-related targets are set by, and achievement of targets are approved by , the Compensation Committee and/or the Board of Directors.

At the beginning of each year, the Compensation Committee reviews and approves a cash bonus target under the Annual Plan for each officer, as a percentage of base salary for the year.

Under the Annual Plan in 2024, the CEO may earn up to 220% of base salary.

The non-CEO named executive officers may earn up to 0% to 150% of their respective base salaries.

All performance-related targets under the Annual Plan are set by, and achievement of targets are approved by , the Compensation Committee and/or the Board of Directors.

For our executive officers, the 2024 Annual Plan payout opportunities as a percentage of base salary applicable to each performance metric are shown in the table below:

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Scott Ryan 37.5 % 75.0 % 150.0 %

No changes were made to the Annual Plan target opportunities for executive officers in 2023, as it is believed the threshold, target, and maximum opportunity levels remain appropriate.

The foregoing payout opportunities are

multiplied by the weighting factor of a particular performance metric to determine the amounts of cash bonuses payable to officers to the extent the threshold, target, or maximum for a performance metric is met or exceeded.

To the extent performance exceeds the established threshold or target, as applicable, for any performance metric, but does not meet or exceed the established target or maximum, as applicable, linear interpolation is used to determine the pro rata portion of the performance bonus.

The Compensation Committee also has discretion to increase (or decrease) such performance-based bonuses using its judgment, provided that bonuses are not in any event to exceed 250% of the applicable base salary.

For 2024, Mr.

Downing's Annual Plan target opportunity increased from 100% to 110% in part due to their being no increase to his base salary, despite that base salary being below market median among the Company's defined peer group.

In lieu of a base salary increase, the Compensation Committee recommended to the Board, and the Board approved an increase to Mr.

Downing's Annual Plan target opportunity in 2024.

Downing's target opportunity remains within the market median for short-term incentives for executives with similar job responsibilities.

No other changes were made to the Annual Plan target opportunities for executive officers in 2024, as it is believed those threshold, target, and maximum opportunity levels remain appropriate.

The foregoing payout opportunities are multiplied by the weighting factor of a particular performance metric to determine the amounts of cash bonuses payable to officers based on actual performance compared to the threshold, target, or maximum for a performance metric.

When actual performance is compared to the established threshold, target, or maximum, as applicable, for any performance metric, linear interpolation is used to determine any pro rata portion of the performance bonus.

The Compensation Committee and/or the Board also have discretion to increase (or decrease) such performance-based bonuses using their judgment, provided that bonuses are not in any event to exceed 250% of the applicable base salary.

Since its inception in 2019, the Annual Plan uses the same three key performance metrics and weighting:

Revenue (weighted 33.33%), Operating Income (weighted 33.33%) and Earnings per Diluted Share (33.33%) since such metrics are not only appropriate measures of performance, but also align with the Company's overall business strategy.

Revenue (weighted 33.33%), Operating Income (weighted 33.33%) and Earnings per Diluted Share (33.33%) because such metrics are not only appropriate measures of performance, but also align with the Company's overall business strategy.

In determining whether annual cash bonuses are paid under the Annual Plan, actual performance for the year is measured against specified target levels for each performance metric.

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Scott Ryan $577,275 $0

These Annual Plan results appropriately reflect management's excellent work in addressing the ongoing impacts stemming from the ongoing pandemic supply chain shortages, especially electronics components, as well as labor disruptions and significant volatility within customer orders.

Were it not for management's leadership in redesigning products to allow more customer demand to be met notwithstanding the parts shortages and labor market constraints, more revenue would have been lost in 2022.

For 2023, the Compensation Committee has established targets for Revenue, Operating Income, and Earnings per Diluted Share for the Annual Plan performance metrics as it has done in the past, and consistent with 2022 is using ± 25% of target in 2023for determining thresholds and maximums and is not making any adjustments for tariffs.

These Annual Plan results appropriately reflect management's work in terms of a 13% revenue outperformance versus the Company's primary underlying markets, execution of the previously announced gross margin recovery plan, and ongoing business development efforts.

For 2024, the Compensation Committee has established targets for Revenue, Operating Income, and Earnings per Diluted Share for the Annual Plan performance metrics as it has done in the past, and has made a minor change in 2024, to be consistent with periods prior to 2022.

During 2022 and 2023, the Compensation Committee and Board widened the range of threshold and maximum performance under the Annual Plan to ±25% to account for increased volatility in potential financial performance, as a result of

the ongoing supply chain crisis.

In 2024, the Company is again using ± 20% of target in 2024 for determining thresholds and maximums under the Annual Plan due to a reduction in overall end market volatility.

2019 Omnibus Incentive Plan and Long-Term Incentive Program

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Pursuant to the 2019 OIP, the Company implemented the Long-Term Incentive Plan (the "Long-Term Plan").

The Long-Term Plan

provides officers, including our named executive officers, with incentive awards that serve an important role by balancing other applicable short-term goals with longer term shareholder value creation , while minimizing risk-taking behaviors that could negatively affect long-term results.

The Long-Term Plan provides officers, including our named executive officers, with incentive awards that serve an important role by balancing other applicable short-term goals with longer term shareholder value creation , while minimizing risk-taking behaviors that could negatively affect long-term results.

The Long-Term Plan uses three-year performance periods and selected performance objectives to determine equity incentive awards so as to balance short-term goals under the Annual Plan, with performance objectives associated with longer-term shareholder value creation under the Long-Term Plan.

Under the Long-Term Plan, the Board of Directors and/or the Compensation Committee determines the amount of the long-term incentive awards.

Under the Long-Term Plan, the Board and/or the Compensation Committee determines the amount of the long-term incentive awards.

Each officer's award opportunity is based on a target dollar value (determined toward the very beginning of the performance period) as a percentage of base salary assigned to his or her position based on market comparisons for similar positions, using both a peer group and general industry market data.

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Scott Ryan 155 %

These Long-Term Plan Target Opportunity Percentages of Base Salary for 2023 - 2025 remain the same as those applicable for 2022 - 2024.

These Long-Term Plan Target Opportunity Percentages of Base Salary for 2024 - 2026 for Mr.

Downing and Mr.

Boehm have changed from those applicable for 2023 - 2025.

Downing's target opportunity increased from 365% to 385% due in part to there being no increase in his base salary, despite a base salary that is below market median among the Company's defined peer group.

The Compensation Committee recommended, and the Board approved, this increase to Mr.

Downing's Long-Term Plan target opportunity in 2024 as set forth.

Boehm's target opportunity increased from 155% to 185%, as a result of Mr.

Boehm's increase in overall job responsibilities.

The Compensation Committee also recommended, and the Board approved, this increase to Mr.

Boehm's Long-Term Plan target opportunity in 2024.

All Long-Term Plan target opportunities remain within the market median for long-term incentives for the officers' respective job responsibilities.

