UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended: December 31, 2021
	For the fiscal year ended: December 31, 2022
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number: 000-27793

ELECTRONIC SYSTEMS TECHNOLOGY INC.

(Exact name of registrant as specified in its charter)

Washington		91-1238077
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

415 N. Roosevelt St., STE B1, Kennewick, Washington		99336
(Address of principal executive offices)		(Zip Code)

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

Securities registered under Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

None	N/A	N/A

Securities registered under Section 12(g) of the Exchange Act:
Common

(Title of Class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o☐ No x☒

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x☒ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated Filer x☒ Smaller reporting company x☒ Emerging Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x☒

The aggregate market value of the registrant’s common stock held by non-affiliates was $~~921~~861,~~507~~449, based on the reported last sale price of common stock on June 30, ~~2020~~2022, which was the last business day of the registrant’s most recently completed second fiscal quarter. For purposes of this computation, all executive officers and directors were deemed affiliates.

The number of shares outstanding of the registrant’s common stock as of February 15, ~~2022~~2023: 4,946,502 shares.

ELECTRONIC SYSTEMS TECHNOLOGY INC.

FORM 10-K

Table of Contents

PART I	34
Item 1. Business.	34
Item 1A. Risk Factors.	67
Item 1B. Unresolved Staff Comments.	78
Item 2. Properties.	89
Item 3. Legal Proceedings.	89
Item 4. Mine Safety Disclosure.	89
PART II	9
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	9
Item 6. Selected Financial Data.	10
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.	1112
Item 8. Financial Statements and Supplementary Data.	1213
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.	28
Item 9A. Controls and Procedures.	28
Item 9B. Other Information.	28
PART III	29
Item 10. Directors, Executive Officers and Corporate Governance.	29
Item 11. Executive Compensation.	31
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	33
Item 13. Certain Relationships and Related Transactions, and Director Independence.	3435
Item 14. Principal Accounting Fees and Services.	3536
PART IV	36
Item 15. Exhibits and Financial Statement Schedules.	36
SIGNATURES	37

PART I

FORWARD LOOKING STATEMENTS:

This Annual Report on Form 10-K and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements concern the Company’s anticipated results and developments in the Company’s operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Any statement that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always using words or phrases such as “believes”, “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates”, or “intends”, or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements.

The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law. The Company advises readers to carefully review the reports and documents filed from time to time with the Securities and Exchange Commission (the “SEC”), particularly the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Management’s Discussion and Analysis is intended to be read in conjunction with the Company’s financial statements and the integral notes (“Notes”) thereto for the fiscal year ending December 31, ~~2021~~2022. The following statements may be forward-looking in nature and actual results may differ materially. All dollar amounts in this Annual Report are expressed in U.S. dollars, unless otherwise indicated.

Item 1. Business.

For over 35 years, Electronic Systems Technology, Inc. (“EST”, “us”, “we”, “our” or the “Company”) has specialized in the development and manufacturing of digital data (non-voice) radio transceivers for use in industrial wireless networking applications. With reliance on wireless communication in the modern world, the global modernization of industrial control systems now requires the benefits gained by use of wireless technology. EST designs, manufactures, develops and produces these specialized, hardened products uniquely designed to operate and survive in these difficult environments in which these systems must perform.

The Company’s ESTeem® line of products provide innovative communication solutions for harsh environment applications not served or that are underutilized by conventional, commercial grade communication systems. Our products are part of the ESTeem® Industrial Wireless Solutions for commercial, industrial, and government arenas both domestically and internationally. We market through direct sales, sales representatives, resellers and system integrators

EST was incorporated in the State of Washington in February 1984 and was granted a United States Patent for the “Wireless Computer Modem” in May 1987, and Canadian patent in October 1988. We registered and commenced building brand recognition on the trade name of “ESTeem® Wireless Modems” in 2007. After reviewing for marketability and profitability, our strategy is to provide product improvements and enhancements that incorporate technological developments in response to customer needs and market opportunities arising from changes in FCC regulations or technological developments.

Development efforts in ~~2021~~2022 were focused primarily on software enhancements and hardware maintenance for the ESTeem® Horizon Series. These next generation industrial wireless products will improve our networking capability with higher data rates, improved security, improved support features and updates to the latest wireless standards.

In an effort to maintain and expand our customer base in the industrial control marketplace, we team with major automation hardware vendors such as Rockwell Automation. Our 30-year relationship with Rockwell Automation’s Encompass Program delivers significant benefits via increased exposure to markets that would not otherwise be available to us. Rockwell Automation has the largest market share in the United States and is a major entity in the world-wide automation and controls marketplace.

PRODUCTS AND MARKETS

ESTeem® industrial wireless products provide communication links between computer networks, network enabled devices and mobile devices without cables. The widespread use of networked computer systems in business, industry and public service and the adoption of mobile devices in all aspects of modern life has created an environment where the wireless network is no longer a convenience but a necessity. As wireless networking proliferates through the modernization of the industrial sector the need for our products, which are specifically designed for rigors of operation in harsh environments, is increasing dramatically. Wireless networks are the backbone connections to the Internet for cloud-based services such as the Internet of Things (“IoT”) and Industrial Internet of Things (“IIoT”).

All of the ESTeem® models come with industry standard Ethernet (Internet) communication ports and legacy serial ports to provide the broadest range of connections for both new and legacy hardware. The combined features such as AES 128 or AES 256 security encryption, self-healing repeaters, mesh networking, long range operation and outdoor weatherproof cases make the ESTeem® products unique in our market space.

PRODUCT APPLICATIONS

Major applications and industries in which ESTeem® products are being utilized are as follows:

Water/Wastewater	Mining
Oil/Gas	Industrial Automation

PRODUCT LINES

We manufacture nine (9) models of the ESTeem® industrial wireless modems that operate in frequency from 150 MHz to 5.8 GHz. A wireless modem is a hardware device for sending and receiving data over a radio carrier and is the foundation of our industrial wireless solution. Each model will fit best in a specific application based upon several factors such as distance, required data rate and Federal Communication Commission (“FCC”) licensing requirements. Each wireless network is discussed in detail with the end customer to determine the best overall solution for their application. No single model or frequency band can solve all applications and having a diverse product selection is critical for expanding our customer base. The following is a summary of our product offering.

