UNITED STATES SECURITIES AND EXCHANGECOMMISSIONS

WASHINGTON D.C. 20549

FORM 10-QSB

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES 

EXCHANGE ACT OF 1934

For the quarterly period ended:
September 30 2000

Commission File Number:
000-27793

 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC.

(A Washington Corporation)

I.R.S. Employer Identificationno.
91-1238077

 

415 N. Quay St., #4

Kennewick  WA  99336

Registrant's telephone number, including area code:
(509) 735-9092

 

 

Check whether the issuer (1) has filed all reports requiredto be filed 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 suchreports), and (2) has been subject to such filing requirements for the past 90days.  Yes [ X ]    No [  ]   

 

The number of shares outstanding of common stock as ofSeptember 30, 2000 was 5,068,667.

 
**PART I - FINANCIALINFORMATION

Item 1.  FINANCIAL STATEMENTS.
**ELECTRONIC SYSTEMSTECHNOLOGY, INC.

(as prepared by Management)

(Unaudited)

SELECTED FINANCIAL DATA

 

Nine Months Ended
September 30, 2000
September 30, 1999
Sales
$        1,021,365
$   787,377
Other Revenues
176,620
136,670
Gross Profit
457,655
378,596   
Income (Loss) Before Taxes	
36,550
(      18,864)
Net Income (Loss) After Taxes
24,124
(      12,451)   
Earnings (Loss) Per Share Before Taxes  
Basic
$         0.006
$(          0.004)
Diluted
       0.006
(          0.004)   
Earnings (Loss) Per Share After Taxes  
Basic
$        0.004
$ (          0.003)
Diluted
      0.004
	(          0.003)   
Weighted Average Shares Outstanding (Basic)  
Primary
5,744,992
5,553,941
Diluted
5,744,992
5,553,941   
Total Assets
$        2,457,104
$2,244,301   
Long-Term Debt and Capital Lease Obligations
$                      0
$           -0-   
Shareholders' Equity
$        2,308,326
$2,180,000   
Shareholders' Equity Per Share
$                 0.46
$         0.44   
Working Capital
$        2,113,748
$2,014,620   
Current Ratio
16:1
32:1   
Equity To Total Assets
94%
97%   

 

 

 

 

 
**ELECTRONIC SYSTEMSTECHNOLOGY, INC.

BALANCE SHEET

 (as prepared by Management)

 (Unaudited)

September 30, 2000
Dec. 31 ,1999
ASSETS  
CURRENT ASSETS
		 
Cash and cash equivalents
$             1,506,262
$       1,624,728 
Accounts Receivable, net of allowance foruncollectibles
212,707
         154,788 
Inventory
519,347
         357,490 
Accrued Interest
8,769
             5,415 
Prepaid Expenses
15,441
             5,652
Provision for Federal Income Taxes
                           0
             5,045
Total Current Assets
$            2,262,526
$     2,153,118   
PROPERTY & EQUIPMENT net of

   Depreciation of $308,318 at

   September 30, 2000 and $278,821

   At Dec. 31, 1999      
186,949
        145,123
		  
OTHER ASSETS
                    7,629
             9,474
TOTAL ASSETS
$           2,457,104
$    2,307,715   
LIABILITIES & STOCKHOLDERS' EQUITY     
CURRENT LIABILITIES  
Accounts Payable
$                44,546
$         36,607
Refundable Deposits
78,038
--
Deferred Tax Liability 
816
           816
Accrued Liabilities
                21,952
           25,540 
Federal Income Taxes Payable
                   3,426
           25,540
Total Current Liabilities	
              148,778
           62,963   
STOCKHOLDERS' EQUITY

Common Stock,  $.001 Par Value

50,000,000 Shares Authorized

5,068,667 Shares Issued And Outstanding	      
$                 5,069
$           4,954  
Additional Paid-in Capital
933,464
         894,129  
Retained Earnings
            1,369,793
       1,345,669

$          2,308,326
$     2,244,752   
TOTAL LIABILITIES AND STOCKHOLDERS'

   EQUITY  
$           2,457,104
$     2,307,715     

(See "Notes to Financial Statements")
**ELECTRONIC SYSTEMSTECHNOLOGY, INC.