Achievement at threshold performance yields 50% of the target award and achievement of the maximum performance yields another 100% of the target award.

To the extent performance exceeds the established threshold or target, as applicable, for an applicable performance objective, but does not meet or exceed the established target or maximum, as applicable, linear interpolation is used to determine the pro rata portion of such award.

Actual performance is compared to the established threshold, target, or maximum, as applicable, for an applicable performance objective, and linear interpolation is used to determine any pro rata portion of such award.

Seventy percent (70%) of the total value of the target long-term incentive opportunity is delivered through performance share awards ("PSAs") and the other thirty percent (30%) through restricted stock ("RS").

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earnings before interest, taxes, depreciation and amortization (EBITDA) and return on invested capital (ROIC), in each case adjusted and calculated as determined by the Compensation Committee.

Each performance objective is based on a three-year performance period (2023-2025) with a performance range that can result in PSAs of 0% for failure to achieve threshold, 50% of target for achieving threshold, to 200% of the target opportunity for achieving maximum.

Each performance objective is based on a three-year performance period (2024-2026) with a performance range that can result in PSAs of 50% of target for achieving threshold and 200% of the target opportunity for achieving maximum.

The targets for EBITDA and ROIC for 2024-2026 were established by the Compensation Committee as it has done in the past.

For the 2023-2025 performance period, ± 25% of target is being used for determining thresholds and maximums, which is consistent with 2022.

For the 2024-2026 performance period, ± 20% of target is being used for determining thresholds and maximums, which is consistent with performance periods that began in 2021 and prior, for similar reasons as noted with respect to the Annual Plan.

EBITDA drives the ability to commit resources to continued growth, but is also a measure of ability to provide shareholder return.

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ROIC ensures management uses the Company's capital in an effective manner that drives shareholder value.

Since the value of PSAs is tied to the Company's actual performance in financial objectives, it aligns the officers' interests with those of

shareholders.

Since the value of PSAs is tied to the Company's actual performance in financial objectives, it aligns the officers' interests with those of shareholders.

The target opportunities of PSAs awarded in 2024 for the named executive officers are shown in the table below:

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Scott Ryan 6,075

Retention Grant

As part of its objective of attracting and retaining management to fulfil the Company's strategic goals, the Compensation Committee recommended and the Board approved on February 16, 2023, a retention grant of PSAs.

In addition to the retention of management, the PSA's have been granted to further align management goals with those of the Company's shareholders.

For that reason, the PSAs have been granted with performance criteria and will be based upon achievement of the Company's relative total shareholder return (TSR) over a four year period (2023-2026), against a predetermined peer group.

Achievement levels vary from 50% to 200% of granted PSA's, for relative TSR between 0 and the 100th Percentile of relative TSR as disclosed in the below table.

In addition to requiring achievement of performance objectives in respect of PSAs, this grant also requires the executive officers to remain employed with the Company for four years from the grant date (unless the executive officer attains retirement age, departs for good reason, dies, or becomes disabled or a change in control occurs whereby an award may be paid or partially paid).

Relative TSR Criteria Achievement Level of Award

0 - 25th percentile 50 %

25 - 50th percentile 100 %

50 - 75th percentile 150 %

Above 75th percentile 200 %

The Retention grant of PSA's for the named officers are shown in the table below:

Executive Officer Retention PSA Awarded in 2023

Steve Downing 29,361

Neil Boehm 17,790

Kevin Nash 17,790

Matt Chiodo 15,717

Scott Ryan 14,336

2021-2023 Long-Term Plan Performance (three-year performance period ending December 31, 2023)

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The performance metrics, targets and performance payout ranges for these awards were set and approved by the Compensation Committee and the Board in February 2021.

Consistent with the Long-Term Plan, incentive could be earned by the officers based on performance associated with two equally weighted metrics, EBITDA and ROIC, in each case adjusted as determined by the Compensation Committee, both measured cumulatively over the three-year performance period.

The target levels of achievement for the EBITDA and the ROIC were established to align with financial goals set at the beginning of the three-year performance period for the years 2020 through 2022, The table below summarizes the results of the 2020-2022 performance period relative to target and the achievement level of the 2020-2022 PSAs:.

Consistent with the Long-Term Plan, incentive could be

earned by the officers based on performance associated with two equally weighted metrics, EBITDA and ROIC, in each case adjusted as determined by the Compensation Committee, both measured cumulatively over the three-year performance period.

The target levels of achievement for the EBITDA and the ROIC were established to align with financial goals set at the beginning of the three-year performance period for the years 2021 through 2023.

The table below summarizes the results of the 2021-2023 performance period relative to target and the achievement level of the 2021-2023 PSAs:.

Performance Metric Weight Threshold* Target* Maximum* Actual Performance* Performance to Target Weighted Performance

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ROIC 50 % 36.80 % 46.00 % 55.20 % 37.12 % 62.48 % 31.24 %

*amounts in thousands (000) percentages.

*amounts in thousands (000) except percentages.

Threshold, Target, and Maximum for EBITDA and ROIC were adjusted to address the estimated impact of tariffs and the Actual Performance was similarly adjusted with respect to the actual impact of tariffs.

Additionally, Actual performance was adjusted by $8.8 million of previously disclosed severance related costs incurred in 2020.

The PSAs awarded in February 2020, based on target opportunity, along with the actual payout of PSAs to the executive officers, for the 2020-2022 performance period are reflected in the table below and include dividend equivalents assuming reinvestment of dividends.

The PSAs awarded in February 2021, based on target opportunity, along with the actual payout of PSAs to the executive officers, for the 2021-2023 performance period are reflected in the table below and include additional shares awarded for dividend equivalents assuming reinvestment of dividends.

Executive Officer Number of PSAs Awarded in 2021 (Target) for 2021-2023 2021-2023 PSAs Payout

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Since each executive officer awarded restricted stock in 2021 remained employed by the Company for three years from the grant date, each restricted stock awarded vested with such executive officers.

The Board also approved an increase in the annual retainer paid to all directors who are not an employee of the Company in the amount of $10,000 (going from $80,000 to $90,000), though all other Board compensation remained the same.

