UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON D.C. 20549FORM 10-QSB

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

For the quarterly period ended:
March 31 2003
Commission File Number:
000-27793** **
**ELECTRONIC SYSTEMS TECHNOLOGY, INC.**(A Washington Corporation)

 

I.R.S. Employer    Identification no.
91-1238077
 

415 N. Quay St., #4Kennewick WA 99336(509) 735-9092

 

 

Check whether the issuer (1) has filed all reports required to be filedby Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorterperiod that the registrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes [ X ] No [ ].

The number of shares outstanding of common stock as of March 31, 2003 was5,098,667. 

 

 
**PART IFINANCIAL INFORMATION

Item 1. Financial Statements.**
 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.SELECTED FINANCIAL DATA(as prepared by Management)(Unaudited)
Three Months Ended
Mar. 31, 2003
Mar. 31, 2002Sales
$ 569,453
$ 485,748Other Revenues
$ 48,373
$ 55,538Gross Profit
$ 323,952
$ 293,525 Net Income (Loss) Before Taxes 
$ 62,150
$ 129,847Net Income (Loss) 
$ 41,019
$ 85,699 Earnings (Loss) Per Share Before TaxesBasic
$ 0.01
$ 0.02Diluted
$ 0.01
$ 0.02 Earnings (Loss) Per Share Basic
$ 0.007
$ 0.015Diluted
$ 0.007
$ 0.015 Weighted Average Shares Outstanding (Basic)Primary
5,627,571
5,622,338Diluted
5,628,667
5,633,667 Total Assets
$ 2,780,177
$ 2,654,937 Long-Term Debt and Capital Lease    Obligations
$ 0
$ 0 Shareholders' Equity
$ 2,562,153
$ 2,395,848 Shareholders' Equity Per Share
$ 0.50
$ 0.47 Working Capital
$ 2,357,940
$ 2,216,829 Current Ratio
11.8:1
9.5:1 Equity To Total Assets
92 %
90 %
 

 

 

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.BALANCE SHEET(as prepared by Management)(Unaudited)
 
Mar. 31, 2003
Dec. 31 ,2002ASSETSCURRENT ASSETS Cash and cash equivalents
$ 339,595
$ 322,997 Available for sale marketable    securities
1,336,072
1,337,668Accounts Receivable, net of    allowance    for uncollectibles
317,253
302,269 Inventory
571,388
569,424 Prepaid Expenses
11,569
11,023Total Current Assets
$ 2,575,877
$ 2,543,381 PROPERTY & EQUIPMENT net of    Depreciation of $380,811 at Mar. 31, 2003 and $395,366 at Dec. 31, 2002
    182,916
    159,182 OTHER ASSETS
12,184
30,407Deferred Income Tax Benefit
9,113
9,200TOTAL ASSETS
$ 2,780,090
$ 2,742,170 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable
$ 123,387
$ 38,855Refundable Deposits 
6,402
21,758Deferred Tax Liability 
31,127
30,400Federal Income Taxes Payable
21,131
104,594Accrued Liabilities
35,890
27,019Total Current Liabilities 
217,937
222,626 STOCKHOLDERS' EQUITYCommon Stock, $.001 Par Value    50,000,000 Shares Authorized    5,098,667 Shares Issued And Outstanding 
 

$ 5,099
 

$ 5,099 Additional Paid-in Capital
945,734
945,734 Retained Earnings
1,613,912
1,572,893 Accumulated other comprehensive loss
(2,592)
(4,182) 
$ 2,562,153
$ 2,519,544 TOTAL LIABILITIES AND    STOCKHOLDERS'    EQUITY
$ 2,780,090
$ 2,742,170 
 

(See "Notes To Financial Statements")

