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<head>
<TITLE>EST 1999 10KSB</TITLE>
</head>

<body>
<font FACE="Arial" SIZE="3"><b>

<p ALIGN="CENTER">U.S. Securities and Exchange Commission</p>

<p ALIGN="CENTER">Washington, D.C. 20549</p>

<p ALIGN="CENTER">FORM 10-KSB</p>
</b></font><font SIZE="3">

<p ALIGN="CENTER">(Mark One)</p>

<p ALIGN="CENTER">[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) of
the SECURITIES</p>

<p ALIGN="CENTER">EXCHANGE ACT OF 1934</p>
</font><font SIZE="2">

<p ALIGN="CENTER">For the fiscal year ended <b>December</font><font SIZE="3">
31, 1999</font></b><font SIZE="2"> </p>
</font><font SIZE="3">

<p ALIGN="CENTER">[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE</p>

<p ALIGN="CENTER">SECURITIES ACT OF 1934</p>
</font><font SIZE="2">

<p ALIGN="CENTER">For the transition period _____to_____ <u></p>
</u></font><font SIZE="3">

<p ALIGN="CENTER">Commission file number <b>000-27793</p>
</b></font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="696">
  <tr>
    <td VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b><p
ALIGN="CENTER">ELECTRONIC SYSTEMS
    TECHNOLOGY, INC.</b></font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" COLSPAN="3"><font SIZE="2"><p ALIGN="CENTER">(Name
of small business
    issuer in its charter)</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" COLSPAN="3" HEIGHT="9"></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b><p
ALIGN="CENTER">Washington</b></font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="3"><b><p
ALIGN="CENTER">91-1238077</b></font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">(State or other
    jurisdiction of incorporation or organization)</font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(I.R.S. Employer
    Identification No.)</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" COLSPAN="3"> </td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="3"><b><p
ALIGN="CENTER">415 N. Quay St.,
    Kennewick , Washington </b></font></td>
    <td WIDTH="50%" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b><p
ALIGN="CENTER">99336</b></font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">(Address of
    principal executive offices)</font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">(Zip
Code)</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><p
ALIGN="CENTER">Issuer's
    telephone number </font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="3"><b><p
ALIGN="CENTER">(509) 735-9092</b></font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">Securities registered under Section 12(b) of the
Exchange Act: 
None</p>

<p ALIGN="JUSTIFY">Securities registered under Section 12(g) of the
Exchange Act: 
Common</p>

<p ALIGN="JUSTIFY">Check whether the issuer (1) filed all reports
required by Section 13
or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing
requirements for the past 90 days.</font><font SIZE="3"> Yes [X] No [
]</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">Check if there is no disclosure of delinquent filers
in response to
Item 405 of Regulations S-B is met contained in this form, and no
disclosure will be
contained, to the best of the registrant's knowledge, in definitive
proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or
any amendment to
this Form 10-KSB.</font><font SIZE="3"> [ ] Not applicable [ ]</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">State issuer's revenues for its most recent fiscal
year.</font><font SIZE="3"> <u>$1,434,393</u>.</p>

<p ALIGN="JUSTIFY"></font><font SIZE="2">On February 1, 2000 the
aggregate market value,
based on the asked price, of the voting stock held by nonaffiliates of
the registrant was
$5,033,002.</p>

<p ALIGN="JUSTIFY">The number of shares outstanding of the registrant's
common stock as of
February 1, 2000: </font><font SIZE="2">
</font><font SIZE="2">4,953,667
shares.</p>

<p ALIGN="JUSTIFY">DOCUMENTS INCORPORATED BY REFERENCE</p>

<p ALIGN="JUSTIFY">The following documents are incorporated by
reference into Parts I, II,
III, and IV of this report:  (1) Form S-18, effective Nov. 5,
1984, Commission
File No. 2-92949-S; (2) Form 8-K, filed March 15, 1985, Commission
File
No. 2-92949-S; Form 8-A, Commission File No. 000-27793, dated
October 25, 1999; Forms
8-K dated July 12, 1991, December 14, 1992, December 10, 1993, and
Forms 8-K, dated
February 9, 1996, February 7, 1997, February 6, 1998, February 12, 1999
and February 11,
2000 .</p>

<p ALIGN="JUSTIFY">Transitional Small Business Disclosure
Format:</font><font SIZE="3">
Yes [ ] No [X]</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER">PART I</p>

<p ALIGN="CENTER">ITEM 1.</p>

<p>FORWARD LOOKING STATEMENTS:</p>
</font><font SIZE="2"><i><b>

<p ALIGN="JUSTIFY">When used in this Annual Report and the documents
incorporated herein
by reference, the words "believes", "anticipates",
"expects"
and similar expressions are intended to identify in certain
circumstances, forward-looking
statements. Such statements are subject to a number of risks and
uncertainties that could
cause actual results to differ materially from those projected,
including the risks
described in this Annual Report. Given these uncertainties, readers are
cautioned not to
place undue reliance on such statements. The Company also undertakes no
obligation to
update those forward-looking statements.</p>
</b></i></font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">BUSINESS  </p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">Electronic Systems Technology, Inc. ("EST"
or the
"Company") specializes in the manufacturing and development
of wireless modem
products. The Company uses its research and development, manufacturing,
and marketing
efforts to produce and market the Company’s line of ESTeem (TM)
Wireless Modem
products and accessories. The Company offers product lines, which
provide innovative
communication solutions for applications not served by existing
conventional communication
systems. The Company’s products are offered in markets for process
automation in
commercial, industrial, and government arenas both domestically and
internationally, and
domestic markets for public safety communications infrastructure. The
Company’s
product lines are marketed through direct sales, sales representatives,
Original Equipment
Manufacturers (OEM’s) and domestic and foreign resellers. </p>

<p ALIGN="JUSTIFY">The Company was incorporated in the State of
Washington in February
1984, and was granted a U.S. Patent for the "Wireless Computer
Modem" in May
1987, and Canadian patent in October 1988. In the past three years, the
Company continues
to improve its products to incorporate the latest technology and
respond to customer needs
and market opportunities.</font><font SIZE="2">
</font><font SIZE="2">During
1999, the Company’s development efforts concentrated on refining
the new ESTeem 192S
product line of spread spectrum, non-licensed radio frequency modems
and bringing the
product to market. The Company has continually expanded its customer
base, particularly in
the industrial control arena with efforts to team with all major
programmable logic
controller (PLC) hardware vendors. The Company has also been involved
from time to time as
a hardware provider for Government programs such as the Core Automated
Maintenance System
(CAMS) for the U.S. Air Force and Automatic Identification Technology
(AIT) for the U.S.
Army. In 1999, the Company expanded marketing ESTeem products for use
in mobile data
terminal applications by public safety entities, a marketing strategy
began in 1998, and
continued to participate in foreign and domestic Supervisory Control
and Data Acquisition
(SCADA), Industrial Automation, and Government marketplaces. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">PRODUCTS AND MARKETS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">EST's products provide communication links between
computers,
peripherals, and instrumentation controls using radio frequency waves.
The Company’s
products are packet burst, VHF & UHF FM radio modems, operating in
radio frequency
bands of 72 to 76 Megahertz (MHz), 150 to 174 MHz, 400 to 420 MHz, 450
to 470 MHz, and 2.4
Gigahertz (GHz).</p>

<p ALIGN="JUSTIFY">The ongoing proliferation of computer applications
in business,
industry and public service has created a dynamic environment of
automation and networking
which requires increasing amounts of data transfer. Prior to the
invention of the ESTeem
modem, the majority of data transfers used telephone modems or direct
cable connections.
These latter methods both have costly side effects. Telephone modems
have a potentially
expensive monthly charge for the use of telephone lines, and direct
cable connections can
have installation costs as much or more than the cost of the
communication system. ESTeem
wireless modem products provide a "Wireless Solution" by
eliminating the need
for conventional hardwiring and leased phone lines. </p>

<p ALIGN="JUSTIFY">All of the ESTeem models ("ESTeems") come
with industry
standard asynchronous communications ports, giving users new dimensions
to "Local
Area Networking". As many as 253 devices can be interfaced on a
single frequency.
ESTeem wireless modems have over one hundred internal software
commands, which are saved
in non-volatile memory, allowing users to easily configure the unit for
any application. </p>

<p ALIGN="JUSTIFY">ESTeem Modems work on a packet burst communications
concept. Packet
systems, whether hardwired or radio, share the same principle of
operation: data is taken
from a standard RS-232C, RS-422 or RS-485 asynchronous port and is
transmitted in
"Electronic Packets". The size of the packet can be user
defined from 1 to 2000
bytes of information, depending on model. Once a packet of data is
formed, it is
transmitted in a "burst," from one ESTeem modem to another
ESTeem modem, hence
the term "packet burst communications." ESTeem Modems provide
data accuracy of
greater than one part in 100 million. Internal Digi-Repeater features
allow the user to
increase operating range by relaying transmission through a maximum of
three ESTeems to
reach a destination ESTeem. An ESTeem can operate as an operating node,
a repeater node,
or both simultaneously, for added flexibility. Secure data
communication is provided in
the ESTeem products through use of proprietary technology and
techniques, providing users
of the products four definable security codes. If higher security is
required, the ESTeem
is compatible with asynchronous Data Encryption Standard (DES)
encryption devices.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">PRODUCT APPLICATIONS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">Some of the major applications and/or industries for
which the ESTeem
products are being utilized are as follows:</p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="696">
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Water and Waste Water
    Industry </font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Overhead Crane Control</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2">Industrial Process
Control </font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Shop
Floor Manufacturing</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Remote Data Acquisition
    (SCADA) </font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Intra-Office/Building
    Computer Networking</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Law
Enforcement/Public
    Safety </font></td>
    <td WIDTH="50%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"> </td>
    <td WIDTH="50%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Power Utility </font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Federal</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2">Oil/Gas Pipeline
</font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Ground Mobile
    Communications</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Material Handling </font></td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Ship
to Shore
    Communications</font></td>
  </tr>
  <tr>
    <td WIDTH="50%" VALIGN="TOP"> </td>
    <td WIDTH="50%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Flight Line Maintenance</font></td>
  </tr>
</TABLE>
<font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">PRODUCT LINES</p>
</font><font SIZE="2"><b>