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

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/s/ Leslie Brown Director

/s/ Garth Deur Director

/s/ Steven Downing Director

Steven Downing

/s/ Gary Goode Director

/s/ James Hollars Director

James Hollars

/s/ Richard Schaum Director

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In our opinion, Gentex Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Gentex Corporation and subsidiaries as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 22, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 22, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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Long-term investments 299,080,876 202,331,983

Equity method investments 48,425,978 —

Intangible assets, net 214,005,910 219,360,910

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Accumulated other comprehensive (loss) income:

Unrealized (loss) gain on investments, net ( 10,110,695 ) 1,006,655

Unrealized loss on investments, net ( 2,022,403 ) ( 10,110,695 )

Cumulative translation adjustment ( 4,534,719 ) ( 4,032,239 )

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OTHER INCOME:

Investment income 4,795,823 3,589,798 6,986,303

Investment income, net

13,498,351 4,795,823 3,589,798

Other (loss) income, net ( 4,248,230 ) ( 5,078,873 ) 2,979,960

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Foreign currency translation adjustments ( 502,480 ) ( 4,952,828 ) 151,544

Unrealized (losses) gains on available-for-sale securities, net ( 14,072,595 ) ( 6,424,496 ) 6,312,051

Other comprehensive (loss) income, before tax ( 19,025,423 ) ( 6,272,952 ) 9,465,685

Unrealized gains (losses) on available-for-sale securities, net

10,238,344 ( 14,072,595 ) ( 6,424,496 )

Other comprehensive income (loss), before tax

9,735,864 ( 19,025,423 ) ( 6,272,952 )

(Benefit) expense for income taxes related to components of other comprehensive (loss) income 2,150,052 ( 2,955,245 ) ( 1,349,144 )

Other comprehensive (loss) income, net of tax ( 16,070,178 ) ( 4,923,808 ) 8,140,155

Other comprehensive income (loss), net of tax

7,585,812 ( 16,070,178 ) ( 4,923,808 )

Comprehensive income $ 435,989,084 $ 302,687,174 $ 355,873,424

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Issuance of common stock from stock plan transactions 2,343,169 140,590 29,668,197 — — 29,808,787

Issuance of common stock related to acquisitions 163,718 9,823 3,549,406 — — 3,559,229

Repurchases of common stock ( 9,595,198 ) ( 575,712 ) ( 30,447,965 ) ( 293,619,458 ) — ( 324,643,135 )

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Issuance of common stock from stock plan transactions 1,606,965 96,418 16,505,856 — — 16,602,274

Issuance of common stock related to acquisitions 162,433 9,746 4,990,266 — 5,000,012

Repurchases of common stock ( 4,040,903 ) ( 242,454 ) ( 13,638,790 ) ( 100,013,126 ) — ( 113,894,370 )

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Issuance of common stock from stock plan transactions 2,218,094 133,086 29,265,186 — — 29,398,272

Issuance of common stock related to acquisitions 162,433 9,746 4,990,266 — — 5,000,012

Repurchases of common stock ( 4,931,986 ) ( 295,920 ) ( 17,716,056 ) ( 128,024,161 ) — ( 146,036,137 )

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Purchases ( 97,849,498 ) ( 18,194,193 ) ( 100,301,699 )

Purchase of equity method investments ( 33,830,274 ) — —

Purchase of technology investments

( 71,083,511 ) ( 45,743,460 ) ( 12,902,500 )

Plant and equipment additions ( 183,678,460 ) ( 146,433,123 ) ( 68,835,047 )

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Increase in other assets ( 4,453,376 ) ( 3,611,244 ) ( 5,501,445 )

Net cash (used for) from investing activities ( 172,738,508 ) ( 113,106,955 ) 26,416,437

Net cash used for investing activities

( 299,416,320 ) ( 172,738,508 ) ( 113,106,955 )

CASH FLOWS USED FOR FINANCING ACTIVITIES:

Proceeds from borrowings on Credit Agreement — — 75,000,000

Repayment of borrowings on Credit Agreement — — ( 75,000,000 )

Issuance of common stock from stock plan transactions 29,398,272 16,602,274 29,808,787

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Net cash used for financing activities ( 230,152,891 ) ( 209,019,053 ) ( 410,119,973 )

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 43,557,032 ) ( 161,059,366 ) 127,049,414

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 7,680,381 ( 43,557,032 ) ( 161,059,366 )

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, Beginning of year 218,754,638 262,311,670 423,371,036

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, End of year $ 226,435,019 $ 218,754,638 $ 262,311,670

Twelve Months Ended December 31,

SUPPLEMENTAL CASH FLOW DATA 2023 2022 2021

Non-cash investing and financing activities:

Change in Property and equipment in accounts payable and accrued expenses and other current liabilities

$ 6,927,750 $ 14,608,665 $ 6,292,196

The accompanying notes are an integral part of these consolidated financial statements.

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(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Gentex Corporation, including its wholly-owned subsidiaries (the "Company"), is a leading supplier of digital vision, connected car, dimmable glass, and fire protection products.

Gentex Corporation, including its wholly-owned subsidiaries (the "Company"), is a leading supplier of digital vision, connected car, dimmable glass, and fire protection technologies.

The Company’s largest business segment involves designing, developing, manufacturing, marketing, and supplying automatic-dimming rearview and non-dimming mirrors and various electronic modules for the automotive industry.

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The Company continues to work with these financially distressed customers in collecting past due balances.

Available for sale securities

The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, and for its non-financial assets and liabilities subject to fair value measurements.

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These investments are carried at amortized cost, which approximates fair value.

The Company also periodically makes technology investments in certain non-consolidated third parties.

These equity investments are accounted for in accordance with ASC 323, Investments - Equity Method and Joint Ventures .

The Company's share of the earnings or losses of non-controlled affiliates, over which the Company exercises significant influence (generally a 20 % to 50 % ownership interest), is included within Other Income (Loss) in the Company's consolidated statement of income using the equity method of accounting.

These equity method investments, over which the Company exercises significant influence, totaled approximately $ 48.4 million as of December 31, 2022 (including approximately $ 11.1 million of investments accounted for under ASC 321, Investments - Equity Securities , as of December 31, 2021, for which the Company obtained significant influence during 2022).

On June 3, 2022, the Company obtained an approximate 20 % equity share in GreenMarbles for $ 20.0 million, in addition to an issuance of $ 5.0 million worth of common stock.

GreenMarbles is a leading provider of sustainable solutions for integration into properties.

The Company did no t have equity method investments as of December 31, 2021.

These investments are classified within Equity Method Investments in the consolidated balance sheets as of December 31, 2022.

The Company has made technology investments in certain non-consolidated affiliates for ownership interests of less than 20 % (where the Company does not have the ability to exercise significant influence).

These equity investments are accounted for in accordance with ASC 321.

These equity investments that do not have readily determinable fair values, and where the Company has not identified any observable events that would cause adjustment of the valuation to date, are then held at cost.

These technology investments totaled $ 17.1 million and $ 16.8 million as of December 31, 2022 and December 31, 2021, respectively.

As of December 31, 2022, $ 3.8 million of these investments are classified within Short-Term Investments in the consolidated balance sheets.

$ 13.3 million and $ 16.8 million of these investments are classified within Long-Term Investments in the consolidated balance sheets as of December 31, 2022 and December 31, 2021, respectively.

Assets or liabilities that have recurring fair value measurements are shown below as of December 31, 2022 and December 31, 2021:

On October 4, 2023, the Company entered into a Stock Purchase Agreement to acquire up to 3,137,500 shares of VOXX International Corporation ("VOXX") Class A Common Stock.

