false --12-31 2024 Q2 0000752294 0000752294 2024-01-01 2024-06-30 0000752294 2024-07-23 0000752294 2024-06-30 0000752294 2023-12-31 0000752294 2024-04-01 2024-06-30 0000752294 2023-04-01 2023-06-30 0000752294 2023-01-01 2023-06-30 0000752294 2022-12-31 0000752294 2023-06-30 0000752294 us-gaap:CommonStockMember 2022-12-31 0000752294 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0000752294 us-gaap:RetainedEarningsMember 2022-12-31 0000752294 us-gaap:CommonStockMember 2023-03-31 0000752294 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0000752294 us-gaap:RetainedEarningsMember 2023-03-31 0000752294 2023-03-31 0000752294 us-gaap:CommonStockMember 2023-12-31 0000752294 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0000752294 us-gaap:RetainedEarningsMember 2023-12-31 0000752294 us-gaap:CommonStockMember 2024-03-31 0000752294 us-gaap:AdditionalPaidInCapitalMember 2024-03-31 0000752294 us-gaap:RetainedEarningsMember 2024-03-31 0000752294 2024-03-31 0000752294 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0000752294 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0000752294 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0000752294 2023-01-01 2023-03-31 0000752294 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0000752294 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0000752294 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0000752294 us-gaap:CommonStockMember 2024-01-01 2024-03-31 0000752294 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-03-31 0000752294 us-gaap:RetainedEarningsMember 2024-01-01 2024-03-31 0000752294 2024-01-01 2024-03-31 0000752294 us-gaap:CommonStockMember 2024-04-01 2024-06-30 0000752294 us-gaap:AdditionalPaidInCapitalMember 2024-04-01 2024-06-30 0000752294 us-gaap:RetainedEarningsMember 2024-04-01 2024-06-30 0000752294 us-gaap:CommonStockMember 2023-06-30 0000752294 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0000752294 us-gaap:RetainedEarningsMember 2023-06-30 0000752294 us-gaap:CommonStockMember 2024-06-30 0000752294 us-gaap:AdditionalPaidInCapitalMember 2024-06-30 0000752294 us-gaap:RetainedEarningsMember 2024-06-30 0000752294 us-gaap:EmployeeStockOptionMember 2023-06-08 2023-06-09 0000752294 us-gaap:EmployeeStockOptionMember 2023-06-09 0000752294 ELST:MarketingAndSalesMember 2023-04-01 2023-06-30 0000752294 ELST:MarketingAndSalesMember 2023-01-01 2023-06-30 0000752294 us-gaap:GeneralAndAdministrativeExpenseMember 2023-04-01 2023-06-30 0000752294 us-gaap:GeneralAndAdministrativeExpenseMember 2023-01-01 2023-06-30 0000752294 us-gaap:EmployeeStockOptionMember 2024-06-30 0000752294 us-gaap:EmployeeStockOptionMember 2024-01-01 2024-06-30 0000752294 us-gaap:ProductMember 2024-04-01 2024-06-30 0000752294 us-gaap:ProductMember 2023-04-01 2023-06-30 0000752294 us-gaap:MaintenanceMember 2024-04-01 2024-06-30 0000752294 us-gaap:MaintenanceMember 2023-04-01 2023-06-30 0000752294 us-gaap:ProductMember 2024-01-01 2024-06-30 0000752294 us-gaap:ProductMember 2023-01-01 2023-06-30 0000752294 us-gaap:MaintenanceMember 2024-01-01 2024-06-30 0000752294 us-gaap:MaintenanceMember 2023-01-01 2023-06-30 0000752294 us-gaap:GeographicDistributionDomesticMember 2024-04-01 2024-06-30 0000752294 us-gaap:GeographicDistributionDomesticMember 2023-04-01 2023-06-30 0000752294 us-gaap:GeographicDistributionForeignMember 2024-04-01 2024-06-30 0000752294 us-gaap:GeographicDistributionForeignMember 2023-04-01 2023-06-30 0000752294 us-gaap:GeographicDistributionDomesticMember 2024-01-01 2024-06-30 0000752294 us-gaap:GeographicDistributionDomesticMember 2023-01-01 2023-06-30 0000752294 us-gaap:GeographicDistributionForeignMember 2024-01-01 2024-06-30 0000752294 us-gaap:GeographicDistributionForeignMember 2023-01-01 2023-06-30 0000752294 ELST:CustomerAMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2024-04-01 2024-06-30 0000752294 ELST:CustomerAMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-04-01 2023-06-30 0000752294 ELST:CustomerBMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2024-04-01 2024-06-30 0000752294 ELST:CustomerBMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-04-01 2023-06-30 0000752294 ELST:CustomerCMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-04-01 2023-06-30 0000752294 ELST:CustomerAMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2024-01-01 2024-06-30 0000752294 ELST:CustomerAMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-06-30 0000752294 ELST:CustomerBMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2024-01-01 2024-06-30 0000752294 ELST:CustomerBMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-06-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

  ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

 

OR

 

  ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

From ________________ to ________________

 

 

ELECTRONIC SYSTEMS TECHNOLOGY INC

(Exact name of registrant as specified in its charter)

 

Washington 000-27793 91-1238077
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

 

415 N. Roosevelt St. STE B1 Kennewick WA   99336
(Address of principal executive offices)   (Zip Code)

 

(509) 735-9092

(Registrant's telephone number, including area code)

 

N/A

(Former name, former address & former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(g) of the Act:

 

Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, $0.001 par value ELST OTCQB

 

Indicate by check mark whether the registrant (1) has filed all documents and reports required to be filed by Sections 13 or☐ 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings for the past 90 days. Yes x NO ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x NO ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large Accelerated Filer   ☐ Accelerated Filer  ☐

Non-Accelerated Filer ☒

 

Small Reporting Company ☒

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

As of July 23, 2024, the number of the Company's shares of Common Stock par value $0.001, outstanding was 4,946,502. 

 

 
 

 

PART I

FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.
CONDENSED BALANCE SHEETS
(Unaudited)

         
   June 30,   December 31, 
   2024   2023 
ASSETS          
Current assets          
Cash and cash equivalents  $322,634   $486,252 
Certificates of deposit   400,000    400,000 
Accounts receivable, net   76,322    52,592 
Inventories   748,344    722,457 
Prepaid expenses   20,961    19,278 
Accrued interest receivable   1,235    1,906 
Total current assets   1,569,496    1,682,485 
           
Property and equipment, net of depreciation   17,502    18,255 
           
Right to use – Lease, net of amortization   10,363    30,298 
           
   Total assets  $1,597,361   $1,731,038 
           
LIABILITIES and STOCKHOLDERS' EQUITY          
Current liabilities          
Accounts payable  $74,117   $37,355 
Accrued wages   9,527    4,188 
Operating lease liability, current portion   10,521    30,773 
Accrued vacation pay   25,631    21,243 
Other accrued liabilities   6,741    10,221 
   Total liabilities   126,537    103,780 
           
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   933,105    933,105 
Retained earnings   532,772    689,206 
Total stockholders' equity   1,470,824    1,627,258 
   Total liabilities and stockholders' equity  $1,597,361   $1,731,038 

 

 

See Notes to Condensed Financial Statements.

 

 

1 
 

  

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

                 
   Three Months Ended June 30, 2024   Three Months Ended June 30, 2023   Six Months Ended June 30, 2024   Six Months Ended June 30, 2023 
                 
SALES - NET  $333,569   $585,206   $689,630   $890,295 
COST OF SALES   (155,809)   (268,636)   (316,524)   (408,196)
GROSS PROFIT   177,760    316,570    373,106    482,099 
                     
Operating Expenses                    
     General and administrative   62,670    61,492    151,448    146,257 
     Research and development   35,080    28,021    64,027    56,684 
     Marketing and sales   156,462    173,368    325,127    321,595 
TOTAL OPERATING EXPENSE   254,212    262,881    540,602    524,536 
                     
OPERATING INCOME (LOSS)   (76,452)   53,689    (167,496)   (42,437)
                     
OTHER INCOME                    
     Interest income   5,592    5,181    11,062    9,183 
TOTAL OTHER INCOME   5,592    5,181    11,062    9,183 
                     

NET INCOME (LOSS) BEFORE

INCOME TAX

   (70,860)   58,870    (156,434)   (33,254)
     Benefit (provision) for income tax   —    —    —    — 
NET INCOME (LOSS)  $(70,860)  $58,870   $(156,434)  $(33,254)
                     
Basic and diluted earnings per share  $(0.01)  $0.01   $(0.03)  $(0.01)
                     
Basic and diluted weighted average shares used in computing income (loss) per share:   4,946,502    4,946,502    4,946,502    4,946,502 

 

 

See Notes to Condensed Financial Statements.

