Electronic Systems Technology (ELST) 10-Q 28 Oct 22 2022 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2022	Oct. 22, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	000-27793
Entity Registrant Name	ELECTRONIC SYSTEMS TECHNOLOGY INC
Entity Central Index Key	0000752294
Entity Tax Identification Number	91-1238077
Entity Incorporation, State or Country Code	WA
Entity Address, Address Line One	415 N. Roosevelt St.
Entity Address, Address Line Two	STE B1
Entity Address, City or Town	Kennewick
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	99336
City Area Code	(509)
Local Phone Number	735-9092
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	ELST
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,946,502

CONDENSED BALANCE SHEETS (Unaud

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 561,605	$ 655,616
Certificates of deposit	400,584	400,000
Accounts receivable	162,659	166,303
Inventories	558,434	501,833
Prepaid expenses	77,764	24,387
Accrued interest receivable	829	35
Total current assets	1,761,875	1,748,174
Property and equipment, net of depreciation	1,025	1,358
Right to use – Lease, net of amortization (NOTE 6)	78,757	28,922
Total assets	1,841,657	1,778,454
Current liabilities
Accounts payable	26,842	71,645
Accrued wages and bonus	23,130	9,114
Accrued vacation pay	15,423	28,438
Lease liability, current (NOTE 6)	37,937	13,613
Other accrued liabilities	7,073	14,827
Total current liabilities	110,405	137,637
Operating lease liability (NOTE 6)	40,821	0
Total liabilities	151,226	137,637
Stockholders' equity
Common stock, $ 0.001 par value 50,000,000 shares authorized 4,946,502 and 4,946,502 shares issued and outstanding respectively	4,947	4,947
Additional paid-in capital	932,412	932,412
Retained earnings	753,072	703,458
Total stockholders' equity	1,690,431	1,640,817
Total liabilities and stockholders' equity	$ 1,841,657	$ 1,778,454

CONDENSED BALANCE SHEETS (Una_2

CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	4,946,502	4,946,502
Common Stock, Shares, Outstanding	4,946,502	4,946,502

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
SALES - NET	$ 487,160	$ 256,069	$ 1,376,195	$ 1,137,848
COST OF SALES	(210,056)	(152,834)	(611,376)	(546,568)
GROSS PROFIT	277,104	103,235	764,819	591,280
Operating Expenses
General and administrative	60,784	55,574	212,308	215,528
Research and development	40,029	46,534	131,662	153,483
Marketing and sales	104,293	122,960	373,694	344,594
TOTAL OPERATING EXPENSE	205,106	225,068	717,664	713,605
OPERATING INCOME (LOSS)	71,998	(121,833)	47,155	(122,325)
OTHER INCOME
Gain on forgiveness of CARES Act loan	0	130,255	0	280,373
Interest income	1,373	555	2,459	1,981
TOTAL OTHER INCOME	1,373	130,810	2,459	282,354
NET INCOME (LOSS) BEFORE  INCOME TAX	73,371	8,977	49,614	160,029
Benefit (provision) for income tax	0	0	0	0
NET INCOME (LOSS)	$ 73,371	$ 8,977	$ 49,614	$ 160,029
Basic and diluted net income (loss) per share	$ 0.01	$ 0	$ 0.01	$ 0.03
Basic and diluted weighted average shares used in computing net income (loss) per share:	4,946,502	4,946,502	4,946,502	4,946,502

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 49,614	$ 160,029
Noncash items included in net income (loss):
Depreciation	333	3,867
Share based compensation	0	970
Gain on forgiveness of CARES Act loan	0	(280,373)
Changes in operating assets and liabilities:
Accounts receivable, net	3,644	197,494
Inventories	(56,601)	97,428
Accrued interest receivable	(794)	3,467
Prepaid expenses	(53,377)	(2,209)
Accounts payable	(44,803)	59,027
Other accrued liabilities	(14,525)	20,231
NET CASH PROVIDED (USED) IN OPERATING ACTIVITIES	(87,459)	259,931
CASH FLOWS FROM INVESTING ACTIVITIES:
Certificates of deposit redeemed	850,000	249,999
Certificates of deposit purchased	(850,584)	0
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES	(584)	249,999
CASH FLOWS USED IN FINANCING ACTIVITIES:
Principal payments on CARES Act loan payable (round 1)	(5,968)	(1,975)
Proceeds from CARES Act loan payable (round 2)	0	130,255
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES	(5,968)	128,280
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	(94,011)	638,210
Cash and cash equivalents at beginning of period	655,616	308,110
Cash and cash equivalents at end of period	$ 561,605	$ 946,320