<p ALIGN="JUSTIFY">Model 192C.</b> A licensed narrow band packet burst
transceiver for
commercial, industrial, and public safety applications operating in the
450 to 470 MHz
spectrum. The digitally synthesized transceiver is field tunable over
the operating band
in 6.25 KHz steps. RF data rate is 19,200 bps @ 25 KHz channel spacing
and 9,600 bps @
12.5 KHz channel spacing. Standard RF output power is 2 watts (4 watts
optional). Typical
indoor and outdoor fixed base and mobile applications include point to
point and point to
multi-point digital data networking for distances to approximately 15
miles line-of-sight
without the use of the digi-repeater option. Typical application uses
for the ESTeem 192C
are as follows: </p>

<p align="left">Domestic: Industrial Automation, inventory control,
public safety.<br>
International: Telephone by-pass, and industrial automation.</p>
<b>

<p ALIGN="JUSTIFY">Model 192F.</b> A licensed narrow band packet burst
transceiver for
foreign market commercial, industrial automation, public safety and
Federal (USA only)
applications operating in the 400 to 420 MHz spectrum. The digitally
synthesized
transceiver is field tunable over the operating band in 6.25 KHz steps.
RF data rate is
19,200 bps @ 25 KHz channel spacing and 9,600 bps @ 12.5 KHz channel
spacing. Standard RF
output power is 4 watts (2 watts optional). Typical indoor and outdoor
fixed base and
mobile applications include point to point and point to multi-point
digital data
networking for distances to approximately 15 miles line-of-sight
without the use of the
digi-repeater option. Typical application uses for the ESTeem 192F are
as follows: </p>

<p ALIGN="left">International: Telephone by-pass, industrial automation
and inventory
control.<br>
Federal: Inventory and command control.</p>
<b>

<p ALIGN="JUSTIFY">Model 192M.</b> A licensed narrow band packet burst
transceiver for
foreign and domestic commercial, industrial automation, and public
safety applications
operating in the 150 to 174 MHz spectrum. The digitally synthesized
transceiver is field
tunable over the operating band in 6.25 KHz steps. RF data rate is
19,200 bps @ 25 KHz
channel spacing and 9,600 bps @ 12.5 KHz channel spacing. Standard RF
output power is 2
watts (4 watts optional). Typical indoor and outdoor fixed base and
mobile applications
include point to point and point to multi-point digital data networking
for distances to
approximately 15 miles line-of-sight without the use of the digi-
repeater option. Typical
application uses for the ESTeem 192M are as follows:</p>

<p ALIGN="left">Domestic: Industrial automation, inventory control, and
public safety.<br>
International: Telephone by-pass, industrial automation and SCADA.</p>
<b>

<p ALIGN="JUSTIFY">Model 192V</b><strong>.</strong> A licensed narrow
band packet burst
transceiver for foreign and domestic commercial and industrial
applications operating in
the 72 to 73 MHz spectrum (66 to 72 and 74 to 76 custom order). The
digitally synthesized
transceiver is field tunable over the operating band in 20 KHz steps.
RF data rate is
19,200 bps @ 20 KHz channel spacing. Standard RF output power is 1
watt. Typical indoor
and outdoor fixed base and mobile applications include point to point
and point to
multi-point digital data networking for distances to approximately 5
miles line-of-sight
without the use of the digi-repeater option. Typical application uses
for the ESTeem 192V
are as follows:</p>

<p ALIGN="left">Domestic: Industrial automation and inventory
control.<br>
International: Telephone by-pass and industrial automation.</p>
<b>

<p ALIGN="JUSTIFY">Model 192S.</b> A low cost unlicensed direct
sequence spread spectrum
transceiver for foreign and domestic commercial and industrial
applications operating in
the 2.4 GHz spectrum.. RF data rate is 171,000 bps. Standard RF output
power is 1 watt.
Typical indoor and outdoor fixed base and mobile applications include
point to point and
point to multi-point digital data networking for distances to
approximately 10 miles
line-of-sight without the use of the digi-repeater option. Typical
application uses for
the ESTeem 192S are as follows:</p>

<p ALIGN="left">Domestic: Industrial automation and inventory
control.<br>
International: Telephone by-pass and industrial automation.<br>
Federal: Inventory and command control.</p>
<b>

<p ALIGN="JUSTIFY">Model 95.</b> A low cost licensed narrow band packet
burst transceiver
for foreign and domestic commercial and industrial applications
operating in the 72 to 73
MHz spectrum (66 to 72 and 74 to 76 custom order). The digitally
synthesized transceiver
is field tunable over the operating band in 20 KHz steps. RF data rate
is 9,600 bps @ 20
KHz channel spacing. Standard RF output power is 1 watt. Typical indoor
and outdoor fixed
base and mobile applications include point to point and point to multi-
point digital data
networking for distances to approximately 5 miles line-of-sight without
the use of the
digi-repeater option. Typical application uses for the ESTeem 95 are as
follows:</p>

<p ALIGN="left">Domestic: Industrial automation and inventory
control.<br>
International: Telephone by-pass and industrial automation.<br>
Federal: Inventory and command control.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">ADDITIONAL PRODUCTS AND SERVICES<u></p>
</u></font><font SIZE="2">

<p>The Company sells various accessories that support its EST product
lines. Accessories
are purchased from other manufacturers and resold by EST to support the
application of
ESTeem modems. Antennas, power supplies and cable assemblies are
examples of such items.
The Company also provides Factory Services, such as repair and upgrade
of ESTeem products.
To assist in the application of ESTeem wireless modems the Company
provides professional
services, site survey testing, system start-up, and custom engineering
services.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">RESEARCH AND DEVELOPMENT AND NEW PRODUCTS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The Company’s products compete in the rapidly
changing technology
environment of the communications industry, where standards and
technologies are subject
to rapid and unexpected changes. This environment results in it being
necessary for the
Company to be continually updating and enhancing existing products, as
well as developing
new products in order to remain competitive. Research and Development
expenditures for new
product development and improvements of existing products by the
Company for 1999 and 1998
were $171,658 and $139,675, respectively. None of the Company’s
research and
development expenses were directly paid for by any of the
Company’s customers. In
1999, the Company continued to contract with an independent,
nonaffiliated, engineering
company specializing in radio design, when that expertise was required.
</p>

<p ALIGN="JUSTIFY">During 1999, the Company completed development and
brought to market
the ESTeem 192S, using spread spectrum, nonlicensed radio architecture
to augment the
Company’s existing products. The Company’s development
efforts were also used to
complete redesign of the outer case structure of the ESTeem products
for both cost savings
and performance enhancement, to fully be implemented during 2000.
Initial research and
development was commenced on a wireless modem using Ethernet interface
protocol, intended
for completion during 2000, to take advantage of perceived market
opportunities for this
type of product. The Company plans on continued research and
development expenditures and
to undertake new development and improvement projects, as they become
necessary. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">MARKETING, CUSTOMERS AND SUPPORT</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The majority of the Company’s products are sold
and distributed
directly from the Company’s facility through direct sales to end
users of the ESTeem
products. The remainder of the Company’s sales are through non-
exclusive,
non-stocking Resellers. Normally, seventy percent of the Company’s
products are
distributed through direct sales and thirty percent are through
Resellers. Customers
generally place orders on an "as needed basis". Shipping
dates for most products
are generally 5 to 10 working days after receipt of a customer order.
As of December 31,
1999, the Company had a backlog of $87,000.</p>

<p ALIGN="JUSTIFY">During 1999, the Company continued to advertise in
trade publications
specifically targeted at users of control, instrumentation, and
automation systems
worldwide, and public safety entities domestically. The Company’s
advertising is
primarily targeted toward potential customers using Programmable Logic
Controllers (PLCs).
There are approximately twenty-five major PLC manufacturers worldwide.
The Company also
attends tradeshows each year specifically targeted toward the customers
and markets in
which it sells products. During 2000, the Company intends to continue
marketing strategies
targeted at existing markets of industrial controls and Mobile Data
Computers for public
safety networks. The Company maintains an Internet web site to provide
easy access to
product and technical information for both present and potential
customers of the
Company’s products. The Company provides technical support and
service for its
products through phone support, field technicians, and Internet
sources. The Company
believes high quality customer and technical support is necessary and
vital to its
business and the markets in which it competes. To maintain this high
level of customer
support the Company has in the past, and will continue in the future,
to make investments
and expenditures in support of its customer service programs. </p>

<p ALIGN="JUSTIFY">The Company is continuing marketing activities
directed towards all
branches of the U.S. Government, including United States Armed
Services. Examples of
projects the Company’s products are included in are; flight-line
maintenance for the
United States Air Force, flight-line lighting for the United States
Navy, command and
inventory control for the United States Marine Corps, and the Automatic
Identification
Technology program for the United States Army. </p>

<p ALIGN="JUSTIFY">For the year ended December 31, 1999, the largest
sales concentration
was to subsidiaries of Consolidated Electrical Distributors (CED), a
nationwide
distributor of the Company’s products, which accounted for
approximately 14% of the
Company’s product sales. Foreign sales were 10% of total revenues
for 1999. No other
sales to a single customer comprised 10% or more of total product sales
as of December 31,
1999. See "Management’s Discussion and Analysis of Financial
Condition and
Results of Operations", and "Financial Statements".</p>