The Company agreed to purchase the shares in two tranches:

(1) on October 6, 2023, the Company purchased 1,568,750 shares of Class A Common Stock at a price of $ 10 per share, and (2) on January 5, 2024, the Company purchased 1,568,750 shares of Class A Common Stock at a price of $ 10 per share.

The VOXX shares held by the Company are publicly traded and have a readily determinable fair market value and are considered Level 1 assets.

The investment is accounted for in accordance with ASC 321, Investments - Equity Securities, with changes in fair value recorded in Investment income, net in consolidated statements of income.

No significant changes in fair value related to the commitment to purchase the second tranche occurred between October 4, 2023 and December 31, 2023.

Technology Investments

The Company also periodically makes strategic investments in the non-marketable debt or equity securities of non-consolidated third parties ("technology investments").

Such technology investments totaled approximately $ 128.0 million at December 31, 2023, of which $ 124.6 million and $ 3.4 million are recorded in long-term investments and short-term investments on the consolidated balance sheet, and $ 65.5 million as of December 31, 2022, of which $ 61.7 million and $ 3.8 million are recorded in long-term investments and short-term investments on the consolidated balance sheet.

Depending on the form of investment, and the degree of influence the Company has over the investee, the Company primarily accounts for the technology investments in accordance with ASC 321, Investments- Equity Securities or ASC 323 – Investments – Equity Method and Joint Venture .

The Company accounts for equity securities in non-controlled affiliates through which the Company exercises significant influence but do not have control over the investee under the equity method, with the Company’s share of the earnings or losses of non-controlled affiliates recognized within Other (loss) income, net in the Company's consolidated statement of income .

All other technology investments that the Company holds are primarily accounted for under the measurement alternative of ASC 321.

Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

A summary of the Company’s most significant technology investments is below:

GENTEX CORPORATION AND SUBSIDIARIES

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(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

Adasky - Adasky is an Israeli based leading developer and manufacturer of intelligent, high-resolution thermal sensing systems for vehicle safety and perception applications and smart city roadway solutions.

During 2023, the Company invested approximately $ 46.5 million in Adasky, which resulted in an approximately 27 % ownership stake in Adasky.

These investments included approximately $ 25 million related to preferred shares of Adasky accounted for using the measurement alternative and $ 21.5 million for common shares of Adasky accounted for using the equity method.

As of December 31, 2023, the carrying value of the Company’s investments in Adasky was $ 45.8 million.

Green Marbles - GreenMarbles is a leading provider of sustainable solutions for integration into properties.

On June 3, 2022, the Company obtained an approximate 20 % equity share in GreenMarbles for $ 25.0 million, consisting of $ 20.0 million of cash investment and the issuance of $ 5.0 million worth of Gentex common stock.

The Company accounts for its investment in GreenMarbles using the equity method.

As of December 31, 2023 and 2022, the carrying value of the investment in GreenMarbles was $ 22.6 million and $ 24.4 million, respectively.

Simplenight - Simplenight provides drivers and vehicle occupants with access to enhanced mobile capability for booking personalized entertainment and lifestyle experiences in addition to everyday purchases.

During the years ended December 31, 2023 and 2022, the Company made investments of $ 7.5 million and $ 7.5 million in Simplenight, respectively, and as of December 31, 2023, the Company has an approximately 30 % ownership interest in Simplenight primarily accounted for using the measurement alternative.

As of December 31, 2023 and 2022, the carrying value of the Company’s investments in Simplenight was $ 20.9 million and $ 12.9 million.

Solace Power - Solace Power is a Canada-based company specializing in wireless power solutions.

On December 12, 2023, the Company purchased a 13 % equity interest in Solace Power, which is accounted for using the measurement alternative.

Assets or liabilities that have recurring fair value measurements are shown below as of December 31, 2023 and December 31, 2022:

Fair Value Measurements at Reporting Date Using

6 unchanged sentences

Cash & Cash Equivalents $ 226,435,019 $ 226,435,019 $ — $ —

Restricted Cash 4,000,000 $ 4,000,000 — —

Short-Term Investments:

12 unchanged sentences

Total $ 411,798,242 $ 248,253,297 $ 163,544,945 $ —

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

Fair Value Measurements at Reporting Date Using

6 unchanged sentences

Cash & Cash Equivalents $ 214,754,638 $ 214,754,638 $ — $ —

Restricted Cash 4,000,000 $ 4,000,000 — —

Short-Term Investments:

1 unchanged sentence

Corporate Bonds 5,473,341 — 5,473,341 —

Government Securities 4,423,041 — 4,423,041 —

Municipal Bonds 5,174,773 — 5,174,773 —

Other 2,347,602 1,093,602 1,254,000 —

5 unchanged sentences

Municipal Bonds 48,430,166 48,430,166 —

Common Stock 293,300 293,300 — —

Total $ 378,544,756 $ 222,116,628 $ 156,428,128 $ —

The amortized cost, unrealized gains and losses, and market value of investment securities are shown as of December 31, 2023 and 2022:

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

2023 Cost Gains Losses Market Value

13 unchanged sentences

Total $ 186,637,592 $ 3,251,708 $ ( 4,526,077 ) $ 185,363,223

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

2022 Cost Gains Losses Market Value

2 unchanged sentences

Corporate Bonds 5,571,417 — ( 98,076 ) 5,473,341

Government Securities 4,476,613 — ( 53,572 ) 4,423,041

Municipal Bonds 5,223,500 — ( 48,727 ) 5,174,773

Other 2,347,602 — — 2,347,602

5 unchanged sentences

Municipal Bonds 53,476,883 235,713 ( 5,282,430 ) 48,430,166

Common Stock 292,638 662 — 293,300

Total $ 172,587,805 $ 236,375 $ ( 13,034,062 ) $ 159,790,118

9 unchanged sentences

Total $ 13,034,062 $ 154,344,732

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

Effective January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments .

6 unchanged sentences

Fixed income securities as of December 31, 2023, have contractual maturities as follows:

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

Due within one year $ 9,953,308

5 unchanged sentences

The Company’s estimate of the fair values of these financial instruments approximates their carrying amounts at December 31, 2023 and 2022.

Inventories include material, direct labor and manufacturing overhead and are valued at the lower of first-in, first-out (FIFO) cost or net realizable value.

Inventories include material, direct labor and manufacturing overhead and are valued at the lower of cost or net realizable value.

Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method.

Inventories consisted of the following as of December 31, 2023 and 2022:

10 unchanged sentences

Depreciation expense was approximately $ 73.6 million, $ 74.9 million and $ 76.8 million in 2023, 2022 and 2021, respectively.

As of December 31, 2022 , 2021 and 2020 , capital expenditures recorded in accounts payable totaled $ 14.6 million, $ 9.8 million and $ 4.8 million, respectively.

