UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON D.C. 20549 

FORM 10-QSB 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934. 

| For the quarterly period ended:
June 30 2005
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
Registrant’s telephone number, including area code:(509) 735-9092
 

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

The number of shares outstanding of common stock as of June 30, 2005 was 5,148,667. 
**PART I - FINANCIAL INFORMATION
**Item 1. FINANCIAL STATEMENTS. 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.(as prepared by Management) (Unaudited) Six Months Ended
June 30, 2005
June 30, 2004Sales
$ 1,130,184
$ 1,332,459Other Revenues
16,135
10,864Gross Profit
581,801
774,581Net Income (Loss) Before Taxes 
19,963
223,759Net Income (Loss) After Taxes
5,247
147,687 Earnings (Loss) Per Share Before TaxesBasic
$ 0.00
$ 0.04Diluted
0.00
0.04 Earnings (Loss) Per Share After TaxesBasic
$ 0.00
$ 0.03Diluted
0.00
0.03 Weighted Average Shares Outstanding (Basic)Primary
5,148,667
5,098,667Diluted
5,236,410
5,259,653 Total Assets
$ 2,903,995
$ 2,921,143 Long-Term Debt and Capital Lease    Obligations
$ 0
$ 0 Shareholders' Equity
$ 2,656,484
$ 2,651,964 Shareholders' Equity Per Share
$ 0.52
$ 0.52 Working Capital
$ 2,448,905
$ 2,457,490 Current Ratio
15.0:1
12.7:1 Equity To Total Assets
91%
91%
(See "Notes to Financial Statements")

 

 

 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC. 

BALANCE SHEETS(as prepared by Management) (Unaudited) ****
 
 
June 30, 2005
Dec. 31, 2004ASSETSCURRENT ASSETS Cash and Cash Equivalents
$ 563,380
$ 488,480Short Term Certificates of Deposit    Investments
269,460
--Available for Sale Marketable    Securities
928,995
1,344,619Accounts Receivable, net of    allowance    for uncollectibles
216,560
257,080Inventory
610,850
605,159Accrued Interest
1,998
--Prepaid Expenses
15,667
12,578Prepaid Software/Network Services-current    portion
16,306
--Total Current Assets
2,623,216
2,707,916 PROPERTY & EQUIPMENT net of    depreciation of $507,218 at June 30, 2005 and $476,185 at Dec. 31, 2004
234,946
253,456 OTHER ASSETS
3,198
4,624DEFERRED INCOME TAX BENEFIT
14,100
17,300PREPAID SOFTWARE/NETWORK SERVICES-long term    portion
28,535
--TOTAL ASSETS
$ 2,903,995
$ 2,983,296 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIESAccounts Payable
72,426
96,949Refundable Deposits
3,587
3,630Accrued Liabilities
30,953
69,255Distributions Payable
51,487
--Federal Income Taxes Payable
15,858
39,201Total Current Liabilities 
174,311
209,035 DEFERRED INCOME TAXES
73,200
75,500STOCKHOLDERS' EQUITY    Common Stock, $.001 Par Value 50,000,000 Shares Authorized    5,148,667 Shares Issued And Outstanding 
 

5,149
 

5,149 Additional Paid-in Capital
966,184
966,184 Retained Earnings
1,697,012
1,743,252 Accumulated other Comprehensive Gain (Loss)
(11,861)
(15,824) 
2,656,484
2,698,761TOTAL LIABILITIES AND    STOCKHOLDERS' EQUITY
$ 2,903,995
$ 2,983,296 
(See "Notes to Financial Statements")
**ELECTRONIC SYSTEMS TECHNOLOGY, INC. 