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.STATEMENTS OF INCOME (LOSS)(as prepared by Management)(Unaudited)
Three Months Ended
Mar. 31, 2003
Mar. 31, 2002 SALES
$ 569,453
$ 485,748COST OF SALESBeginning Inventory
569,424
531,599Purchases and Allocated Costs
247,465
239,295 
$ 816,889 
$ 770,894 Ending Inventory
571,388
578,671Total Cost of Sales
$ 245,501
$ 192,223Gross Profit
$ 323,952
$ 293,525 OPERATING EXPENSESFinance/Administration
$ 91,500
$ 51,581Research & Development
54,080
39,730Marketing
116,034
61,692Customer Service
18,175
23,610Total Operating Expense
$ 279,789
$ 176,613OPERATING INCOME (LOSS)
$ 44,163
$ 116,912 Other Income (expenses)Interest/Investment Income
$ 7,748
$ 6,611Realized Loss on Marketable Securities
(2,334)
--Management Fee, Marketable Securities
(2,052)
--Loss on Asset Disposal
(1,245)
--Engineering Services
40,625
48,927Engineering Support
(24,755)
(42,603)Net Other Income (expense)
$ 17,981
$ 12,935 NET INCOME (LOSS) BEFORE TAX
$ 62,150
$ 129,847Provision For Income Tax
( 21,131)
( 44,148)NET INCOME (LOSS)
$ 41,019
$ 85,699 Basic Earnings (Loss)    Per Share Before Tax
$ 0.01
$ 0.02Basic Earnings (Loss)    Per Share After Tax
$ 0.007
$ 0.015 Diluted Earnings    (Loss) Per Share Before Tax
$ 0.01
$ 0.02Diluted Earnings    (Loss) Per Share After Tax
$ 0.007
$ 0.015
 

(See "Notes To Financial Statements")

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(as prepared by Management)(Unaudited)

 
Three Months Ended
Mar. 31, 2003
Mar. 31, 2002NET INCOME (LOSS)
$ 41,019
$ 85,699 OTHER COMPREHENSIVE LOSS:Unrealized gain on securities arising during    period (net of tax effect)
1,417
--COMPREHENSIVE INCOME (LOSS)
$42,436
$85,699
 

 

(See "Notes To Financial Statements")

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.STATEMENT OF CASH FLOWS(as prepared by Management)(Unaudited)

 
Three Months Ended
Mar. 31, 2003
Mar. 31, 2002 CASH FLOWS PROVIDED (USED) IN OPERATING    ACTIVITIES:Net Income (Loss)
$ 41,019
$ 85,699Noncash items included in income:
Depreciation

9,681
9,689
Amortization

1,101
1,101
Loss on Disposition of Assets

1,245
--
Loss on Marketable Securities

2,334
--
Provision for Federal Income Taxes

--
6,633 DECREASE (INCREASE) IN CURRENT ASSETS:Accounts Receivable Net
( 14,984)
( 56,301)Marketable Securities Investments Purchased
( 802,000)
--Marketable Securities Investments Sold
803,666
--Inventory
( 1,964)
( 47,072)Prepaid Expenses
( 546)
( 7,110)Accrued Interest
--
285 INCREASE (DECREASE) IN CURRENT LIABILITIES:Accounts Payable and Accrued Expenses 
93,403
32,028Refundable Deposits
( 15,356)
98,024Accrued Federal Income Taxes
( 83,463)
37,515 
$ 34,136 
$ 160,491 CASH FLOWS PROVIDED (USED) IN INVESTING    ACTIVITIES:Deposits applied to Property and    Equipment
17,122Additions To Property And    Equipment
$ ( 34,660)
$ ( 7,131) 
$ ( 17,538)
$ ( 7,131) CASH FLOWS PROVIDED (USED) IN FINANCING    ACTIVITIES:No Financing Activities Recorded
$ --
$ -- NET INCREASE (DECREASE) IN CASH    AND EQUIVALENTS
    $ 16,598
    $ 153,360Cash and Equivalents At Beginning    Of Period
322,997
1,513,592Cash and Equivalents At Ending of Period 
$ 339,595
$ 1,666,952 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS    INFORMATION:Cash Paid Year To Date:Interest
0
0 Federal Income Taxes
$ 104,594
$ 0  Cash and Equivalents:Cash
$ 10,136
$ 6,060Money Market Accounts
329,459
664,465Certificates Of Deposit
--
996,427 
$ 339,595
$ 1,666,952
(See "Notes To Financial Statements")

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.NOTES TO FINANCIAL STATEMENTS(as prepared by Management)(Unaudited)
**NOTE 1 - BASIS OF PRESENTATION**
The financial statements of Electronic Systems Technology, Inc. (the"Company"), presented in this Form 10Q are unaudited and reflect, in the opinionof Management, a fair presentation of operations for the three month periods ended March31, 2003 and March 31, 2002. Certain information and footnote disclosure normally includedin financial statements prepared in accordance with generally accepted accountingprincipals have been condensed or omitted pursuant to the applicable rules and regulationsof the Securities and Exchange Commission. In preparation of the financial statements,certain amounts and balances have been restated from previously filed reports to conformwith the format of this quarterly presentation. These financial statements should be readin conjunction with the audited financial statements and notes thereto included in theCompany's Form 10K for the year ended December 31, 2002 as filed with Securities andExchange Commission.