Impairment or Disposal of Long-Lived Assets

The Company reviews long-lived assets, including property, plant and equipment and other intangible assets with definite lives, for impairment whenever events or changes in circumstances indicate that the

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

asset’s carrying amount may not be recoverable.

The Company conducts its long-lived asset impairment analysis in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets .

5 unchanged sentences

The Company periodically obtains intellectual property rights, in the ordinary course of business, and the cost of the rights are amortized over their useful lives.

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

Goodwill and Intangible Assets

1 unchanged sentence

The Company reviews goodwill for impairment during the fourth quarter on an annual basis or more frequently if events or changes in circumstances indicate that goodwill might be impaired.

The Company performs an impairment review for its automotive reporting unit, which has been determined to be one of the Company’s reportable segments, using either a qualitative approach or quantitative approach which utilizes a fair value method that incorporates certain assumptions and judgments.

The Company performs an impairment review for its Automotive and Other reporting units, which have been determined to be the Company’s reportable segments, using either a qualitative approach or quantitative approach which utilizes a fair value method that incorporates certain assumptions and judgments.

The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date.

14 unchanged sentences

If not, no further impairment testing over the indefinite lived intangible assets is performed.

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

indefinite lived intangible assets were not impaired as a result of the annual test prepared by management for either period presented.

The indefinite lived intangible assets were not impaired as a result of the annual test prepared by management for either period presented.

As part of recent acquisitions, the Company acquired Indefinite lived in-process research and development ("IPR&D") intangible assets.

4 unchanged sentences

Revenue Recognition

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers .

7 unchanged sentences

As part of certain agreements, entered into in the ordinary course of business, the Company is asked to provide customers with annual price reductions.

Such amounts are subject to estimate and are accrued as a reduction of revenue as products are shipped to those customers.

Such amounts are subject to estimate and are accrued as a reduction of revenue as control of the products is transferred to the customer under standard commercial terms.

For any shipments of product that may be subject to retroactive price adjustments that are then being negotiated, the Company records revenue based on the Company’s best estimate of the amount of consideration to which the entity will be entitled in exchange for transferring the promised goods to the customer.

1 unchanged sentence

The Company's approach is to consider these adjustments to the contract price as variable consideration which is estimated based on the then most likely price amount.

In addition, the Company has ongoing adjustments to our pricing arrangements with customers based on the related content, the cost of Company products and other commercial factors.

In addition, the Company has ongoing adjustments to pricing arrangements with customers based on the related content, the cost of Company products and other commercial factors.

Such pricing accruals are adjusted as they are settled with customers.

10 unchanged sentences

IBNR claims are estimated using historical lag information and other data provided by claims administrators.

This estimation

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

process is subjective, and to the extent that future results differ from original estimates, adjustments to recorded accruals may be necessary.

This estimation process is subjective, and to the extent that future results differ from original estimates, adjustments to recorded accruals may be necessary.

Product Warranty

6 unchanged sentences

The Company applies the provisions of ASC 740, Income Taxes , as it relates to uncertainty in income taxes recognized in the Company’s consolidated financial statements.

A threshold of more likely than not to be sustained upon examination is applied to uncertain tax positions.

A threshold of more likely than not to be sustained upon

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued

examination is applied to uncertain tax positions.

The Company deems the estimates related to this provision to be reasonable, however, no assurance can be given that the final outcome of these matters will not vary from what is reflected in the historical income tax provisions and accruals.

5 unchanged sentences

2024 $ 1,857,325

2025 1,091,917

Thereafter 3,846

29 unchanged sentences

Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

For the Company, comprehensive income represents net income adjusted for unrealized gains and losses on certain investments and foreign currency translation adjustments that are further detailed in Note 9 , "Comprehensive Income", for more information.

For the Company, comprehensive income represents net income adjusted for unrealized gains and losses on available for sale investments and foreign currency translation adjustments that are further detailed in Note 9 , "Comprehensive Income", for more information.

Foreign Currency Translation

16 unchanged sentences

Actual results could differ from those estimates.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation.

Recent Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No.

2023-07, Improvements to Reportable Segment Disclosures .

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is also permitted.

The Company will likely include additional disclosures when this ASU is adopted.

The Company is currently evaluating the provisions of this ASU and expects to adopt the ASU for the year ending December 31, 2024.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

Under this ASU, public benefit entities must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate).” This ASU is effective on a prospective basis for the Company in the fiscal year ending December 31, 2025.

This ASU will result in additional disclosures being included in the consolidated financial statements once adopted.

(2) DEBT AND FINANCING ARRANGEMENTS

On October 15, 2018, the Company entered into a Credit Agreement ("Credit Agreement") with PNC as the administrative agent and sole lender.

Pursuant to this Credit Agreement, the Company has access to a $ 150 million senior revolving credit facility (“Revolver”).

Under the terms of the Credit Agreement, the Company is entitled to further request an additional aggregate principal amount of up to $ 100 million, subject to the satisfaction of certain conditions.

In addition, the Company is entitled to the benefit of Swing Loans from amounts otherwise available under the Revolver in the aggregate principal amount of up to $ 20 million and to request Letters of Credit from amounts otherwise available under the Revolver in the aggregate principle amount up to $ 20 million, both subject to certain conditions.

On October 15, 2018, the Company entered into a credit agreement with PNC as the administrative agent and sole lender, which has now been amended and restated as discussed below.

On February 21, 2023, as previously disclosed, the Company entered into an amended and restated credit agreement ("Credit Agreement") that provides for, among other things, a three-year unsecured revolving credit facility with a borrowing capacity of up to $ 250 million ("Revolver") that matures on February 21, 2026, replacing in its entirety the Company's above referenced prior $ 150.0 million revolving credit facility, which would have otherwise matured on October 15, 2023.

Included in the Revolver is a $ 20.0 million sublimit for standby letters of credit and a $ 35.0 million sublimit for swingline loans, each subject to certain conditions.

Funds are available under the Revolver for working capital, capital expenditures, and other lawful corporate purposes, including, but not limited to, acquisitions and common stock repurchases, subject in each case to compliance with certain financial covenants, as defined in the Credit Agreement.

The obligations of the Company under the Credit Agreement are not secured, but are subject to certain covenants.

As of December 31, 2022 and 2021, there were no outstanding balances on the Revolver.

The Revolver expires on October 15, 2023.

As of December 31, 2023, there was no outstanding balances on the Revolver and as of December 31, 2022 there was no outstanding balance under the prior revolving credit facility.

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Credit Agreement contains customary representations and warranties and certain covenants that place certain limitations on the Company.

As of December 31, 2023, the Company was in compliance with its covenants under the Credit Agreement.