ESTeem Model	Type	Frequency (MHz)	RF Power (Watts)	RF Data Rate	LOS Range (Miles)	Interface
210M	Narrow Band Licensed	150 to 174	2	64.8 Kbps	15	Ethernet/RS-232
195M	Narrow Band Licensed	150 to 174	4	12.5 Kbps	15	Ethernet/RS-232/422/485
195C	Narrow Band Licensed	450 to 470	4	12.5 Kbps	15	Ethernet/RS-232/422/485
195H	Narrow Band Licensed	217 to 220	2	50 Kbps	15	Ethernet/RS-232/422/485
Horizon900	Unlicensed	900	1	72.2 Mbps	10	Ethernet/ RS-232
Horizon2.4	Unlicensed	2400	1	150 Mbps	5-7	Ethernet/ RS-232
Horizon2.4MIMO	Unlicensed	2400	.5 (Dual Stream)	300 Mbps	5-7	Ethernet/ RS-232
Horizon4.9	Licensed	4900	1	72.2 Mbps	5-7	Ethernet/ RS-232
Horizon5.8	Unlicensed	5800	.250 (Dual Stream)	300 Mbps	5-7	Ethernet/ RS-232
Edge900	Unlicensed	900	.25	1 Mbps	10	Ethernet/ RS-232

ADDITIONAL PRODUCTS AND SERVICES

Various accessories to support the above products, e.g., antennas, power supplies and cable assemblies, are purchased from other manufacturers and resold by us to support the application of our industrial wireless modems for repairs and upgrades. To assist in the application of ESTeem industrial wireless modems, we also offer professional services, including site survey testing, system start-up, and custom engineering.

RESEARCH AND DEVELOPMENT AND NEW PRODUCTS

Our products compete in an environment of rapidly changing technology which results in the necessity for continuous updates and enhancements. Research and ~~Development~~development expenditures for new product development and improvements of existing products for ~~2021~~2022 and ~~2020~~2021 were $~~212~~163,~~397~~ 189 and $~~200~~212,~~024~~397 respectively. None of our research and development expenses were paid directly by any of our customers. We contract with third parties for software development and hardware design as needed. Development efforts during ~~2021~~2022 were focused primarily on software enhancements for the ESTeem® Horizon Series and the redesign of the Horizon900. Research and development expenditures will continue, in order to meet our customers’ evolving needs.

MARKETING, CUSTOMERS AND SUPPORT

The majority of our products sold during ~~2021~~2022 were through the reselling efforts of non-exclusive, non-stocking distributors and resellers, and the remainder our sales were direct to end-users. Orders are generally ~~place~~placed on an “as needed basis”. Shipping of products is usually completed 1 to 15 working days after receipt of a customer order, with the exception of ongoing scheduled projects and custom designed equipment for specific applications. Our sales order backlog at year end was $8149,~~293~~173.

We advertise in trade publications and attend trade shows specifically targeting industrial automation systems. We provide support personnel and maintain an internet web site to provide access to product and technical information for customers. We provide technical support and service for our products and installations through phone support, field technicians and internet sources. High quality customer support is vital to differentiate ourselves in our marketplace. We intend to maintain this high level of customer support by investing in our customer service programs.

COMPETITION

All of our markets are highly competitive as there are approximately twenty major automation hardware manufacturers worldwide. Listed below are major competitors in the markets in which we compete.

Major Market Major Competitors Industrial Automation FreeWave Technologies, GE/Microwave Data Systems, Data-Linc and Cal Amp Computer networking, inter and intra building, and remote internet access Cisco, Digital Wireless, D-link, Linksys, P-Com and Proxim

We believe our products compete favorably based on performance, price, and adaptability of the products to a wide range of applications, as well as world class service and support.

PATENTS, TRADEMARKS, AND PROPRIETARY INFORMATION

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 nondisclosure agreements. Rights to the ESTeem® Wireless Modems, trademark were renewed in 2014. The initial patents granted in 1987 and 1988 have expired and we currently have no patents on any of our products.

GOVERNMENT REGULATION

For operation in the United States, the ESTeem® industrial wireless products require FCC type acceptance which is granted for devices demonstrating operation within mandated and tested performance criteria. All of our products requiring FCC type acceptance have been granted such acceptance, and all except the Horizon4.9 have been granted such acceptance in Canada.

The ESTeem® industrial wireless products that operate in the FCC licensed frequency band require licensing under Part 90 of the FCC Rules and Regulations which must be applied for by the end user. We provide information to customers to assist in the application for FCC consumer licenses, although we cannot guarantee FCC licenses in a given frequency spectrum for a particular application will be received.

5While there can be no assurance that future FCC regulations will not have material adverse effects on our operations, we are unaware of any such existing or proposed FCC regulations at this time.

~~While there can be no assurance that future FCC regulations will not have material adverse effects on our operations, we are unaware of any such existing or proposed FCC regulations at this time.~~6

SOURCE OF SUPPLY AND MANUFACTURING

Components are purchased through a number of distributors and key component suppliers, such as Hitachi, Motorola, and others, some of which have long lead times. Although these components could be replaced or substituted by other products, if necessary, a significant interruption or delay in their availability could have a material adverse effect on our business.

Approximately 30 47% of the Company’s inventory at December 31, ~~2021~~2022 consisted of parts having lead times ranging from 12 to 30 weeks. Some parts are maintained at high levels to assure availability to meet production requirements, thus, accounting for a significant portion of the Company’s inventory value. Based on past experience with component availability, distributor relationships, and inventory levels, we do not foresee shortages of materials. However, developments in the electronic component marketplace, which are also used in cellular phones, personal technology devices and other technology devices, have the potential of creating negative availability and delivery issues for components used by us. Although we have been able to procure parts on a timely basis as of the date of this report, however procurement cannot be guaranteed in the future. If shortages were to occur, material interruption of production and product delivery to customers would result.

The Company contracts with multiple companies for manufacturing of sub-assemblies and some engineering assistance services as needed. By contracting with these companies, the Company is able to avoid staff fluctuations associated with operating its own manufacturing and reduced capital investments in specialized manufacturing equipment. We review the costs for the services provided by these companies and regularly submits Requests for Quotes (RFQ) to multiple suppliers of these operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and “Financial Statements”.