<p ALIGN="JUSTIFY">The Company has a General Services Administration
(GSA) contract to
sell goods to the U.S. Government. This contract is a fixed price,
indefinite quantity and
delivery agreement. The current contract runs through February 2004.
</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">COMPETITION</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The Company’s competition varies according to
the market in which
the Company's products are competing. All of the markets in which the
Company’s
products are sold are highly competitive. Listed below are the markets
the Company’s
products compete in and competition in those markets:</p>
</font>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="703">
  <tr>
    <td WIDTH="45%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="JUSTIFY">Major Market</u></font></td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="JUSTIFY">Major Competitors</u></font></td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"> </td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Industrial Automation,
    Remote Data Acquisition, Shop Floor Manufacturing, Overhead Crane
Control</font></td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Data-Linc, GRE America,
    Johnson, Maxon, Adaptive Broadband (formerly Microwave Data
Systems) and Motorola. </font></td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"> </td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Computer Networking, inter
    and intra building</font></td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Aironet Wireless
    Communications, Cylink, Digital Wireless, Metricom, and
Proxim</font></td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"> </td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Radio Area Networking of
    hand held data collection terminals and bar coding</font></td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Intermec, LXE, Norand,
    Symbol Technologies, and Telxon </font></td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"> </td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP" HEIGHT="38"><font SIZE="2"><p
ALIGN="JUSTIFY">Mobile Data
    Computer systems for public safety applications</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="38"></td>
    <td WIDTH="52%" VALIGN="TOP" HEIGHT="38"><font SIZE="2"><p
ALIGN="JUSTIFY">Data Radio,
    Motorola, various cellular service providers using CDPD
architectures. </font></td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"> </td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="45%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Federal applications</font></td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="52%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Data
Radio, Datron
    Technology, Harris Computer Systems, Lockheed Martin, Magnavox,
Motorola, Siemens,
    Watkins-Johnson, and Adaptive Broadband.</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">Management believes the ESTeem products compete
favorably in the market
because of performance, price, and adaptability of the products to a
wide range of
applications. The Company's major limitation in competing with other
manufacturers is its
limited marketing budget.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">PATENTS, TRADEMARKS, AND PROPRIETARY INFORMATION</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">EST was granted a United States patent in 1987 for a
"Wireless
Computer Modem". In 1988, EST was granted a Canadian Patent for a
"Wireless
Computer Modem". Both patents have lives of 17 years. Trademark
for the ESTeem
Wireless Modem was granted in 1985. </p>

<p ALIGN="JUSTIFY">To protect the Company against unauthorized
disclosure of proprietary
information belonging to the Company, all employees, dealers,
distributors, original
equipment manufacturers, sales representatives and other persons having
access to
confidential information regarding Company products or technology are
bound by
non-disclosure agreements.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">GOVERNMENT REGULATION</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">For operation in the United States, the ESTeem Radio
Modems, require
Federal Communications Commission (FCC) Type Acceptance. The FCC Type
Acceptance is
granted for devices, which demonstrate operation within mandated,
observed, and tested
performance criteria. All of the Company’s products requiring FCC
Type Acceptance
have been granted such acceptance. </p>

<p ALIGN="JUSTIFY">For operation in Canada, the ESTeem RF Modems
require Industry Canada
Type Acceptance. Industry Canada grants the Type Acceptance for devices
demonstrating
operation within performance criteria mandated, observed, and tested.
Of the
Company’s current production line, the ESTeem 192F, 192C, 192V,
192M and 192S have
been granted type acceptance in Canada. </p>

<p ALIGN="JUSTIFY">All ESTeem radio modem products, with the exception
of the ESTeem 192S,
nonlicensed, spread spectrum wireless modem, require consumer licensing
under Part 90 of
the FCC Rules and Regulations, which must be applied for by the end
user of the
Company’s products. The Company cannot guarantee customers will
receive FCC consumer
licenses in the VHF or UHF frequency spectrum for any particular
application. The Company
provides information to its customers to assist in the application for
FCC consumer
licenses.</p>

<p ALIGN="JUSTIFY">At the time of this filing the Company is unaware of
any existing or
proposed FCC regulation that would have an materially adverse effect on
the Company’s
operations, but there can be no assurance that future FCC regulations
will not have
materially adverse effects on the operations of the Company.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">SOURCE OF SUPPLY AND MANUFACTURING</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The Company purchases certain components necessary
for the production
of its products from sole suppliers. Key components for the
Company’s products are
supplied by the Motorola Corporation and Toko America Inc., as
purchased through a number
of distributors. The components provided by Motorola and Toko America
could be replaced or
substituted by other products, if it became necessary to do so. If this
action became
necessary, a material interruption of production and/or material cost
expenditures
involved with locating and qualifying replacement components could take
place. </p>

<p ALIGN="JUSTIFY">Approximately 15% of the Company’s inventory at
December 31, 1999
consisted of parts having lead times ranging from 12 to 28 weeks. Some
parts are
maintained at high levels to assure availability to meet production
requirements, and
accordingly, account for a significant portion of the inventory dollar
amount. Based on
past experience with component availability, current distributor
relationships, and
current inventory levels, the Company does not foresee shortages of
materials used in
production. However, recent parts shortage developments in the
electronic component
marketplace, involving components used by the Company uses which are
also used in cellular
phones and paging devices, has the potential of creating negative
component availability
and delivery issues for the Company in the future. The Company has been
able to procure
parts on a timely basis as of the date of this report. However this
cannot be guaranteed
in the future and if shortages were to occur material interruption of
production and
consequently product delivery to customers could occur. </p>

<p ALIGN="JUSTIFY">The Company contracts with Manufacturing Services,
Inc., in Kennewick,
Washington, for assembly of the Company’s products, using material
purchased by the
Company. By contracting with Manufacturing Services, Inc., the Company
is able to avoid
staff fluctuations associated with operating its own manufacturing
operation. The
President of Manufacturing Services, Melvin H. Brown, is a Director of
the Company.
Management believes all prices for services, provided by Manufacturing
Services, Inc.,
were as favorable as could be obtained from comparable manufacturing
services companies.
See "Management’s Discussion and Analysis of Financial
Condition and Results of
Operations", and "Financial Statements".</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">EMPLOYEES</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">As of December 31, 1999, the Company employed a
staff of</font><font SIZE="2"> </font><font SIZE="2">11 persons on a full
time basis, 3 in
marketing, 2 in technical support, 5 in engineering/manufacturing, and
1 in Finance and
Administration. The Company’s operations are dependent upon key
members of its
Engineering and Management personnel. In the event services of these
key individuals were
lost to the Company, adverse effects on the Company’s operations
may be realized. The
Company employs part-time labor on an "as needed" basis,
usually in
engineering/manufacturing. At year-end 1999 the Company employed 3
part-time employees.
None of the Company’s employees are represented by a labor union
and the Company
believes it has good relations with its employees.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER">ITEM 2.</p>

<p ALIGN="CENTER">PROPERTIES</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">EST does not own any real property, plants, mines,
or any other
materially important physical properties. The Company's administrative
offices and
laboratories are located in leased facilities at 415 N. Quay Street,
Kennewick,
Washington. The Company leases its office and laboratory space in a
lease agreement with
The Port of Kennewick in Kennewick, Washington for approximately 6,300
square feet of
office and laboratory space. The total monthly lease cost is $2,407.44,
including a
leasehold tax of $273.94. The lease covers a period of three years,
expiring November 30,
2001. </p>

<p ALIGN="JUSTIFY">The Company also owns miscellaneous assets, such as
computer equipment,
laboratory equipment, and furnishings. The Company does not have any
real estate holdings,
nor investments in real estate. The Company maintains insurance in such
amounts and
covering such losses, contingencies and occurrences that the Company
deems adequate to
protect its property. Insurance coverage includes a comprehensive
liability policy
covering legal liability for bodily injury or death of persons, and for
property owned by,
or under the control of the Company, as well as damage to the property
of others. The
Company maintains key man life insurance protecting the Company in the
event of the death
of the Company President. The Company also maintains fidelity insurance
which provides
coverage to the Company in the event of employee dishonesty.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">ITEM 3. </p>

<p ALIGN="CENTER">LEGAL PROCEEDINGS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">No proceedings are identified to which involve a
claim for damages,
exclusive of interest and costs, that exceed 10% of the current assets
of the Company. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">ITEM 4. </p>

<p ALIGN="CENTER">SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The Company did not submit any matters for
shareholder approval during
the fourth quarter of the1999 fiscal year. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">PART II</p>

<p ALIGN="CENTER">ITEM 5.<b> </p>

<p ALIGN="CENTER"></b>MARKET INFORMATION FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">There is no established market for trading the
Common Stock of the
Company. The Common Stock is not regularly quoted in the automated
quotation system of a
registered securities system or association. The Common Stock of the
Company is traded on
the "over-the-counter" market and is listed on the electronic
bulletin board
under the symbol of "ELST". The following table illustrates
the average high/low
price of the Common Stock for the last two (2) fiscal years. The
"over-the-counter" quotations do not reflect inter-dealer
prices, retail
mark-ups, commissions or actual transactions.</p>
</font>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="552">
  <tr>
    <td WIDTH="43%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER"><u>Bid </u></font></td>
    <td WIDTH="33%" VALIGN="TOP" COLSPAN="3"><font SIZE="2"><p
ALIGN="CENTER"><u>Ask</u></font></td>
  </tr>
  <tr>
    <td WIDTH="43%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">High</u></font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">Low</u></font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">High</u></font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">Low</u></font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" COLSPAN="6"><font SIZE="2"><p
ALIGN="JUSTIFY">Fiscal year ended December
    31, 1999</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">First Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.375</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.2813</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.5313</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.2813 </font></td>
  </tr>
  <tr>
    <td WIDTH="43%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Second Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.4063</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.34</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.50</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">0.34
</font></td>
  </tr>
  <tr>
    <td WIDTH="43%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Third Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.35</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.34</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.4375</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.35</font><font SIZE="2">
    </font></td>
  </tr>
  <tr>
    <td WIDTH="43%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Fourth Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.36</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.35</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.4063</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.35</font></td>
  </tr>
</TABLE>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="553">
  <tr>
    <td VALIGN="TOP" COLSPAN="6"><font SIZE="2"><p
ALIGN="JUSTIFY">Fiscal year ended December
    31, 1998</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">First Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">3/8</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.26</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.44</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.32</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Second Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">19/32</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">3/8</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">11/16</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">7/16</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Third Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1/2</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1/4</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">9/16</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">7/16</font></td>
  </tr>
  <tr>
    <td WIDTH="44%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Fourth Quarter</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">11/32</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1/4</font></td>
    <td WIDTH="10%" VALIGN="TOP"> </td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">7/16</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">11/32</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">The above data was compiled from information
obtained from the National
Quotation Bureau, Inc. daily quotation service.</p>

<p ALIGN="JUSTIFY">The approximate number of record holders of common
stock of the
Registrant as of February 1, 2000 was 580 persons/entities.</p>

<p>Electronic Systems Technology Inc. paid non-cumulative, cash
distributions on July 9,
1999, July 9, 1998 and July 11, 1997, respectively, each equivalent to
$0.01 per
outstanding share. The Company’s Forms 8-K dated June 11, 1999,
June 4, 1998 and June
5, 1997, as filed with the Securities and Exchange Commission are
included herein by
reference. The Company has never paid a cash dividend, and any such
dividend undertaken by
the Company will be solely at the discretion of the Board of Directors.
</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER">ITEM 6.</p>