CONDENSED STATEMENTS OF CHANGES

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2020	$ 4,947	$ 931,442	$ 610,469	$ 1,546,858
Beginning Balance, Shares at Dec. 31, 2020	4,946,502
Net income (loss)			4,682	4,682
Ending balance, value at Mar. 31, 2021	$ 4,947	931,442	615,151	1,551,540
Ending Balance, Shares at Mar. 31, 2021	4,946,502
Net income (loss)			146,370	146,370
Ending balance, value at Jun. 30, 2021	$ 4,947	931,442	761,521	1,697,910
Ending Balance, Shares at Jun. 30, 2021	4,946,502
Net income (loss)			8,977	8,977
Stock based compensation		970		970
Ending balance, value at Sep. 30, 2021	$ 4,947	933,412	770,498	1,707,857
Ending Balance, Shares at Sep. 30, 2021	4,946,502
Beginning balance, value at Dec. 31, 2021	$ 4,947	932,412	703,458	1,640,817
Beginning Balance, Shares at Dec. 31, 2021	4,946,502
Net income (loss)			(4,961)	(4,961)
Ending balance, value at Mar. 31, 2022	$ 4,947	932,412	698,497	1,635,856
Ending Balance, Shares at Mar. 31, 2022	4,946,502
Net income (loss)			(18,796)	(18,796)
Ending balance, value at Jun. 30, 2022	$ 4,947	932,412	679,701	1,617,060
Ending Balance, Shares at Jun. 30, 2022	4,946,502
Net income (loss)			73,371	73,371
Ending balance, value at Sep. 30, 2022	$ 4,947	$ 932,412	$ 753,072	$ 1,690,431
Ending Balance, Shares at Sep. 30, 2022	4,946,502

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
BASIS OF PRESENTATION	NOTE 1 - BASIS OF PRESENTATION The financial statements, including notes, of Electronic Systems Technology, Inc. (the "Company") are representations of the Company’s management, which is responsible for their integrity and objectivity. The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2022, and its results of operations, cash flows, and changes in stockholders’ equity for the three months and nine months ended September 30, 2022 and 2021. The balance sheet at December 31, 2021 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. All amounts presented are in U.S. dollars. For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the three month and nine-month period ended September 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2022 the anticipated effective annual federal income tax rate will be 0%. New Accounting Pronouncements Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

INVENTORIES

INVENTORIES	9 Months Ended
	Sep. 30, 2022
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 2 - INVENTORIES Inventories are stated at lower of direct cost or net realizable value with cost determined using the FIFO (first in, first out) method. Inventories consist of the following: Schedule of Inventories September 30, December 31, Parts $ 184,459 $ 92,751 Work in progress 149,498 171,705 Finished goods 224,477 237,377 Total inventory $ 558,434 $ 501,833

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
EARNINGS (LOSS) PER SHARE	NOTE 3 - EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average number of shares of Common Stock outstanding for the period. Diluted earnings (loss) per share reflects potential dilution occurring if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in the earnings of the Company. At September 30, 2022 and 2021, the Company had 210,000 240,000

STOCK OPTIONS

STOCK OPTIONS	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
STOCK OPTIONS	NOTE 4 - STOCK OPTIONS No stock options were issued, exercised and 30,000 210,000 0.40 2.7 no