ACCESS TO COMPANY INFORMATION

The Registrant does not issue annual or quarterly reports to security holders other than the annual Form 10-K and quarterly Forms 10-Q as electronically filed with the Securities and Exchange Commission (“SEC”) and available for viewing at www.sec.gov. Electronically filed reports may be accessed at www.sec.gov or via the Company’s website at www.esteem.com. We make available on our website such reports as soon as reasonably practicable after they are filed with the SEC.

EMPLOYEES

As of December 31, ~~2021~~2022, we employ 98 persons on a full-time basis (4 in sales/marketing, ~~1 in technical support,~~ 3 in engineering/manufacturing, and 1 in finance and administration). The Company’s operations are dependent upon key members of its engineering and management personnel, which, if lost to the Company, could have a material adverse effect on our business.

Item 1A. Risk Factors.

Our common stock value and our business, results of operations, cash flows and financial condition are subject to various risks, including, but not limited to those set forth below. If any of the following risks actually occurs, our common stock, business, results of operations, cash flows and financial condition could be materially adversely affected. These risk factors should be carefully considered together with the other information in this Annual Report on Form 10-K, including the risks and uncertainties described under the heading “Forward-Looking Statements.” This list is not exhaustive of the factors that may affect the Company’s forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the sections titled “Risk Factors and Uncertainties”, “Description of Business” and “Management’s Discussion and Analysis” of this Annual Report. If any of the events described in the risk factors below actually occur, our business, financial condition or results of operations could suffer significantly. In such case, the value of your investment could decline and you may lose all or part of the money you paid to buy our common stock. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

We cannot predict whether we will be able to sustain revenue growth, profitability or positive cash flow. Our products are sold in highly competitive markets. Our revenues and operating results may be negatively affected by technology changes in our markets, economic conditions in our markets, and the level of competition in our markets.

Our marketing efforts may be unsuccessful due to limited marketing and sales capabilities. Our limited national advertising and sales coverage may result in our markets not being fully penetrated. The lack of market penetration may result in an adverse effect on our revenues. We must continue to develop and maintain appropriate marketing, sales, technical, customer service and distribution capabilities, or enter into agreements with third parties to provide these services, to successfully market our products. A failure to develop these capabilities or obtain third-party agreements could adversely affect us.

We may be unable to produce products for sale if we are unable to obtain component materials. Our products require highly specialized components, which are subject to rapid obsolescence, limited availability and design change. Many of the components in our products are also used in cellular phone, pagers and other technology devices. If we cannot obtain material to produce products, our sales revenues will be negatively impacted.

Our success depends on our ability to retain key management personnel. The success of our Company depends in large part on our ability to attract and retain highly qualified management, administrative, manufacturing, sales, and research and development personnel. Due to the specialized nature of our business, it may be difficult to locate and hire qualified personnel. Our success is significantly dependent on the performance and continued service of key members of Management, such as Chief Executive Officer, Dan Tolley and Chief Financial Officer Michael Eller, and certain other key employees. If the services of any members of Management become unavailable for any reason, our business and prospects could be adversely affected. Although we have been successful in retaining highly capable and qualified management in the past, there can be no assurance that we will be able to do so in the future.

We may be adversely affected by government regulation. The Federal Communication Commission (FCC) governs use of the products we sell. If the FCC were to implement rules detrimental to our products and the markets in which they are offered, our operations would be negatively impacted.

Rapid technological changes in our industry may adversely affect us if we do not keep pace with advancing technology. The wireless communication market is characterized by rapidly advancing technology. Our success depends on our ability to keep pace with advancing technology, processes and standards, such as cellular telephone based technology. We intend to continue to develop and enhance our products to meet perceived market opportunities. However, our development efforts may be rendered obsolete by research efforts and technological advances made by others, and devices other than those we currently produce may prove more advantageous.

~~We have~~The ~~material~~market ~~weaknesses~~for in our ~~internal~~common ~~controls~~stock ~~which~~is ~~may~~limited ~~result~~and our inshareholders usmay ~~not~~have ~~being~~difficulty ~~able~~reselling totheir ~~prevent~~shares orwhen ~~detect~~desired aor ~~material~~at ~~misstatement of~~attractive ~~our~~market ~~financial~~prices. ~~statements,~~Our ~~which~~stock ~~could~~price ~~harm~~and our ~~business and result in regulatory scrutiny. Pursuant to the requirements of Section~~listing ~~404~~may ofmake ~~the~~it ~~Sarbanes-Oxley~~more ~~Act~~difficult offor ~~2002 (“Section 404”), Management conducted an assessment of the effectiveness of~~ our ~~internal controls~~shareholders ~~over~~to ~~financial~~resell ~~reporting~~shares ~~for~~when ~~the~~desired ~~year~~or ~~ending~~at ~~December~~attractive ~~31, 2021~~prices. WeOur ~~determined~~Company ~~that~~stock ~~there~~trades ~~continues~~on ~~to be material weakness affecting~~the ~~our internal control~~ “over-the-counter” ~~financial~~market ~~reporting~~ and, asis alisted ~~result~~on ofOTCQB ~~that~~tier ~~weakness, our disclosure controls and procedures were not effective as~~ of ~~December~~the ~~31,~~OTC ~~2021~~Markets. WeOur ~~have~~common ~~not~~stock ~~maintained~~has ~~effective~~continued ~~controls~~ to ~~ensure~~trade ~~appropriate~~in ~~segregation~~low ~~of duties due to our limited number~~volumes ofand ~~employees~~at inlow ~~finance and administration~~prices. ~~The~~Some ~~same~~investors ~~employee~~view islow-priced ~~responsible~~stocks ~~for~~as ~~the~~unduly ~~initiating~~speculative and ~~recording~~therefore ofnot ~~transactions,~~appropriate ~~thereby creating~~candidates ~~segregation~~for ~~of duties weaknesses~~investment. ~~Due to this weakness and absence of sufficient mitigating controls, we determined that this~~ ~~control~~Many ~~deficiency~~institutional ~~resulted~~investors inhave ainternal ~~more~~policies ~~than~~prohibiting ~~remote likelihood that material misstatement or lack of disclosure within~~ the ~~annual~~purchase or ~~interim financial~~maintenance statements will not be prevented or detected. Avenues for mitigating our internal control weaknesses have been evaluated but mitigating controls have been deemed to be impractical and prohibitively costly due to the size of ~~our~~positions ~~organization at the current time. The material weakness~~ in ~~our~~low-priced ~~internal controls may subject us to regulatory scrutiny with undetermined consequences~~stocks.