On February 21, 2023, the Company entered into an amended and restated credit agreement ("Amended Credit Agreement") that provided for, among other things, a three-year unsecured revolving credit facility with a borrowing capacity of up to $ 250.0 million ("Revolving Credit Facility") that matures on February 21, 2026, replacing in its entirety the Company's prior $ 150.0 million Revolver scheduled to mature on October 15, 2023.

Included in the Revolving Credit Facility is a $ 20.0 million sublimit for standby letters of credit and a $ 35.0 million sublimit for swingline loans, each subject to certain conditions.

Funds are available under the Revolving Credit Facility for working capital, capital expenditures, and other lawful corporate purposes, including, but not limited to, acquisitions and common stock repurchases, subject in each case to compliance with certain financial covenants, as defined in the Amended Credit Agreement.

(3) INCOME TAXES

1 unchanged sentence

The Company recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.

Under this method, deferred income tax liabilities and assets are determined based on the cumulative temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates expected to be applied to taxable income in years which those temporary

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) INCOME TAXES, continued

differences are expected to be recovered or settled.

Deferred income tax expense is measured by the net change in deferred income tax assets and liabilities during the year.

30 unchanged sentences

Stock based compensation 15,536,416 14,670,250

Excess tax over book depreciation 7,060,777 —

Other 4,025,082 4,722,513

32 unchanged sentences

In 2023, 2022 and 2021 the Company’s contributions were approximately $ 13.8 million, $ 12.9 million and $ 9.0 million, respectively.

The increase in the Company's matching contributions in 2022 was due to changes, approved by the Company's Board of Directors, to the rate of Company match as well as increased participation in the plan.

The increase in 2021 was due to increased employee participation in the plan.

The increase in the Company's matching contributions in 2023 was due to increased employee participation in the plan.

The increase in 2022 was due to changes, approved by the Company's Board of Directors, to the rate of Company match, as well as increased participation in the plan.

The Company does not provide health care benefits to retired employees.

18 unchanged sentences

The Company also makes periodic payments into Company-owned life insurance policies held in this Rabbi Trust to fund the expected obligations arising under this plan.

At December 31, 2022, total assets held by the trustee were $ 5.6 million and recorded in Other Assets and an associated liability of $ 5.3 million and recorded in Other Non-Current Liabilities in the Company's consolidated balance sheets.

At December 31, 2023, total assets held by the trustee were $ 8.9 million, which are recorded in Other Assets, with an associated liability of $ 9.0 million recorded in Other Non-Current Liabilities in the Company's consolidated balance sheets.

The $ 8.9 million of assets held by the trustee is invested in Company-owned life insurance policies.

124 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As part of its objective of attracting and retaining management to fulfill the Company's strategic goals, the Compensation Committee recommended and the Board approved on February 16, 2023, a retention grant of performance share awards ("PSAs").

In addition to the retention of management, the PSAs have been granted to further align management goals with those of the Company's shareholders.

For that reason, the PSAs have been granted with performance criteria and will be based upon achievement of the Company's relative total shareholder return ("TSR") over a four year period (2023-2026), against a predetermined peer group.

The grant date fair value of PSAs with TSR targets was determined using a Monte Carlo simulation.

Compensation expense related to these retention grants for the year ended December 31, 2023 was $ 1,526,983 .

Employee Stock Purchase Plan

8 unchanged sentences

Prior Employee Stock Purchase Plan — 126,101 143,892 1,624,122 $ —

(6) CONTINGENCIES

(6) COMMITMENTS AND CONTINGENCIES

On October 4, 2023, the Company entered into a Stock Purchase Agreement to acquire up to 3,137,500 shares of VOXX Class A Common Stock.

As part of this agreement, the Company agreed to purchase 1,568,750 shares of Class A Common Stock at a price of $ 10 per share on January 5, 2024.

The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business, including proceedings relating to product liability, intellectual property, safety and health, employment and other matters.

1 unchanged sentence

The Company does not believe, however, that at the current time there are matters that constitute material pending legal proceedings that will have a material adverse effect on the financial position, future results of operations, or cash flows of the Company.

On February 7, 2023, the SEC announced that it has accepted an Offer of Settlement submitted by the Company and its current Chief Financial Officer Kevin Nash.

Under the settlement, without admitting or denying the SEC’s findings in this matter, the Company and Nash have consented to the entry of an administrative civil cease-and-desist order by the SEC (the “Order”) with respect to certain violations of the federal securities laws in the third quarter of 2015 through the second quarter of 2018 (the “Relevant Period”).

The Company agreed to pay a civil monetary penalty of $ 4.0 million, which was fully accrued by the Company in the second and third quarters of 2022.

Nash agreed to pay a civil monetary penalty of $ 75,000 .

The Company had $ 4.0 million of restricted cash as of December 31, 2022 in escrow, pending the finalization of the settlement agreement with the SEC, which occurred on February 7, 2023.

(7) SEGMENT REPORTING

10 unchanged sentences

Mexico 142,082,011 121,553,711 111,761,245

Republic of Korea

149,554,788 95,395,479 67,219,836

Other Countries 656,457,524 576,874,606 529,104,581

19 unchanged sentences

Total $ 183,678,460 $ 146,433,123 $ 68,835,047

Other includes Dimmable Aircraft Windows, Fire Protection Products, and Nanofiber.

Other includes Dimmable Aircraft Windows, Fire Protection Products, Nanofiber, and Medical.

Major product line revenues included within the Automotive Products segment are as follows:

9 unchanged sentences

Corporate assets are principally cash and cash equivalents, investments, deferred income taxes and corporate fixed assets.

Depreciation & Amortization on corporate fixed assets are allocated as appropriate to the Automotive and Other segments when reviewing operating results.

Substantially all long-lived assets are located in the U.S.

Depreciation & Amortization on corporate fixed assets are allocated as appropriate

GENTEX CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(7) SEGMENT REPORTING, continued

to the Automotive and Other segments when reviewing operating results.

Substantially all long-lived assets are located in the U.S.

Automotive Products revenues in the “Other countries” category are sales to customer automotive manufacturing plants in Korea, Canada, Hungary, China, and the United Kingdom, as well as other foreign automotive customers.

23 unchanged sentences

Comprehensive income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

For the Company, comprehensive income represents net income adjusted for unrealized gains and losses on certain investments and foreign currency translation adjustments.

For the Company, comprehensive income represents net income adjusted for unrealized gains and losses on available for sale investments and foreign currency translation adjustments.