REVENUE

REVENUE	9 Months Ended
	Sep. 30, 2022
Revenue
REVENUE	NOTE 5 – REVENUE The Company’s product revenue includes industrial wireless products and accessories such as antennas, power supplies and cable assemblies. The Company also provides direct site support and engineering services to customers, such as repair and upgrade of its products. During the three-month period ended September 30, 2022 and 2021, the Company’s revenue from products sales was $ 480,260 230,869 6,900 25,200 During the nine-month period ended September 30, 2022 and 2021, the Company’s revenue from products sales was $ 1,351,495 1,100,948 24,700 36,900 The Company’s customers, to which trade credit terms are extended, consist of United States and local governments and foreign and domestic companies. Domestic sales of products and services for the three-month period ended September 30, 2022 and September 30, 2021 were $ 419,164 227,001 67,996 29,068 Domestic sales for the nine-month period ended September 30, 2022 and September 30, 2021 were $ 1,234,793 1,021,331 141,402 116,517 For the three-month period ended September 30, 2022, sales to three customers represented more than 10% of total revenue, one customer represented more than 10% of total revenue for the same period in 2021. Revenue 2022 Sales 2022 %age of Total Sales 2021 Sales 2021 %age of Total Sales Domestic customer A $ 60,130 12 % $ 70,505 28 % Domestic customer B 58,167 12 % — — Domestic customer C 46,703 10 % — — For the nine-month period ended September 30, 2022, sales to two customers represented more than 10% of total revenue, two customers represented more than 10% of total revenue for the same period in 2021. 2022 Sales 2022 %age of Total Sales 2021 Sales 2021 %age of Total Sales Domestic customer A $ 165,621 12 % $ 203,623 18 % Domestic customer B 137,346 10 % 129,798 11 % As of September 30, 2022 and 2021, the Company had a sales order backlog of $ 141,066 93,059

LEASES

LEASES	9 Months Ended
	Sep. 30, 2022
Leases [Abstract]
LEASES	NOTE 6 - LEASES On September 19, 2022, the Company signed a new two-year lease for its facilities. The base lease is $ 3,373 3,478 12.84 78,757 Prior to the new lease on September 19, 2022, the Company’s lease for its facilities was for $ 3,267 For the three month and nine-month periods ended September 30, 2022 and 2021, lease expenses of $ 11,616 10,862 34,839 32,586 Leases For the three-month period ending September 30, 2022 2021 Cost of sales Operating expenses Total Cost of sales Operating expenses Total Base rent pursuant to lease agreement $ 5,751 $ 4,526 $ 10,277 $ 5,396 $ 4,248 $ 9,644 Variable lease costs 749 590 1,339 682 536 1,218 Total lease costs $ 6,500 $ 5,116 $ 11,616 $ 6,078 $ 4,784 $ 10,862 For the nine-month period ending September 30, 2022 2021 Cost of sales Operating expenses Total Cost of sales Operating expenses Total Base rent pursuant to lease agreement $ 17,252 $ 13,578 $ 30,830 $ 16,190 $ 12,742 $ 28,932 Variable lease costs 2,249 1,770 4,019 2,045 1,609 3,654 Total lease costs $ 19,501 $ 15,348 $ 34,849 $ 18,235 $ 14,351 $ 32,586 As of September 30, 2022, total future lease payments are as follows: Schedule of Future Minimum Lease Payment Remainder of 2022 $ 10,118 2023 40,790 2024 31,304 Total 82,212 Less imputed interest (3,454 ) Net lease liability 78,758 Current portion (37,937 ) Long-term portion $ 40,821

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Sep. 30, 2022
Inventory Disclosure [Abstract]
Schedule of Inventories	Schedule of Inventories September 30, December 31, Parts $ 184,459 $ 92,751 Work in progress 149,498 171,705 Finished goods 224,477 237,377 Total inventory $ 558,434 $ 501,833

REVENUE (Tables)

REVENUE (Tables)	9 Months Ended
	Sep. 30, 2022
Revenue
Revenue	Revenue 2022 Sales 2022 %age of Total Sales 2021 Sales 2021 %age of Total Sales Domestic customer A $ 60,130 12 % $ 70,505 28 % Domestic customer B 58,167 12 % — — Domestic customer C 46,703 10 % — — For the nine-month period ended September 30, 2022, sales to two customers represented more than 10% of total revenue, two customers represented more than 10% of total revenue for the same period in 2021. 2022 Sales 2022 %age of Total Sales 2021 Sales 2021 %age of Total Sales Domestic customer A $ 165,621 12 % $ 203,623 18 % Domestic customer B 137,346 10 % 129,798 11 %

LEASES (Tables)