~~The market~~Item ~~for our common stock is limited and our shareholders may have difficulty reselling their shares when desired or at attractive market prices~~1B. ~~Our~~Unresolved ~~stock~~Staff ~~price and our listing may make it more difficult for our shareholders to resell shares when desired or at attractive prices~~Comments. Our Company stock trades on the “over-the-counter” market and is listed on OTCQB tier of the OTC Markets. Our common stock has continued to trade in low volumes and at low prices. Some investors view low-priced stocks as unduly speculative and therefore not appropriate candidates for investment. Many institutional investors have internal policies prohibiting the purchase or maintenance of positions in low-priced stocks.

~~Item 1B~~None. ~~Unresolved Staff Comments.~~

~~None.~~8

7Item 2. Properties.

~~Item~~We do not own any real property, plants, mines, or 2any other materially important physical properties. ~~Properties~~The Company’s administrative offices, inventory and laboratories are located in leased facilities at 415 N. Roosevelt Street, STE B1, Kennewick, Washington. The Company leases approximately 5,270 square feet of office and laboratory space by a lease agreement with the Port of Kennewick in Kennewick, Washington. As of December 31, 2022, the total monthly lease cost, including tax, is $3,806. The lease initially covered a period of two years, expiring September 2024.

We do ~~not~~also own ~~any~~miscellaneous ~~real property~~assets, ~~plants~~such as computer equipment, ~~mines~~laboratory equipment, orand ~~any~~furnishings. ~~other~~We ~~materially~~maintain ~~important~~insurance ~~physical~~in ~~properties.~~such ~~The~~amounts ~~Company’s~~and ~~administrative~~covering ~~offices~~such losses, ~~inventory~~ contingencies and ~~laboratories~~occurrences deemed ~~are~~adequate ~~located~~to inprotect ~~leased~~our ~~facilities~~property. atInsurance ~~415~~coverage N.includes ~~Roosevelt~~a ~~Street,~~comprehensive ~~STE~~liability ~~B1,~~policy ~~Kennewick,~~covering ~~Washington.~~legal ~~The~~liability ~~Company~~for ~~leases~~bodily ~~approximately~~injury ~~5,270~~or ~~square~~death ~~feet~~ of ~~office~~persons, and ~~laboratory~~for ~~space~~property owned by, aor ~~lease~~under ~~agreement~~our ~~with~~control, ~~the~~as ~~Port~~well ofas ~~Kennewick~~damage into ~~Kennewick,~~the ~~Washington. As~~property of ~~December~~others. ~~31,~~We ~~2021,~~also ~~the~~maintain fidelity ~~total~~insurance ~~monthly~~which ~~lease~~provides ~~cost,~~coverage ~~including~~to ~~tax,~~the isCompany ~~$3,687~~in ~~The~~the ~~lease~~event ~~initially covered a period~~ of ~~two~~employee ~~years, expiring September 2022~~dishonesty.

~~We also~~Item ~~own miscellaneous assets, such as computer equipment, laboratory equipment, and furnishings~~3. WeLegal ~~maintain insurance in such amounts and covering such losses, contingencies and occurrences deemed adequate to protect our property~~Proceedings. Insurance coverage includes a comprehensive liability policy covering legal liability for bodily injury or death of persons, and for property owned by, or under our control, as well as damage to the property of others. We also maintain fidelity insurance which provides coverage to the Company in the event of employee dishonesty.

~~Item~~EST is not a party to any material legal proceedings 3.and, ~~Legal~~to ~~Proceedings~~management’s knowledge, no such proceedings are threatened or contemplated.

~~EST is~~Item ~~not~~4. aMine ~~party~~Safety ~~to any material legal proceedings and, to management’s knowledge, no such proceedings are threatened or contemplated~~Disclosure.

~~Item 4.~~Not ~~Mine Safety Disclosure.~~Applicable

~~Not~~PART II ~~Applicable~~

~~PART~~The closing price for our common stock on the OTCQB II was $0.28 on February 14, 2023.

~~Item 5.~~There ~~Market~~were ~~for~~335 ~~Registrant’s~~holders ~~Common~~of ~~Equity,~~record ~~Related~~of ~~Stockholder~~our ~~Matters~~Common ~~and~~Stock as ~~Issuer Purchases~~ of ~~Equity~~February ~~Securities~~14, 2023.

~~The closing~~Our ~~price~~stock ~~for~~transfer ~~our~~agent ~~common~~is ~~stock~~EQ onShareowner ~~the~~Services, 320 ~~OTCQB~~Cherry ~~was~~Creek ~~$0.30~~Drive onSouth, ~~February~~Suite 15435, ~~2022~~Denver CO 80209.

~~There were~~The ~~339~~Company ~~holders~~does ofnot ~~record~~maintain ofany ~~our~~form ~~Common Stock as~~ of ~~February~~Equity ~~15, 2022~~Compensation Plan.

~~Our stock transfer agent is EQ Shareowner Services, 320 Cherry Creek Drive South, Suite 435, Denver CO 80209.~~9

~~The Company~~Stock ~~does not maintain any form of Equity Compensation Plan.~~Repurchases

On January 13, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to $100,000 of the Company’s common stock at the price of $0.38 per share. The Company’s share repurchase program does not obligate it to acquire any specific number of shares. On March 2, 2016 the Company’s Board of Director approved a resolution authorizing the repurchase of an additional $150,000 of the Company’s common stock at the price of $0.38 per share. Under the program (the “Stock Repurchase Plan”), shares may be repurchased in ~~Repurchases~~open market transactions, complying with Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Shares repurchased are retired. On April 23, 2020, repurchases were suspended indefinitely.