<p ALIGN="CENTER">MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS
OF OPERATIONS</p>
</font><font SIZE="2"><b>

<p ALIGN="JUSTIFY">Management’s discussion and analysis is
intended to be read in
conjunction the Company’s audited financial statements the
integral notes thereto.
The following statements may be forward- looking in nature and actual
results may differ
materially.</p>
</b></font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">RESULTS OF OPERATIONS</p>

<p ALIGN="JUSTIFY">GENERAL</font><font SIZE="2">: The Company
specializes in the
manufacturing and development of wireless modem products. The Company
offers a product
line which provide innovative communication solutions for applications
not served by
existing conventional communication systems. The Company offers product
lines in markets
for process automation in commercial, industrial and government arenas
domestically, as
well as internationally, and domestically to public safety entities for
mobile data
computer terminal applications. The Company markets its products
through direct sales,
sales representatives, and domestic, as well as foreign, resellers.
Operations of the
Company are sustained solely from revenues received through sales of
its products and
services. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">FISCAL YEAR 1999 vs. FISCAL YEAR 1998</p>

<p ALIGN="JUSTIFY">GROSS REVENUES</font><font SIZE="2">: Total revenues
for the fiscal
year 1999 were $1,434,393 reflecting an 11% decrease from $1,631,298
gross revenues for
fiscal year 1998. The decrease is attributable primarily to decreased
product sales in
1999, of $1,239,390 as compared to 1998 sales of $1,485,381, reflecting
a decrease of 17%.
The product sales decrease during 1999 is primarily the result of
decreased sales to U.S.
Government, and foreign market segments. The Company also reduced the
selling price of the
ESTeem modem products to both distributors and end users during 1999,
but Managment
believes the overall effect of this price reduction on sales revenues
during 1999 was
minimal, and that the majority of the decreased sales revenues was due
to decreased U.S.
Government sales.  Management believes the decrease in U.S.
Government sales revenue
was the result of lack of U.S. Government funding for, or
discontinuance of, programs
using the Company’s products. As the Company has stated
previously, the uncertain
nature of U.S. Government purchasing, makes prediction and planning of
revenues to be
received from the U.S. Government difficult to predict, and there can
be no guarantee that
sales to the U.S. Government will return to previous levels. </p>

<p ALIGN="JUSTIFY">In 1999, a majority of the Company's domestic sales
were for industrial
automation applications. An example of an industrial automation
application is a city's
water treatment operation. It is Management's opinion that these
industrial automation
applications will continue to provide the largest portion of the
Company's revenues in the
foreseeable future. The Company’s domestic sales were also
augmented by sales of the
Company’s products for mobile data computer systems to public
entities, which
accounted for 40% of the Company’s domestic sales during 1999. An
example of a mobile
data computer system for a public entity is a local area network (LAN),
between a police
department computer dispatch center and the police departments
individual police vehicles.
</p>

<p ALIGN="JUSTIFY">During 1999, the Company had $133,025 in foreign
export sales,
amounting to 10% of gross product and service sales for the year. For
year-end 1998,
foreign export sales were $214,396, or 14% of gross product sales for
the year. It is
Management’s belief that foreign sales decreased due to the result
of increased
competition in foreign industrial automation markets. Products
purchased by foreign
customers were used primarily for use in industrial automation
projects. Management
believes the majority of foreign export sales are due to EST
distributor efforts and the
Company’s Internet website presence. The geographic compositions
of the
Company’s foreign export sales for 1999 and 1998 are shown in Note
6 to the Financial
Statements. (See Note 6 to Financial Statements.)</p>

<p ALIGN="JUSTIFY">In 1999 products purchased by U.S. Government
agencies or by U.S.
Government contractors amounted to $46,739 or 3%, of gross product
sales compared with
1998 levels of $423,923, or 27%, of gross product sales. During 1999,
Products purchased
by the U.S. Government were utilized primarily in PC to PC (Personal
Computer) networking.
Management believes the decrease in U.S. Government sales revenues was
the result of lack
of U.S. Government funding for, or discontinuance of, programs using
the Company’s
products. The uncertain nature of U.S. Government purchasing, makes
prediction and
planning of revenues to be received from U.S. Government difficult to
predict. </p>

<p ALIGN="JUSTIFY">As of December 31, 1999, the Company had a backlog
of $87,000. The
Company’s customers generally place orders on an "as needed
basis".
Shipment for most of the Company’s products is generally made
within 5 to 10 working
days after receipt of customer orders. </p>

<p ALIGN="JUSTIFY">COST OF SALES: Cost of Sales, as a percentage of
gross sales, for the
years of 1999 and 1998 was 51% and 47%, respectively. The cost of sales
variation for 1999
is the result of the Company reducing sales prices of the ESTeem
products during 1999, and
the product mix of items sold during 1999 having a higher cost than
1998. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">INVENTORY</font><font SIZE="2">: The Company's year-
end inventory
values for 1999 and 1998 were as follows:</p>
</font><div align="center"><center>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="306">
  <tr>
    <td WIDTH="39%" VALIGN="TOP"> </td>
    <td WIDTH="8%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1999</font></td>
    <td WIDTH="6%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1998</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP"> </td>
    <td WIDTH="8%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"> </td>
    <td WIDTH="6%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Parts</font></td>
    <td WIDTH="8%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">$256,334</font></td>
    <td WIDTH="6%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">$229,903</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Work
in Progress</font></td>
    <td WIDTH="8%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">52,279</font></td>
    <td WIDTH="6%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">--
</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Finished goods</font></td>
    <td WIDTH="8%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">48,877</font></td>
    <td WIDTH="6%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">155,462</font></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">TOTAL</font></td>
    <td WIDTH="8%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">$357,490</font></td>
    <td WIDTH="6%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">$385,365</font></td>
  </tr>
</TABLE>
</center></div><font SIZE="2">

<p ALIGN="JUSTIFY">The Company's objective is to maintain inventory
levels as low as
possible to provide maximum cash liquidity, while at the same time,
meet production and
delivery requirements. If the Company's sales are less than
anticipated, inventory
over-stocking can occur. Some parts are maintained at high levels to
assure availability
to meet production requirements, and accordingly, account for a
significant portion of the
inventory dollar amount. Based on past experience with component
availability, current
distributor relationships, and current inventory levels, the Company
does not foresee
shortages of materials used in production, and the Company has been
able to procure parts
on a timely basis as of the date of this report. However this cannot be
guaranteed in the
future and if shortages were to occur material interruption of
production and consequently
product delivery to customers could occur. </p>

<p ALIGN="JUSTIFY">For year-end 1999, purchases and costs allocated to
cost of goods sold
were $605,240 as compared to $758,870 in 1998. The decrease in
purchases and allocated
costs is a result of decreased purchases by the Company during 1999 due
to lower than
expected sales volume during most of the year. Also when compared with
1998, more of the
Company’s salaries and wages expense that was previously
classified as manufacturing
support, were in 1999 allocated to research and development projects
and engineering
projects ultimately billed to customers. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">OPERATING EXPENSES</font><font SIZE="2">: Operating
expenses, prior to
allocation of expenses to Cost of Sales and Engineering Services,
increased to $907,953 in
1999, from 1998 levels of $885,416. Material changes in expenses are
comprised of the
following components: Advertising expenses decreased to $10,970 in 1999
from 1998 levels
of $37,149 due to continued reduced advertising frequency by the
Company during 1999.
Supplies and materials expenses increased during 1999 to $21,875 in
1999, from $15,568 in
1998 due to increases in research and development projects requiring
such material.
Professional services increased to $69,785 from 1998 levels of $66,210
due to increased
subcontracted engineering services and year-end audit fees. Printing
expenses increased to
$15,220 during 1999 from 1998 levels of $7,082 primarily due to the
redesign of the
Company’s brochure items and increased marketing mailings by the
Company. Repair and
maintenance expenses decreased in 1999 to $12,826 as compared to
$18,259 in 1998, due to
decreased equipment repairs. </p>

<p ALIGN="JUSTIFY">Salaries increased to $503,156 in 1999, from 1998
levels of $467,118,
due to increased wages paid to engineering services employees, wages
paid on a commission
basis based on engineering service revenues during 1999, and planned
wage increases for
Company employees. Travel expenses for the Company increased to $56,292
during 1999 from
1998 levels of $50,847 due to increased travel expenses related to
engineering services
and increased marketing trips by the Company. The Company incurred bad
debt expense of
$1,155 during 1999 and did not incur any such expense during 1998. </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">FISCAL YEAR 1998 vs. FISCAL YEAR 1997</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">Total revenues for the fiscal year 1998 were
$1,631,298 reflecting a
10% increase from the $1,476,487 gross revenues for fiscal year 1997.
The increase is
attributable to increased product sales in 1998, of $1,485,381 as
compared to 1997 sales
of $1,337,303, representing an increase of 11%. During 1998 the Company
had increased
sales to U.S. Government contractors, which accounted for the majority
of increased sales
revenues.</font><font SIZE="2"> </font><font SIZE="2">
Management believed
the increase in U.S. Government sales revenues was the result of
unexpected contract
purchases, and due to the uncertain nature of U.S. Government
purchasing patterns, that a
continuation of U.S. Government sales revenues like those experienced
in 1998 could not be
guaranteed. </p>

<p ALIGN="JUSTIFY">In 1998, the Company had $214,396 in foreign export
sales, amounting to
14% of gross product and service sales for the year. For year-end 1997,
foreign export
sales were $340,423, or 24% of gross product sales for the year. It is
Management’s
belief that foreign sales decreased due to the result of economic
downturns experienced in
Asia and South America, and 1998 performance being compared with the
strong 1997 foreign
export year of $340,423, or 24% of product sales for the Company, which
historically
amounts to 15% to 20% of the Company’s product sales. Products
purchased by foreign
customers were used primarily for use in industrial automation
projects. The geographic
compositions of the Company’s foreign export sales for 1998 are
shown in Note 6 to
the Financial Statements. (See Note 6 to Financial Statements.)</p>