STATEMENTS OF OPERATIONS(as prepared by Management) (Unaudited) 
 
Three Months    Ended
Six Months Ended
June 30, 2005
June 30, 2004
June 30, 2005
June 30, 2004 SALES
$ 547,178
$ 687,919
$ 1,130,184
$ 1,332,459COST OF SALES
281,467
287,943
548,383
557,878Gross Profit
265,711
399,976
581,801
774,581 OPERATING EXPENSESFinance/Administration
62,696
51,257
138,699
113,675Research & Development
69,659
80,273
136,351
151,727Marketing
129,733
121,819
234,766
226,374Customer Service
26,966
30,829
56,229
65,256Total Operating Expenses
289,054
284,178
566,045
557,032OPERATING INCOME (LOSS)
(23,343)
115,798
15,756
217,549 Other Income (expenses)Interest/Investment Income
9,811
5,447
16,134
8,686Uncollectible amount recovered
--
--
--
2,178Realized Loss on Marketable Securities
(1,500)
--
(7,140)
--Management Fee, Marketable Securities
(2,331)
(2,330)
(4,655)
(4,650)Loss on Asset Disposal
--
--
(132)
(4)Net Other Income (Expense)
5,980
3,117
4,207
6,210 NET INCOME (LOSS) BEFORE TAX
(17,363)
118,915
19,963
223,759Provision For Income Tax
2,645
(40,340)
(14,716)
(76,072) NET INCOME (LOSS)
$ ( 14,718)
$ 78,575
$ 5,247
$ 147,687 Basic Earnings (Loss) Per Share    Before Tax
$ ( 0.00)
$ 0.02
$ 0.00
$ 0.04Basic Earnings (Loss) Per Share     After Tax
$ ( 0.00)
$ 0.01
$ 0.00
$ 0.03Diluted Earnings (Loss) Per Share    Before Tax
$ ( 0.00)
$ 0.02
$ 0.00
$ 0.04Diluted Earnings (Loss) Per Share    After Tax
$ ( 0.00)
$ 0.01
$ 0.00
$ 0.03
(See "Notes to Financial Statements") 
**STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(as prepared by Management)(Unaudited)**** 
Three Months    Ended
Six Months    Ended
June 30, 2005
June 30, 2004
June 30, 2005
June 30, 2004NET INCOME (LOSS)
$ (14,718)
$ 78,575
$ 5,247$ 147,687 OTHER COMPREHENSIVE GAIN (LOSS):Unrealized gain (loss) on securities arising    during period (net of tax effect)
1,609
(9,524)
( 749)
( 5,514)COMPREHENSIVE INCOME (LOSS)$ ( 13,109)
$ 69,051
$ 4,498$ 142,173
 

 

 

 

 
** 

 

 

 **
(See "Notes To Financial Statements")
** 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

STATEMENTS OF CASH FLOWS(as prepared by Management) (Unaudited) 
Six Months Ended
June 30, 2005
June 30, 2004CASH FLOWS PROVIDED (USED) IN OPERATING    ACTIVITIES:Net Income (Loss)
$ 5,247
$147,687Noncash items included in income:  Depreciation
35,428
24,836Amortization
1,426
2,128Loss on Disposition of Assets
132
4Loss on Marketable Securities
7,140
--Provision for Federal Income Taxes
( 2,042)
29,433Accrued Interest
( 1,998)
29,433 DECREASE (INCREASE) IN CURRENT ASSETS:Accounts Receivable Net
40,520
35,828Certificates of Deposit Purchased
( 450,000)
--Marketable Securities Investments Purchased
--
(12,749)Marketable Securities Investments Sold
595,028
--Inventory
( 5,691)
21,446Prepaid Software and Network Services
( 16,306)
--Deferred Tax Benefit
3,200
--Prepaid Expenses
( 3,089)
2,658 DECREASE (INCREASE) IN LONG TERM ASSETS:Prepaid Software and Network Services
( 28,535)
-- INCREASE (DECREASE) IN CURRENT LIABILITIES:Accounts Payable and Accrued Expenses 
( 62,825)
15,151Refundable Deposits
( 43)
(77,580)Deferred Tax Liability
( 2,300)
--Accrued Federal Income Taxes 
( 23,343)
46,639Deferred Income 
--
(25,088) 
91,950
210,393CASH FLOWS PROVIDED (USED) IN INVESTING    ACTIVITIES:Deposits applied to Property and Equipment
--
18,605Additions To Property And Equipment
( 17,050)
(34,688) 
( 17,050)
(16,083)CASH FLOWS PROVIDED (USED) IN FINANCING    ACTIVITIES:No Financing Activities Recorded
--
--   NET INCREASE (DECREASE) IN CASH    AND CASH EQUIVALENTS
74,900
194,310************** |
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