~~On January 13, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to $100,000 of the Company’s common stock at the price of $0.38 per share.~~ The ~~Company’s~~following ~~share~~table ~~repurchase~~shows ~~program does not obligate it to acquire any specific number of shares. On March 2, 2016~~ the Company’s ~~Board of Director approved a resolution authorizing the repurchase of an additional~~activity ~~$150,000~~and ofrelated ~~the~~information ~~Company’s~~under ~~common stock at~~ the ~~price of $0.38 per share. Under the program (the “~~Stock Repurchase Plan~~”), shares may be repurchased in open market transactions, complying with Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)~~. ~~Shares repurchased are retired. On April 23, 2020, repurchases were suspended indefinitely.~~

~~The following~~ISSUER ~~table~~PURCHASES ~~shows~~OF ~~the~~EQUITY ~~Company’s activity and related information for the year ended December 31, 2021 and 2020 under the Stock Repurchase Plan.~~SECURITIES

ISSUER PURCHASES OF EQUITY SECURITIES

Period		Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number of shares that may yet be purchased under the plans or programs
	January 1, 2017-January 31, 2017		98,764	$	0.38		98,764		559,130
	February 1, 2017-February 28, 2017		-0-		-0-		-0-		559,130
	March 1, 2017-March 31,2017		7,725	$	0.38		106,489		551,405
	April 1, 2017-April 30, 2017		45,601	$	0.38		152,090		505,804
	May 1, 2017-June 30, 2017		-0-		-0-		-0-		505,804
	July 1, 2017-July 31, 2017		8,642	$	0.38		160,732		497,162
	August 1, 2017-August 31, 2017		11,887	$	0.38		172,619		485,275
	September 1, 2017-December 31, 2017		-0-		-0-		-0-		485,275
	January 1, 2018 – November 31, 2018		-0-		-0-		-0-		485,275
	December 1, 2018 – December 31, 2018		300	$	0.38		172,919		484,975
	January 1, 2019 – January 31, 2019		39,246	$	0.38		212,165		445,729
	February 1, 2019 – December 31, 2019		-0-		-0-		-0-		445,729
	Total		212,165	$	0.38		212,165		445,729

Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
January 1, 2017-January 31, 2017	98,764	$0.38	98,764	559,130
February 1, 2017-February 28, 2017	-0-	-0-	-0-	559,130
March 1, 2017-March 31,2017	7,725	$0.38	106,489	551,405
April 1, 2017-April 30, 2017	45,601	$0.38	152,090	505,804
May 1, 2017-June 30, 2017	-0-	-0-	-0-	505,804
July 1, 2017-July 31, 2017	8,642	$0.38	160,732	497,162
August 1, 2017-August 31, 2017	11,887	$0.38	172,619	485,275
September 1, 2017-December 31, 2017	-0-	-0-	-0-	485,275
January 1, 2018 – November 31, 2018	-0-	-0-	-0-	485,275
December 1, 2018 – December 31, 2018	300	$0.38	172,919	484,975
January 1, 2019 – January 31, 2019	39,246	$0.38	212,165	445,729
February 1, 2019 – December 31, 2019	-0-	-0-	-0-	445,729
Total	212,165	$0.38	212,165	445,729

Item 6. Selected Financial Data.

9We are a “smaller reporting company” as defined by Regulation S-K and as such, are not required to provide this information.

Item 6 7. ~~Selected~~Management’s Discussion and Analysis of Financial ~~Data~~Condition and Results of Operations.

~~We are~~Management’s adiscussion ~~“smaller~~and ~~reporting~~analysis ~~company”~~is provided as ~~defined~~supplement byto, ~~Regulation~~and ~~S-K~~is ~~and~~intended asto ~~such~~be read in conjunction with, ~~are~~the ~~not~~Company’s ~~required~~audited tofinancial ~~provide~~statements ~~this~~and ~~information~~the accompanying integral notes (“Notes”) thereto. The following statements may be forward-looking in nature and actual results may differ materially.

~~Item 7.~~RESULTS ~~Management’s~~OF ~~Discussion and Analysis of Financial Condition and Results of Operations.~~OPERATIONS

~~Management’s discussion~~GENERAL: We specialize in the manufacturing and ~~analysis~~development of isdata ~~provided~~radio asproducts. ~~supplement~~The ~~to,~~Company ~~and~~offers isproduct ~~intended~~lines towhich beprovide ~~read~~innovative communication solutions for applications not served by existing conventional communication systems. We offer product lines in ~~conjunction~~markets ~~with,~~for ~~the~~process ~~Company’s~~automation ~~audited~~in ~~financial statements~~commercial, industrial and government ~~the~~arenas ~~accompanying~~domestically ~~integral~~as ~~notes~~well ~~(“Notes”)~~as ~~thereto~~internationally. ~~The~~We ~~following~~market ~~statements~~our ~~may~~products bethrough ~~forward-looking~~direct insales, ~~nature~~ sales representatives, and ~~actual~~domestic, as ~~results~~well ~~may~~as ~~differ~~foreign, ~~materially~~resellers. Operations are sustained solely from revenues received through sales of its products and services.

~~RESULTS OF OPERATIONS~~10

~~GENERAL: We~~FISCAL ~~specialize~~YEAR in2022 ~~the manufacturing and development of data radio products~~vs. ~~The~~FISCAL ~~Company~~YEAR offers product lines which provide innovative communication solutions for applications not served by existing conventional communication systems. We offer product lines in markets for process automation in commercial, industrial and government arenas domestically as well as internationally. We market our products through direct sales, sales representatives, and domestic, as well as foreign, resellers. Operations are sustained solely from revenues received through sales of its products and services.2021

