10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2017

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. Quay St. Bldg 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)

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).   YESxNO¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  

Large Accelerated Filer   ¨	Accelerated Filer  ¨
Non-Accelerated Filer    ¨ (Do not check if a smaller reporting company)	Small Reporting Company    x 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¨Nox

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of September 30, 2017, the number of the Company's shares of common stock par value $0.001, outstanding was 4,986,048.

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ELECTRONIC SYSTEMS TECHNOLOGY, INC.

FORM 10-Q

September 30, 2017

Index

2

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

ELECTRONIC SYSTEMS TECHNOLOGY, INC.
BALANCE SHEETS
	September 30, 2017 (Unaudited)	December, 31, 2016
ASSETS
Current assets
Cash and cash equivalents	$           257,112	$       502,971
Certificates of deposit investments	1,000,000	1,000,000
Accounts receivable	94,506	71,202
Inventories	813,970	703,147
Accrued interest receivable	5,784	6,903
Prepaid expenses	20,322	8,405
Total current assets	2,191,694	2,292,628
Property and equipment, net	36,428	51,383
Deferred income tax asset, net	244,092	244,092
Total assets	$        2,472,214	$      2,588,103
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$             54,709	$          15,114
Accrued liabilities	27,005	22,693
Refundable deposits	7,247	4,527
Total current liabilities	88,961	42,334
Total liabilities	88,961	42,334
COMMITMENTS (NOTE 6)
Stockholders’ equity
Common stock, $0.001 par value 50,000,000 shares authorized 4,986,048 and 5,060,903 shares issued and outstanding, respectively	4,986	5,061
Additional paid-in capital	944,160	972,609
Retained earnings	1,434,107	1,568,099
Total stockholders’ equity	2,383,253	2,545,769
Total liabilities and stockholders’ equity	$        2,472,214	$    2,588,103

(See "Notes to Financial Statements")

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ELECTRONIC SYSTEMS TECHNOLOGY, INC. STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended September 30, 2017	Three Months Ended September 30, 2016	Nine Months Ended September 30, 2017	Nine Months Ended September 30, 2016
SALES, NET	$         312,042	$         302,252	$        1,038,932	$       1,159,846
SITE SUPPORT	10,720	19,216	43,229	90,392
COST OF SALES	(133,721)	(126,374)	(481,931)	(517,974)
GROSS PROFIT	189,041	195,094	600,230	732,264
Operating Expenses
General and administrative	59,367	67,792	212,802	233,748
Research and development	55,511	59,624	191,836	205,233
Marketing and sales	114,902	113,221	338,080	357,314
TOTAL OPERATING EXPENSE	229,780	240,637	742,718	796,295
OPERATING INCOME (LOSS)	(40,739)	(45,543)	(142,488)	(64,031)
OTHER INCOME
Interest income	2,958	3,046	8,496	8,917
TOTAL OTHER INCOME	2,958	3,046	8,496	8,917
NET INCOME (LOSS) BEFORE    INCOME TAX	(37,781)	(42,497)	(133,992)	(55,114)
Benefit (provision) for income tax (Note 9)	-	-	-	-
NET INCOME (LOSS)	$       (37,781)	$       (42,497)	$        (133,992)	$        (55,114)
Basic and diluted earnings per share	$           (0.01)	$           (0.01)	($0.03)	$           (0.01)
Weighted average shares used in computing income (loss) per share:
Basic and diluted	5,019,376	5,081,108	5,032,788	5,097,059

(See "Notes to Financial Statements")

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ELECTRONIC SYSTEMS TECHNOLOGY, INC. STATEMENTS OF CASH FLOWS (Unaudited)
	Nine Months Ended September 30, 2017	Nine Months Ended September 30, 2016
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
Net loss	$           (133,992)	$            (55,114)
Non-cash items included in net loss:
Depreciation	14,954	19,718
Share based compensation	-	1,841
Changes in operating assets and liabilities:
Accounts receivable	(23,304)	(36,014)
Inventories	(110,823)	(131,528)
Accrued interest receivable	1,119	923
Prepaid expenses	(11,916)	(11,718)
Accounts payable	39,595	29,463
Accrued liabilities	4,313	10,211
Refundable deposits	2,719	-
NET CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES	(217,335)	(172,218)
CASH FLOWS PROVIDED (USED) IN INVESTING ACTIVITIES:
Certificates of deposit redeemed	-	202,625
NET CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES	-	202,625
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repurchase of shares of common stock	(28,524)	(29,472)
NET CASH USED IN FINANCING ACTIVITIES	(28,524)	(29,472)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(245,859)	935
Cash and cash equivalents at beginning of period	502,971	618,060
Cash and cash equivalents at end of period	$           257,112	$           618,995

(See "Notes to Financial Statements")

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ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The financial statements of Electronic Systems Technology, Inc. (the "Company"), presented in this Form 10Q are unaudited and reflect, in the opinion of Management, a fair presentation of operations for the three and nine month periods ended September 30, 2017 and September 30, 2016.  All adjustments of a normal recurring nature and necessary for a fair presentation of the results for the periods covered have been made. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Form 10K for the year ended December 31, 2016 as filed with Securities and Exchange Commission.

The results of operations for the three and nine months ended September 30, 2017 and September 30, 2016, are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period.

New Accounting Pronouncements

In July of 2015 the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-11 “Simplifying the Measurement of Inventory” an update to Inventory Topic 330. The ASU simplifies the concept of lower of cost or market to the lower of cost and net realizable value and more closely align the measurement of inventory in Generally Accepted Accounting Principles (“GAAP”) with the measurement of inventory in International Financial Reporting Standards (“IFRS”). This update was adopted and did not materially impact the financial statements.

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations, cash flows or financial position of prior period amounts.

NOTE 2 - INVENTORIES

Inventories are stated at lower of cost or net realizable value with cost determined using the FIFO (first in, first out) method.  Inventories consist of the following:

	September 30,   2017	December 31, 2016
Parts	$ 147,379	$ 185,911
Work in progress	240,557	216,859
Finished goods	426,034	300,377
	$ 813,970	$ 703,147

NOTE 3 - INCOME (LOSS) PER SHARE

Basic income (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 income (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, 2017, the Company had 150,000 outstanding stock options that could have a dilutive effect on future periods.  However, at September 30, 2017 there was no dilutive effect of stock options on earnings per share or weighted average shares outstanding.  

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ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 - STOCK OPTIONS

As of September 30, 2017, the Company had outstanding stock options, which have been granted periodically to individual employees and directors with no less than three years of continuous tenure with the Company.  The Board of Directors has not awarded stock options during the nine months ended September 30, 2017. The Board of Directors may consider issuing stock options later in 2017. Shareholders approved the 2015 Stock Incentive Plan on June 3, 2016 for 250,000 stock options. 150,000 of the approved amount were granted to certain management employees as part of the 2015 Stock Incentive Plan. The options were dated effective August 7, 2015 and have a five year exercise period. The company recognized an expense of $1,841 for the quarter ending September 30, 2016 in which the options were approved by the Shareholders and were fully vested at that time.

The fair value of each option award is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2015 and approved by the Shareholders in 2016.

	2015
Dividend yield	0.00%
Expected volatility	68%
Risk-free interest rate	1.08%
Expected term (in years)	5
Estimated Fair Value per Option Granted	$0.23

The Company uses historical data to estimate option exercise rates.  The option exercise rate for option grants in 2005 through 2016 was 5.2%.  

A summary of option activity during the nine months ended September 30, 2017 is as follows:

	Number Outstanding	Weighted-Average Exercise Price Per Share	Weighted-Average Remaining Life (Years)	Approximate Aggregate Intrinsic Value
Outstanding and Exercisable at December 31, 2016	220,000	$0.40
Granted (Approved)	-0-
Expired	(70,000)	0.41
Outstanding and Exercisable at September 30, 2017	150,000	$0.40	2.9	$28,500

NOTE 5 - RELATED PARTY TRANSACTIONS

During the quarter ended September 30, 2017, the Company accrued total directors’ fees of $1,200, or $300 per director for board meetings attended. For the nine-month period ending September 30, 2017, the Company paid or accrued a total of $3,600 for directors’ fees.

NOTE 6 - COMMITMENTS

The Company leases its facilities from a port authority for $5,445 per month for three years, expiring in September 2020, with annual increases based upon the Consumer Price Index.

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ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 7 - SEGMENT REPORTING

Segment information is prepared on the same basis that the Company's management reviews financial information for operational decision-making purposes.    

During the quarter ended September 30, 2017, Domestic customers represented approximately 88% of total net revenues. Domestic sales revenues increased to $283,239 for the quarter ended September 30, 2017 compared to $275,709 for the quarter ended September 30, 2016. Year to date domestic sales revenues decreased to $893,277 as of September 30, 2017 compared to $1,020,831 for the same period of 2016.  Foreign customers represented approximately 12% of total net revenues.  Foreign sales revenues decreased to $39,523 for the quarter ended September 30, 2017 compared to $45,759 for the quarter ended September 30, 2016. Year to date foreign sales revenues decreased to $188,884 as of September 30, 2017 compared to $229,407 for the same period of 2016.  During the quarter ended September 30, 2017, sales to one customer comprised more than 10% of the Company’s sales revenues.  Revenues from foreign countries during the third quarter of 2017 consist primarily of revenues from product sales to Mexico, Peru, India.

NOTE 8 – Stock Repurchase

On January 13, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to $100,000 of the Company’s common stock at the price of $0.38 per share. On March 2, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to an additional $150,000 of the Company’s common stock at the price of $0.38 per share. As of September 30, 2017, $184,405 remains of $250,000 approved by the board. 97,764 shares were repurchased for $37,191 in 2016, bringing the total number of shares repurchased to 172,619 through September 30, 2017. The Company’s share repurchase program does not obligate it to acquire any specific number of shares. The following table shows the Company’s activity and related information for the nine-month period ending September 30, 2017.

	Purchase Period End Date	Number of Shares	Average Repurchase Price Per Share	Amount (1)
January 2017	January 31, 2017	1,000	$0.38	$      390
March 2017	March 31, 2017	7,725	$0.38	$   2,962
April 2017	April 30, 2017	45,601	$0.38	$ 17,343
July 2017	July 31, 2017	8,500	$0.38	$   3,237
August 2017	August 31, 2017	12,029	$0.38	$   4,592
Total		74,855	$0.38	$ 28,524

⁽¹⁾  Amount includes commissions paid of $79.

The trading price of the Company’s shares as of September 30, 2017, was $0.59.

NOTE 9 – Income Taxes

No Income Tax has been recognized due to the net operating loss. The current year’s net operating loss tax impact has been reserved, as the estimated effective tax rate for 2017 will be zero.

The Deferred Tax asset that is recognized on the Balance Sheets consists primarily of prior years’ net operating loss and R&D credits. We believe that the Company will be generate net operating income and utilize the asset in future periods.

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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 quarter ended September 30, 2016.  The following statements may be forward looking in nature and actual results may differ materially.

A.  Results of Operations

REVENUES:

Total revenues from the sale of the Company’s ESTeem wireless modem products and services increased to $322,763 for the third quarter of 2017, compared to $321,468 for the third quarter of 2016.  Gross revenues, including interest income, increased to $325,721 for the quarter ended September 30, 2017, from $324,514 for the same quarter of 2016.  Year to date sales decreased to $1,082,161 as of September 30, 2017, as compared to $1,250,238 as of September 30, 2016. Year to date gross revenues, including interest income, decreased to $1,090,657 as of September 30, 2017, compared to $1,259,155 as of September 30, 2016.  Management believes the increase in quarterly sales revenues is due to increased demand for the new products introduced at the beginning of 2017.

The Company's revenues have historically fluctuated from quarter to quarter due to timing factors such as customer order placement and product shipments to customers, as well as 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 in regard to the Company's revenues become difficult to predict.

A percentage breakdown of EST's Domestic and Export Sales, for the third quarter of 2017 and 2016 are as follows:

	For the third quarter
	2017	2016
Domestic Sales	88%	86%
Export Sales	12%	14%

Domestic Revenues

During the quarter ended September 30, 2017, the Company’s domestic operations represented 88% of the Company’s total sales revenues.  Domestic operations sell ESTeem modem products, accessories and service primarily through domestic resellers, as well as directly to end users of the Company’s products.  Domestic sales revenues increased to $283,239 for the quarter ended September 30, 2017 compared to $275,709 for the quarter ended September 30, 2016.  Management believes the increase in sales revenues is due to increased domestic sales for water/waste water and mining industrial automation projects during the three-month period ending September 30, 2017.During the quarter ended September 30, 2017, one customer, comprised more than 10% of the Company’s sales revenues.  

For the nine-month period ended September 30, 2017, the Company’s domestic operations represented 83% of the Company’s total sales revenues.  Year to date domestic sales revenues decreased to $893,277 as of September 30, 2017 compared to $1,020,831 for the same period of 2016. Management believes the decrease in year to date sales revenues is due to decreased engineering services and related product sales during the first half of 2017.  

Foreign Revenues

The Company’s foreign operating segment represented 12% of the Company’s total net revenues for the quarter ended September 30, 2017.  The foreign operating segment is based wholly in the United States and maintains no assets outside of the United States.  The foreign operating segment sells ESTeem modem products, accessories and service primarily through foreign resellers, as well as directly to end customers of the Company’s products located outside the United States.  

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During the quarter ended September 30, 2017, the Company had $39,522 in foreign export sales, amounting to 12% of total net revenues of the Company for the quarter, compared with foreign export sales of $45,759 for the same quarter of 2016.  Management believes the decrease in foreign sales revenues was due to decreased automation needs in Oil & Gas and Mining industries.  Revenues from foreign countries during the third quarter of 2017 consist primarily of revenues from product sales to Mexico, Peru and India.  No foreign sales to a single customer comprised 10% or more of the Company's product sales for the quarter ended September 30, 2017.  Products purchased by foreign customers were used primarily in industrial automation applications.  We believe the majority of foreign export sales are the results of the Company’s Latin American sales staff, EST foreign reseller activity, and the Company’s internet website presence.

For the nine-month period ended September 30, 2017, the Company had $188,884 in foreign export sales, amounting to 17% of total sales revenues of the Company for the period, compared with foreign export sales of $229,407 for the same period of 2016. Management believes the decrease in foreign sales revenues is due end of life product purchases in 2016 to Croatia and slow acceptance of product released in 2017 in Latin America.

BACKLOG:

The Corporation had a sales order backlog of approximately $22,707 as of September 30, 2017.  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 15 working days after receipt of customer orders, with the exception of ongoing, scheduled projects, and custom designed equipment.

COST OF SALES:

Cost of sales percentage for the third quarter of 2017 and 2016 was 40% and 36%, respectively. The cost of sales increase for the third quarter of 2017 is the result of the product mix for items sold during the period.

OPERATING EXPENSES:

Operating expenses for the third quarter of 2017 decreased $10,857 from the third quarter of 2016.  The following is an outline of operating expenses:

For the quarter ended:	September 30, 2017	September 30, 2016	Increase (Decrease)
General and Administrative	$             59,367	$             67,792	($8,425)
Research/Development	55,511	59,624	(4,113)
Marketing and Sales	114,902	113,221	1,681
Total Operating Expenses	$           229,780	$           240,637	($10,857)

GENERAL AND ADMINISTRATIVE:

During the third quarter of 2017, general and administrative expenses decreased $8,425 to $59,367 from the same quarter of 2016, due to decreased professional services and bank fees.

RESEARCH AND DEVELOPMENT:

Research and development expenses decreased $4,113 to $55,511 during the third quarter of 2017 when compared with the same period in 2016 due to fees paid for type acceptance and prototype builds of new product.

MARKETING AND SALES:

During the third quarter of 2017, marketing and sales expenses increased $1,681 to $114,092 from the same period in 2016, due to increased services purchased.

INTEREST AND DIVIDEND INCOME:

The Corporation earned $2,958 in interest and dividend income during the quarter ended September 30, 2017.  Sources of this income were money market accounts and certificates of deposit.

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NET INCOME (LOSS):

The Company had a net loss of $37,781 for the third quarter of 2017, compared to a net loss of $42,497 for the same quarter of 2016.  For the nine-month period ended September 30, 2017, the Company recorded a net loss of $133,992, compared with a net loss of $55,114 for the same period of 2016. The decrease in the Company’s net loss is the result of increased sales revenues, decreased gross margins and reduced operating expenses during the third quarter of 2017.

B.  Financial Condition, Liquidity and Capital Resources

The Corporation's current asset to current liabilities ratio at September 30, 2017 was 24.6:1 compared to 54:1 at December 31, 2016. At September 30, 2017, the Company had cash and cash equivalents of $257,112; compared to cash and cash equivalent holdings of $502,971 at December 31, 2016.  The Company had certificates of deposit investments in the amount of $1,000,000 at September 30, 2017 and $1,000,000 at December 31, 2016.

Accounts receivable increased to $94,506 as of September 30, 2017 from December 31, 2016 levels of $71,202, due to sales revenue timing differences between the third quarter of 2017 and year-end 2016.  Inventories increased to $813,970 as of September 30, 2017, from December 31, 2016 levels of $703,147, due primarily to an increase of finished goods.  The Company's fixed assets, net of depreciation, decreased to $36,428 as of September 30, 2017, from December 31, 2016 levels of $51,383.

As of September 30, 2017, the Company’s accounts payable balance was $54,709 as compared with $15,114at December 31, 2016, and reflects amounts owed for inventory items, contracted services, and state tax liabilities.  Accrued liabilities and refundable deposits as of September 30, 2017 were $34,252 compared with $27,220at December 31, 2016, and reflect items such as accrued vacation benefits and payroll tax liabilities        

In Management's opinion, the Company's cash and cash equivalent reserves, and working capital at September 30, 2017 is sufficient to satisfy requirements for operations, capital expenditures, and other expenditures as may arise during the next 12 months.

The Company did not declare or issue any cash dividends during 2016 or 2017.

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.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable

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Item 4.  Evaluation of Disclosure Controls and Procedures.

Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company's management, including the President and Principal Executive Officer ("PEO") and Principal Financial Officer ("PFO"), of the effectiveness of the design and operations of the Company's disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation, the PEO and the PFO have concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures. 

Management of the company believes that these material weaknesses are due to the small size of the company's accounting staff. The small size of the company's accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

Changes in internal control over financial reporting.

There have been no changes during the quarter ended September 30, 2017 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1 Legal Proceedings

The Company is not involved in any material current of pending legal proceedings

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3 Defaults Upon Senior Securities

None

Item 4 Mine Safety Disclosure

Not Applicable

Item 5 Other Information

None

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

13

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.
Date:   October 21, 2017	/s/ Michael W. Eller
	Name:  Michael Eller
	Title: Director/President (Chief Executive Officer)
Date:   October 21, 2017	/s/ Michael W. Eller
	Name:  Michael Eller
	Title: Director/President (Principal Accounting Officer)

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EX-31

Exhibit 31.1

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

President

(Chief Executive Officer)

Date: October 31, 2017

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.

EX-31

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

President

Principal Accounting Officer

Date: October 31, 2017

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.

EX-32

Exhibit 32.1 – CEO Certification

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 September 30, 2017 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

President

(Chief Executive Officer)

Date: October 31, 2017

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.

EX-32

Exhibit 32.2 – CFO Certification

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 September 30, 2017 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

President

(Principal Accounting Officer)

Date: October 31, 2017

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.

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2017 shares
Document and Entity Information
Entity Registrant Name	Electronic Systems Technology Inc
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Entity Central Index Key	0000752294
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	4,986,048
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Trading Symbol	elst

XML

ELECTRONIC SYSTEMS TECHNOLOGY, INC. BALANCE SHEETS (Interim period unaudited) - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents		$ 257,112	$ 502,971
Certificates of deposit investments		1,000,000	1,000,000
Accounts receivable		94,506	71,202
Inventories		813,970	703,147
Accrued interest receivable		5,784	6,903
Prepaid expenses		20,322	8,405
Total current assets		2,191,694	2,292,628
Property and equipment, net		36,428	51,383
Deferred income tax asset, net		244,092	244,092
Total assets		2,472,214	2,588,103
Current liabilities
Accounts payable		54,709	15,114
Accrued liabilities		27,005	22,693
Refundable deposits		7,247	4,527
Total current liabilities		88,961	42,334
Total liabilities		88,961	42,334
COMMITMENTS	[1]	0	0
Stockholders' equity
Common stock, $0.001 par value 50,000,000 shares authorized 4,986,048 and 5,060,903 shares issued and outstanding, respectively		4,986	5,061
Additional paid-in capital		944,160	972,609
Retained earnings		1,434,107	1,568,099
Total stockholders' equity		2,383,253	2,545,769
Total liabilities and stockholders' equity		$ 2,472,214	$ 2,588,103

[1] Note 6

XML

Statement of Financial Position - Parenthetical - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of financial position
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares Issued	4,986,048	5,060,903
Common Stock, Shares Outstanding	4,986,048	5,060,903

XML

ELECTRONIC SYSTEMS TECHNOLOGY, INC. STATEMENTS OF OPERATIONS (Unaudited) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income statement
SALES, NET		$ 312,042	$ 302,252	$ 1,038,932	$ 1,159,846
SITE SUPPORT		10,720	19,216	43,229	90,392
COST OF SALES		(133,721)	(126,374)	(481,931)	(517,974)
GROSS PROFIT		189,041	195,094	600,230	732,264
Operating Expenses
General and administrative		59,367	67,792	212,802	233,748
Research and development		55,511	59,624	191,836	205,233
Marketing and sales		114,902	113,221	338,080	357,314
TOTAL OPERATING EXPENSE		229,780	240,637	742,718	796,295
OPERATING INCOME (LOSS)		(40,739)	(45,543)	(142,488)	(64,031)
OTHER INCOME
Interest income		2,958	3,046	8,496	8,917
TOTAL OTHER INCOME		2,958	3,046	8,496	8,917
NET INCOME (LOSS) BEFORE INCOME TAX		(37,781)	(42,497)	(133,992)	(55,114)
Benefit (provision) for income tax	[1]	0	0	0	0
NET INCOME (LOSS)		$ (37,781)	$ (42,497)	$ (133,992)	$ (55,114)
Basic and diluted earnings per share		$ (0.01)	$ (0.01)	$ (0.03)	$ (0.01)
Weighted average shares used in computing income (loss) per share: Basic and diluted		5,019,376	5,081,108	5,032,788	5,097,059

[1] Note 9

XML

ELECTRONIC SYSTEMS TECHNOLOGY, INC. STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
Net loss	$ (133,992)	$ (55,114)
Non-cash items included in net loss:
Depreciation	14,954	19,718
Share based compensation		1,841
Changes in operating assets and liabilities:
Accounts receivable	(23,304)	(36,014)
Inventories	(110,823)	(131,528)
Accrued interest receivable	1,119	923
Prepaid expenses	(11,916)	(11,718)
Accounts payable	39,595	29,463
Accrued liabilities	4,313	10,211
Refundable deposits	2,719
NET CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES	(217,335)	(172,218)
CASH FLOWS PROVIDED (USED) IN INVESTING ACTIVITIES:
Certificates of deposit redeemed		202,625
NET CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES		202,625
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repurchase of shares of common stock	(28,524)	(29,472)
NET CASH USED IN FINANCING ACTIVITIES	(28,524)	(29,472)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(245,859)	935
Cash and cash equivalents at beginning of period	502,971	618,060
Cash and cash equivalents at end of period	$ 257,112	$ 618,995

XML

Note 1 - Basis of Presentation

9 Months Ended

Sep. 30, 2017

Notes

Note 1 - Basis of Presentation

NOTE 1 - BASIS OF PRESENTATION

The financial statements of Electronic Systems Technology, Inc. (the "Company"), presented in this Form 10Q are unaudited and reflect, in the opinion of Management, a fair presentation of operations for the three and nine month periods ended September 30, 2017 and September 30, 2016.  All adjustments of a normal recurring nature and necessary for a fair presentation of the results for the periods covered have been made. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Form 10K for the year ended December 31, 2016 as filed with Securities and Exchange Commission.

The results of operations for the three and nine months ended September 30, 2017 and September 30, 2016, are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period.

New Accounting Pronouncements

In July of 2015 the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-11 “Simplifying the Measurement of Inventory” an update to Inventory Topic 330. The ASU simplifies the concept of lower of cost or market to the lower of cost and net realizable value and more closely align the measurement of inventory in Generally Accepted Accounting Principles (“GAAP”) with the measurement of inventory in International Financial Reporting Standards (“IFRS”). This update was adopted and did not materially impact the financial statements.

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations, cash flows or financial position of prior period amounts.

XML

Note 2 - Inventories

9 Months Ended

Sep. 30, 2017

Notes

Note 2 - Inventories

NOTE 2 - INVENTORIES

Inventories are stated at lower of cost or net realizable value with cost determined using the FIFO (first in, first out) method.  Inventories consist of the following:

	September 30,   2017	December 31,  2016
Parts	$ 147,379	$ 185,911
Work in progress	240,557	216,859
Finished goods	426,034	300,377
	$ 813,970	$ 703,147

XML

Note 3 - Income (Loss) Per Share

9 Months Ended

Sep. 30, 2017

Notes

Note 3 - Income (Loss) Per Share

NOTE 3 - INCOME (LOSS) PER SHARE

Basic income (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 income (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, 2017, the Company had 150,000 outstanding stock options that could have a dilutive effect on future periods.  However, at September 30, 2017 there was no dilutive effect of stock options on earnings per share or weighted average shares outstanding. 

XML

Disclosure of Compensation Related Costs, Share-based Payments

9 Months Ended

Sep. 30, 2017

Notes

Disclosure of Compensation Related Costs, Share-based Payments

NOTE 4 - STOCK OPTIONS

As of September 30, 2017, the Company had outstanding stock options, which have been granted periodically to individual employees and directors with no less than three years of continuous tenure with the Company.  The Board of Directors has not awarded stock options during the nine months ended September 30, 2017. The Board of Directors may consider issuing stock options later in 2017. Shareholders approved the 2015 Stock Incentive Plan on June 3, 2016 for 250,000 stock options.150,000 of the approved amount were granted to certain management employees as part of the 2015 Stock Incentive Plan. The options were dated effective August 7, 2015 and have a five year exercise period. The company recognized an expense of $ 1,841 for the quarter ending September 30, 2016 in which the options were approved by the Shareholders and were fully vested at that time.

The fair value of each option award is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2015 and approved by the Shareholders in 2016.

	2015
Dividend yield	0.00%
Expected volatility	68%
Risk-free interest rate	1.08%
Expected term (in years)	5
Estimated Fair Value per Option Granted	$ 0.23

The Company uses historical data to estimate option exercise rates.  The option exercise rate for option grants in 2005 through 2016 was 5.2%.     