The results of operation for the three-month periods ended March 31, 2003 and March 31,2002 are not necessarily indicative of the results expected for the full fiscal year orfor any other fiscal period.
**NOTE 2 - INVENTORIES**
Inventories are stated at lower of cost or market with cost determined using the FIFO(first in, first out) method. Inventories consist of the following:
 
March 31 2003 
December 31 

2002Parts
$ 255,536
$ 359,915Work in progress
125,838
--Finished goods
190,014
209,509
$ 571,388
$ 569,424**NOTE 3 - EARNINGS PER SHARE**
Basic EPS excludes dilution and is computed by dividing incomeavailable to common stockholders by the weighted-average number of common sharesoutstanding for the period. Diluted EPS reflects potential dilution occurring ifsecurities or other contracts to issue common stock were exercised or converted intocommon stock or resulted in the issuance of common stock that then shared in the earningsof the Company. The primary weighted average number of common shares outstanding was5,627,571 and 5,622,338 for the quarters ended March 31, 2003 and 2002 respectively.

For the Quarter Ended    March 31, 2003 
Income (Numerator)
Shares (Denominator)
Per Share Amount
Basic EPS

Income available to common stockholders
 

$41,019
 

5,627,571
 

$0.007
Diluted EPS

Income available to common stockholders + assumed conversions
 

$41,019
 

5,628,667
 

$0.007

 **NOTE 4 - STOCK OPTIONS**
As of March 31, 2003, the Company had outstanding stock options whichhave been granted periodically to individual employees and directors with no less thanthree years of continuous tenure with Company. On February 21, 2003, additional stockoptions to purchase shares of the Company's common stock were granted to individualemployees and directors with no less than three years continuous tenure. The optionsgranted on February 21, 2003 totaled 180,000 shares under option and have an exerciseprice of $0.40 per share. The options granted on February 21, 2003 may be exercised anytime during the period from February 21, 2003 through February 20, 2006. The Company'sForm 8-K dated February 21, 2003, as filed with the Securities and Exchange Commission isincluded herein by reference. All outstanding stock options must be exercised within 90days after termination of employment. 

During the 12 month period from March 31, 2003 to March 31, 2002,185,000 shares under option expired, no shares under option were exercised, and 180,000shares under option were granted. At March 31, 2003 there were 530,000 shares under optionreserved for future exercises.

The Company has adopted the disclosure-only provisions of Statement ofFinancial Accounting Standards (SFAS) No. 123, "Accounting for Stock-BasedCompensation." The Company undertakes to make disclosures and calculations pursuantto SFAS 123 on an annual basis coinciding with the issuance of the Company's AnnualFinancial Statements. Accordingly, no compensation cost has been recognized for the stockoption plan. 
**NOTE 5 - OTHER COMPREHENSIVE INCOME (LOSS)**
For the quarter ended March 31, 2003, the Company’s only item ofother comprehensive income (loss) was unrealized gains on marketable securitiesinvestments, net of tax in the amount $1,417. There was no comprehensive income (loss)during the first quarter of 2002. 
**NOTE 6 - RELATED PARTY TRANSACTIONS**
For the quarter ended March 31, 2003, services in the amount of $26,456were contracted with Manufacturing Services, Inc., of which the owner/president is amember of the Board of Directors of EST.

 

 

 

 
** 

ITEM II**
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATION
***Management's discussion and analysis is intended to be read inconjunction with the Company's unaudited financial statements and the integral notesthereto for the quarter ending March 31, 2003. The following statements may be forwardlooking in nature and actual results may differ materially.*
A. RESULTS OF OPERATIONS**
REVENUES: Total revenues from the sale of EST products and servicesincreased to $610,078 for the first quarter of 2003 as compared to $534,675 in the firstquarter of 2002, an increase of 14%. Gross revenues increased to $617,826 for the quarterending March 31, 2003, from $541,286 for the same quarter of 2002. Management believes theincreased product and service revenues are the result of continued strong domesticindustrial automation sales, as the Company experienced during 2002, and increases inforeign export sales due to particular large industrial automation projects during thefirst quarter of 2003, when compared with first quarter 2002. Management believes theincrease in sales is the result of increased marketing efforts on the part of the Company,specifically increased regional tradeshow attendance and salesperson activity. Managementintends to sustain the increased marketing effort in 2003, but believes sales revenues for2003 may be impacted by existing economic factors negatively effecting industrialautomation projects involving the Company’s products and services.