~~As a~~GROSS ~~result~~REVENUES: ofTotal ~~COVID-19,~~revenues ~~and~~for ~~governmental~~the ~~responses~~fiscal ~~thereto,~~year 2022 ~~are~~were ~~experiencing~~$1,910,061 ~~some~~reflecting ~~negative~~an ~~impacts~~increase toof ~~our~~26.3% ~~business~~from $1,512,028 ~~primarily~~in asgross arevenues ~~result of~~for ~~reductions~~fiscal inyear ~~staffing~~2021. byDuring ~~our~~the ~~customers,~~year ~~and~~ended ~~their~~December 31, ~~customers~~2022, ~~which~~two iscustomers’ ~~lengthening~~sales ~~our~~accounted ~~normal~~for ~~sales~~more ~~cycles.~~than ~~Many~~10% of ~~our~~the ~~customers are~~total ~~also~~sales ~~restricting~~revenues. ~~visits~~The ~~from~~increase ~~vendors.~~in ~~All~~total ofrevenues ~~our~~is ~~planned~~the ~~trade~~result of ~~shows~~increased ~~and~~product sales ~~presentations~~during ~~have~~2022. ~~been~~Domestic ~~canceled~~Sales orfor ~~postponed as a result of~~ the ~~risks~~fiscal ~~associated~~year ~~with~~were ~~face~~$1,697,261 compared to ~~face~~$1,341,287 ~~meetings~~in 2021. WeSales ~~have utilized various platforms~~ to ~~provide~~Foreign Customers ~~current~~for ~~customers~~the ~~and~~fiscal ~~potential customers~~year ~~with~~were ~~presentations~~$212,800 ~~about~~compared ~~our~~to ~~products~~$170,741 ~~and~~in ~~services~~2021. WeProduct ~~have~~sales ~~also~~increased ~~experienced~~to ~~some~~$1,881,661 ~~delays~~ in ~~our~~2022, ~~supply~~as ~~chain~~compared ~~but~~to 2021 ~~none~~sales of ~~these COVID-19 related disruptions~~$1, ~~to the supply chain~~458,328 ~~has~~reflecting ~~been~~an ~~significant~~increase atof ~~this point~~29.0%.

~~FISCAL~~Interest revenues during 2022 increased to $5,217 ~~YEAR~~from 2021 vslevel of $2,488 due to the increased interest rates for the certificates of deposit held by the Company and the reduction of the value of the certificates held during 2022. ~~FISCAL~~Other ~~YEAR~~income ~~2020~~decreased to $63,000 for the gain on employee retention tax credit compared to 280,373 of gain on forgiveness of CARES Act loan in 2021.

~~GROSS REVENUES:~~As ~~Total revenues for the fiscal year 2021 were $1,512,028 reflecting an increase~~ of ~~23.4% from $1,225,372 in gross revenues for fiscal year 2020. During the year ended~~ December 31, ~~2021~~2022, ~~two~~the ~~customers~~Company had sales ~~accounted for more than 10%~~ backlog of ~~the total sales revenues~~$49,173. The ~~increase~~Company’s incustomers ~~total~~generally ~~revenues~~place isorders ~~the~~on ~~result~~an of“as ~~increased~~needed ~~product sales during 2021~~basis”. ~~Domestic~~Shipment ~~Sales~~of ~~for~~ the ~~fiscal year were $1,341,287~~Company’s ~~compared~~products tois ~~$927,494~~generally incompleted ~~2020.~~within ~~Sales~~1 to ~~Foreign~~15 ~~Customers~~working ~~for~~days ~~the~~after ~~fiscal~~receipt ~~year~~of ~~were~~customer ~~$170~~orders,~~741~~ ~~compared~~with tothe ~~$297,878~~exception inof ~~2020.~~ongoing, ~~Product sales~~scheduled ~~increased to $1~~projects,~~458,328~~ inand ~~2021,~~custom asdesigned ~~compared~~equipment tofor ~~2020~~specific ~~sales~~customer ~~of $1,181,022 reflecting an increase of 23~~applications.~~5%.~~

~~Interest revenues~~COST ~~during~~OF ~~2021~~SALES: ~~decreased~~Cost toof $2Sales,~~489~~ ~~from~~as ~~2020~~a ~~level~~percentage of ~~$10~~net sales,~~736~~ ~~due~~was to46.1% ~~the~~and ~~decreased~~49.2% ~~interest~~respectively, ~~rates~~ for ~~the~~2022 ~~certificates~~and 2021. Cost of ~~deposit held~~Sales byvariances are the ~~Company~~result ~~and~~of differences in the ~~reduction~~product mix sold and occurrences of obsolete inventory expense, as well as differences in the ~~value~~price ofdiscounting structure for the ~~certificates~~mix ~~held~~of products sold during ~~2021~~the period.

~~As of~~INVENTORY: ~~December 31, 2021, the Company had sales backlog of $81,293.~~ The Company’s ~~customers~~year-end ~~generally place orders on an “as needed~~inventory ~~basis”.~~values ~~Shipment~~for of2022 ~~the Company’s products is generally completed within 1 to 15 working days after receipt of customer orders, with the exception of ongoing, scheduled projects,~~ and ~~custom~~2021 ~~designed~~were ~~equipment~~as ~~for specific customer applications.~~follows:

COST OF SALES: Cost of Sales, as a percentage of net sales, was 49.2% and 49.7% respectively, for 2021 and 2020. Cost of Sales variances are the result of differences in the product mix sold and occurrences of obsolete inventory expense, as well as differences in the price discounting structure for the mix of products sold during the period.

	2022		2021
Parts	$	172,190	$	92,751
Work in progress		336,298		171,705
Finished goods		216,990		237,377
TOTAL	$	725,478	$	501,833

~~INVENTORY:~~ The Company’s ~~year-end~~objective is to maintain inventory levels ~~values~~as ~~for~~low ~~2021~~as possible to provide maximum cash liquidity, while at the same time meet production and ~~2020~~delivery requirements. Inventory levels were asincreased ~~follows:~~during the year due to concerns with regards to supply chain issues with long-lead time items.

	2021	2020
Parts	$ 92,751	$ 99,303
Work in progress	171,705	275,230
Finished goods	237,377	257,174
TOTAL	$ 501,833	$ 631,707

OPERATING EXPENSES: Operating expenses decreased to $950,338 in 2022 from 2021 levels of $957,654. Significant changes in expenses are comprised of the following components: decreases in services purchased ($35,375), professional services ($47,261), travel ($2,971), and depreciation ($4,725) offset by increases in salaries and benefits ($82,328) and taxes, licenses and health insurance costs ($11,293).