GENTEX CORPORATION AND SUBSIDIARIES

4 unchanged sentences

Balance at beginning of period $ ( 4,032,239 ) $ 920,589 $ 769,045

Other comprehensive income (loss) before reclassifications ( 4,952,828 ) 151,544 3,153,634

Other comprehensive (loss) income before reclassifications

( 502,480 ) ( 4,952,828 ) 151,544

Net current-period change ( 502,480 ) ( 4,952,828 ) 151,544

2 unchanged sentences

Balance at beginning of period ( 10,110,695 ) 1,006,655 6,082,007

Other comprehensive income before reclassifications ( 12,470,515 ) ( 4,228,434 ) 6,644,459

Amounts reclassified from accumulated other comprehensive income 1,353,165 ( 846,918 ) ( 1,657,938 )

Other comprehensive income (loss) before reclassifications

3,360,396 ( 12,470,515 ) ( 4,228,434 )

Amounts reclassified from accumulated other comprehensive income (loss)

4,727,896 1,353,165 ( 846,918 )

Net current-period change 8,088,292 ( 11,117,350 ) ( 5,075,352 )

3 unchanged sentences

Amounts in parentheses indicate debits.

The following table presents details of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2022, 2021 and 2020:

Details about Accumulated Other Comprehensive Income Components Affected Line item in the Statement of Consolidated Income

The following table presents details of reclassifications from accumulated other comprehensive (loss) income for the years ended December 31, 2023, 2022 and 2021:

Details about Accumulated Other Comprehensive (Loss) Income Components

Affected Line item in the Statement of Consolidated Income

For the Years ended December 31,

2023 2022 2021

Unrealized gains on available-for-sale debt securities

Realized gain on sale of securities $ ( 1,712,867 ) $ 1,072,048 $ 2,098,656 Other income, net

Unrealized (losses) gains on available-for-sale securities

Realized (loss) gain on sale of securities

$ ( 5,984,678 ) $ ( 1,712,867 ) $ 1,072,048 Other (loss) income, net

Provision for income taxes 1,256,782 359,702 ( 225,130 ) Provision for Income Taxes

6 unchanged sentences

$ 3.7 million as part of the acquisition of Vaporsens, Inc.

("Vaporsens") in the second quarter of 2020;

$ 0.2 million as part of the acquisition of Air-Craftglass Production BV ("Air-Craftglass") in the third quarter of 2020;

("Vaporsens") in 2020;

$ 0.2 million as part of the acquisition of Air-Craftglass Production BV ("Air-Craftglass") in 2020;

$ 1.0 million as part of the acquisition of Argil, Inc.

("Argil") in the fourth quarter of 2020;

and $ 2.0 million as part of the acquisition of Guardian Optical Technologies ("Guardian") in the first quarter of 2021.

Refer to Note 12, "Acquisitions" , for further information on the Guardian acquisition.

("Argil") in 2020;

$ 2.0 million as part of the acquisition of Guardian Optical Technologies ("Guardian") in 2021;

and $ 26.7 million as part of the acquisition of eSight in the fourth quarter of 2023.

Refer to Note 12, "Acquisitions" , for further information on the eSight acquisition.

The carrying value of Goodwill as of December 31, 2023 and December 31, 2022 was $ 340.1 million and $ 313.8 million, respectively, as set forth in the table below.

6 unchanged sentences

Balance as of December 31, 2023 340,105,631

As of December 31, 2023, $ 30.6 million of goodwill was recorded within the Other segment as a result of the Vaporsens, Air-Craftglass, and the eSight acquisitions, and $ 309.5 million of goodwill was recorded within the Automotive segment.

The Company reviews goodwill and IPR&D for impairment during the fourth quarter on an annual basis or more frequently if events or changes in circumstances indicate that goodwill might be impaired.

2 unchanged sentences

The Company has not recognized any impairment of goodwill or IPR&D in the current or prior periods.

The Company continuously monitors for events and circumstances that could negatively impact the key assumptions in determining fair value thus resulting in the need for interim testing, including long-term revenue growth projections, profitability, discount rates, recent market valuations from transactions by comparable companies, volatility in the Company's market capitalization, and general industry, market and macro-economic conditions.

No such events or circumstances, including supply chain disruptions and electronics components shortage, that might negatively impact the key assumptions were observed in 2022 and, as such, nothing indicated the need for interim impairment testing.

The Company continuously monitors for events and circumstances that could negatively impact the key assumptions in determining fair value thus resulting in the need for interim testing, including long-term revenue growth projections, profitability, discount rates, recent market valuations from transactions by comparable companies, volatility in the Company's market capitalization, and certain general industry, market and macro-economic conditions.

No such events or circumstances that might negatively impact the key assumptions were observed in 2023 and, as such, nothing indicated the need for interim impairment testing.

The Intangible Assets and related change in carrying values are set forth in the table below as of December 31, 2023 and December 31, 2022.

As of December 31, 2023:

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Intangible Assets Gross Accumulated Amortization Net Assumed Useful Life

5 unchanged sentences

Exclusive Licensing Agreement 96,000,000 — 96,000,000 Indefinite

eSight Technology 12,000,000 — 12,000,000 12 years

eSight Trade Names and Trademarks 870,000 — 870,000 12 years

Vaporsens In-Process R&D 11,000,000 — 11,000,000 Indefinite

4 unchanged sentences

Total other identifiable intangible assets $ 410,755,910 $ ( 196,750,000 ) $ 214,005,910

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022:

18 unchanged sentences

$ 14 million for the year ended December 31, 2025;

$ 13 million for the year ended December 31, 2025;

and $ 12 million for the years ended December 31, 2026 and December 31, 2027.

$ 3 million for each of the years ended December 31, 2026, December 2027, and December 31, 2028.

GENTEX CORPORATION AND SUBSIDIARIES

8 unchanged sentences

Mexico 142,082,011 121,553,711 111,761,245

Republic of Korea

149,554,788 95,395,479 67,219,836

Other 656,457,524 576,874,606 529,104,581

18 unchanged sentences

Nanofiber Products — — 18,400

Medical 44,786 — —

Total Other $ 44,554,753 $ 44,215,585 $ 33,981,895

2 unchanged sentences

Such recognition generally occurs with the transfer of control of the products at a point in time.

The Company's automotive OEM contracts generally include Long Term Supply Agreements ("LTSA") entered into in the ordinary course of business and Purchase Orders ("PO") whereby the LTSA sometimes stipulates

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the pricing and delivery terms and is evaluated together with a PO, which identifies the quantity, timing, and the type of product to be transferred.

Company's automotive OEM contracts generally include Long Term Supply Agreements ("LTSA") entered into in the ordinary course of business and Purchase Orders ("PO") whereby the LTSA sometimes stipulates the pricing and delivery terms and is evaluated together with a PO, which identifies the quantity, timing, and the type of product to be transferred.

Certain customer contracts do not always have an LTSA, in which case, the contracts are governed by the PO from the customer in conjunction with other mutually agreed upon terms and conditions.

1 unchanged sentence

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods excluding revenue amounts that are transferred to third parties, such as sales, value add, and other taxes the Company collects concurrently with revenue-producing activities.

The Company does not incur any incremental cost to obtain contracts.

Costs are incurred to fulfill contracts with the OEM.