<p ALIGN="JUSTIFY">During 1998 products purchased by U.S. Government
agencies or by U.S.
Government contractors amounted to $423,923 or 27%, of gross product
sales compared with
1997 levels of $250,840, or 18%, of gross product sales. Management
believed the increase
in U.S. Government sales revenues during 1998 was the result unexpected
contract
purchases, and due to the uncertain nature of U.S. Government
purchasing patterns, that a
continuation of U.S. Government sales revenues like those experienced
in 1998 could not be
guaranteed. Management does not base liquidity, profitability, or
material purchase
projections on anticipated U.S Government sales. Products purchased by
the U.S. Government
during 1998 were utilized in inventory control, PC/PC (Personal
Computer) networking and
command control. </p>

<p ALIGN="JUSTIFY">Cost of Sales, as a percentage of gross sales, for
1998 and 1997 was
47% and 43%, respectively. The cost of sales variation for 1998 is the
result of the
Company having more discounted sales through distributors and U.S.
Government contracts,
and a product mix of items sold with a higher cost than 1997. </p>

<p ALIGN="JUSTIFY">For 1998, purchases and costs allocated to cost of
goods sold were
$758,870 as compared to $492,985 in 1997. The increase is a result of
increased purchasing
by the Company in 1998 to respond to large U.S. Government orders late
in the year, and
increased manufacturing salaries and wages, when compared with
1997.</p>

<p ALIGN="JUSTIFY">Operating expenses, prior to allocation of expenses
to Cost of Sales
and Engineering Services, increased to $885,416 in 1998, from 1997
levels of $813,364.
Material changes in expenses are comprised of the following components:
Advertising
expenses decreased to $37,149 in 1998 from 1997 levels of $51,935 due
to reduced
advertising frequency by the Company in 1998. Supplies and materials
expenses decreased to
$15,568 in 1998, from $22,079 in 1997 due to decreased research and
development projects
requiring such material. Professional services increased to $66,210
from 1997 levels of
$56,215 due to increased subcontracted engineering services for
research and development
projects during 1998. Repair and maintenance expenses increased in 1998
to $18,259 as
compared to $10,759 in 1997, due to increased equipment repairs, and
scheduled facilities
maintenance. </p>

<p ALIGN="JUSTIFY">Salaries increased to $467,118 in 1998, from 1997
levels of $408,840,
due to addition of manufacturing labor and a sales manager for the
Company’s Mobile
Data Computer program. Travel expenses for the Company increased to
$50,847 from 1997
levels of $36,804 due to increased marketing trips by the Company. The
Company did not
incur bad debt expense during 1998 or 1997. </p>

<p ALIGN="JUSTIFY">The Company's cash resources at December 31, 1998,
including cash and
cash equivalent liquid assets, were $1,426,381, reflecting an decrease
from cash resources
of $1,466,760 for year end 1997. The decrease in cash resources at year
end 1998 is the
result of increased inventory expenditures by the Company, increased
year end accounts
receivable levels yet to be converted to cash, and deposits for ESTeem
case mold
manufacturing, when compared with year-end 1997. Cash flows from
operating activities were
provided by net income of $162,927, and depreciation of $31,630. Cash
flows were offset
primarily by increases in accounts receivable of $112,407, inventory of
$66,238, deposits
paid for ESTeem case molds of $26,250, additions to property plant and
equipment of
$11,021, cash distributions paid by the Company of $49,537.</font>
<font SIZE="2"> </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">LIQUIDITY AND CAPITAL RESOURCES</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The Company’s revenues and expenses resulted in
net income of
$52,301 for 1999, reflecting a 68% decrease from the $162,927 net
income of 1998.
  The reduction in net income is due to reduced sales revenues
during 1999, which
managment believes was primarily due to a reduction in U.S. Government
sales.  The
Company also reduced the selling price of the ESTeem modem products to
both distributors
and end users during 1999, which Managment feels had minimal impacts on
sales revenues and
net income during 1999, when compared with the overall reduction in
U.S. Government sales.
  At December 31, 1999, the Company's working capital was
$2,090,155 compared with
$2,119,569 at December 31, 1998. The decrease in working capital is
primarily attributable
to decreases in accounts receivable and inventory when compared with
year-end 1998. The
Company’s operations rely solely on the income generated from
sales. The Company's
major capital resource requirements are maintaining inventory levels
adequate for
production and payment of employee salaries. Long lead times for some
of the critical
components, ranging from 12 to 28 weeks, require the Company to
maintain high inventory
levels. It is Management’s opinion that the Company’s working
capital as of
December 31, 1999 is adequate for expected resource requirements for
the next twelve
months. </p>

<p ALIGN="JUSTIFY">The Company's current asset to current liability
ratio at December 31,
1999 was 34.2:1 compared to 25.3:1 at December 31, 1998. The increase
in current asset
ratio is the result of the Company having no federal income tax
liability and reduced
trade accounts payable levels at the end of 1999 when compared with
year-end 1998. </p>

<p ALIGN="JUSTIFY">The Company's cash resources at December 31, 1999,
including cash and
cash equivalent liquid assets, were $1,624,728, reflecting an increase
from cash resources
of $1,426,381 for year end 1998. The increase in cash resources at year
end is the result
of timing differences in sales and collection cycles, when compared
with year-end 1998,
which included high sales revenues late in the fourth quarter of the
year, which remained
to be collected at year-end. Cash flows from operating activities were
provided by the
Company’s net income of $52,30. Cash flows were offset primarily
by increases,
additions to property plant and equipment of $65,508 and cash
distributions paid by the
Company of $49,537.</font><font SIZE="2"> </p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The Company's trade accounts receivable, adjusted
for allowance for
uncollectible accounts, at December 31, 1999, were $154,788, compared
to $381,386 at
year-end 1998. The decrease is attributable to year-end 1999 being
compared with heavy
late fourth quarter sales experienced in 1998. Management believes that
all of the
Company’s accounts receivable as of December 31, 1999, are
collectible.</p>

<p>The Company believes the level of risk associated with customer
receipts on export
sales is minimal. Foreign shipments are made only after payment has
been received,
irrevocable letter of credit terms have been pre-arranged, or on Net 30
terms to foreign
offices of domestic companies with which the Company has an existing
relationship. Foreign
orders are generally filled as soon as they are received, therefore,
foreign exchange rate
fluctuations do not impact the Company. </p>

<p ALIGN="JUSTIFY">Inventory level as of December 31, 1999, was
$357,490, reflecting a
decrease from December 31, 1998, levels of $385,365. The decrease in
inventory is due
conservative purchasing by the Company during lower than expected sales
months during the
year and strong fourth quarter sales revenues decreasing existing
inventory items.</font><font SIZE="2"> </p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">Capital expenditures during year 1998 amounted to
$65,508, primarily
for research/development and manufacturing equipment and computer
upgrades. The Company
intends on investing in additional capital equipment as it is deemed
necessary to support
development and/or manufacture of the ESTeem Modem.</p>

<p ALIGN="JUSTIFY">As of December 31, 1999, the Company's current
liabilities were
$62,963, decreased from1998 year-end levels of $87,140. The decrease is
due to the lack of
federal income taxes payable and decreased levels of trade accounts
payable at year-end
1999. All of the Company's accounts payable at year-end were current.
The Company
recognized Deferred Income liability of $25,017 at year-end 1998 for a
public safety
communications project, with the liability representing the amount of
the contract billed
to the customer, but performed during the first quarter of 1999.</p>

<p ALIGN="JUSTIFY">The Company’s Automated Identification
Technology (AIT)
subcontract with INTERMEC was a five-year indefinite delivery,
indefinite quantity, fixed
price contract in place through the end of September 1999. It is
Management’s opinion
that the AIT subcontract contract has not been renewed by INTERMEC due
to restructuring of
the AIT program and subsequent contracts awarded to INTERMEC. </p>

<p ALIGN="JUSTIFY">The Company has a General Services Administration
(GSA) contract to
sell goods to the U.S. Government. This contract is a fixed price,
indefinite quantity and
delivery agreement. The current contract runs through February 2004.
Projections regarding
liquidity, profitability, and material purchases are based on past
history of annual
purchases. Due to the uncertain nature of Federal Government
purchasing, procurement of
material and production planning is adjusted quarterly based on demand.
It is Management's
opinion that the majority of Federal Government purchases in 2000 will
be pursuant to the
Company’s GSA contract. </p>

<p ALIGN="JUSTIFY">The Company’s operations were not adversely
effected by inflation
during 1999. No adverse affect is anticipated during 2000.</p>
<b>

<p ALIGN="JUSTIFY">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 registrations statements filed with the
Securities and Exchange
Commission.</p>
</b></font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">ITEM 7. </p>

<p ALIGN="CENTER">FINANCIAL STATEMENTS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">See Exhibit 1, Financial Statements and Financial
Statement Schedules.
Such Financial Statements and Schedules are incorporated herein by
reference.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">ITEM 8.</p>

<p ALIGN="CENTER">CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND
FINANCIAL DISCLOSURE.</p>
</font><font SIZE="2">

<p ALIGN="CENTER">None</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">PART III</p>