The Company's revenues have historically fluctuated from quarter toquarter due to timing factors such as customer order placement and product shipments tocustomers, as well as customer buying trends, and changes in the general economicenvironment. The procurement process regarding plant and project automation, or projectdevelopment, which usually surrounds the decision to purchase ESTeem products can belengthy. This procurement process may involve bid activities unrelated to the ESTeemproducts, such as additional systems and subcontract work, as well as capital budgetconsiderations on the part of the customer. Because of the complexity of this procurementprocess, forecasts in regard to the Company's revenues become difficult to predict. 

The Company's revenues fall into three major customer categories,Domestic, Export and U.S. Government sales. Domestic commercial sales decreased slightlyto $484,017 in the first quarter of 2003 as compared to $498,559 for the first quarter of2002. The decrease in domestic sales was offset by an increase of foreign export sales forthe first quarter of 2003 to $126,061 as compared to the $32,985 in foreign sales in thesame quarter of 2002. The increase in foreign sales reflects sales for large industrialautomation projects in India, Israel and Peru during the first quarter of 2003. TheCompany did not record sales for U.S. Government programs for the first quarter of 2003 ascompared with $3,131 in the first quarter 2002. Engineering services billed in the firstquarter of 2003 decreased to $40,625 as compared with $48,927 for the same quarter of2002. Decreased engineering services billed is the result of decreased quantity and scopeof engineering services undertaken by the Company during the first quarter of 2003, whencompared with the same quarter of 2002. During the quarter ended March 31, 2003 sales toTata Honeywell Ltd of India, an end user of the Company’s products, for an industrialautomation project, and Power Engineers, an integrator of the Company’s products fora water control network upgrade, each consisted of 10% of the Company's sales and servicerevenues. No other sales to a single customer comprised 10% or more of the Company'sproduct sales.

A percentage breakdown of EST's major customer categories of Domestic,Export and U.S. Government Sales, for the first quarter of 2003 and 2002 are as follows: 

For the first quarter of
2003
2002
Domestic Sales
79%
93%
U.S. Government Sales
--
1%
Export Sales
21%
6%
A percentage breakdown of EST's product sales categories for the first quarter of 2003and 2002 are as follows:
For the first quarter of
2003
2002ESTeem Model 192
71%
75%ESTeem Model 95
--
2%ESTeem Accessories
21%
13%Factory Services
1%
1%Site Support
7%
9%
Sales include foreign export sales as follows:
Three Months Ended
March 31 2003
March 31 2002Export sales
$ 126,061
$ 32,985Percent of sales
21%
6%
The geographic distribution of foreign sales for the first quarter of 2003 and 2002 isas follows:
Percent of Foreign Sales
March 31

2003
March 31

2002COUNTRYIndia
50%
--Israel
17%
--Peru
15%
--Spain
7%
--Brazil
5%
12%Puerto Rico
3%
--Canada
3%
55%Ecuador
--
32%Chile
--
1%
The majority of the Company's domestic and foreign sales for the firstquarter of 2003 were used in industrial automation applications. It is Management’sopinion that the majority of foreign export applications will continue to be in industrialautomation applications for the foreseeable future. Industrial Automation applicationshave historically been the majority of the Company’s domestic sales, which Managementbelieves will continue for the foreseeable future, but will also be, augmented by sales ofMobile Data Computer Systems (MDCS) for public safety entities. During the first quarterof 2003, MDCS sales levels were strong, accounting for 21% of the Company’s sales andservice revenues. Management believes the MDCS sales increase may continue in the nearterm, however cannot be assured due to public safety entity purchases being linked touncertain government funding. 

