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 |