<p ALIGN="CENTER">ITEM 9. </p>

<p ALIGN="CENTER">DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; </p>

<p ALIGN="CENTER">COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT</p>

<p ALIGN="JUSTIFY">IDENTIFICATION OF DIRECTORS:</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The following table sets forth the names and ages of
all directors of
the Company as of December 31, 1999; as well as term in office and
principal occupation of
each director. </p>
</font>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="600">
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><u>Name of
Director</u></font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">Term in Office</u></font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">Age</u></font></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="2"><u>Principal
Occupation</u></font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"> </td>
    <td WIDTH="22%" VALIGN="TOP"> </td>
    <td WIDTH="11%" VALIGN="TOP"> </td>
    <td WIDTH="42%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2">T.L. Kirchner
</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">06/11/99 - 06/10/02</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">51</font></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="2">President of the
Company</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"> </td>
    <td WIDTH="22%" VALIGN="TOP"> </td>
    <td WIDTH="11%" VALIGN="TOP"> </td>
    <td WIDTH="42%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2">Melvin H.
Brown</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">06/06/97 - 06/06/00</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">69</font></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="2">President of
Manufacturing Services, Inc.</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"> </td>
    <td WIDTH="22%" VALIGN="TOP"> </td>
    <td WIDTH="11%" VALIGN="TOP"> </td>
    <td WIDTH="42%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2">Arthur
Leighton</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">06/06/97 - 06/06/00</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">76</font></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="2">Consultant</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"> </td>
    <td WIDTH="22%" VALIGN="TOP"> </td>
    <td WIDTH="11%" VALIGN="TOP"> </td>
    <td WIDTH="42%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2">Robert
Southworth</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">06/04/97 - 06/06/00</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">56</font></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="2">Patent Attorney for
U.S. Dept. of Energy</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"> </td>
    <td WIDTH="22%" VALIGN="TOP"> </td>
    <td WIDTH="11%" VALIGN="TOP"> </td>
    <td WIDTH="42%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2">John H.
Rector</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">06/11/99 - 06/10/02</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">83</font></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="2">Consultant</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"> </td>
    <td WIDTH="22%" VALIGN="TOP"> </td>
    <td WIDTH="11%" VALIGN="TOP"> </td>
    <td WIDTH="42%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2">John L. Schooley
</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">06/05/98 - 06/05/01</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">60</font></td>
    <td WIDTH="42%" VALIGN="TOP"><font SIZE="2">President of Remtron,
Inc.</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">Management believes that there are no agreements or
understanding
between the directors and suppliers or contractors of the Company,
except the agreement
with Manufacturing Services, Inc. as described elsewhere in this
report.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">IDENTIFICATION OF EXECUTIVE OFFICERS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The following table sets forth the names and ages of
all executive
officers of the Company as of December 31, 1999; all positions by such
persons; term of
office and the period during which he has served as such; and any
arrangement or
understanding between him and any other person(s) pursuant to which he
was elected as an
officer:</p>
</font><div align="center"><center>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="516">
  <tr>
    <td WIDTH="29%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="JUSTIFY">Name of Officer</u></font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">Age</u></font></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">Position</u></font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="CENTER">Term of Office</u></font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><u><p
ALIGN="JUSTIFY">Period of Service</u></font></td>
  </tr>
  <tr>
    <td WIDTH="29%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">T.
L. Kirchner</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">51</font></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">President</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">3
Years</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">02/10/84- Present</font></td>
  </tr>
  <tr>
    <td WIDTH="29%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Robert Southworth</font></td>
    <td WIDTH="12%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">56</font></td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Sec/Treas</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">3
Years</font></td>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">12/11/92- Present</font></td>
  </tr>
</TABLE>
</center></div><font SIZE="2">

<p ALIGN="JUSTIFY">There are no family relationships, whether by blood,
marriage, or
adoption, between any of the Directors or Executive Officers of the
Company.</p>

<p ALIGN="JUSTIFY">The following is a brief description of the business
experience during
the last five years of each director and/or executive officer of the
Company.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">T.L. KIRCHNER</font><font SIZE="2">. Mr. Kirchner is
founder, President
and a Director of the Company. During the last five years Mr. Kirchner
devoted 100% of his
time to the Management of the Company. His primary duties are to
oversee the Management
and Marketing functions of the Company. Mr. Kirchner does not serve as
a director for any
other company registered under the Securities Exchange Act.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">MELVIN H. BROWN</font><font SIZE="2">. Mr. Brown is
a Director of the
Company. During the last five years Mr. Brown has been the owner and
president of
Manufacturing Services, Inc. Manufacturing Services provides services
in packaging design,
printed circuit board layout, prototyping, production runs,
verification of documentation
testing, burn-in, quality control, and repetitive volume production.
Manufacturing
Services provides electronic manufacturing and quality control testing
services for
Electronic Systems Technology. Mr. Brown does not serve as a director
for any other
company registered under the Securities Exchange Act.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">ROBERT SOUTHWORTH</font><font SIZE="2">. Mr.
Southworth is a Director
and the Secretary/Treasurer of the Company. Since 1980, Mr. Southworth
has been employed
with the U. S. Department of Energy as a Senior Patent Attorney in
Richland, Washington.
His primary duties with the Department of Energy include the
preparation and prosecution
of domestic and foreign patent applications in such fields as nuclear
reactors, fuel
reprocessing, waste management and energy related fields of solar,
wind, and fossil fuels.
Mr. Southworth does not serve as a director of any other company which
is registered under
the Securities Exchange Act.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">ARTHUR LEIGHTON</font><font SIZE="2">. Mr. Leighton
is a Director of
the Company. Mr. Leighton served as President of Kraft Industries
through mid 1986. Since
then he has been working as an independent Management Consultant. Mr.
Leighton does not
serve as director of any other company that is registered under the
Securities Exchange
Act.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">JOHN H. RECTOR</font><font SIZE="2">. Mr. Rector is
a Director of the
Company. Mr. Rector founded Western Sintering, located in Richland,
Washington. Western
Sintering, a powdered metal parts manufacturer, is an Original
Equipment Manufacturer
(OEM). Mr. Rector is the former President of Western Sintering, Inc.
Mr. Rector currently
serves as President of Plastic Injection Molding, Inc., a plastic
injection parts
manufacturer. Mr. Rector does not serve as director of any other
company that is
registered under the Securities Exchange Act.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">JOHN L. SCHOOLEY</font><font SIZE="2">. Mr. Schooley
is a Director of
the Company. During the past five years, Mr. Schooley has been the
owner and President of
Remtron, Inc. in San Diego, California. Remtron, Inc. is a manufacturer
of advanced radio
control and telemetry systems for the industrial market. Remtron, Inc.
has provided
research and development services for Electronic Systems Technology.
Mr. Schooley does not
serve as director of any other company that is registered under the
Securities Act.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="JUSTIFY">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The following person(s) who, at any time during the
fiscal year, was a
director, officer, beneficial owner or more than 10% any class of
equity securities of the
registrant, failed to file on a timely basis the required disclosure
Form as noted:</p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="696">
  <tr>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2">Tom Kirchner
(Director/Officer)</font></td>
    <td WIDTH="78%" VALIGN="TOP"><font SIZE="2">one late filing of Form
3, Initial Statement
    of Beneficial Ownership of Securities, November 23,
1999</font></td>
  </tr>
  <tr>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2">Robert Southworth
(Director/Officer)</font></td>
    <td WIDTH="78%" VALIGN="TOP"><font SIZE="2">one late filing of Form
3, Initial Statement
    of Beneficial Ownership of Securities, November 23,
1999</font></td>
  </tr>
  <tr>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Arthur Leighton (Director)</font></td>
    <td WIDTH="78%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">one
late filing of Form 3,
    Initial Statement of Beneficial Ownership of Securities, November
23, 1999</font></td>
  </tr>
  <tr>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
Rector (Director)</font></td>
    <td WIDTH="78%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">one
late filing of Form 3,
    Initial Statement of Beneficial Ownership of Securities, November
23, 1999</font></td>
  </tr>
  <tr>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
Schooley (Director)</font></td>
    <td WIDTH="78%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">one
late filing of Form 3,
    Initial Statement of Beneficial Ownership of Securities, November
23, 1999</font></td>
  </tr>
  <tr>
    <td WIDTH="22%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Melvin Brown (Director)</font></td>
    <td WIDTH="78%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">one
late filing of Form 3,
    Initial Statement of Beneficial Ownership of Securities, November
23, 1999</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY"> </p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">ITEM 10.<b> </p>
</b>

<p ALIGN="CENTER">EXECUTIVE COMPENSATION</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The Company’s named compensated executive
officer is T.L.
Kirchner, President and CEO. The Company had no other compensated
executive officers as of
December 31, 1999. </p>

<p ALIGN="JUSTIFY">The information specified concerning the
compensation of the named
executive officers for each of the Registrant's last three completed
fiscal years is
provided in the following Summary Compensation Table:</p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="613">
  <tr>
    <td VALIGN="TOP" COLSPAN="10"><font SIZE="2"><p
ALIGN="CENTER">SUMMARY COMPENSATION TABLE</font></td>
  </tr>
  <tr>
    <td WIDTH="52%" VALIGN="TOP" COLSPAN="5"> </td>
    <td WIDTH="48%" VALIGN="TOP" COLSPAN="5"><font SIZE="2">Long Term
Compensation</font></td>
  </tr>
  <tr>
    <td WIDTH="52%" VALIGN="TOP" COLSPAN="5"><font SIZE="2"><p
ALIGN="CENTER">Annual
    Compensation</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Awards</font></td>
    <td WIDTH="21%" VALIGN="TOP" COLSPAN="3"><font SIZE="2"><p
ALIGN="CENTER">Payouts</font></td>
    <td WIDTH="17%" VALIGN="TOP"> </td>
  </tr>
  <tr>
    <td WIDTH="14%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(a)</font></td>
    <td WIDTH="7%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(b)</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(c)</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(d)</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(e)</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(f)</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(g)</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(h)</font></td>
    <td WIDTH="18%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">(i)</font></td>
  </tr>
  <tr>
    <td WIDTH="14%" VALIGN="TOP"><font SIZE="2">Name and Principal
Position </font></td>
    <td WIDTH="7%" VALIGN="TOP"><font SIZE="2">Year</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Salary</p>
    <p ALIGN="CENTER">($)</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font
SIZE="2">Bonus<p>($)(1)</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">Other
Annual Compensation
    ($)(2)</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Restricted Stock Awards</p>
    <p ALIGN="CENTER">($)</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Securities Options
    Underlying SARs</p>
    <p ALIGN="CENTER">(#)</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">LTIP</p>
    <p ALIGN="CENTER">Payouts</p>
    <p ALIGN="CENTER">($)</font></td>
    <td WIDTH="18%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">All</p>
    <p ALIGN="CENTER">Other</p>
    <p ALIGN="CENTER">Compensation</p>
    <p ALIGN="CENTER">($)(3)(4)</font></td>
  </tr>
  <tr>
    <td WIDTH="14%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">T. L.
Kirchner,</p>
    <p ALIGN="CENTER">President &</p>
    <p ALIGN="CENTER">CEO</font></td>
    <td WIDTH="7%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1999</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">87,430</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">4,087</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1,881</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">25,000</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="18%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">5,845</font></td>
  </tr>
  <tr>
    <td WIDTH="14%" VALIGN="TOP"> </td>
    <td WIDTH="7%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1998</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">74,580</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">5,080</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">734</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">25,000</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="18%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">5,846</font></td>
  </tr>
  <tr>
    <td WIDTH="14%" VALIGN="TOP"> </td>
    <td WIDTH="7%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1997</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">74,580</font></td>
    <td WIDTH="8%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">5,081</font></td>
    <td WIDTH="15%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1,615</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="11%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">25,000</font></td>
    <td WIDTH="9%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="18%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">5,524</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p>(1) Includes amounts paid under the Non-qualified Employee Profit
Sharing Bonus</p>