STATEMENT OF OPERATIONS

(as prepared by Management)

(Unaudited)

 
Three Months Ended
Nine Months Ended 
September  30,

 2000
September 30,

1999
September 30, 2000
September 30, 1999     
SALES
$432,439
$  275,891
$1,021,365
$  787,377
COST OF SALES    
Beginning Inventory
$     499,202
$ 417,514
$      357,490
$  385,365
Purchases and Allocated Costs
260,365
109,559
725,567
411,430

759,567
$ 527,073
1,083,057
$  796,795
Ending Inventory
519,347
388,014
519,347
388,014
Total Cost of Sales
$     240,220
$ 139,059
$     563,710
$  408,781
Gross Profit
$     192,219
$ 136,832
$     457,655
$  378,596     
OPERATING EXPENSES    
Finance/Administration
$       33,872
$   35,047
$       125,669
$  142,228
Research & Development
48,964
35,404
139,346
119,815
Marketing
55,692
48,277
170,140
155,234
Customer Service
22,814
12,276
$       73,604
44,780
Total Operating Expense
$     161,342
$  131,004
$     508,759
$  462,057
OPERATING INCOME (LOSS)
$       30,877
$     5,828
$     (51,104)
$(   83,461)     
Other Income (expenses)    
Interest Income
$        19,967
$  14,331
$          58,543
$   44,398
Engineering Services
47,488
31,153
118,077
92,272
Engineering Support
(32,385)
(   17,575)
(88,966)
(   72,074)
Other Income (expense)
$        35,070
$  27,909
$         87,654
$   64,596     
INCOME (LOSS) BEFORE TAX
$        65,947
$  33,737
36,550
$(  18,865)
Provision For Income Tax
(22,422)
(  11,471)
(12,426)
6,414     
NET INCOME (LOSS)
$       43,525
$  22,266
$        24,124
$(   12,451)     
Basic Earnings  (Loss) Per Share    
         Before Tax
$         0.01
$   0.006
$         0.006
$(    0.004)
Basic Earnings  (Loss) Per Share 

  
         After Tax
$         0.008
$   0.004
$        0.004
$(    0.003)     
Diluted Earnings (Loss) Per Share    
         Before Tax
$         0.01
$   0.006
$       0.006
$(    0.004)
Diluted Earnings (Loss) Per Share

  
         After Tax
$         0.008
$   0.004
$      0.004
$(    0.003)

(See "Notes to Financial Statements") 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC.

STATEMENT OF CASH FLOWS

(as prepared by Management)

(Unaudited)

Nine Months Ended
September 30, 2000
September 30, 1999   
CASH FLOWS PROVIDED (USED) IN OPERATING ACTIVITIES:   
Net Income (Loss)
$24,124
$  (   12,451)
Noncash items included in income:  
      Depreciation
29,497
23,805
      Amortization
1,845
2,148
      Provision for Federal Income Taxes
5,045
(   22,414)   
DECREASE (INCREASE) IN CURRENT ASSETS:
Accounts Receivable Net
(57,919)
187,292
Inventory
(161,857)
(     2,649)
Prepaid Expenses
(9,789)
(   13,689)
Accrued Interest
(3,354)
	      3,043   
INCREASE (DECREASE) IN CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses 
4,351
	$(  66,422)
Refundable Deposits
78,038
      --
Accrued Federal Income Taxes
3,426
(  14,510)
Deferred Income
--
(    25,017)

$(86,593)
$ 117,229
CASH FLOWS PROVIDED (USED) IN INVESTING ACTIVITIES:
Additions To Property And Equipment
$(71,323)
$    ( 65,507)
Capitalized Software
--
(3,725)
Deposits; application of mold deposit to property
--
26,250

$(71,323)
$(  43,897)
CASH FLOWS PROVIDED (USED) IN FINANCING ACTIVITIES:
Payment of Cash Distribution 
$(  49,537)
Common Stock Issued through exercised stock options
$       115
$            --
Additional Paid In Capital from exercised stockoptions
    39,335
               -- 
$  39,450
$(  49,537)
NET INCREASE (DECREASE) IN CASH AND  
    CASH EQUIVALENTS
$   (118,466)
$     23,795
Cash And Cash Equivalents  
    At Beginning Of Period
  1,624,728
1,426,381
Cash And Cash Equivalents At Ending of Period	
$1,506,262
$1,450,176   
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
Cash Paid Year To Date:  
Interest
$                  0
$                0
Federal Income Taxes
$            3,955
30,510   
Cash And Cash Equivalents:  
Cash
$5,803
$       6,650
Money Market Accounts
461,877
628,962
Certificates Of Deposit
1,038,582
     814,564
	  	 
