Electronic Systems Technology (ELST) 10-Q 28 Apr 23 2023 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 19, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
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
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

CONDENSED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 592,417	$ 751,118
Certificates of deposit	251,699	251,699
Accounts receivable, net	107,770	141,394
Inventories	729,308	725,478
Prepaid expenses	36,896	42,627
Employee retention tax credit receivable (NOTE 7)	63,000	63,000
Accrued interest receivable	682	808
Total current assets	1,781,772	1,976,124
Property and equipment, net of depreciation	9,876	914
Right to use – Lease, net of amortization (NOTE 6)	59,984	69,419
Total assets	1,851,632	2,046,457
Current liabilities
Accounts payable	64,084	138,996
Accrued wages	2,904	24,777
Operating lease liability, current portion (NOTE 6)	40,100	39,120
Accrued vacation pay	22,220	16,846
Other accrued liabilities	6,900	8,913
Total current liabilities	136,208	228,652
Long-Term Liabilities
Operating lease liability (NOTE 6)	20,200	30,457
Total liabilities	156,408	259,109
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	757,865	849,989
Total stockholders' equity	1,695,224	1,787,348
Total liabilities and stockholders' equity	$ 1,851,632	$ 2,046,457

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
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 - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
SALES - NET	$ 305,089	$ 472,143
COST OF SALES	(139,560)	(209,883)
GROSS PROFIT	165,529	262,260
OPERATING EXPENSES
General and administrative	84,765	84,776
Research and development	28,663	45,777
Marketing and sales	148,227	137,159
Total operating expenses	261,655	267,712
OPERATING LOSS	(96,126)	(5,452)
OTHER INCOME
Interest income	4,002	491
Total other income	4,002	491
NET LOSS BEFORE INCOME TAX	(92,124)	(4,961)
Benefit (provision) for income tax
NET LOSS	$ (92,124)	$ (4,961)

CONDENSED STATEMENTS OF OPERA_2

CONDENSED STATEMENTS OF OPERATIONS (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Earnings (loss) per share - basic	$ (0.02)	$ 0
Earnings (loss) per share - diluted	$ (0.02)	$ 0
Weighted average shares - basic	4,946,502	4,946,502
Weighted average shares - diluted	4,946,502	4,946,502

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (92,124)	$ (4,961)
Noncash items included in net loss:
Depreciation	38	111
Changes in operating assets and liabilities:
Accounts receivable, net	33,624	24,977
Inventories	(3,830)	66,997
Accrued interest receivable	126	(270)
Prepaid expenses	5,731	(16,508)
Accounts payable	(74,912)	(20,983)
Other accrued liabilities, accrued wages and accrued vacation pay	(18,354)	1,653
NET CASH PROVIDED (USED) IN OPERATING ACTIVITIES	(149,701)	51,016
CASH FLOWS FROM INVESTING ACTIVITIES:
Certificates of deposit redeemed	300,000	150,000
Certificates of deposit purchases	(300,000)
Purchase of equipment	(9,000)
NET CASH PROVIDED (USED) FROM INVESTING ACTIVITIES	(9,000)	150,000
CASH FLOWS USED IN FINANCING ACTIVITIES:
Principal payments on CARES Act loan payable (round 1)		(5,968)
NET CASH USED IN FINANCING ACTIVITIES		(5,968)
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS	(158,701)	195,048
Cash and cash equivalents at beginning of period	751,118	655,616
Cash and cash equivalents at end of period	$ 592,417	$ 850,664

CONDENSED STATEMENTS OF CHANGES

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
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
Beginning balance, value at Dec. 31, 2022	$ 4,947	932,412	849,989	1,787,348
Beginning Balance, Shares at Dec. 31, 2022	4,946,502
Net income (loss)			(92,124)	(92,124)
Ending balance, value at Mar. 31, 2023	$ 4,947	$ 932,412	$ 757,865	$ 1,695,224
Ending Balance, Shares at Mar. 31, 2023	4,946,502

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
BASIS OF PRESENTATION	NOTE 1 - BASIS OF PRESENTATION The condensed 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 condensed 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 of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2023, and its results of operations, cash flows, and changes in stockholders’ equity for the three months ended March 31, 2023 and 2022. The balance sheet at December 31, 2022 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, 2022. The results of operations for the three-month period ended March 31, 2023 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2023 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	3 Months Ended
	Mar. 31, 2023
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 March 31, December 31, Parts $ 146,628 $ 172,190 Work in progress 247,223 336,298 Finished goods 335,457 216,990 Total inventory $ 729,308 $ 725,478

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	3 Months Ended
	Mar. 31, 2023
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 common shares 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 March 31, 2023 and 2022, the Company had 180,000 240,000

STOCK OPTIONS

STOCK OPTIONS	3 Months Ended
	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
STOCK OPTIONS	NOTE 4 - STOCK OPTIONS The Company has outstanding stock options, which have been granted periodically to individual employees and directors. No shared based compensation was recognized during the three-month periods ended March 31, 2023 and 2022. As of March 31, 2023 and 2022, there were 180,000 240,000 0.40 2.3 3.4 no

REVENUE

REVENUE	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
REVENUE	NOTE 5 – REVENUE The Company 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 March 31, 2023 and 2022, the Company’s revenue from products sales was $ 297,589 461,843 7,500 10,300 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 for the three-month period ended March 31, 2023 and March 31, 2022 were $ 293,908 436,670 11,181 35,473 For the three-month period ended March 31, 2023 and 2022, sales to individual customers representing more than 10% of total revenue were as follows: Schedule of revenue For the three-month period ended March 31, 2023 2022 Sales %age of Total Sales Sales %age of Total Sales Domestic customer A $ 70,090 23 % $ 75,505 16 % Domestic customer B — — 72,683 15 % Domestic customer C — — 53,625 11 % As of March 31, 2023 Domestic customer A’s accounts receivable balance was $ 43,019 As of March 31, 2023 and 2022, the Company had a sales order backlog of $ 162,396 116,461