<p>(2) Other Annual Compensation includes Accrued Vacation Pay</p>

<p>(3) All Other Compensation consists of premiums paid for Group
Health Insurance and Key
Man Insurance

<dir>
  <dir>
    <p>(4) Amounts do not reflect proceeds of $0.01 per share cash
distribution received
    during 1997,1998, and 1999 totaling $4035 for each year listed,
respectively. Receipt of
    cash distribution was based solely on capacity as a shareholder.
</p>
  </dir>
</dir>

<p>The information specified concerning the stock options of the named
executive officers
during the fiscal year ended December 31, 1999 is provided in the
following Option/SAR
Grants in the Last Fiscal Year Table:</p>

<p> </p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="696">
  <tr>
    <td VALIGN="TOP" COLSPAN="5"><font SIZE="2"><p
ALIGN="CENTER">OPTION/SAR GRANTS IN LAST
    FISCAL YEAR</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" COLSPAN="5"><font SIZE="2"><p
ALIGN="CENTER">Individual Grants (5)</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(a)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(b)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(c)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(d)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(e)</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2">Name</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Number of Securities</p>
    <p ALIGN="CENTER">Underlying</p>
    <p ALIGN="CENTER">Options/SARs</p>
    <p ALIGN="CENTER">Granted # (4)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">% of
Total Options/SARs
    Granted to Employees in Fiscal Year</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Exercise or base price
    ($/Share)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Expiration Date</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">T.L.
Kirchner</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">25,000</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">11.1%</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.44</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">2/11/02</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<dir>
  <dir>
    <p ALIGN="JUSTIFY">(5) This table does not include Stock Options
granted previously. Forms
    8-K dated 2/7/97, 2/6/98, and 2/12/99 respectively, are
incorporated herein by reference.</p>
  </dir>
</dir>

<p ALIGN="JUSTIFY">The information specified concerning the stock
options of the named
executive officers during the fiscal year ended December 31, 1999 is
provided in the
following Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End
Options/SAR Values Table:</p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="696">
  <tr>
    <td VALIGN="TOP" COLSPAN="5"><font SIZE="2"><p
ALIGN="CENTER">AGGREGATED OPTION/SAR
    EXERCISES IN LAST FISCAL YEAR</p>
    <p ALIGN="CENTER">AND FISCAL YEAR END OPTION/SAR VALUES</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(a)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(b)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(c)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(d)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">(e)</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Name</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Number of Shares Acquired on
    Exercise</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">Value
Realized ($)</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Number of Securities</p>
    <p ALIGN="CENTER">Underlying</p>
    <p ALIGN="CENTER">Unexercised</p>
    <p ALIGN="CENTER">Options/SARs at</p>
    <p ALIGN="CENTER">FY-End (#)</p>
    <p ALIGN="CENTER">Excercisable/</p>
    <p ALIGN="CENTER">Unexercisable</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">Value
of Unexercised</p>
    <p ALIGN="CENTER">In-the-money</p>
    <p ALIGN="CENTER">Options/SARs</p>
    <p ALIGN="CENTER">At FY-End ($)</p>
    <p ALIGN="CENTER">Excercisable/</p>
    <p ALIGN="CENTER">Unexercisable</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">T.L.
Kirchner</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">75,000</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">The Company does not currently have a Long-Term
Incentive Plan
("LTIP").</p>

<p ALIGN="JUSTIFY">Compensation to outside directors is limited to
reimbursement of
out-of-pocket expenses that are incurred in connection with the
directors duties
associated with the Company's business. There is currently no other
compensation
arrangements for the Company’s directors. (See "Security
Ownership of Certain
Beneficial Owners and Management" for Stock Options granted in
previous years.)</p>

<p ALIGN="JUSTIFY">The Company currently does not hold any Employment
Contracts or Change
of Control Arrangements with any parties.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">ITEM 11.</p>

<dir>
  <dir>
    <p ALIGN="CENTER">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT</p>
  </dir>
</dir>

<p ALIGN="JUSTIFY">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The following table sets forth, as of December 31,
1999, the amount and
percentage of the Common Stock of the Company, which according to
information supplied by
the Company, is beneficially owned by each person who, to the best
knowledge of the
Company, is the beneficial owner (as defined below) of more than five
(5%) of the
outstanding common stock.</p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="696">
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">Title
of Class</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">Name
& Address</p>
    <p ALIGN="CENTER">Of</p>
    <p ALIGN="CENTER">Beneficial Owner (1)</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Amount & Nature of</p>
    <p ALIGN="CENTER">Beneficial Ownership</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Percent of Class</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">EDCO
Partners LLLP</p>
    <p ALIGN="CENTER">4605 Denice Drive</p>
    <p ALIGN="CENTER">Englewood CO 80111</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">442,365</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">8.93%</font></td>
  </tr>
  <tr>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">T.L.
Kirchner</p>
    <p ALIGN="CENTER">415 N. Quay St.</p>
    <p ALIGN="CENTER">Kennewick WA 99336</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">403,488 (2)(3)</font></td>
    <td WIDTH="25%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">8.1%</font></td>
  </tr>
</TABLE>
<font SIZE="3">

<dir>
  <dir>
    </font><font SIZE="2"><p ALIGN="JUSTIFY">(1) Under Rule 13d-3,
issued by the Securities
    and Exchange Commission, a person is, in general, deemed to
"Beneficially own"
    any shares if such person directly or indirectly, through any
contract, arrangement,
    understanding, relationship or otherwise, has or shares (a) voting
power, which includes
    the power to vote or to direct the voting of those shares and/or
(b) investment power,
    which included the power to dispose, or to direct the disposition
of those securities. The
    foregoing table gives effect to shares deemed beneficially owned
under Rule 13d-3 based on
    the information supplied to the Company.  The persons named in
the table have sole
    voting power and investment power with respect to all shares of
Common Stock beneficially
    owned by them.</p>
    </font><font SIZE="3"><p ALIGN="JUSTIFY"></font><font SIZE="2">(2)
The beneficial owner
    listed above has stock options giving the right to acquire 75,000
shares of Electronic
    Systems Technology, Inc. Common Stock: Options for 25,000 shares
were granted February 7,
    1997; Options for 25,000 shares were granted February 6, 1998, and
Options for 25,000
    granted February 12, 1999. Forms 8-K , dated February 9, 1996,
February 7, 1997, February
    6, 1998, and February 12, 1999 respectively, are incorporated
herein by reference.</p>
    </font><font SIZE="3"><p ALIGN="JUSTIFY"></font><font SIZE="2">(3)
Does not include
    options granted. See footnote (1) above.</p>
    </font><font FACE="Arial" SIZE="2">
  </dir>
</dir>

<p ALIGN="JUSTIFY">SECURITY OWNERSHIP OF MANAGEMENT</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">The following table sets forth, as of February 1,
2000, amount and
percentage of the Common Stock of the Company, which according to
information supplied by
the Company, is beneficially owned by Management, including officers
and directors of the
Company.</p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="2" WIDTH="493">
  <tr>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">Title
</p>
    <p ALIGN="CENTER">of</p>
    <p ALIGN="CENTER">Class</font></td>
    <td WIDTH="3%" VALIGN="TOP"> </td>
    <td WIDTH="24%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">Name </p>
    <p ALIGN="CENTER">Of</p>
    <p ALIGN="CENTER">Beneficial Owner</font></td>
    <td WIDTH="12%" VALIGN="TOP" COLSPAN="2"> </td>
    <td WIDTH="24%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="CENTER">Amount &
    Nature</p>
    <p ALIGN="CENTER">of</p>
    <p ALIGN="CENTER">Beneficial Ownership</font></td>
    <td WIDTH="6%" VALIGN="TOP"> </td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Percent of </p>
    <p ALIGN="CENTER">Class</font></td>
  </tr>
  <tr>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"> </td>
    <td WIDTH="33%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="JUSTIFY">T.L. Kirchner</p>
    <p ALIGN="JUSTIFY">(Officer & Director)</font></td>
    <td WIDTH="1%" VALIGN="TOP"> </td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">403,488 </font></td>
    <td WIDTH="13%" VALIGN="TOP" COLSPAN="2"><font
SIZE="2">(1)</font></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">8.1%</font></td>
  </tr>
  <tr>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"> </td>
    <td WIDTH="33%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="JUSTIFY">Robert
    Southworth</p>
    <p ALIGN="JUSTIFY">(Officer & Director)</font></td>
    <td WIDTH="1%" VALIGN="TOP"> </td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">4,000
</font></td>
    <td WIDTH="13%" VALIGN="TOP" COLSPAN="2"><font
SIZE="2">(1)</font></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.1%</font></td>
  </tr>
  <tr>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"> </td>
    <td WIDTH="33%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="JUSTIFY">Melvin H. Brown
    (Director)</font></td>
    <td WIDTH="1%" VALIGN="TOP"> </td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">76,500</font></td>
    <td WIDTH="13%" VALIGN="TOP" COLSPAN="2"><font
SIZE="2">(1)</font></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">1.5%</font></td>
  </tr>
  <tr>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"> </td>
    <td WIDTH="33%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="JUSTIFY">Arthur Leighton
    (Director)</font></td>
    <td WIDTH="1%" VALIGN="TOP"> </td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">104,000</font></td>
    <td WIDTH="13%" VALIGN="TOP" COLSPAN="2"><font
SIZE="2">(1)</font></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">2%</font></td>
  </tr>
  <tr>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"> </td>
    <td WIDTH="33%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="JUSTIFY">John Schooley
    (Director)</font></td>
    <td WIDTH="1%" VALIGN="TOP"> </td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">10,000</font></td>
    <td WIDTH="13%" VALIGN="TOP" COLSPAN="2"><font
SIZE="2">(1)</font></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.2%</font></td>
  </tr>
  <tr>
    <td WIDTH="21%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">Common</font></td>
    <td WIDTH="5%" VALIGN="TOP" COLSPAN="2"> </td>
    <td WIDTH="33%" VALIGN="TOP" COLSPAN="2"><font SIZE="2"><p
ALIGN="JUSTIFY">John H. Rector
    (Director)</font></td>
    <td WIDTH="1%" VALIGN="TOP"> </td>
    <td WIDTH="17%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">3,000</font></td>
    <td WIDTH="13%" VALIGN="TOP" COLSPAN="2"><font
SIZE="2">(1)</font></td>
    <td WIDTH="10%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="CENTER">0.06%</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">(1) Does not include stock options. See below.</p>