$   1,506,262
$1,450,176

(See "Notes to Financial Statements)

 
**ELECTRONIC SYSTEMSTECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

 (as prepared by Management)

 (Unaudited)

	
**NOTE 1 - BASIS OF PRESENTATION 

The financial statements of Electronic Systems Technology,Inc. (the 2Company2), presented in this Form 10Q are unaudited and reflect, in the opinion ofManagement, a fair presentation of operations for the three and nine monthperiods ended September 30, 2000 and September 30, 1999. Certain information andfootnote disclosure normally included in financial statements prepared inaccordance with generally accepted accounting principals have been condensed oromitted pursuant to the applicable rules and regulations of the Securities andExchange Commission. These financial statements should be read in conjunctionwith the audited financial statements and notes thereto included in theCompany's Form 10K for the year ended December 31, 1999 as filed with Securitiesand Exchange Commission.

The results of operation for the three and nine month periods ended September30, 2000 and September 30, 1999, are not necessarily indicative of the resultsexpected for the full fiscal year or for any other fiscal period.
**NOTE 2 - INVENTORIES

Inventories are stated at lower of cost or market with cost determined usingthe FIFO (first in, first out) method.  Inventories consist of thefollowing:

 
September 30

2000 
December 31

1999
Parts
$307,430 
$ 256,334
Work in progress
92,787 
52,279
Finished goods
119,130 
48,877 
$519,347 
$ 357,490

 
**NOTE 3 - EARNINGS (LOSS)PER SHARE 

Basic Earnings Per Share (EPS) excludes dilution and iscomputed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period.  Diluted EPSreflects potential dilution occurring if securities or other contracts to issuecommon stock were exercised or converted into common stock or resulted in theissuance of common stock that then shared in the earnings of the Company.  Theprimary weighted average number of common shares outstanding was 5,744,992 and5,553,941 for the quarters ended September 30, 2000 and 1999 respectively.

For the Quarter Ended September 30,2000 
Income

(Numerator)
Shares

(Denominator)
Per-Share

Amount
Basic EPS

Income available to common     stockholders
$43,525
5,744,992
$0.008
Diluted EPS

Income available to common stockholders+assumedconversions
$43,525
5,648,667
$0.008**NOTE 4 - STOCK OPTIONS

As of September 30, 2000, the Company had outstandingstock options that have been granted periodically to individual employees anddirectors with no less than three years of continuous tenure with Company. OnFebruary 11, 2000, additional stock options to purchase shares of the Company'scommon stock were granted to individual employees and directors with no lessthan three years continuous tenure.  The options granted on February 11, 2000totaled 220,000 shares under option and have an exercise price of $2.81 pershare.  The options granted on February 11, 2000 may be exercised any timeduring the period from February 11, 2000 through February 10, 2003.  TheCompany's Form 8-K dated February 11, 2000, as filed with the Securities andExchange Commission is included herein by reference.  All outstanding stockoptions must be exercised within 90 days after termination of employment. Duringthe 12 month period from September 30, 1999 to September 30, 2000, 165,000shares under option expired, 115,000 shares under option were exercised, and220,000 shares under option were granted.  At September 30, 2000 there were580,000 shares under option reserved for future exercises.

The Company has adopted the disclosure-only provisions ofStatement of Financial Accounting Standards (SFAS) No. 123, "Accounting forStock-Based Compensation." The Company undertakes to make disclosures andcalculations pursuant to SFAS 123 on an annual basis coinciding with theissuance of the Company's Annual Financial Statements. Accordingly, nocompensation cost has been recognized for the stock option plan. 
**NOTE 5 - RELATED PARTY TRANSACTIONS

For the nine-month period ended September 30, 2000services in the amount of $73,652 were contracted with Manufacturing Services,Inc., of which the owner/president is a member of the Board of Directors of theCompany.  
**NOTE 6 - CASHDISTRIBUTION