~~The Company’s~~LIQUIDITY ~~objective~~AND isCAPITAL ~~to maintain inventory levels as low as possible to provide maximum cash liquidity, while at the same time meet production and delivery requirements.~~RESOURCES

10The Company’s revenues and expenses resulted in net income of $146,531 for 2022, an increase from net income of $92,989 for 2021. At December 31, 2022, the Company’s working capital was $1,747,472 compared with $1,610,537 at December 31, 2021. The Company’s operations rely solely on the income generated from sales. The Company’s major capital resource requirements are payment of employee salaries and benefits and maintaining inventory levels adequate for production. Extended availability for components critical for production of the Company’s products, ranging from 12 to 52 weeks, require the Company to maintain high inventory levels. It is management’s opinion that the Company’s working capital as of December 31, 2022 is adequate for expected resource requirements for the next twelve months. During the twelve month period ending December 31, 2022, the Company had positive cash flow of $95,502.

OPERATING EXPENSES: Operating expenses increased to $957,654 in 2021 from 2020 levels of $839,173. Significant changes in expenses are comprised of the following components: Payroll and related expenses $19,911 increase, services purchased $109,432 increase, Travel $15,191 increase Depreciation expense decreased during 2021 to $1,784 from 2020 levels of $5,169 due to the Company’s decreased capital purchases.11

~~LIQUIDITY~~The Company’s current asset to current liability ~~AND~~ratio ~~CAPITAL~~at ~~RESOURCES~~December 31, 2022 was 8.6:1 compared to 12.7:1 at December 31, 2021. The decrease in current asset ratio is the result of the Company having increased accounts payable for year-end 2022 when compared with year-end 2021. The Company’s liquid resources at December 31, 2022, including cash and cash equivalent and certificates of deposits, were $1,002,817, compared to $1,055,616 at December 31, 2021. The decrease in liquid resources is the result increases in inventory levels in 2022. The Company’s accounts receivable at December 31, 2022 were $141,394, compared to $166,303 at December 31, 2021. Management believes that all Company accounts receivable as of December 31, 2022 are collectible and does not have a reserve for uncollectable accounts.

The Company’s ~~revenues~~believes ~~and~~the ~~expenses~~level ~~resulted in net income~~ of ~~$92,989~~risk ~~for 2021, an increase from a net loss of $202,179 for 2020. At~~associated ~~December 31, 2021, the Company’s working capital was $1,6410,537 compared~~ with ~~$1,676,530~~customer atreceipts ~~December 31, 2020. The Company’s operations rely solely~~ on ~~the~~export ~~income~~sales ~~generated~~is ~~from sales~~minimal. ~~The~~Foreign ~~Company’s~~shipments ~~major~~are ~~capital~~made ~~resource~~only ~~requirements~~after ~~are~~ payment ofhas ~~employee~~been ~~salaries~~received ~~and benefits~~or ~~and~~on ~~maintaining~~Net ~~inventory~~30 ~~levels~~day ~~adequate for production. Extended availability for components critical for production of the~~credit ~~Company’s~~terms ~~products,~~to ~~ranging~~established ~~from~~foreign 12companies towith 30which ~~weeks, require~~ the Company tohas ~~maintain~~distributor ~~high inventory levels~~relationships. ItForeign isorders ~~management’s opinion~~are ~~that~~generally ~~the~~filled ~~Company’s~~as ~~working capital~~ soon as ofthey ~~December~~are ~~31,~~received ~~2021~~therefore; isforeign ~~adequate~~exchange ~~for~~rate ~~expected~~fluctuations ~~resource~~do ~~requirements~~not ~~for~~impact the ~~next twelve months. During the twelve month period ending December 31, 2021, the~~ Company ~~had positive cash flow of $347,506~~.

~~The Company’s~~Inventories ~~current asset to current liability ratio~~ at December 31, ~~2021~~2022 ~~was~~were ~~12.7:1 compared to 20.7:1 at December 31~~$725,478, ~~2020. The decrease~~reflecting inan ~~current~~increase ~~asset~~from ~~ratio is the result of the Company having increased accounts payable for year-end 2021 when compared with year-end 2020. The Company’s liquid resources at~~ December 31, 2021, ~~including~~balance ~~cash and cash equivalent and certificates~~ of ~~deposits, were~~ $1501,~~055,616, compared to $808,109 at December 31, 2020~~833. The increase in ~~liquid~~inventory ~~resources~~between ~~is the result of the 2021 operating income. The Company’s accounts receivable at~~ December 31, ~~2021~~2022 ~~were~~and ~~$166,303, compared to $288,884 at~~ December 31, ~~2020.~~2021 ~~Management~~is ~~believes that all Company~~due ~~accounts~~to ~~receivable~~management’s asdecision ofto ~~December~~purchase ~~31,~~more ~~2021~~items ~~are~~crucial ~~collectible~~to ~~and~~manufacture ~~does~~goods ~~not~~with ~~have~~lead atimes ~~reserve~~in ~~for~~excess ~~uncollectable~~of ~~accounts~~12 weeks.

~~The Company~~We ~~believes~~had ~~the~~capital ~~level~~expenditures of$0 ~~risk~~during ~~associated with customer receipts on export sales is minimal~~2022. ~~Foreign~~The ~~shipments are made only after~~Company ~~payment~~intends ~~has been received or~~ on ~~Net~~investing 30in ~~day~~additional ~~credit~~capital ~~terms~~equipment ~~to established foreign companies with which the Company has distributor relationships. Foreign orders are generally filled~~ as ~~soon~~deemed asnecessary ~~they~~to ~~are~~support ~~received~~development ~~therefore;~~and ~~foreign~~manufacture ~~exchange~~of ~~rate~~current ~~fluctuations~~and ~~do not impact the Company~~future products.

~~Inventories at~~As of December 31, ~~2021~~2022, ~~were~~our ~~$501,833,~~current ~~reflecting~~liabilities aincreased to ~~decrease~~$228,652 from ~~December 31~~$137,637 ~~2020~~at ofDecember ~~$631~~31,~~707~~ 2021. The ~~decrease~~increase in ~~inventory~~current ~~between~~liabilities ~~December 31,~~was ~~2021~~impacted ~~and~~by ~~December~~an ~~31,~~increase ~~2020,~~in isaccounts ~~due~~payable to $138,996 ~~the~~from ~~delays in the supply chain~~$71,645.