Based on previous experience, U.S. Government purchases of theCompany’s products will be pursuant to the Company’s General ServicesAdministration (GSA) contract. Management believes the decreased U.S. Government sales arethe result of a continuing downward sales trend for projects and purchases involving theCompany’s products in the U.S. Government sales marketplace, which the Company hasexperienced for the past four years, and will continue for the foreseeable future. 
**BACKLOG:**
As of March 31, 2003, the Company had a sales order backlog of $52,000. TheCompany’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 workingdays after receipt of customer orders, with the exception of ongoing, scheduled projects,and custom designed equipment for specific customer applications.
**COST OF SALES:**
Cost of sales percentages of gross sales for the first quarters of 2003and 2002 were 43% and 40% of gross sales respectively. The cost of sales increase for thefirst quarter of 2003 is the result of the product mix of the items sold during thequarter having increased cost and/or lower profit margins, when compared with the samequarter of 2002.
**OPERATING EXPENSES:**
Operating expenses for the first quarter of 2003 increased $103,176from first quarter of 2002 levels. The following is a delineation of operating expenses:

March 312003
March 312002
Increase(Decrease)Finance/Administration
$ 91,500
$ 51,581
$ 39,919Research/Development
54,080
39,730
14,350Marketing
116,034
61,692
54,342Customer Service
18,175
23,610
( 5,435)Total Operating Expenses
$279,789
$176,613
$ 103,176**Finance and Administration: During the first quarter of 2003 Finance andAdministration expenses increased $39,919 to $91,500, when compared with the first quarterof 2002. The increase is the result of increased salaries and associated taxes related topayment of bonuses during the first quarter of 2003 based on 2002 year end performance, aswell as increased professional services purchased by the Company, when compared with thefirst quarter of 2002.
**Research and Development: Research and Development expensesincreased $14,350 to $54,080, during the first quarter of 2003, as compared with the sameperiod in 2002. The increase in Research and Development costs is due to increaseddepartment salaries resulting from the addition of a Research and Development employeeduring the last quarter of 2002, when compared with the same quarter of 2002. 
**Marketing: During the first quarter of 2003, marketing expensesincreased $54,342, to $116,034, when compared with the same period of 2002. The increaseis due to increased department wages resulting from the addition of a sale manager duringthe second half of 2002, increased travel, advertising and trade show expenses incurred bythe Company for increased marketing efforts during the first quarter of 2003, in additionto sales commissions paid to foreign sales agents for related sales during the firstquarter of 2003. 
**Customer Service: Customer service expenses decreased $5,435, to$18,175 during the first quarter of 2003 due to increased department wages being billeddirectly to customers instead of absorbed as department expense, when compared with thesame quarter of 2002. 
**INTEREST AND DIVIDEND INCOME:**
The Corporation earned $7,748 in interest and dividend income duringthe quarter ending March 31, 2003. Sources of this income were money market accounts andmarketable securities investments. 
**ENGINEERING SUPPORT:**
Engineering support costs decreased to $24,755 as of March 31, 2003, as compared to$42,603 for the same period of 2002. The decrease in engineering support costs for thefirst quarter of 2003, is the result of decreased quantity and scope of engineeringservices undertaken by the Company during the first quarter of 2003, when compared withthe same quarter of 2002. 
**NET INCOME:**
The Company had a net income of $41,019 for the first quarter of 2003compared to net income of $85,699 for the same quarter of 2002. The comparative reductionin net income is the result of increased operating expenses during the first quarter of2003, when compared with the first quarter of 2002.
**B. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES**
The Corporation's current asset to current liabilities ratio at March31, 2003 was 11.8:1 compared to 11.4:1 at December 31, 2002. The increase in current ratiois due to decreases in federal income taxes payable and refundable deposit amounts whencompared with amounts at December 31, 2002.

For the quarter ending March 31, 2003, the Company had cash and cashequivalents of $339,595 as compared to cash and cash equivalent holdings of $322,997 atDecember 31, 2002. Available for sale marketable securities decreased from December 31,2002 amounts of 1,337,668, to $1,336,072 as of March 31, 2003 as the result ofreclassification of some investments as cash equivalents and management fees. As of March31, 2003, certain components of investments held by the Company, if sold as of March 31,2003, would have presented a realized loss, net of tax of $2,592, compared with apotential loss of $4,182 as of December 31, 2002, which was decreased by an unrealizedgain of $1,417 recorded during the first quarter of 2003. The contingency for these itemsis reflected in the Balance Sheet as Accumulated other comprehensive loss, and theStatement of Comprehensive Income, respectively, as of March 31, 2003.