On June 11, 1999, the Company declared aone-time, non-cumulative, cash distribution to shareholders of record as of June25, 1999, of $0.01 per share of common stock, with a payable date of July 9,1999.  The payment of the cash distribution was completed by July 9, 1999 for atotal dollar value of $49,537.  For the quarter ended September 30, 1999, theCompany had met all cash distribution obligations and no longer recognizedcurrent liabilities previously recorded for the cash distribution.  TheCompany's Form 8-K dated June 11, 1999, as filed with the Securities andExchange Commission is included herein by reference.
**ITEM II

MANGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATION
*Management's discussion and analysis is intended to beread in conjunction with the company's unaudited financial statements and theintegral notes thereto for the quarter ending September 30, 2000.  The followingstatements may be forward looking in nature and actual results may differmaterially.
**A.	RESULTS OF OPERATIONS

REVENUES:

Total revenues from the sale of theCompany's ESTeemÔ wireless modem systems, accessories, and services increased to $479,927 for thethird quarter of 2000 as compared to $307,044 in the third quarter of 1999,reflecting an increase of 56%.  Gross revenues increased to $499,894 for thequarter ending September 30, 2000, from $321,375 for the same quarter of 1999,reflecting an increase of 56%. The sales revenue increase is attributable totiming differences for revenues recognized by the Company for Mobile DataComputer (MDC) for public safety entities projects using the Company's products,when compared with the same period of 1999, and large volume shipments to theCompany's distributors for use in Industrial Automation applications.  InManagement's opinion, the increase in revenues for the quarter ended September30, 2000 is a short-term result and should not be viewed as a long-term trend.

The Company's revenues have historically fluctuated fromquarter to quarter due to timing factors such as customer order placement andproduct shipments to customers, as well as customer buying trends, and changesin the general economic environment. The procurement process regarding plant andproject automation, or project development, which usually surrounds the decisionto purchase ESTeem products can be lengthy. This procurement process may involvebid activities unrelated to the ESTeem products, such as additional systems andsubcontract work, as well as capital budget considerations on the part of thecustomer.  Because of the complexity of this procurement process, forecasts inregard to the Company's revenues become difficult to predict.

The Company's revenues fall into three major customercategories, Domestic, Export and U.S. Government Sales.  Domestic commercialsales increased to $404,187 in the third quarter of 2000 as compared to $227,339for the third quarter of 1999.  Foreign export sales for the third quarter of2000 increased to $68,703 as compared to the $58,669 in the same quarter of1999, due to strong sales activity in Brazil.

U.S. Government sales decreased in the third quarter of 2000 to $7,037, downfrom third quarter 1999 levels of $21,036.  Management believes the decreasedU.S. Government sales is a result of a continued lack of new projects andpurchases for the Company's products, a trend experienced by the Company for theprevious twelve months, and which Management feels may continue for theforeseeable future. Due to the uncertain nature of U.S. Government purchasing,Management does not base profitability or liquidity projections on expected U.S.Government sales.

During the quarter ended September 30, 2000, material and services providedto the Blaine County, Idaho, Sheriff's Department and the City of Florence,Alabama, Police Department accounted for 23% and 19% of the Company's sales andservice revenues, respectively.  Sales to Industrial Electronics and Controls, asouthwestern regional distributor, consisted of 12% of the Company's sales andservice revenues.  No other sales to a single customer comprised 10% or more ofthe Company's product and service sales for the quarter ending September 30,2000. 

A percentage breakdown of EST's major customer categories of Domestic, Exportand U.S. Government Sales, for the third quarter of 2000 and 1999 are asfollows:

			   

For the third quarter of 
2000
1999
Domestic Sales
85%
74%
Export Sales
14%
19%
U.S. Government Sales
1%
7%

A percentage breakdown of EST's product sales categoriesfor the third quarter of 2000 and 1999 are as follows:

For the Quarter Ended September 30 
2000
1999
ESTeem Model 192
46%
46%
ESTeem Model 95
3%
18%
ESTeem Model 96
1%
9%
ESTeem Accessories
38%
14%
Factory Services
2%
3%
Site Support
10%
10%
Sales for the third quarter of 2000 and 1999 include foreign export sales asfollows:

Three Months Ended
September 30, 2000
September 30, 1999
Export sales
$     68,703
$     58,669
Percent of sales
14%
19%
 

The geographic distribution of foreign sales for thethird quarter of  2000 and 1999 is as follows:

Percent of Foreign Sales
COUNTRY
September 30, 2000
September 30, 1999
Brazil
63%
44%
Australia
16%
--
South Korea
7%
16%
Canada
5%
--
Taiwan
5%
--
Indonesia
2%
3%
Ecuador
1%
--
Austria
Nil
--
Croatia/Slovenia
--
24%
Thailand
--
7%
Israel
--
6%
Mexico
--
Nil
The majority of the Company's domesticand foreign sales for the third quarter of 2000 were used in IndustrialAutomation applications. Industrial Automation applications have historicallybeen the majority of the Company's domestic sales, which Management believeswill continue for the foreseeable future, but will also be, augmented by salesof Mobile Data Computer Systems for public safety entities.  It is Management'sopinion that the majority of foreign export applications will continue to be inIndustrial Automation applications for the foreseeable future.

Based on previous sales activity, the majority of all U.S.Government purchases are expected to be under the Company's General ServicesAdministration (GSA) contract.  Projections regarding liquidity, profitability,and material purchases are based on past history of annual purchases.Historically, Federal sales average approximately 18% of annual sales, but thislevel cannot be guaranteed, as is demonstrated in the reduced Federal salesvolume the Company has experienced in the last twelve months. Due to theuncertain nature of Federal purchasing, procurement of material and productionplanning is adjusted quarterly based on demand. It is Management's opinion thatthe majority of U.S Government purchases in 2000 will be under thiscontract.
**BACKLOG:

The Company had backlog of $126,000 at September 30,2000, for orders placed late in the quarter.  The Company expects to makedelivery of all backlog items in the fourth quarter of 2000 or alternatively thebacklog is part of ongoing large-scale public safety Mobile Data Computer (MDC)projects and will be delivered as part of project timelines.  Customersgenerally place orders on an "as needed basis".  Shipment is generallymade within 5 to 10 working days after receipt of an order from a customer.
**COST OF SALES: 

Cost of sales percentages of gross salesfor the third quarters of 2000 and 1999 were 56% and 50% of gross salesrespectively.  Cost of Sales variations are attributable to the type of productsold and the size of the order.  Larger orders grant lower sales prices becauseof volume discounting, reducing the margin of profit. The increase in cost ofsales in the third quarter of 2000 is due to a combination of decreased salesprices and product mix.
**OPERATING EXPENSES:

Operating expenses for the third quarter of 2000increased $30,338 when compared with the third quarter of 1999.  The followingis a delineation of operating expenses:

For the quarter ended:
September 30, 2000
September 30, 1999
Increase (Decrease)
Finance/Administration
$   33,872
$35,047
$(    1,175)
Research/Development
48,964
35,404
   13,560
Marketing
55,692
48,277
    7,415
Customer Service
22,814
12,276
    10,538
Total Operating Expenses
$ 161,342
$ 131,004
$    30,338**FINANCE AND ADMINISTRATION:

During the third quarter of 2000 Finance andAdministration expenses decreased $1,175 when compared with the third quarter of1999.  The decrease is the result of decreased professional services in thethird quarter of 2000 in comparison.  
**RESEARCH AND DEVELOPMENT:

During the third quarter of 2000, Research andDevelopment expenses increased $13,560 when compared with the third quarter of1999.  The increase in Research and Development expenditures during the thirdquarter of 2000 was due to increased subcontracted engineering expertisecontracted by the Company primarily for development of the ESTeem Ethernet basedproducts. 
**MARKETING:

Marketing expenses increased $7,415 fromthe same period in 1999, due to timing differences in advertising and tradeshowexpenditures by the Company as well as increased salaries and wages beingassigned to the department when compared with the same period of 1999. 
**CUSTOMER SERVICE:

Customer service expenses for the thirdquarter of 2000 increased $10,538 when compared with the third quarter of 1999.The increase is primarily the result of increased salaries and wages from anadditional employee being added to the department during 2000.
**INTEREST INCOME:

The Corporation earned $19,967 in interest income for thequarter ended September 30, 2000. Sources of interest income were short-terminvestments, as well as savings and money market accounts.
**ENGINEERING SUPPORT:

Engineering support costs increased to$32,385 for the quarter ended September 30, 2000, as compared to $17,575 for thesame period of 1999.  The increase in engineering support costs is a directresult of increased engineering services performed by the Company for customersin the third quarter of 2000.  
**NET INCOME (LOSS):