3 unchanged sentences

The Company manufactures interior electrochromic automatic-dimming rearview mirrors that darken to reduce glare and improve visibility for the driver.

These electronic interior mirrors can also include additional electronic features such as compass, microphones, HomeLink ® , lighting assist and driver assist forward safety camera systems, various lighting systems, various telematics systems, ITM ® systems, and a wide variety of displays.

The Company also ships interior non-automatic-dimming rearview mirrors with features.

13 unchanged sentences

For the majority of automotive products, transfer of control and revenue recognition occurs when the Company ships the product from the manufacturing facility to the customer.

Other Segment

Dimmable Aircraft Windows

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Segment

Dimmable Aircraft Windows

The Company supplies variable dimmable windows for the passenger compartment on the Boeing 787 Dreamliner Series of Aircraft.

7 unchanged sentences

Vaporsens is primarily involved with research and development of technology related to nanofibers sensing a variety of chemicals and/or compounds.

In January 2020 the Company unveiled an innovative lighting technology for medical applications that was co-developed with Mayo Clinic.

This new lighting concept represents the collaboration of a global, high-technology electronics company with a world leader in health care.

The Company's new intelligent lighting system combines ambient room lighting with camera-controlled, adaptive task lighting to optimize illumination for surgical and patient-care environments.

The system was developed over an 18 month period of collaboration between Company engineers and Mayo Clinic surgeons, scientists, and operating room staff.

The teams researched, designed, and rapidly iterated multiple prototypes in order to develop unique features intended to address major gaps in current surgical lighting solutions.

The Company continues to further develop and work on the intelligent medical lighting system in order to assess system performance and work toward obtaining any necessary approvals.

On November 2, 2023, the Company acquired certain technology assets from eSight for approximately $ 18.9 million in cash, in addition to the 20 % equity the Company previously held in the assets, as well as an earn out provision.

The technology acquired from eSight provides advanced and versatile low-vision smart glasses for those with visual impairments and is compatible with more than 20 eye conditions including Macular Degeneration, Diabetic Retinopathy, and Stargardt disease.

Refer to Note 12, "Acquisitions" , for further information.

(12) ACQUISITIONS

On March 3, 2021 the Company acquired Guardian for approximately $ 12.0 million.

Guardian is an Israeli research and development company that specializes in in-cabin sensing technologies for the automotive industry.

On November 2, 2023, the Company acquired certain technology assets from eSight for approximately $ 18.9 million in cash, the assumption of a $ 9.4 million promissory note given in exchange for the 20 % equity the Company previously held in the assets, as well as an earn out provision over a ten year period.

The earn out provision consists of multiple potential payments based on the revenue over the next ten calendar years, with the total earn out not to exceed $ 70 million.

The Company funded the acquisition with cash on hand.

The valuation process was completed during the fourth quarter of 2021.

Guardian is now a 100 % owned subsidiary of the Company as Gentex Technologies (Israel), LTD, and is classified within the Automotive segment.

The Company accounted for the acquisition under the provisions of FASB ASC Topic 805, Business Combinations .

(13) SUBSEQUENT EVENTS

On February 21, 2023, the Company entered into the Amended Credit Agreement that provided for, among other things, a three-year unsecured Revolving Credit Facility with a borrowing capacity of up to $ 250.0 million that matures on February 21, 2026, replacing in its entirety the Company's prior $ 150.0 million Revolver scheduled to mature on October 15, 2023.

Included in the Revolving Credit Facility is a $ 20.0 million sublimit for standby letters of credit and a $ 35.0 million sublimit for swingline loans, each subject to certain conditions.

The technology acquired from eSight provides advanced and versatile low-vision smart glasses for those with visual impairments and is compatible with more than 20 eye conditions including

GENTEX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Macular Degeneration, Diabetic Retinopathy, and Stargardt disease.

These assets will be classified within the Company's Other segment.

The Company will account for the acquisition under the provisions of FASB ASC Topic 805, Business Combinations .

The Company is still in the process of verifying data and finalizing information related to the valuation and recording of identifiable intangible assets, net working capital, contingent liabilities, and the resulting effects on the amount of recorded goodwill.

The Company expects to finalize these matters within the measurement period, which is currently expected to remain open through the third quarter of 2023.

Less than $ 0.1 million of revenue of the business of eSight was included in the Company's consolidated statement of income and comprehensive income for the year ended December 31, 2023.

The following table summarizes the fair values of the assets acquired, and the liabilities assumed, as of the acquisition date of November 2, 2023:

Current Assets $ 441,228

Personal Property 75,000

Right of Use Asset (Lease) 116,562

ESight Technology 12,000,000

Trade Names and Trademarks 870,000

Goodwill 26,696,012

Total Assets $ 40,198,802

Lease Liability $ 116,562

Contingent Earn Out Liability 12,000,000

Total Liabilities $ 12,116,562

EXHIBIT INDEX

27 unchanged sentences

*10.22 Specimen Form of Gentex Corporation Non-Employee Director Restricted Stock Agreement was filed as an exhibit to Registrant's Report on Form 10-Q dated November 1, 2019, and is hereby incorporated herein by reference.

*10.23 Specimen form of Performance Share Award Agreement for the Gentex Corporation Long-Term Incentive Plan filed as exhibit to Registrant's Report on Form 10-K filed February 23, 2022 , and is he reby incorporated herein by reference .

*10.24 2022 Gentex Corporation Employee Stock Purchase Plan was included in Registrant's Proxy Statement filed with the Commission on A ugust 5 , 20 22 , and is incorporated herein by reference.

*10.25 Specimen form of Performance Share Award Agreement for the Gentex Corporation Long-Term Incentive Plan filed as an exhibit to Registrant's Report on Form 10-K filed February 22, 2023.

*10.24 2022 Gentex Corporation Employee Stock Purchase Plan was included in Registrant's Proxy Statement filed with the Commission on August 5, 2022, and is incorporated herein by reference.

*10.25 Specimen form of Performance Share Award Agreement for the Gentex Corporation Long-Term Incentive Plan filed as an exhibit to Registrant's Report on Form 10-K filed February 22, 2023., and is hereby incorporated herein by reference.

Specim e n form of Gentex Corporation Restricted Stock Unit Award Agreement was filed as an exhibit to Registrant's Report on Form 10-Q dated November 3, 2023, and is hereby incorporated herein by reference.

Stock Purchase Agreement by and among Gentex Corporation, Avalon Park International LLC and Avalon Park Group Holding AG, dated as of October 4, 2023, filed as exhibit to Registrant's Report on Form 10-K filed February 22, 2024..

21 List of Company Subsidiaries

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32 Certificate of the Chief Executive Officer and Chief Financial Officer of Gentex Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

97 G entex Corporation Incentive-Based Compensation Recoupment Policy, effective November 16, 2023

101.INS XBRL Instance Document

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures