10-Q

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, 2022

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 ☒ 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 ☒ 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 ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of July 20, 2022, 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,
		2022		2021
ASSETS
Current assets
Cash and cash equivalents	$	579,021	$	655,616
Certificates of deposit		400,000		400,000
Accounts receivable, net		159,468		166,303
Inventories		529,085		501,833
Prepaid expenses		18,083		24,387
Accrued interest receivable		676		35
Total current assets		1,686,333		1,748,174
Property and equipment, net of depreciation		1,136		1,358
Right to use – Lease, net of amortization (NOTE 6)		9,737		28,922
Total assets	$	1,697,206	$	1,778,454
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	39,535	$	71,645
Accrued wages and bonus		5,818		9,114
Accrued vacation pay		17,845		28,438
Lease liability, current (NOTE 6)		9,895		13,613
Other accrued liabilities		7,053		14,827
Total current liabilities		80,146		137,637
Stockholders' equity
Common stock, $0.001 par value 50,000,000 shares authorized 4,946,502 and 4,946,502 shares issued and outstanding respectively		4,947		4,947
Additional paid-in capital		932,412		932,412
Retained earnings		679,701		703,458
Total stockholders' equity		1,617,060		1,640,817
Total liabilities and stockholders' equity	$	1,697,206	$	1,778,454

See Notes to Financial Statements.

2 

ELECTRONIC SYSTEMS TECHNOLOGY, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months Ended June 30, 2022			Three Months Ended June 30, 2021			Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
SALES - NET	$	416,892		$	457,003		$	889,035		$	881,779
COST OF SALES		(191,437	)		(213,197	)		(401,321	)		(393,734	)
GROSS PROFIT		225,455			243,806			487,714			488,045
Operating Expenses
General and administrative		66,747			66,452			151,522			159,955
Research and development		45,856			54,249			91,633			106,949
Marketing and sales		132,242			127,419			269,401			221,634
TOTAL OPERATING EXPENSE		244,845			248,120			512,556			488,538
OPERATING INCOME (LOSS)		(19,390	)		(4,314	)		(24,842	)		(493	)
OTHER INCOME
Gain on forgiveness of CARES Act loan		—			150,118			—			150,118
Interest income		594			566			1,085			1,427
TOTAL OTHER INCOME		594			150,684			1,085			151,545
NET INCOME (LOSS) BEFORE INCOME TAX		(18,796	)		146,370			(23,757	)		151,052
Benefit (provision) for income tax		—			—			—			—
NET INCOME (LOSS)	$	(18,796	)	$	146,370		$	(23,757	)	$	151,052
Basic and diluted earnings per share	($	0.00	)	$	0.03		($	0.00	)	$	0.03
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 Financial Statements.

3 

ELECTRONIC SYSTEMS TECHNOLOGY, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
	Six Months Ended
	June 30,			June 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(23,757	)	$	151,052
Noncash items included in net loss:
Depreciation		222			2,578
Gain on forgiveness of CARES Act loan		—			(150,118	)
Changes in operating assets and liabilities:
Accounts receivable, net		6,835			127,588
Inventories		(27,252	)		139,934
Accrued interest receivable		(641	)		3,845
Prepaid expenses		6,304			4,745
Accounts payable		(31,151	)		5,146
Other accrued liabilities		(1,187	)		64,152
NET CASH PROVIDED (USED) IN OPERATING ACTIVITIES		(70,627	)		348,922
CASH FLOWS FROM INVESTING ACTIVITIES:
Certificates of deposit redeemed		300,000			249,999
Certificates of deposit purchased		(300,000	)		—
NET CASH PROVIDED FROM INVESTING ACTIVITIES		—			249,999
CASH FLOWS USED IN FINANCING ACTIVITIES:
Principal payments on CARES Act loan payable (round 1)		(5,968	)		(1,975	)
Proceeds from CARES Act loan payable (rounds 1 and 2)		—			130,255
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES		(5,968	)		128,280
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		(76,595	)		727,201
Cash and cash equivalents at beginning of period		655,616			308,110
Cash and cash equivalents at end of period	$	579,021		$	1,035,311

See Notes to Financial Statements.

4 

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, 2021		4,946,502	$	4,947	$	931,442	$	610,469		$	1,546,858
Net income (loss)		—		—		—		4,682			4,682
Balance at March 31, 2021		4,946,502	$	4,947	$	931,442	$	615,151		$	1,551,540
Net income (loss)		—		—		—		146,370			146,370
Balance at June 30, 2021		4,946,502	$	4,947	$	931,442	$	761,521		$	1,697,910
Balances, January 1, 2022		4,946,502	$	4,947	$	932,412	$	703,458		$	1,640,817
Net income (loss)		—		—		—		(4,961	)		(4,961	)
Balance at March 31, 2022		4,946,502	$	4,947	$	932,412	$	698,497		$	1,635,856
Net income (loss)		—		—		—		(18,796	)		(18,796	)
Balance at June 30, 2022		4,946,502	$	4,947	$	932,412	$	679,701		$	1,617,060

See Notes to Financial Statements.

5 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The financial statements, including notes, of Electronic Systems Technology, Inc. (the "Company") are representations of the Company’s management, which is responsible for their integrity and objectivity. The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2021, and its results of operations, cash flows, and changes in stockholders’ equity for the three months and six months ended June 30, 2022, and 2021. The balance sheet at December 31, 2021 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. All amounts presented are in U.S. dollars. For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The results of operations for the three month and six-month period ended June 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2022 the anticipated effective annual federal income tax rate will be 0%.

New Accounting Pronouncements

Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption

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, 2022		December 31, 2021
Parts	$	107,986	$	92,751
Work in progress		182,753		171,705
Finished goods		238,346		237,377
Total inventories	$	529,085	$	501,833

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ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO 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, 2022 and 2021, the Company had 210,000 and 180,000 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

No stock options were issued, exercised, or expired during the six month periods ended June 30, 2022 and 2021. During the same periods, 30,000 and nil options were forfeited in 2022 and 2021 respectively. As of June 30, 2022, there were 210,000   options outstanding with a weighted average exercise price of $0.40 per share, a weighted average remaining life of 2.9 years and no intrinsic value.

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, 2022 and 2021, the Company’s revenue from products sales was $409,392 and $448,403, respectively. Revenue from site support and engineering services was $7,500 and $8,600 respectively, over the same periods.

During the six month periods ended June 30, 2022 and 2021, the Company’s revenue from products sales was $871,235 and $870,079, respectively. Revenue from site support and engineering services was $17,800 and $11,700 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, 2022 and June 30, 2021 were $378,959 and $432,215, respectively. Sales to foreign customers for the three month period ended June 30, 2022 and June 30, 2021 were $37,933 and $24,788, respectively.

Domestic sales for the six month period ended June 30, 2022 and June 30, 2021 were $815,629 and $794,330, respectively. Sales to foreign customers for the six month period ended June 30, 2022 and June 30, 2021 were $73,406 and $87,449, respectively.

For the three-month period ended June 30, 2022, sales to three customers represented more than 10% of total revenue, three customers represented more than 10% of total revenue for the same period in 2021.

7 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

	2022 Sales		2022 %age of Total Sales			2021 Sales		2021%age of Total Sales
Domestic customer A	$	54,436		13	%	$	76,947		17	%
Domestic customer B		53,880		13	%		64,968		14	%
Domestic customer C		49,031		12	%		62,080		14	%

For the six-month period ended June 30, 2022, sales to three customers represented more than 10% of total revenue, two customers represented more than 10% of total revenue for the same period in 2021.

	2022 Sales		2022 %age of Total Sales			2021 Sales		2021 %age of Total Sales
Domestic customer A	$	121,715		14	%	$	133,118		15	%
Domestic customer B		107,505		12	%		129,798		15	%
Domestic customer C		100,693		11	%

As of June 30, 2022 and 2021, the Company had a sales order backlog of $24,857 and $17,143, respectively.

NOTE 6 - LEASES

On September 23, 2020, the Company signed a new two-year lease for its facilities. The base lease is $3,162 and $3,267 per month for years one and two, respectively. There is a leasehold tax applied to the base lease at 12.84%. The Company has the right to terminate the lease with 90 days’ notice. There is no renewal clause contained in the current lease. Upon signing the lease, the Company recognized a lease liability and right of use asset of $74,005 based on the two-year payment stream discounted using an estimated incremental borrowing rate of 4.0%. At June 30, 2022, the remaining lease term is three months over which payments of $9,737 will be paid.

8 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

For the three month and six-month periods ended June 30, 2022 and 2021, lease expenses of $10,903 and $10,862, and $21,805 and $21,724, respectively, are included in the following expense classifications on the statement of operations:

	For the three-month period ending June 30,
	2022						2021
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	5,397	$	4,248	$	9,645	$	5,396	$	4,248	$	9,644
Variable lease costs		704		554		1,258		682		536		1,218
Total lease costs	$	6,101	$	4,802	$	10,903	$	6,078	$	4,784	$	10,862

	For the six-month period ending June 30,
	2022						2021
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	10,793	$	8,495	$	19,288	$	10,793	$	8,495	$	19,288
Variable lease costs		1,408		1,109		2,517		1,363		1,073		2,436
Total lease costs	$	12,201	$	9,604	$	21,805	$	12,156	$	9,568	$	21,724

9 

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 June 30, 2020. 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 $416,892 for the second quarter of 2022 as compared to $457,003 in the second quarter of 2021, reflecting a decrease of 8.8%. Management believes the decrease in sales revenues is due to the impact of supply chain delays to materials needed by our customers to compete projects. Year to date total revenues from sales increased to $889,035 in 2022 as compared to $881,779 in 2021, reflecting an increase of 0.8%. Management believes the increase in sales revenues is due the company increased inventory level and the ability to ship orders in a timely manner.

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, 2022 and 2021 are as follows:

	Three Months ended June 30, 2022		Three Months ended June 30, 2021		Six Months ended June 30, 2022		Six Months ended June 30, 2021
Domestic Sales		91%		95%		92%		90%
Export Sales		9%		5%		8%		10%

BACKLOG:

As of June 30, 2022, the Company had a sales order backlog of $24,857. 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 2022 and 2021 were 46% and 47% of respective net sales. The cost of sales percentage decreased in the second quarter of 2022 is the result of the product mix sold during the same quarter of 2021. Cost of sales percentages for the six month periods ended June 30, 2022 and 2021 were 45.1% and 44.7%, respectively. The cost of sales percentage increase in the second quarter of 2022 is the result of the product mix sold during the same period of 2021.

10 

OPERATING EXPENSES:

The following is a delineation of operating expenses:

	Three Months Ended							Six Month Ended
	June 30, 2022		June 30, 2021		Increase (Decrease)			June 30, 2022		June 30, 2021		Increase (Decrease)
General and administrative	$	66,747	$	66,452	$	295		$	151,522	$	159,955	$	(8,433	)
Research and development		45,856		54,249		(8,393	)		91,633		106,949		(15,316	)
Marketing and sales		132,242		127,419		4,823			269,401		221,634		47,767
Total operating expenses	$	244,845	$	248,120	$	(3,275	)	$	512,556	$	488,538	$	24,018

General and administrative: For the second quarter of 2022, general and administrative expenses increased $295 to $66,747, due to increased wages when compared with the same quarter of 2021. For the six-month period, general and administrative expenses decreased by $8,433 to $151,522, due to decreased services purchased. General and administrative expense was 16.0% compared to 14.5% of sales revenue for the second quarter of 2022 and 17.0% compared to 18.1% of sales revenue for six month period ended June 30, 2022.

Research and development: Research and development expenses decreased $8,393 to $45,856 during the second quarter of 2022 due to decreased payroll expenses when compared with the same quarter of 2021. For the six-month period, research and development expenses decreased by $15,316 to $91,633, due to decreased payroll expenses. Research and development expense was 11.0% compared to 11.9% of sales revenue for the second quarter of 2022 and 10.3% compared to 12.1% of sales revenue for six month period ending June 30, 2022.

Marketing and sales: During the second quarter of 2022, marketing and sales expenses increased $4,823 to $132,242 when compared with the same period of 2021, due to increased benefits expenses and travel. For the six-month period, marketing and sales expenses increased by $47,767 to $269,401, due to increased payroll. Marketing and sales expense was 31.7% compared to 27.9% of sales revenue for the second quarter of 2022 and 30.3% compared to 25.1% of sales revenue for six month period ended June 30, 2022.

OTHER INCOME:

The Company earned $594 in interest income during the quarter ended June 30, 2022 and $1,085 for the six-month period. Sources of this income were money market accounts and certificates of deposit. In 2021, the Company recognized a gain on forgiveness of debt in the amount of $150,118 for the first CARES Act loan (PPP round 1).

NET LOSS:

The Company had a net loss of 18,796 for the second quarter of 2022 compared to a net income of $146,370 for the same quarter of 2021. For the six-month period ended June 30, 2022, the Company recorded a net loss of $23,757 compared with net income of $151,052 for the same period of 2021. The decrease in net income during 2022 is the result of increased operating expenses and no CARES Act forgiveness.

11 

B.       FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The Corporation's current asset to current liabilities ratio at June 30, 2022 was 21.0 compared to 12.7 at December 31, 2021. The increase in current ratio is due to the decrease of accounts payable and short-term leases payable at June 30, 2022 as compared to December 31, 2021.

At June 30, 2022, the Company had cash and cash equivalents of $579,021 as compared to cash and cash equivalent of $655,616 at December 31, 2021.

Cash provided from operating activities decreased by $419,549 for the six-month period ended June 30, 2022 when compared to the same period in 2021. The decrease is attributable to a decrease in net income for the period being $174,809 less than the same period in 2021. The reduction in the change in accounts receivable and inventory balances contributed $120,753 and $167,186 respectively.

In management's opinion, the Company's cash and cash equivalents and other working capital at June 30, 2022 is sufficient to satisfy requirements for operations, capital expenditures, and other expenditures as may arise during 2022 and into the first half of 2023.

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 4. 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, 2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have determined that there was a material weakness affecting our internal control over financial reporting and, as a result of that weakness, our disclosure controls and procedures were not effective as of June 30, 2022.

12 

The material weakness is as follows:

We did not maintain effective controls to ensure appropriate segregation of duties as the same officer and employee   was responsible for the initiating and recording of transactions, thereby creating segregation of duties weaknesses. Due to the (1) significance of segregation of duties to the preparation of reliable financial statements; (2) the significance of potential misstatement that could have resulted due to the deficient controls; and, (3) the absence of sufficient other mitigating controls; we determined that this control deficiency resulted in more than a remote likelihood that a material misstatement or lack of disclosure within the annual or interim financial statements will not be prevented or detected.

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.

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

None.

13 

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

14 

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:  August 9, 2022	Name:  Daniel M. Tolley
	Title:  President
	(Principal Executive Officer)

	By: /s/ Michael W. Eller
Date:  August 9, 2022	Name:  Michael W. Eller
	Title:  Vice President Administration
	(Principal Accounting Officer)

15 

EX-31.1

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: August 9, 2022

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-31.2

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

Vice President Administration

Principal Accounting Officer

Date: August 9, 2022

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-32.1

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, 2022, 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: August 9, 2022

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-32.2

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, 2022,1 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: August 9, 2022

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

Cover - shares	6 Months Ended
	Jun. 30, 2022	Jul. 20, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2022
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	000-27793
Entity Registrant Name	ELECTRONIC SYSTEMS TECHNOLOGY INC
Entity Central Index Key	0000752294
Entity Tax Identification Number	91-1238077
Entity Incorporation, State or Country Code	WA
Entity Address, Address Line One	415 N. Roosevelt St.
Entity Address, Address Line Two	STE B1
Entity Address, City or Town	Kennewick
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	99336
City Area Code	(509)
Local Phone Number	735-9092
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	ELST
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,946,502

XML

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 579,021	$ 655,616
Certificates of deposit	400,000	400,000
Accounts receivable, net	159,468	166,303
Inventories	529,085	501,833
Prepaid expenses	18,083	24,387
Accrued interest receivable	676	35
Total current assets	1,686,333	1,748,174
Property and equipment, net of depreciation	1,136	1,358
Right to use – Lease, net of amortization (NOTE 6)	9,737	28,922
Total assets	1,697,206	1,778,454
Current liabilities
Accounts payable	39,535	71,645
Accrued wages and bonus	5,818	9,114
Accrued vacation pay	17,845	28,438
Lease liability, current (NOTE 6)	9,895	13,613
Other accrued liabilities	7,053	14,827
Total current liabilities	80,146	137,637
Stockholders' equity
Common stock, $0.001 par value 50,000,000 shares authorized 4,946,502 and 4,946,502 shares issued and outstanding respectively	4,947	4,947
Additional paid-in capital	932,412	932,412
Retained earnings	679,701	703,458
Total stockholders' equity	1,617,060	1,640,817
Total liabilities and stockholders' equity	$ 1,697,206	$ 1,778,454

XML

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

XML

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
SALES - NET	$ 416,892	$ 457,003	$ 889,035	$ 881,779
COST OF SALES	(191,437)	(213,197)	(401,321)	(393,734)
GROSS PROFIT	225,455	243,806	487,714	488,045
Operating Expenses
General and administrative	66,747	66,452	151,522	159,955
Research and development	45,856	54,249	91,633	106,949
Marketing and sales	132,242	127,419	269,401	221,634
TOTAL OPERATING EXPENSE	244,845	248,120	512,556	488,538
OPERATING INCOME (LOSS)	(19,390)	(4,314)	(24,842)	(493)
OTHER INCOME
Gain on forgiveness of CARES Act loan	0	150,118	0	150,118
Interest income	594	566	1,085	1,427
TOTAL OTHER INCOME	594	150,684	1,085	151,545
NET INCOME (LOSS) BEFORE INCOME TAX	(18,796)	146,370	(23,757)	151,052
Benefit (provision) for income tax	0	0	0	0
NET INCOME (LOSS)	$ (18,796)	$ 146,370	$ (23,757)	$ 151,052
Basic and diluted earnings per share	$ 0.00	$ 0.03	$ 0.00	$ 0.03
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

XML

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (23,757)	$ 151,052
Noncash items included in net loss:
Depreciation	222	2,578
Gain on forgiveness of CARES Act loan	0	(150,118)
Changes in operating assets and liabilities:
Accounts receivable, net	6,835	127,588
Inventories	(27,252)	139,934
Accrued interest receivable	(641)	3,845
Prepaid expenses	6,304	4,745
Accounts payable	(31,151)	5,146
Other accrued liabilities	(1,187)	64,152
NET CASH PROVIDED (USED) IN OPERATING ACTIVITIES	(70,627)	348,922
CASH FLOWS FROM INVESTING ACTIVITIES:
Certificates of deposit redeemed	300,000	249,999
Certificates of deposit purchased	(300,000)	0
NET CASH PROVIDED FROM INVESTING ACTIVITIES	0	249,999
CASH FLOWS USED IN FINANCING ACTIVITIES:
Principal payments on CARES Act loan payable (round 1)	(5,968)	(1,975)
Proceeds from CARES Act loan payable (rounds 1 and 2)	0	130,255
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES	(5,968)	128,280
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	(76,595)	727,201
Cash and cash equivalents at beginning of period	655,616	308,110
Cash and cash equivalents at end of period	$ 579,021	$ 1,035,311

XML

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

XML

BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

BASIS OF PRESENTATION

NOTE 1 - BASIS OF PRESENTATION

The financial statements, including notes, of Electronic Systems Technology, Inc. (the "Company") are representations of the Company’s management, which is responsible for their integrity and objectivity. The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2021, and its results of operations, cash flows, and changes in stockholders’ equity for the three months and six months ended June 30, 2022, and 2021. The balance sheet at December 31, 2021 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. All amounts presented are in U.S. dollars. For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The results of operations for the three month and six-month period ended June 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. The Company estimates that for 2022 the anticipated effective annual federal income tax rate will be 0%.

New Accounting Pronouncements

Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption

XML

INVENTORIES

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 2 - INVENTORIES

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

	June 30, 2022		December 31, 2021
Parts	$	107,986	$	92,751
Work in progress		182,753		171,705
Finished goods		238,346		237,377
Total inventories	$	529,085	$	501,833

XML

EARNINGS (LOSS) PER SHARE

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

NOTE 3 - EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average number of shares of Common Stock outstanding for the period. Diluted earnings (loss) per share reflects potential dilution occurring if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in the earnings of the Company. At June 30, 2022 and 2021, the Company had 210,000 and 180,000 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.

XML

STOCK OPTIONS

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

STOCK OPTIONS

NOTE 4 - STOCK OPTIONS

No stock options were issued, exercised, or expired during the six month periods ended June 30, 2022 and 2021. During the same periods, 30,000 and nil options were forfeited in 2022 and 2021 respectively. As of June 30, 2022, there were 210,000   options outstanding with a weighted average exercise price of $0.40 per share, a weighted average remaining life of 2.9 years and no intrinsic value.

XML

REVENUE

6 Months Ended

Jun. 30, 2022

Revenue

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, 2022 and 2021, the Company’s revenue from products sales was $409,392 and $448,403, respectively. Revenue from site support and engineering services was $7,500 and $8,600 respectively, over the same periods.

During the six month periods ended June 30, 2022 and 2021, the Company’s revenue from products sales was $871,235 and $870,079, respectively. Revenue from site support and engineering services was $17,800 and $11,700 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, 2022 and June 30, 2021 were $378,959 and $432,215, respectively. Sales to foreign customers for the three month period ended June 30, 2022 and June 30, 2021 were $37,933 and $24,788, respectively.

Domestic sales for the six month period ended June 30, 2022 and June 30, 2021 were $815,629 and $794,330, respectively. Sales to foreign customers for the six month period ended June 30, 2022 and June 30, 2021 were $73,406 and $87,449, respectively.

For the three-month period ended June 30, 2022, sales to three customers represented more than 10% of total revenue, three customers represented more than 10% of total revenue for the same period in 2021.

(Unaudited)

	2022 Sales		2022 %age of Total Sales			2021 Sales		2021%age of Total Sales
Domestic customer A	$	54,436		13	%	$	76,947		17	%
Domestic customer B		53,880		13	%		64,968		14	%
Domestic customer C		49,031		12	%		62,080		14	%

For the six-month period ended June 30, 2022, sales to three customers represented more than 10% of total revenue, two customers represented more than 10% of total revenue for the same period in 2021.

	2022 Sales		2022 %age of Total Sales			2021 Sales		2021 %age of Total Sales
Domestic customer A	$	121,715		14	%	$	133,118		15	%
Domestic customer B		107,505		12	%		129,798		15	%
Domestic customer C		100,693		11	%

As of June 30, 2022 and 2021, the Company had a sales order backlog of $24,857 and $17,143, respectively.

XML

LEASES

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

LEASES

NOTE 6 - LEASES

On September 23, 2020, the Company signed a new two-year lease for its facilities. The base lease is $3,162 and $3,267 per month for years one and two, respectively. There is a leasehold tax applied to the base lease at 12.84%. The Company has the right to terminate the lease with 90 days’ notice. There is no renewal clause contained in the current lease. Upon signing the lease, the Company recognized a lease liability and right of use asset of $74,005 based on the two-year payment stream discounted using an estimated incremental borrowing rate of 4.0%. At June 30, 2022, the remaining lease term is three months over which payments of $9,737 will be paid.

For the three month and six-month periods ended June 30, 2022 and 2021, lease expenses of $10,903 and $10,862, and $21,805 and $21,724, respectively, are included in the following expense classifications on the statement of operations:

	For the three-month period ending June 30,
	2022						2021
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	5,397	$	4,248	$	9,645	$	5,396	$	4,248	$	9,644
Variable lease costs		704		554		1,258		682		536		1,218
Total lease costs	$	6,101	$	4,802	$	10,903	$	6,078	$	4,784	$	10,862

	For the six-month period ending June 30,
	2022						2021
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	10,793	$	8,495	$	19,288	$	10,793	$	8,495	$	19,288
Variable lease costs		1,408		1,109		2,517		1,363		1,073		2,436
Total lease costs	$	12,201	$	9,604	$	21,805	$	12,156	$	9,568	$	21,724

XML

BASIS OF PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

Accounting standards that have been issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption

XML

INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

	June 30, 2022		December 31, 2021
Parts	$	107,986	$	92,751
Work in progress		182,753		171,705
Finished goods		238,346		237,377
Total inventories	$	529,085	$	501,833

XML

REVENUE (Tables)

6 Months Ended

Jun. 30, 2022

Revenue

Revenue

	2022 Sales		2022 %age of Total Sales			2021 Sales		2021%age of Total Sales
Domestic customer A	$	54,436		13	%	$	76,947		17	%
Domestic customer B		53,880		13	%		64,968		14	%
Domestic customer C		49,031		12	%		62,080		14	%

For the six-month period ended June 30, 2022, sales to three customers represented more than 10% of total revenue, two customers represented more than 10% of total revenue for the same period in 2021.

	2022 Sales		2022 %age of Total Sales			2021 Sales		2021 %age of Total Sales
Domestic customer A	$	121,715		14	%	$	133,118		15	%
Domestic customer B		107,505		12	%		129,798		15	%
Domestic customer C		100,693		11	%

XML

LEASES (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

	For the three-month period ending June 30,
	2022						2021
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	5,397	$	4,248	$	9,645	$	5,396	$	4,248	$	9,644
Variable lease costs		704		554		1,258		682		536		1,218
Total lease costs	$	6,101	$	4,802	$	10,903	$	6,078	$	4,784	$	10,862

	For the six-month period ending June 30,
	2022						2021
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	10,793	$	8,495	$	19,288	$	10,793	$	8,495	$	19,288
Variable lease costs		1,408		1,109		2,517		1,363		1,073		2,436
Total lease costs	$	12,201	$	9,604	$	21,805	$	12,156	$	9,568	$	21,724

XML

INVENTORIES - Schedule of Inventory, Current (Details) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Parts	$ 107,986	$ 92,751
Work in progress	182,753	171,705
Finished goods	238,346	237,377
Total inventories	$ 529,085	$ 501,833

XML

EARNINGS (LOSS) PER SHARE (Details Narrative) - shares	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Earnings Per Share [Abstract]
Anti-dilutive shares	210,000	180,000

XML

STOCK OPTIONS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Share-Based Payment Arrangement [Abstract]
Forfeited	30,000	0
Options outstanding shares	210,000
Weighted average exercise price	$ 0.40
Weighted average remaining life	2 years 10 months 24 days
Intrinsic value	$ 0

XML

Revenue (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenues	$ 416,892	$ 457,003	$ 889,035	$ 881,779
Domestic customer A
Revenues	$ 54,436	$ 76,947	$ 121,715	$ 133,118
Concentration Risk, Percentage	13.00%	17.00%	14.00%	15.00%
Domestic customer B
Revenues	$ 53,880	$ 64,968	$ 107,505	$ 129,798
Concentration Risk, Percentage	13.00%	14.00%	12.00%	15.00%
Domestic customer C
Revenues	$ 49,031	$ 62,080	$ 100,693
Concentration Risk, Percentage	12.00%	14.00%	11.00%

XML

REVENUE (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenues	$ 416,892	$ 457,003	$ 889,035	$ 881,779
Sales order backlog			24,857	17,143
Product Sales [Member]
Revenues	409,392	448,403	871,235	870,079
Site Support And Engineering Services [Member]
Revenues	7,500	8,600	17,800	11,700
Domestic
Revenues	378,959	432,215	815,629	794,330
Foreign
Revenues	$ 37,933	$ 24,788	$ 73,406	$ 87,449

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Leases (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Cost Of Sales 1 [Member]
Base rent pursuant to lease agreement	$ 5,397	$ 5,396	$ 10,793	$ 10,793
Variable lease costs	704	682	1,408	1,363
Operating lease expense distributied	6,101	6,078	12,201	12,156
Operating expenses
Base rent pursuant to lease agreement	4,248	4,248	8,495	8,495
Variable lease costs	554	536	1,109	1,073
Operating lease expense distributied	4,802	4,784	9,604	9,568
Total
Base rent pursuant to lease agreement	9,645	9,644	19,288	19,288
Variable lease costs	1,258	1,218	2,517	2,436
Operating lease expense distributied	$ 10,903	$ 10,862	$ 21,805	$ 21,724

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LEASES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Leasehold tax percentage			12.84%
Leasehold tax	$ 74,005		$ 74,005
Due on future lease payments	9,737		9,737
Operating lease expense	$ 10,903	$ 10,862	21,805	$ 21,724
Monthly rate year one
Operating Lease, Cost			3,162
Monthly rate year two
Operating Lease, Cost			$ 3,267