 

 

2 
 

  

ELECTRONIC SYSTEMS TECHNOLOGY, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited) 

           
     
   Six Months Ended 
   June 30,   June 30, 
   2024   2023 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
           
Net loss  $(156,434)  $(33,254)
           
Noncash items included in net loss:          
     Depreciation and amortization   2,057    418 
     Stock based compensation   —    693 
Changes in operating assets and liabilities:          
     Accounts receivable, net   (23,730)   (36,474)
     Inventories   (25,887)   (115,095)
     Accrued interest receivable   671    109 
     Prepaid expenses   (1,683)   22,901 
     Accounts payable   36,762    (45,207)
     Other accrued liabilities   5,930    4,956 
NET CASH USED IN OPERATING ACTIVITIES   (162,314)   (200,953)
           
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
    Purchase of fixed assets   (1,304)   (19,769)
    Certificates of deposit redeemed   700,000    751,699 
    Certificates of deposit purchased   (700,000)   (900,000)
NET CASH USED IN INVESTING ACTIVITIES   (1,304)   (168,070)
           
NET DECREASE IN CASH AND CASH EQUIVALENTS   (163,618)   (369,023)
    Cash and cash equivalents at beginning of period   486,252    751,118 
    Cash and cash equivalents at end of period  $322,634   $382,095 

 

See Notes to Condensed Financial Statements. 

 

3 
 

  

ELECTRONIC SYSTEMS TECHNOLOGY, INC.
DBA ESTEEM WIRELESS MODEMS
 
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)  

                          
                 
   Common Stock   Additional
Paid-In		   Retained     
   Shares   Amount   Capital   Earnings   Total 
                     
Balances, January 1, 2023   4,946,502   $4,947   $932,412    849,989   $1,787,348 
                          
   Net income (loss)   —    —    —    (92,124)   (92,124)
                          
Balance at March 31, 2023   4,946,502   $4,947   $932,412   $757,865   $1,695,224 
                          
  Net income (loss)   —    —    —    58,870    58,870 
                          
   Stock based compensation   —    —    693    —    693 
                          
Balance at June 30, 2023   4,946,502   $4,947   $933,105   $816,735   $1,754,787 
                          
Balances, January 1, 2024   4,946,502   $4,947   $933,105   $689,206   $1,627,258 
                          
   Net income (loss)   —    —    —    (85,574)   (85,574)
                          
Balance at March 31, 2024   4,946,502   $4,947   $933,105   $603,632   $1,541,684 
                          
   Net income (loss)   —    —    —    (70,860)   (70,860)
                          
Balance at June 30, 2024   4,946,502   $4,947   $933,105   $532,772   $1,470,824 

See Notes to Condensed Financial Statements.

 

4 
 

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

 

 

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 June 30, 2024, and its results of operations, cash flows, and changes in stockholders’ equity for the three and six months ended June 30, 2024 and 2023. The balance sheet at December 31, 2023 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, 2023.

 

The results of operations for the three and six-month periods ended June 30, 2024 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2024 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.

 

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:

 

          
   June 30,
2024		   December 31,
2023		 
Parts  $102,952   $118,472 
Work in progress   386,694    313,597 
Finished goods   258,698    290,388 
Total inventories  $748,344   $722,457 

 

 
5 
 

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

 

 

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 June 30, 2024 and 2023, the Company had 225,000 and 225,000 outstanding stock options, respectively, that could have a dilutive effect on future periods’ net income. The stock options were not included in the calculation of diluted earnings per share for either period as they were anti-dilutive.

 

NOTE 4 - STOCK OPTIONS

 

On June 9, 2023, the Board of Directors granted 45,000 options to employees. The new options have an exercise price of $0.40, a term of 5 years, and vest immediately. The fair value of the options was determined using the Black-Scholes model using the following variables: stock price of $0.24, volatility of 104.1%, expected term of 5 years with a forfeiture rate of 95%, and a discount factor of 3.92%. Share based compensation of $693 ($534 in marketing and sales and $159 in general and administrative in the condensed statement of operations) was recognized during the three and six-month periods ended June 30, 2023.

 

As of June 30, 2024, there were 225,000 options outstanding with a weighted average exercise price of $0.40 per share, a weighted average remaining life of 1.3 years and had intrinsic value of $11,250.

 

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 periods ended June 30, 2024 and 2023, the Company’s revenue from products sales was $326,469 and $575,306, respectively. Revenue from site support and engineering services was $7,100 and $9,900 respectively, over the same periods.

 

During the six-month periods ended June 30, 2024 and 2023, the Company’s revenue from products sales was $671,630 and $872,895, respectively. Revenue from site support and engineering services was $18,000 and $17,400 respectively, over the same periods.

 

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 June 30, 2024 and June 30, 2023 were $269,355 and $575,683, respectively. Sales to foreign customers for the three-month period ended June 30, 2024 and June 30, 2023 were $64,214 and $9,523, respectively.

 

Domestic sales for the six-month period ended June 30, 2024 and June 30, 2023 were $582,595 and $869,591, respectively. Sales to foreign customers for the six-month period ended June 30, 2024 and June 30, 2023 were $107,035 and $20,704, respectively.

 

For the three-month period ended June 30, 2024, sales to two customers represented more than 10% of total revenue, three customers represented more than 10% of total revenue for the same period in 2023.

 

                    
   2024 Sales   2024 %age of Total Sales   2023 Sales   2023 %age of Total Sales 
Customer A  $36,342    11%  $134,604    23%
Customer B   32,996    10%   76,993    13%
Customer C             56,861    10%

 

For the six-month period ended June 30, 2024, 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 2023.

 

   2024 Sales   2024 %age of Total Sales   2023 Sales   2023 %age of Total Sales 
Customer A  $73,534    11%  $204,694    23%
Customer B   72,717    11%   91,821    10%

 

 

 

6 
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATION

 

Management's discussion and analysis is intended to be read in conjunction with the Company's unaudited financial statements and the integral notes thereto for the three-month period ended June 30, 2024. The following statements may be forward looking in nature and actual results may differ materially.

 

A.    RESULTS OF OPERATIONS

  

REVENUES: Total revenues from sales decreased to $333,569 for the three-month period ending June 30, 2024 as compared to $585,206 in the second quarter of 2023, reflecting a decrease of 22.5%. Management believes the decrease in sales revenues is due to the decrease in customer demand. Year to date total revenues from sales decreased to $689,630 in 2024 as compared to $890,295 in 2023, reflecting a decrease of 22.5%. Management believes the decrease in sales revenues is due to customer demand slowing to higher interest rates.

 

The Company's revenues have historically fluctuated from quarter to quarter due to timing factors such as product shipments to customers, customer order placement, customer buying trends, and changes in the general economic environment. The procurement process regarding plant and project automation, or project development, which usually surrounds the decision to purchase ESTeem products, can be lengthy. This procurement process may involve bid activities unrelated to the ESTeem products, such as additional systems and subcontract work, as well as capital budget considerations on the part of the customer. Because of the complexity of this procurement process, forecasts with regard to the Company's revenues are difficult to predict.

 

A percentage breakdown of the Company’s market segments of Domestic and Foreign Export sales for the three- and six-month periods ended June 30, 2024 and 2023 are as follows:

 

   Three Months ended June 30, 2024   Three Months ended June 30, 2023   Six Months ended June 30, 2024   Six Months ended June 30, 2023 
Domestic Sales   81%   98%   84%   98%
Export Sales   19%   2%   16%   2%

 

BACKLOG:

 

As of June 30, 2024, the Company had a sales order backlog of nil. The Company’s customers generally place orders on an "as needed basis". Shipment for most of the Company’s products is generally made within 1 to 5 working days after receipt of customer orders, with the exception of ongoing, scheduled projects, and custom designed equipment.

 

COST OF SALES:

 

Cost of sales percentages for the second quarters of 2024 and 2023 were 46.7% and 45.9% of respective net sales. Cost of sales percentages for the six-month periods ended June 30, 2024 and 2023 were 45.9% and 45.8%, respectively. The cost of sales percentage increase for the six month period ended June 3, 2024 is the result of the product mix sold during the same period of 2023.

 

 

7 
 

 

 

OPERATING EXPENSES:

 

The following is a delineation of operating expenses:

 

    Three Months Ended           Six Month Ended        
    June 30,
2024		     June 30,
2023		     Increase
(Decrease)		     June 30,
2024		     June 30,
2023		     Increase
(Decrease)		  
General and administrative   $ 62,670     $ 61,492     $ 1,178     $ 151,448     $ 146,257     $ 5,191  
Research and development     35,080       28,021       7,059       64,027       56,684       7,343  
Marketing and sales     156,462       173,368       (16,906)       325,127       321,595       3,532  
Total operating expenses   $ 254,212     $ 262,881     $ (8,669)     $ 540,602     $ 524,536     $ 16,066  

 

General and administrative: For the second quarter of 2024, general and administrative expenses increased $1,178 to $62,670, due to increased wages when compared with the same quarter of 2023. For the six-month period ended June 30, 2024, general and administrative expenses increased by $5,191, to $151,448, due to increased payroll and increased services purchased. General and administrative expenses were 18.8% compared to 10.5% of sales revenue for the second quarter of 2024 and 22.0% compared to 16.4% of sales revenue for six-month period ended June 30, 2024.

 

Research and development: Research and development expenses increased $7,059 to $35,080 during the second quarter of 2024 due to increased prototype expenses when compared with the same quarter of 2023. For the six-month period, research and development expenses increased by $7,343 to $64,027, due to increased prototype expenses. Research and development expenses were 10.5% compared to 4.8% of sales revenue for the second quarter of 2024 and 9.3% compared to 6.4% of sales revenue for six-month period ended June 30, 2024.

 

Marketing and sales: During the second quarter of 2024, marketing and sales expenses decreased $16,906 to $156,462 when compared with the same period of 2023, due to decreased payroll, benefits expense, and travel. For the six-month period, marketing and sales expenses increased by $3,532 to $325,127, due to increased advertising. Marketing and sales expenses were 46.9% compared to 29.6% of sales revenue for the second quarter of 2024 and 47.1% compared to 36.1% of sales revenue for the six-month period ended June 30, 2024.

 

OTHER INCOME:

 

The Company earned $5,592 in interest income during the quarter ended June 30, 2024 and $11,062 for the six-month period. Sources of this income were money market accounts and certificates of deposit.

 

NET LOSS:

 

The Company had a net loss of $70,860 for the second quarter of 2024 compared to a net income of $58,870 for the same quarter of 2023. For the six-month period ended June 30, 2024, the Company recorded a net loss of $156,434 compared with a net loss of $33,254 for the same period of 2023. The increase in the net loss during 2024 is the result of decreased sales.

 

 

8 
 

  

B.       FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

 

The Corporation's current asset to current liabilities ratio at June 30, 2024 was 12.4 compared to 16.2 at December 31, 2023. The decrease in current ratio is due to the increase of accounts receivable, inventory, and accounts payable at June 30, 2024 as compared to December 31, 2023.

 

At June 30, 2024, the Company had cash and cash equivalents of $722,634 as compared to cash and cash equivalent of $886,252 at December 31, 2023.

 

Cash used from operating activities decreased by $38,639 for the six-month period ended June 30, 2024 when compared to the same period in 2023. Although the net loss increased when compared to last year there was an improvement in cash flow.. A decreased change to inventory of $89,208 and an increased change to accounts payable of $81,969, had a positive impact to cash flows.

 

In management's opinion, the Company's cash and cash equivalents and other working capital at June 30, 2024 is sufficient to satisfy requirements for operations, capital expenditures, and other expenditures as may arise during 2024 and into the first half of 2025.

 

FORWARD LOOKING STATEMENTS: The above discussion may contain forward looking statements that involve a number of risks and uncertainties. In addition to the factors discussed above, among other factors that could cause actual results to differ materially are the following: competitive factors such as rival wireless architectures and price pressures; availability of third party component products at reasonable prices; inventory risks due to shifts in market demand and/or price erosion of purchased components; change in product mix, and risk factors that are listed in the Company's reports and registration statements filed with the Securities and Exchange Commission.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to its stockholders.

 

Item 1. Controls and Procedures

 

An evaluation has been performed under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Accounting Officer, of the effectiveness of the design and the operation of our "disclosure controls and procedures" (as such term is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2024. Based on that evaluation, our principal executive officer and our principal financial officer concluded that the design and operation of our disclosure controls and procedures were effective as of June 30, 2024.

 

The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. However, management believes that our system of disclosure controls and procedures are designed to provide a reasonable level of assurance that the objectives of the system will be met.

  

Changes in Internal Control Over Financial Reporting

 

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

9 
 

  

PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None.

 

Item 2. Unregistered Sales of Securities

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable

 

Item 5. Other Information

 

During the three months ended June 30, 2024, no director or officer of the Company adopted, modified, or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 arrangement” as defined in Item 408(c) of Regulation S-K.

 

 

10 
 

 

 

Item 6. Exhibits

 

EXHIBIT  NUMBER DESCRIPTION
31.1 Section 302 Certification, CEO
31.2 Section 302 Certification, CFO
32.1 Section 906 Certification, CEO
32.2 Section 906 Certification, CFO
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

 

 

11 
 

 

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

 

 

 

  By: /s/ Daniel M. Tolley 
Date:  July 23, 2024 Name:  Daniel M. Tolley
  Title:  President
(Principal Executive Officer)

 

 

 

  By: /s/ Michael W. Eller 
Date:  July 23, 2024 Name:  Michael W. Eller
  Title:  Vice President Administration
(Principal Accounting Officer)

 

 

 

12 
 

 

 

 

 

 

 

Exhibit 31.1

CERTIFICATION

 

I, Daniel M. Tolley, certify that:

  1. I have reviewed this quarterly report on Form 10-Q of Electronic Systems Technology, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

  4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

  5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

/s/ Daniel M. Tolley

Daniel M. Tolley

President

(Chief Executive Officer)

Date: July 23, 2024

 

A signed original of this written statement has been provided to the registrant and will be retained by the registrant to be furnished to the Securities and Exchange Commission or its staff upon request.

 

 

Exhibit 31.2

CERTIFICATION

 

I, Michael Eller, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Electronic Systems Technology, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

  4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

  5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

/s/ Michael Eller

Michael Eller

CFO

Principal Accounting Officer

Date: July 23, 2024

 

A signed original of this written statement has been provided to the registrant and will be retained by the registrant to be furnished to the Securities and Exchange Commission or its staff upon request.