The Corporation had net income of $43,525 for the thirdquarter of 2000, compared to a $22,266 for the third quarter of 1999.  Theincrease is attributable to increased sales revenues and other income during thethird quarter of 2000, as compared with the third quarter of 1999
**B.  Financial Condition, Liquidityand Capital Resources

The Corporation's current asset tocurrent liabilities ratio at September 30, 2000 was 16:1 compared to 34.2:1 atDecember 31, 1999.  The decrease in current ratio is due to increases inrefundable customer deposits and accounts payable amounts when compared withDecember 31, 1999 amounts.

For the quarter ending September 30,2000, the Company had cash and cash equivalent short-term investment holdings of$1,506,262 as compared to cash and cash equivalent holdings of $1,624,728 atDecember 31, 1999.  The decrease is attributable to increased inventory levels,capital asset procurement, and prepaid expenses paid by the Company, while beingoffset by receipt of refundable deposits from customers and the Company's netincome for the quarter ended September 30, 2000.

Accounts receivable increased to $212,707 as of September 30,2000, from December 31, 1999 levels of $154,788.  Management believes all of theCompany's accounts receivable as of September 30, 2000 are collectible.Inventory increased to $519,347 at September 30, 2000, from December 31, 1999levels of $357,490, due to increased procurement for production of products forboth Mobile Data Computer, Industrial Automation projects and new productdevelopment.  Provision for Federal Income Taxes decreased to $0 at September30, 2000 as the Company's estimated tax liability for Net Income at quarter endabsorbed the provision as compared with December 31, 1999 levels.

The Company's fixed assets, net of depreciation, increased to$186,949 as of September 30, 2000, from December 31, 1999 levels of $145,123,due to capital expenditures of $71,323.  The expenditures were for softwaredevelopment tools for the new ESTeem 192E Ethernet product and additionalequipment used in the manufacturing of the Company's products.  Managementforesees additional capital expenditures may be necessary to support theproduction and sale of the Company's products.

As of September 30, 2000, the Company's trade accountspayable balance was $44,546 as compared with $36,607 at December 31, 1999, andreflects amounts owed for purchases of inventory items and contracted services.Refundable deposit liability was $78,038 for the quarter ended September 30,2000, and reflects prepaid amounts for Mobile Data Computer customers undercontract prior to delivery of material by the Company.

It is Management's opinion the Company's cash, cash equivalent reserves, andworking capital at September 30, 2000 are sufficient to satisfy requirements foroperations, capital expenditures, and other expenditures as may arise in theshort term. 
***FORWARD LOOKINGSTATEMENTS:  The above discussion may contain forwardlooking statements that involve a number of risks and uncertainties.  Inaddition to the factors discussed above, among other factors that could causeactual results to differ materially are the following: competitive factors suchas rival wireless architectures and price pressures; availability of third partycomponent products at reasonable prices; inventory risks due to shifts in marketdemand and/or price erosion of purchased components; change in product mix, andrisk factors that are listed in the Company's reports and registrationstatements filed with the Securities and Exchange Commission.
 

 
**PART II

OTHER INFORMATION
**Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

 	(a)	Exhibits

Exhibit 27. Financial Data Schedule, September 30, 2000

(b)	Reports on Form 8-K                                  

Form 8-K dated June 11, 1999 is incorporated herein by reference.  

Form 8-K dated February 11, 2000 is incorporated herein byreference.

Exhibit Index        				Reference

                                     					              Form10-QSB

Exhibit Number                                       				Notes to

         Financial Statements
**4.	Instruments defining the Rights ofSecurity Holders including indentures.

Form 8-K dated February 11, 2000 is incorporated herein byreference.  
**11.	Statement Re: computation of pershare earnings.    			Note 3 to FinancialStatements**SIGNATURES

In accordance with the requirements of the Exchange Act, theregistrant caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.
 
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
 

Date:	November 4, 2000
/s/ T.L KIRCHNER 
Name:  T.L. Kirchner 
Title: Director/President 
(Principal Executive Officer)
Date:	November 4, 2000
/s/ ROBERT SOUTHWORTH 
Name:  Robert Southworth 
Title: Director/Secretary/Treasurer 
(Principal Financial Officer)
               						 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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