<p ALIGN="JUSTIFY">On various dates, the Company's Board of Directors
has approved Stock
Option Bonuses for Directors and Employees. The following is a summary
of the Stock Option
bonuses currently outstanding: Options are exercisable at fixed prices.
Options may not be
exercised in blocks of less than 5,000 shares. Options not exercised
expire three years
after approval date or 90 days following termination of
employment/board membership,
whichever occurs first. In the event of acquisition, merger,
recapitalization or similar
events of the Company, the optionee will receive equivalent shares or
will have a 10-day
window in which to exercise the options. Option grants are not
transferable or assignable
except to the optionee's estate in the event of the optionee's death.
</p>

<p ALIGN="JUSTIFY">The information below does not include stock options
granted in
February 2000.</p>

<p ALIGN="JUSTIFY">Recipients of Stock Options currently unexpired as
of 12/31/99 were as
follows:</p>

<p ALIGN="JUSTIFY">Exercise Price</p>

<p ALIGN="JUSTIFY">Name Option Shares per Share ($) <u></p>
</u>

<p ALIGN="JUSTIFY">----------------------------------------------------
-------------------</p>

<p ALIGN="JUSTIFY">APPROVAL DATE: 2-12-99</p>
</font>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="270">
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Philip J. Smith</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">5,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">$0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Brad
E. Bement</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">5,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">David B. Strecker</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Eric
P. Marske</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Jon
A. Correio</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Alan
B. Cook</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Melvin Brown</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Tom
Kirchner</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Arthur Leighton</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Robert Southworth</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
H. Rector</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
L. Schooley</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.44</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">APPROVAL DATE: 2-6-98</p>
</font>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="270">
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">David B. Strecker</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">$0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Eric
P. Marske</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Jon
A. Correio</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Alan
B. Cook</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Melvin Brown</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Tom
Kirchner</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Arthur Leighton</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Robert Southworth</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
H. Rector</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
L. Schooley</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.41</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">APPROVAL DATE: 2-7-97</p>
</font>

<table CELLSPACING="0" BORDER="1" CELLPADDING="7" WIDTH="270">
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">David B. Strecker</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">$0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Eric
P. Marske</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Jon
A. Correio</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Alan
B. Cook</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">15,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Melvin Brown</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">Tom
Kirchner</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Arthur Leighton</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="JUSTIFY">Robert Southworth</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
H. Rector</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
  <tr>
    <td WIDTH="47%" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">John
L. Schooley</font></td>
    <td WIDTH="20%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">25,000</font></td>
    <td WIDTH="33%" VALIGN="TOP"><font SIZE="2"><p
ALIGN="RIGHT">0.28</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">Stock options must be exercised within 90 days after
termination of
employment/board membership. During 1999, 215,000 options expired, and
no shares under
option were exercised. At December 31, 1999 there were 640,000 shares
reserved for future
exercise.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER">ITEM 12. </p>

<p ALIGN="CENTER">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</p>

<p ALIGN="JUSTIFY">TRANSACTIONS WITH MANAGEMENT AND OTHERS</p>
</font><font SIZE="3">

<p ALIGN="JUSTIFY"></font><font SIZE="2">During fiscal year 1999, the
Company contracted
for services from Manufacturing Services, Inc. in the amount of
$51,563. Manufacturing
Services, Inc. is owned and operated by Melvin H. Brown, who is a
Director of Electronic
Systems Technology, Inc. Management believes all prices for services,
provided by
Manufacturing Services, Inc., were as favorable as could be obtained
from comparable
manufacturing services companies.</p>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER">PART IV</p>

<p ALIGN="CENTER">ITEM 13. </p>

<p ALIGN="CENTER">EXHIBITS AND REPORTS ON FORM 8-K</p>
</font><font SIZE="2">

<p>Exhibits filed as part of the Company’s 10KSB report for 1999
are listed below.
Certain exhibits have been previously filed with the Securities and
Exchange Commission
and are incorporated by reference.</p>

<p ALIGN="JUSTIFY">EXHIBIT </p>

<p ALIGN="JUSTIFY">NUMBER DESCRIPTION</p>

<p ALIGN="JUSTIFY">--------------------- ------------------------------
</p>

<ol>
  <li>Report of Independent Certified Public Accountant</li>
</ol>

<p
ALIGN="JUSTIFY">         &
nbsp; 
Financial Statements/Financial Statement Schedules </p>

<p
ALIGN="JUSTIFY">         &
nbsp; 
Balance Sheets</p>

<p
ALIGN="JUSTIFY">         &
nbsp; 
Statement of Operations</p>

<p
ALIGN="JUSTIFY">         &
nbsp; 
Statement of Changes in Stockholders Equity</p>

<p
ALIGN="JUSTIFY">         &
nbsp; 
Statement of Cash Flows</p>

<p
ALIGN="JUSTIFY">         &
nbsp; 
Notes to Financial Statements</p>
</font><font SIZE="2">

<ol START="2">
  </font><font SIZE="2">
  <li>Reports on Form 8-K </li>
</ol>

<blockquote>
  <p>2.1    Form 8-K, dated November 2, 1999<br>
  2.2    Form 8-K, dated February 4, 2000<br>
  2.3    Form 8-K, dated February 11, 2000<ol start="3"
  style="margin-left: auto">
    <li>Articles of Incorporation and By-Laws filed as Exhibit 2.1 to
Form S-18, Registration
      Statement No. 2-92949-S, Exhibit (c) to Form 8-K, filed March 15,
1985, and Amendments to
      By-Laws adopted by Shareholders on January 14, 1985 are
incorporated herein by reference.</li>
  </ol>
</blockquote>

<ol>
  <ol style="margin-left: auto" start="4">
    <font SIZE="3">
    <li></font>Instrument defining the rights of security holders
including indentures.</li>
  </ol>
</ol>

<p>           
Exhibit II Form S-18
Registration Statement No. 2-92949-S is incorporated herein by
reference. <br>
            Form
8A Registration
Statement, 000-27793, dated October 25, 1999, is incorporated herein by
reference.<br>
           
Forms 8-K dated
February 9, 1996, February 7, 1997, February 6, 1998, and February 12,
1999 are
            
;           &nbs
p; incorporated
by reference.

<ol start="11">
  <li>Statement re-computation of per share earnings. </font><font
SIZE="2"></li>
</ol>

<ol start="13">
  <li>Annual report to security holders, Form 10-Q or quarterly report
to security holders.
             N/A</font><font
SIZE="2"></li>
</ol>

<ol start="22">
  <li><p ALIGN="JUSTIFY">Published report regarding matters submitted
to vote of security
    holders.         N/A</p>
  </li>
</ol>

<ol START="24">
  <li>Consents of experts and counsel </li>
</ol>

<ol START="27">
  <li>Financial Data Schedule</li>
</ol>

<ol START="99">
  <li>Additional Exhibits

            
;           &nbs
p;           &nb
sp;           &n
bsp;           &
nbsp;         N/A</li>
</ol>
</font><font FACE="Arial" SIZE="2">

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER"> </p>

<p ALIGN="CENTER">SIGNATURES</p>
</font><font SIZE="2">

<p ALIGN="JUSTIFY">In accordance with Section 13 or 15(d) of the
Exchange Act, the
Registrant has caused this Report to be signed on its behalf by the
undersigned, thereunto
duly authorized.</p>

<p ALIGN="JUSTIFY">ELECTRONIC SYSTEMS TECHNOLOGY, INC.</p>

<p ALIGN="JUSTIFY">By: /s/ T.L. KIRCHNER </p>

<p ALIGN="JUSTIFY">T.L. Kirchner, Director/President</p>

<p ALIGN="JUSTIFY">(Principal Executive Officer)</p>

<p ALIGN="JUSTIFY">Date: March 24, 2000</p>

<p ALIGN="JUSTIFY">In accordance with the Exchange Act, this Report has
been signed below
by the following persons on behalf of the Registrant and in the
capacities and on the
dates indicated.</p>
</font>

<table BORDER="1" CELLSPACING="1" CELLPADDING="7" WIDTH="696"
height="655">
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><u><p
ALIGN="CENTER">Signature</u></font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><u><p
ALIGN="CENTER">Title</u></font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><u><p
ALIGN="CENTER">Date</u></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">/s/ T.L.
    KIRCHNER</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">Director/President</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">March 24, 2000</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"><font SIZE="2"><p
ALIGN="JUSTIFY">T.L. Kirchner</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="1"></td>
    <td WIDTH="33%" VALIGN="TOP" height="1"></td>
    <td WIDTH="33%" VALIGN="TOP" height="1"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">/s/ ROBERT
    SOUTHWORTH</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">Director/Secretary
    Treasurer</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">March 24, 2000</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"><font SIZE="2"><p
ALIGN="JUSTIFY">Robert
    Southworth</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">/s/ MELVIN
    BROWN</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">Director</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">March 24, 2000</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"><font SIZE="2"><p
ALIGN="JUSTIFY">Melvin H. Brown</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">/s/ ARTHUR
    LEIGHTON</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">Director</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">March 24, 2000</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"><font SIZE="2"><p
ALIGN="JUSTIFY">Arthur Leighton</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">/s/ JOHN RECTOR</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">Director</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">March 24, 2000</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"><font SIZE="2"><p
ALIGN="JUSTIFY">John H. Rector</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">/s/ JOHN
    SCHOOLEY</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">Director</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="15"><font SIZE="2"><p
ALIGN="JUSTIFY">March 24, 2000</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" VALIGN="TOP" height="19"><font SIZE="2"><p
ALIGN="JUSTIFY">John L.
    Schooley</font></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
  <tr>
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    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
    <td WIDTH="33%" VALIGN="TOP" height="19"></td>
  </tr>
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