 

Exhibit 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. 1350)

In connection with the quarterly report of Electronic Systems Technology Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel M. Tolley, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Daniel M. Tolley

Daniel M. Tolley

President

(Chief Executive Officer)

Date: July 23, 2024

This certification is being furnished to the Securities and Exchange Commission as an exhibit to the Quarterly Report and shall not be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended; and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

A signed original of this written statement has been provided to the Registrant and will be retained by the Registrant to be furnished to the Securities and Exchange Commission or its staff upon request.

 

 

Exhibit 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. 1350)

In connection with the quarterly report of Electronic Systems Technology Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2024,1 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael Eller, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Eller

Michael Eller

Vice President Administration/CFO

(Principal Accounting Officer)

Date: July 23, 2024

This certification is being furnished to the Securities and Exchange Commission as an exhibit to the Quarterly Report and shall not be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.; and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

A signed original of this written statement has been provided to the Registrant and will be retained by the Registrant to be furnished to the Securities and Exchange Commission or its staff upon request.

 

 

v3.24.2
Cover - shares
 6 Months Ended
Jun. 30, 2024
Jul. 23, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
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, $0.001 par value  
Trading Symbol ELST  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   4,946,502
v3.24.2
CONDENSED BALANCE SHEETS (Unaudited) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current assets    
Cash and cash equivalents $ 322,634 $ 486,252
Certificates of deposit 400,000 400,000
Accounts receivable, net 76,322 52,592
Inventories 748,344 722,457
Prepaid expenses 20,961 19,278
Accrued interest receivable 1,235 1,906
Total current assets 1,569,496 1,682,485
Property and equipment, net of depreciation 17,502 18,255
Right to use – Lease, net of amortization 10,363 30,298
   Total assets 1,597,361 1,731,038
Current liabilities    
Accounts payable 74,117 37,355
Accrued wages 9,527 4,188
Operating lease liability, current portion 10,521 30,773
Accrued vacation pay 25,631 21,243
Other accrued liabilities 6,741 10,221
   Total liabilities 126,537 103,780
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 933,105 933,105
Retained earnings 532,772 689,206
Total stockholders' equity 1,470,824 1,627,258
   Total liabilities and stockholders' equity $ 1,597,361 $ 1,731,038
v3.24.2
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Common stock, par value $ 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
v3.24.2
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
SALES - NET $ 333,569 $ 585,206 $ 689,630 $ 890,295
COST OF SALES (155,809) (268,636) (316,524) (408,196)
GROSS PROFIT 177,760 316,570 373,106 482,099
Operating Expenses        
     General and administrative 62,670 61,492 151,448 146,257
     Research and development 35,080 28,021 64,027 56,684
     Marketing and sales 156,462 173,368 325,127 321,595
TOTAL OPERATING EXPENSE 254,212 262,881 540,602 524,536
OPERATING INCOME (LOSS) (76,452) 53,689 (167,496) (42,437)
OTHER INCOME        
     Interest income 5,592 5,181 11,062 9,183
TOTAL OTHER INCOME 5,592 5,181 11,062 9,183
NET INCOME (LOSS) BEFORE INCOME TAX (70,860) 58,870 (156,434) (33,254)
     Benefit (provision) for income tax 0 0 0 0
NET INCOME (LOSS) $ (70,860) $ 58,870 $ (156,434) $ (33,254)
Basic earnings per share $ (0.01) $ 0.01 $ (0.03) $ (0.01)
Diluted earnings per share $ (0.01) $ 0.01 $ (0.03) $ (0.01)
Basic weighted average shares used in computing income (loss) per share: 4,946,502 4,946,502 4,946,502 4,946,502
Diluted weighted average shares used in computing income (loss) per share: 4,946,502 4,946,502 4,946,502 4,946,502
v3.24.2
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (156,434) $ (33,254)
Noncash items included in net loss:    
     Depreciation and amortization 2,057 418
     Stock based compensation 0 693
Changes in operating assets and liabilities:    
     Accounts receivable, net (23,730) (36,474)
     Inventories (25,887) (115,095)
     Accrued interest receivable 671 109
     Prepaid expenses (1,683) 22,901
     Accounts payable 36,762 (45,207)
     Other accrued liabilities 5,930 4,956
NET CASH USED IN OPERATING ACTIVITIES (162,314) (200,953)
CASH FLOWS FROM INVESTING ACTIVITIES:    
    Purchase of fixed assets (1,304) (19,769)
    Certificates of deposit redeemed 700,000 751,699
    Certificates of deposit purchased (700,000) (900,000)
NET CASH USED IN INVESTING ACTIVITIES (1,304) (168,070)
NET DECREASE IN CASH AND CASH EQUIVALENTS (163,618) (369,023)
    Cash and cash equivalents at beginning of period 486,252 751,118
    Cash and cash equivalents at end of period $ 322,634 $ 382,095
v3.24.2
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, 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      
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)       (33,254)
Ending balance, value at Jun. 30, 2023 $ 4,947 933,105 816,735 1,754,787
Ending balance, shares at Jun. 30, 2023 4,946,502      
Beginning balance, value at Mar. 31, 2023 $ 4,947 932,412 757,865 1,695,224
Beginning balance, shares at Mar. 31, 2023 4,946,502      
   Net income (loss) 58,870 58,870
   Stock based compensation 693 693
Ending balance, value at Jun. 30, 2023 $ 4,947 933,105 816,735 1,754,787
Ending balance, shares at Jun. 30, 2023 4,946,502      
Beginning balance, value at Dec. 31, 2023 $ 4,947 933,105 689,206 1,627,258
Beginning balance, shares at Dec. 31, 2023 4,946,502      
   Net income (loss) (85,574) (85,574)
Ending balance, value at Mar. 31, 2024 $ 4,947 933,105 603,632 1,541,684
Ending balance, shares at Mar. 31, 2024 4,946,502      
Beginning balance, value at Dec. 31, 2023 $ 4,947 933,105 689,206 1,627,258
Beginning balance, shares at Dec. 31, 2023 4,946,502      
   Net income (loss)       (156,434)
Ending balance, value at Jun. 30, 2024 $ 4,947 933,105 532,772 1,470,824
Ending balance, shares at Jun. 30, 2024 4,946,502      
Beginning balance, value at Mar. 31, 2024 $ 4,947 933,105 603,632 1,541,684
Beginning balance, shares at Mar. 31, 2024 4,946,502      
   Net income (loss) (70,860) (70,860)
Ending balance, value at Jun. 30, 2024 $ 4,947 $ 933,105 $ 532,772 $ 1,470,824
Ending balance, shares at Jun. 30, 2024 4,946,502      
v3.24.2
Pay vs Performance Disclosure - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure [Table]            
Net Income (Loss) $ (70,860) $ (85,574) $ 58,870 $ (92,124) $ (156,434) $ (33,254)
v3.24.2
Insider Trading Arrangements
 3 Months Ended
Jun. 30, 2024
Insider Trading Arrangements [Line Items]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.2
BASIS OF PRESENTATION
 6 Months Ended
Jun. 30, 2024
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 June 30, 2024, and its results of operations, cash flows, and changes in stockholders’ equity for the three and six months ended June 30, 2024 and 2023. The balance sheet at December 31, 2023 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, 2023.