LEASES

LEASES	3 Months Ended
	Mar. 31, 2023
Leases [Abstract]
LEASES	NOTE 6 - LEASES On September 23, 2022, the Company signed a new two-year lease for its facilities. The base lease is $ 3,373 3,478 12.84 78,757 4.125 18 30,671 31,304 For the three-month periods ended March 31, 2023 and 2022, lease expense of $ 11,576 10,903 Schedule of lease expense 2023 2022 Cost of sales Operating expenses Total Cost of sales Operating expenses Total Base rent pursuant to lease agreement $ 5,751 $ 4,526 $ 10,277 $ 5,397 $ 4,247 $ 9,644 Variable lease costs 727 572 1,299 704 555 1,259 Total lease costs $ 6,478 $ 5,098 $ 11,576 $ 6,101 $ 4,802 $ 10,903

Cares Act Retention Credit

Cares Act Retention Credit	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Cares Act Retention Credit	NOTE 7 - Cares Act Retention Credit As at December 31, 2022 and March 31, 2023, the Company has an employee retention tax credit due of $ 63,000

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Schedule of inventories	Schedule of inventories March 31, December 31, Parts $ 146,628 $ 172,190 Work in progress 247,223 336,298 Finished goods 335,457 216,990 Total inventory $ 729,308 $ 725,478

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Schedule of revenue	Schedule of revenue For the three-month period ended March 31, 2023 2022 Sales %age of Total Sales Sales %age of Total Sales Domestic customer A $ 70,090 23 % $ 75,505 16 % Domestic customer B — — 72,683 15 % Domestic customer C — — 53,625 11 %

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Mar. 31, 2023
Leases [Abstract]
Schedule of lease expense	Schedule of lease expense 2023 2022 Cost of sales Operating expenses Total Cost of sales Operating expenses Total Base rent pursuant to lease agreement $ 5,751 $ 4,526 $ 10,277 $ 5,397 $ 4,247 $ 9,644 Variable lease costs 727 572 1,299 704 555 1,259 Total lease costs $ 6,478 $ 5,098 $ 11,576 $ 6,101 $ 4,802 $ 10,903

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Parts	$ 146,628	$ 172,190
Work in progress	247,223	336,298
Finished goods	335,457	216,990
Inventory, Net	$ 729,308	$ 725,478

EARNINGS (LOSS) PER SHARE (Deta

EARNINGS (LOSS) PER SHARE (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Anti-dilutive shares	180,000	240,000

STOCK OPTIONS (Details Narrativ

STOCK OPTIONS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement [Abstract]
Options outstanding shares	180,000	240,000
Weighted average exercise price	$ 0.40	$ 0.40
Weighted average remaining life	2 years 3 months 18 days	3 years 4 months 24 days
Intrinsic value	$ 0	$ 0

REVENUE (Details)

REVENUE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 305,089	$ 472,143
Geographic Distribution, Domestic [Member]
Disaggregation of Revenue [Line Items]
Revenues	293,908	436,670
Customer A [Member] | Geographic Distribution, Domestic [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 70,090	$ 75,505
Revenues	23%	16%
Customer B [Member] | Geographic Distribution, Domestic [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Revenues		$ 72,683
Revenues		15%
Customer C [Member] | Geographic Distribution, Domestic [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Revenues		$ 53,625
Revenues		11%

REVENUE (Details Narrative)

REVENUE (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 305,089	$ 472,143
Sales order backlog	162,396	116,461
Geographic Distribution, Domestic [Member]
Disaggregation of Revenue [Line Items]
Revenues	293,908	436,670
Geographic Distribution, Domestic [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member]
Disaggregation of Revenue [Line Items]
Account receivable	43,019
Geographic Distribution, Foreign [Member]
Disaggregation of Revenue [Line Items]
Revenues	11,181	35,473
Product [Member]
Disaggregation of Revenue [Line Items]
Revenues	297,589	461,843
Maintenance [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 7,500	$ 10,300

LEASES (Details)

LEASES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Base rent pursuant to lease agreement	$ 10,277	$ 9,644
Variable lease costs	1,299	1,259
Total lease costs	11,576	10,903
Cost of Sales [Member]
Base rent pursuant to lease agreement	5,751	5,397
Variable lease costs	727	704
Total lease costs	6,478	6,101
Operating Expense [Member]
Base rent pursuant to lease agreement	4,526	4,247
Variable lease costs	572	555
Total lease costs	$ 5,098	$ 4,802

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($)		3 Months Ended
	Sep. 23, 2022	Mar. 31, 2023	Mar. 31, 2022
Operating Lease, Cost		$ 10,277	$ 9,644
Leasehold tax percentage	12.84%
Leasehold tax	$ 78,757
Incremental borrowing rate	4.125%
Remaining lease term		18 months
Future payments - 2023		$ 30,671
Future payments - 2024		31,304
Lease expense		$ 11,576	$ 10,903
Monthly rate year one
Operating Lease, Cost	$ 3,373
Monthly rate year two
Operating Lease, Cost	$ 3,478

Cares Act Retention Credit (Det

Cares Act Retention Credit (Details Narrative) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Employee retention tax credit	$ 63,000	$ 63,000