Accounts receivable increased to $317,253 as of March 31, 2003, fromDecember 31, 2002 levels of $302,269, due to increased sales and collection cycle timingdifferences during the first quarter of 2003, when compared with year-end 2002. Inventoryincreased slightly to $571,388 at March 31, 2003, from December 31, 2002 levels of$569,424. The Company's fixed assets, net of depreciation, increased to $182,916 as ofMarch 31, 2003, increased from December 31, 2002 levels of $159,182, due to capitalexpenditures of $34,660 for fixed assets and being offset by depreciation of $9,681, andloss on asset disposition of $1,245. The Company’s capital expenditures for fixedassets were primarily for development software and related computer upgrades. Managementforesees additional capital expenditures may be necessary in 2003 to support theproduction and sale of the Company’s products.

As of March 31, 2003, trade accounts payable balance at March 31, 2003was $123,387 as compared with $38,855 at December 31, 2002, and reflects amounts owed forpurchases of inventory items and contracted services. The Company recorded refundabledeposit liabilities of $6,402 for prepayment of foreign sales prior to shipment andongoing mobile data computer system (MDCS) projects contracted with the Company. FederalIncome Taxes payable decreased to $21,131 at March 31, 2003 from $104,594 at December 31,2002 as the result of payment of the Company’s tax liability for 2002 during thefirst quarter of 2003. Accrued Liabilities as of March 31, 2003 were $35,890, comparedwith $27,019 at December 31, 2002, and reflects items such as accrued vacation benefits,accrued payroll and state tax liabilities.

In Management's opinion, the Company's cash and cash equivalentreserves, and working capital at March 31, 2003 is sufficient to satisfy requirements foroperations, capital expenditures, and other expenditures as may arise during 2003. 
***FORWARD LOOKING STATEMENTS: The above discussion may contain forwardlooking statements that involve a number of risks and uncertainties. In addition to thefactors discussed above, among other factors that could cause actual results to differmaterially are the following: competitive factors such as rival wireless architectures andprice pressures; availability of third party component products at reasonable prices;inventory risks due to shifts in market demand and/or price erosion of purchasedcomponents; change in product mix, and risk factors that are listed in the Company'sreports and registration statements filed with the Securities and Exchange Commission.***
 

**ITEM III**
**CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
The    Company’s Chief Executive and its Chief Financial Officer, after evaluating the    effectiveness of the Company’s disclosure controls and procedures (as defined in the    Securities Exchange Act of 1934 Rules 13a-14(c) and 15d- 14(c) as of a date within 90 days    of the filing date of this quarterly report on Form 10-QSB (the "Evaluation    Date"), have concluded that as of the Evaluation Date, the Company’s disclosure    controls and procedures were adequate and effective to ensure that material information    relating to the Company would be made known to it by others within the Company,    particularly during the period in which this quarterly report on Form 10-QSB was being    prepared.
 
**Changes in Internal Controls.
 There were not significant changes in the    Company’s internal controls or in other factors that could significantly affect the    Company’s disclosure controls and procedures subsequent to the Evaluation Date, nor    any significant deficiencies or material weaknesses in such disclosure controls and    procedures requiring corrective actions.

 

 

 

 

 

 

 
** 

 

 **
**PART IIOTHER INFORMATION**

Item 6. EXHIBITS AND REPORTS ON FORM 8-K- Reports on Form 8-K

Form 8-K dated February 21, 2003 is incorporated herein by reference.
Exhibit IndexReference Form 10-QSB
 
Exhibit NumberNotes to Financial Statements4. Instruments defining the Rights of Security Holders including    indentures.
Form 8-K dated February 15, 2002 is incorporated herein by reference.  Form 8-K dated February 21, 2003 is incorporated herein by reference.
11. Statement Re: computation of per share earnings.Note 3 to Financial Statements.
 
Exhibit 99Exhibit 99.1 – Certification of CEO    Exhibit 99.2 – Certification of CFO
 

 

 

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrantcaused this report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

ELECTRONIC SYSTEMS TECHNOLOGY, INC.
By: /s/ T.L. KIRCHNERDate: May 12, 2003Name: T.L. Kirchner Title: Director/President(Principal Executive Officer)
 
By:  /s/ JON CORREIODate: May 12, 2003Name: Jon Correio Title: Director/Secretary/Treasurer(Principal Financial Officer)
 

 

 

 

 

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