 

The results of operations for the three and six-month periods ended June 30, 2024 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2024 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.

 
v3.24.2
INVENTORIES
 6 Months Ended
Jun. 30, 2024
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:

 

          
   June 30,
2024		   December 31,
2023		 
Parts  $102,952   $118,472 
Work in progress   386,694    313,597 
Finished goods   258,698    290,388 
Total inventories  $748,344   $722,457 

 
v3.24.2
EARNINGS (LOSS) PER SHARE
 6 Months Ended
Jun. 30, 2024
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 June 30, 2024 and 2023, the Company had 225,000 and 225,000 outstanding stock options, respectively, that could have a dilutive effect on future periods’ net income. The stock options were not included in the calculation of diluted earnings per share for either period as they were anti-dilutive.

 
v3.24.2
STOCK OPTIONS
 6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK OPTIONS

NOTE 4 - STOCK OPTIONS

 

On June 9, 2023, the Board of Directors granted 45,000 options to employees. The new options have an exercise price of $0.40, a term of 5 years, and vest immediately. The fair value of the options was determined using the Black-Scholes model using the following variables: stock price of $0.24, volatility of 104.1%, expected term of 5 years with a forfeiture rate of 95%, and a discount factor of 3.92%. Share based compensation of $693 ($534 in marketing and sales and $159 in general and administrative in the condensed statement of operations) was recognized during the three and six-month periods ended June 30, 2023.

 

As of June 30, 2024, there were 225,000 options outstanding with a weighted average exercise price of $0.40 per share, a weighted average remaining life of 1.3 years and had intrinsic value of $11,250.

 
v3.24.2
REVENUE
 6 Months Ended
Jun. 30, 2024
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 periods ended June 30, 2024 and 2023, the Company’s revenue from products sales was $326,469 and $575,306, respectively. Revenue from site support and engineering services was $7,100 and $9,900 respectively, over the same periods.

 

During the six-month periods ended June 30, 2024 and 2023, the Company’s revenue from products sales was $671,630 and $872,895, respectively. Revenue from site support and engineering services was $18,000 and $17,400 respectively, over the same periods.