LEASES (Tables)	9 Months Ended
	Sep. 30, 2022
Leases [Abstract]
Leases	Leases For the three-month period ending September 30, 2022 2021 Cost of sales Operating expenses Total Cost of sales Operating expenses Total Base rent pursuant to lease agreement $ 5,751 $ 4,526 $ 10,277 $ 5,396 $ 4,248 $ 9,644 Variable lease costs 749 590 1,339 682 536 1,218 Total lease costs $ 6,500 $ 5,116 $ 11,616 $ 6,078 $ 4,784 $ 10,862 For the nine-month period ending September 30, 2022 2021 Cost of sales Operating expenses Total Cost of sales Operating expenses Total Base rent pursuant to lease agreement $ 17,252 $ 13,578 $ 30,830 $ 16,190 $ 12,742 $ 28,932 Variable lease costs 2,249 1,770 4,019 2,045 1,609 3,654 Total lease costs $ 19,501 $ 15,348 $ 34,849 $ 18,235 $ 14,351 $ 32,586
Schedule of Future Minimum Lease Payment	Schedule of Future Minimum Lease Payment Remainder of 2022 $ 10,118 2023 40,790 2024 31,304 Total 82,212 Less imputed interest (3,454 ) Net lease liability 78,758 Current portion (37,937 ) Long-term portion $ 40,821

INVENTORIES - Schedule of Inven

INVENTORIES - Schedule of Inventory, Current (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Parts	$ 184,459	$ 92,751
Work in progress	149,498	171,705
Finished goods	224,477	237,377
Total inventory	$ 558,434	$ 501,833

EARNINGS (LOSS) PER SHARE (Deta

EARNINGS (LOSS) PER SHARE (Details Narrative) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Anti-dilutive shares	210,000	240,000

STOCK OPTIONS (Details Narrativ

STOCK OPTIONS (Details Narrative)	9 Months Ended
	Sep. 30, 2022 USD ($) $ / shares shares
Share-Based Payment Arrangement [Abstract]
Stock option expired	30,000
Options outstanding shares	210,000
Weighted average exercise price | $ / shares	$ 0.40
Weighted average remaining life	2 years 8 months 12 days
Intrinsic value | $	$ 0

REVENUE (Details)

REVENUE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues	$ 487,160	$ 256,069	$ 1,376,195	$ 1,137,848
Domestic customer A [Member]
Revenues	$ 60,130	$ 70,505	$ 165,621	$ 203,623
Concentration Risk, Percentage	12%	28%	12%	18%
Domestic customer B [Member]
Revenues	$ 58,167	$ 0	$ 137,346	$ 129,798
Concentration Risk, Percentage	12%	0%	10%	11%
Domestic customer C [Member]
Revenues	$ 46,703	$ 0
Concentration Risk, Percentage	10%	0%

REVENUE (Details Narrative)

REVENUE (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues	$ 487,160	$ 256,069	$ 1,376,195	$ 1,137,848
Sales order backlog			141,066	93,059
Product Sales [Member]
Revenues	480,260	230,869	1,351,495	1,100,948
Site Support And Engineering Services [Member]
Revenues	6,900	25,200	24,700	36,900
Domestic [Member]
Revenues	419,164	227,001	1,234,793	1,021,331
Foreign [Member]
Revenues	$ 67,996	$ 29,068	$ 141,402	$ 116,517

LEASES (Details)

LEASES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Cost Of Sales 1 [Member]
Base rent pursuant to lease agreement	$ 5,751	$ 5,396	$ 17,252	$ 16,190
Variable lease costs	749	682	2,249	2,045
Operating lease expense distributied	6,500	6,078	19,501	18,235
Operating expenses 1 [Member]
Base rent pursuant to lease agreement	4,526	4,248	13,578	12,742
Variable lease costs	590	536	1,770	1,609
Operating lease expense distributied	5,116	4,784	15,348	14,351
Total [Member]
Base rent pursuant to lease agreement	10,277	9,644	30,830	28,932
Variable lease costs	1,339	1,218	4,019	3,654
Operating lease expense distributied	$ 11,616	$ 10,862	$ 34,849	$ 32,586

LEASES (Details 1)

LEASES (Details 1) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Leases [Abstract]
Remainder of 2022	$ 10,118
2023	40,790
2024	31,304
Total	82,212
Less imputed interest	(3,454)
Net lease liability	78,758
Current portion	(37,937)	$ (13,613)
Long-term portion	$ 40,821	$ 0

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 19, 2022	Sep. 30, 2021
Leasehold tax percentage			12.84%
Leasehold tax	$ 78,757		$ 78,757
Operating lease expense	$ 11,616	$ 10,862	34,839	$ 3,267	$ 32,586
Monthly Rate Year One [Member]
Operating Lease, Cost			3,373
Monthly Rate Year Two [Member]
Operating Lease, Cost			$ 3,478