A summary of option activity during the nine months ended September 30, 2017 is as follows:

	Number Outstanding	Weighted-Average Exercise Price Per Share	Weighted-Average Remaining Life (Years)	Approximate Aggregate Intrinsic Value
Outstanding and Exercisable at December 31, 2016	220,000	$ 0.40
Granted (Approved)	-0-
Expired	(70,000)	0.41
Outstanding and Exercisable at September 30, 2017	150,000	$ 0.40	2.9	$ 28,500

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Note 5 - Related Party Transactions

9 Months Ended

Sep. 30, 2017

Notes

Note 5 - Related Party Transactions

NOTE 5 - RELATED PARTY TRANSACTIONS

During the quarter ended September 30, 2017, the Company accrued total directors’ fees of $ 1,200, or $300 per director for board meetings attended. For the nine-month period ending September 30, 2017, the Company paid or accrued a total of $ 3,600 for directors’ fees.

XML

Note 6 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Notes

Note 6 - Commitments and Contingencies

NOTE 6 - COMMITMENTS

The Company leases its facilities from a port authority for $ 5,445 per month for three years, expiring in September 2020, with annual increases based upon the Consumer Price Index.

XML

Note 7 - Segment Reporting

9 Months Ended

Sep. 30, 2017

Notes

Note 7 - Segment Reporting

NOTE 7 - SEGMENT REPORTING

Segment information is prepared on the same basis that the Company's management reviews financial information for operational decision-making purposes.   

During the quarter ended September 30, 2017, Domestic customers represented approximately 88% of total net revenues. Domestic sales revenues increased to $ 283,239 for the quarter ended September 30, 2017 compared to $ 275,709 for the quarter ended September 30, 2016. Year to date domestic sales revenues decreased to $ 893,277 as of September 30, 2017 compared to $ 1,020,831 for the same period of 2016.  Foreign customers represented approximately 12% of total net revenues.  Foreign sales revenues decreased to $ 39,523 for the quarter ended September 30, 2017 compared to $ 45,759 for the quarter ended September 30, 2016. Year to date foreign sales revenues decreased to $ 188,884 as of September 30, 2017 compared to $ 229,407 for the same period of 2016.  During the quarter ended September 30, 2017, sales to one customer comprised more than 10% of the Company’s sales revenues.  Revenues from foreign countries during the third quarter of 2017 consist primarily of revenues from product sales to Mexico, Peru, India.

XML

Note 8 - Stock Repurchase

9 Months Ended

Sep. 30, 2017

Notes

Note 8 - Stock Repurchase

NOTE 8 – Stock Repurchase

 On January 13, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to $100,000 of the Company’s common stock at the price of $0.38 per share. On March 2, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to an additional $150,000 of the Company’s common stock at the price of $0.38 per share. As of September 30, 2017, $184,405 remains of $250,000 approved by the board.97,764 shares were repurchased for $ 37,191 in 2016, bringing the total number of shares repurchased to 172,619 through September 30, 2017. The Company’s share repurchase program does not obligate it to acquire any specific number of shares. The following table shows the Company’s activity and related information for the nine-month period ending September 30, 2017.

	Purchase Period End Date	Number of Shares	Average Repurchase Price Per Share	Amount (1)
January 2017	January 31, 2017	1,000	$0.38	$      390
March 2017	March 31, 2017	7,725	$0.38	$   2,962
April 2017	April 30, 2017	45,601	$0.38	$ 17,343
July 2017	July 31, 2017	8,500	$0.38	$   3,237
August 2017	August 31, 2017	12,029	$0.38	$   4,592
Total		74,855	$ 0.38	$ 28,524

⁽¹⁾  Amount includes commissions paid of $79.

The trading price of the Company’s shares as of September 30, 2017, was $0.59.

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Note 9 - Income Taxes

9 Months Ended

Sep. 30, 2017

Notes

Note 9 - Income Taxes

NOTE 9 – Income Taxes

No Income Tax has been recognized due to the net operating loss. The current year’s net operating loss tax impact has been reserved, as the estimated effective tax rate for 2017 will be zero.

The Deferred Tax asset that is recognized on the Balance Sheets consists primarily of prior years’ net operating loss and R&D credits. We believe that the Company will be generate net operating income and utilize the asset in future periods.

XML

Note 1 - Basis of Presentation: New Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2017

Policies

New Accounting Pronouncements

New Accounting Pronouncements

In July of 2015 the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-11 “Simplifying the Measurement of Inventory” an update to Inventory Topic 330. The ASU simplifies the concept of lower of cost or market to the lower of cost and net realizable value and more closely align the measurement of inventory in Generally Accepted Accounting Principles (“GAAP”) with the measurement of inventory in International Financial Reporting Standards (“IFRS”). This update was adopted and did not materially impact the financial statements.

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations, cash flows or financial position of prior period amounts.