 

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 June 30, 2024 and June 30, 2023 were $269,355 and $575,683, respectively. Sales to foreign customers for the three-month period ended June 30, 2024 and June 30, 2023 were $64,214 and $9,523, respectively.

 

Domestic sales for the six-month period ended June 30, 2024 and June 30, 2023 were $582,595 and $869,591, respectively. Sales to foreign customers for the six-month period ended June 30, 2024 and June 30, 2023 were $107,035 and $20,704, respectively.

 

For the three-month period ended June 30, 2024, sales to two customers represented more than 10% of total revenue, three customers represented more than 10% of total revenue for the same period in 2023.

 

                    
   2024 Sales   2024 %age of Total Sales   2023 Sales   2023 %age of Total Sales 
Customer A  $36,342    11%  $134,604    23%
Customer B   32,996    10%   76,993    13%
Customer C             56,861    10%

 

For the six-month period ended June 30, 2024, 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 2023.

 

   2024 Sales   2024 %age of Total Sales   2023 Sales   2023 %age of Total Sales 
Customer A  $73,534    11%  $204,694    23%
Customer B   72,717    11%   91,821    10%

 
v3.24.2
INVENTORIES (Tables)
 6 Months Ended
Jun. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of inventories
          
   June 30,
2024		   December 31,
2023		 
Parts  $102,952   $118,472 
Work in progress   386,694    313,597 
Finished goods   258,698    290,388 
Total inventories  $748,344   $722,457 
v3.24.2
REVENUE (Tables)
 6 Months Ended
Jun. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of revenue
                    
   2024 Sales   2024 %age of Total Sales   2023 Sales   2023 %age of Total Sales 
Customer A  $36,342    11%  $134,604    23%
Customer B   32,996    10%   76,993    13%
Customer C             56,861    10%

 

For the six-month period ended June 30, 2024, 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 2023.

 

   2024 Sales   2024 %age of Total Sales   2023 Sales   2023 %age of Total Sales 
Customer A  $73,534    11%  $204,694    23%
Customer B   72,717    11%   91,821    10%
v3.24.2
INVENTORIES (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Parts $ 102,952 $ 118,472
Work in progress 386,694 313,597
Finished goods 258,698 290,388
Total inventories $ 748,344 $ 722,457
v3.24.2
EARNINGS (LOSS) PER SHARE (Details Narrative) - shares
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Earnings Per Share [Abstract]    
Outstanding stock options 225,000 225,000
v3.24.2
STOCK OPTIONS (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 09, 2023
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Share based compensation   $ 693 $ 0 $ 693
Marketing And Sales [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Share based compensation   534   534
General and Administrative Expense [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Share based compensation   $ 159   $ 159
Share-Based Payment Arrangement, Option [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Number of shares, granted 45,000      
Weighted average exercise price $ 0.40   $ 0.40  
Vesting term 5 years      
Stock price $ 0.24      
Volatility rate 104.10%      
Expected term 5 years      
Forfeiture rate 95.00%      
Discount factor 3.92%      
Options outstanding     225,000  
Weighted average remaining life     1 year 3 months 18 days  
Intrinsic value     $ 11,250  
v3.24.2
REVENUE (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Disaggregation of Revenue [Line Items]        
Sales $ 333,569 $ 585,206 $ 689,630 $ 890,295
Customer A [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]        
Disaggregation of Revenue [Line Items]        
Sales $ 36,342 $ 134,604 $ 73,534 $ 204,694
% age of total sales 11.00% 23.00% 11.00% 23.00%
Customer B [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]        
Disaggregation of Revenue [Line Items]        
Sales $ 32,996 $ 76,993 $ 72,717 $ 91,821
% age of total sales 10.00% 13.00% 11.00% 10.00%
Customer C [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]        
Disaggregation of Revenue [Line Items]        
Sales   $ 56,861    
% age of total sales   10.00%    
v3.24.2
REVENUE (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Disaggregation of Revenue [Line Items]        
Revenue $ 333,569 $ 585,206 $ 689,630 $ 890,295
Geographic Distribution, Domestic [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 269,355 575,683 582,595 869,591
Geographic Distribution, Foreign [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 64,214 9,523 107,035 20,704
Product [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 326,469 575,306 671,630 872,895
Maintenance [Member]        
Disaggregation of Revenue [Line Items]        
Revenue $ 7,100 $ 9,900 $ 18,000 $ 17,400
Electronic Systems Techn... (PK) (USOTC:ELST)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024 Haga Click aquí para más Gráficas Electronic Systems Techn... (PK).
Electronic Systems Techn... (PK) (USOTC:ELST)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024 Haga Click aquí para más Gráficas Electronic Systems Techn... (PK).