XML

Note 2 - Inventories: Schedule of Inventory, Current (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Inventory, Current

	September 30,   2017	December 31,  2016
Parts	$ 147,379	$ 185,911
Work in progress	240,557	216,859
Finished goods	426,034	300,377
	$ 813,970	$ 703,147

XML

Disclosure of Compensation Related Costs, Share-based Payments: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

	2015
Dividend yield	0.00%
Expected volatility	68%
Risk-free interest rate	1.08%
Expected term (in years)	5
Estimated Fair Value per Option Granted	$ 0.23

XML

Disclosure of Compensation Related Costs, Share-based Payments: Schedule of Share-based Compensation, Stock Options, Activity (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Share-based Compensation, Stock Options, Activity

	Number Outstanding	Weighted-Average Exercise Price Per Share	Weighted-Average Remaining Life (Years)	Approximate Aggregate Intrinsic Value
Outstanding and Exercisable at December 31, 2016	220,000	$ 0.40
Granted (Approved)	-0-
Expired	(70,000)	0.41
Outstanding and Exercisable at September 30, 2017	150,000	$ 0.40	2.9	$ 28,500

XML

Note 8 - Stock Repurchase: Schedule of Repurchase Agreements (Tables)

9 Months Ended

Sep. 30, 2017

Tables/Schedules

Schedule of Repurchase Agreements

	Purchase Period End Date	Number of Shares	Average Repurchase Price Per Share	Amount (1)
January 2017	January 31, 2017	1,000	$0.38	$      390
March 2017	March 31, 2017	7,725	$0.38	$   2,962
April 2017	April 30, 2017	45,601	$0.38	$ 17,343
July 2017	July 31, 2017	8,500	$0.38	$   3,237
August 2017	August 31, 2017	12,029	$0.38	$   4,592
Total		74,855	$ 0.38	$ 28,524

XML

Note 2 - Inventories: Schedule of Inventory, Current (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Details
Inventory, Parts and Components, Net of Reserves	$ 147,379	$ 185,911
Inventory, Work in Process, Gross	240,557	216,859
Inventory, Finished Goods, Gross	426,034	300,377
Inventories	$ 813,970	$ 703,147

XML

Disclosure of Compensation Related Costs, Share-based Payments (Details) - USD ($)		9 Months Ended
	Aug. 07, 2015	Sep. 30, 2017
Details
Employee Stock Ownership Plan (ESOP), Plan Description		Shareholders approved the 2015 Stock Incentive Plan on June 3, 2016 for 250,000 stock options.
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	150,000
Stock or Unit Option Plan Expense		$ 1,841
Estimated option exercise rate		5.20%

XML

Disclosure of Compensation Related Costs, Share-based Payments: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	Aug. 07, 2015 USD ($) $ / shares
Details
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Payments | $	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	68.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.08%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years
Estimated fair value per option granted | $ / shares	$ 0.23

XML

Disclosure of Compensation Related Costs, Share-based Payments: Schedule of Share-based Compensation, Stock Options, Activity (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares	Dec. 31, 2016 $ / shares shares
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares	150,000	220,000
Weighted Average Exercise Price | $ / shares	$ 0.40	$ 0.40
Expired | shares	(70,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ / shares	$ 0.41
Weighted Average Remaining Life Years	2.9
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $	$ 28,500

XML

Note 5 - Related Party Transactions (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Details
Noninterest Expense Directors Fees	$ 1,200	$ 3,600

XML

Note 6 - Commitments and Contingencies (Details)	Sep. 30, 2017 USD ($)
Details
Operating Leases, Rent Expense	$ 5,445

XML

Note 7 - Segment Reporting (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Details
Domestic sales percentage total net revenue	88.00%
Domestic sales revenues	$ 283,239	$ 275,709	$ 893,277	$ 1,020,831
Foreign sales percentage total net revenue	12.00%
Foreign sales	$ 39,523	$ 45,759	$ 188,884	$ 229,407

XML

Note 8 - Stock Repurchase (Details) - USD ($)	9 Months Ended	12 Months Ended	21 Months Ended
	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2017
Details
Employee Stock Ownership Plan (ESOP), Terms of Repurchase Obligation	On January 13, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to $100,000 of the Company’s common stock at the price of $0.38 per share. On March 2, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to an additional $150,000 of the Company’s common stock at the price of $0.38 per share. As of September 30, 2017, $184,405 remains of $250,000 approved by the board.
Stock Repurchased During Period, Shares	74,855	97,764	172,619
Stock Repurchased During Period, Value		$ 37,191

XML

Note 8 - Stock Repurchase: Schedule of Repurchase Agreements (Details) - USD ($)	9 Months Ended		12 Months Ended	21 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016	Sep. 30, 2017
Details
Stock Repurchased During Period, Shares	74,855		97,764	172,619
Average Repurchase Price Per Share	$ 0.38
Repurchase of shares of common stock	$ (28,524)	$ (29,472)