We had ~~capital~~no ~~expenditures~~off-balance ~~$1,082~~sheet ~~during~~arrangements ~~2021.~~for ~~The~~the ~~Company intends on investing in additional capital equipment as deemed necessary to~~year ~~support~~ended ~~development~~December ~~and~~31, ~~manufacture of current and future products~~2022.

~~As of~~Inflation ~~December~~had ~~31,~~minimal ~~2021,~~adverse ~~our~~effect ~~current~~on ~~liabilities~~the ~~increased~~Company’s operations toduring ~~$137,637 from $84,916 at December 31, 2020~~2022. ~~The~~Minimal ~~increase~~adverse ineffect ~~current~~is ~~liabilities was~~anticipated ~~impacted~~during ~~by a increase in accounts payable to $70,686 from $21,113~~2023.

WeFORWARD LOOKING STATEMENTS: The above discussion may ~~had~~contain noforward-looking ~~off~~statements that involve a number of risks and uncertainties. These factors are more fully described in the “Risk Factors” section of Item 1A of this Annual Report on Form 10-~~balance~~K. ~~sheet~~In ~~arrangements~~addition ~~for~~to the ~~year~~factors ~~ended~~discussed ~~December~~above, 31among 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, ~~2021~~rapid advances in competing technologies and risk factors that are listed in the Company’s reports filed with the Securities and Exchange Commission.

~~Inflation had~~Item ~~minimal adverse effect on the Company’s operations during 2021~~7A. ~~Minimal~~Quantitative ~~adverse~~and ~~effect~~Qualitative isDisclosures ~~anticipated~~About ~~during~~Market ~~2022~~Risk.

~~FORWARD LOOKING~~Not ~~STATEMENTS: The above discussion may contain forward-looking statements that involve a number of risks and uncertainties~~Applicable. These factors are more fully described in the “Risk Factors” section of Item 1A of this Annual Report on Form 10-K. 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, rapid advances in competing technologies and risk factors that are listed in the Company’s reports filed with the Securities and Exchange Commission.

~~Item 7A. Quantitative and Qualitative Disclosures About Market Risk.~~12

~~Not Applicable~~Item 8. Financial Statements and Supplementary Data.

11ELECTRONIC SYSTEMS TECHNOLOGY, INC. DBA ESTEEM WIRELESS MODEMS

~~Item~~FINANCIAL STATEMENTS AND SUPPLIMENTAL SCHEDULE 8.AND REPORT ~~Financial~~OF ~~Statements~~INDEPENDENT ~~and~~REGISTERED ~~Supplementary~~PUBLIC ~~Data.~~ACCOUNTING FIRM

~~ELECTRONIC SYSTEMS~~FOR ~~TECHNOLOGY,~~THE ~~INC. DBA~~YEARS ~~ESTEEM~~ENDED ~~WIRELESS~~DECEMBER ~~MODEMS~~31, 2022 AND 2021

~~FINANCIAL STATEMENTS~~TABLE ~~AND SUPPLIMENTAL SCHEDULE AND REPORT~~ OF ~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~CONTENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

	Page
Report of Independent Registered Public Accounting Firm	14

Financial Statements:

Balance Sheets	15

Statements of Operations	16

Statements of Changes in Stockholders’ Equity	17

Statements of Cash Flows	18

Notes to Financial Statements	19-26

Supplemental Schedule	26

1213

~~TABLE~~ REPORT OF ~~CONTENTS~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

	Page
Report of Independent Registered Public Accounting Firm	14
Financial Statements:
Balance Sheets	15
Statements of Operations	16
Statements of Changes in Stockholders’ Equity	17
Statements of Cash Flows	18
Notes to Financial Statements	19-26
Supplemental Schedule	27-28

To the Board of Directors and Stockholders
Electronic Systems Technology, Inc.

13Opinion on the Financial Statements

~~REPORT~~We have audited the accompanying balance sheets of OFElectronic ~~INDEPENDENT~~Systems ~~REGISTERED~~Technology, ~~PUBLIC~~Inc. ~~ACCOUNTING~~(“the ~~FIRM~~Company”) as of December 31, 2022 and 2021, and the related statements of operations, changes in stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

~~To the~~Basis ~~Board~~for ~~of Directors and Stockholders Electronic Systems Technology, Inc.~~Opinion

~~Opinion~~These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the ~~Financial~~Company’s ~~Statements~~financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We ~~have~~ ~~audited~~conducted ~~the~~our ~~accompanying~~audits ~~balance~~in ~~sheets~~accordance ofwith ~~Electronic~~the ~~Systems~~standards of ~~Technology,~~the ~~Inc~~PCAOB. ~~(“the~~Those ~~Company”)~~standards asrequire ofthat ~~December~~we ~~31,~~plan ~~2021~~ and ~~2020,~~perform ~~and~~ the ~~related~~audit ~~statements~~to ofobtain ~~operations,~~reasonable ~~changes~~assurance inabout ~~stockholders’~~whether ~~equity~~the ~~and~~financial ~~cash~~statements are ~~flows~~free ~~for~~of ~~the~~material ~~years then ended~~misstatement, ~~and the~~whether ~~related~~due ~~notes~~to ~~(collectively~~error ~~referred~~or tofraud. asThe ~~the~~Company ~~financial~~is ~~statements).~~not Inrequired ~~our~~to ~~opinion~~have, ~~the~~nor ~~financial~~were ~~statements~~we ~~present~~engaged ~~fairly,~~to inperform, ~~all~~an ~~material~~audit ~~respects,~~of ~~the~~its ~~financial~~internal ~~position~~control ofover ~~the~~financial ~~Company~~reporting. asAs part of ~~December~~our 31audits, ~~2021~~we ~~and~~are ~~2020,~~required ~~and~~to ~~the~~obtain ~~results~~an understanding of ~~its~~internal control ~~operations~~over ~~and its~~financial ~~cash~~reporting, ~~flows~~but not for the ~~years~~purpose ~~then~~of ~~ended,~~expressing inan ~~conformity~~opinion ~~with~~on ~~accounting~~the ~~principles~~effectiveness ~~generally~~of ~~accepted~~the inCompany’s ~~the~~internal control ~~United~~over ~~States~~financial ofreporting. ~~America~~Accordingly, we express no such opinion.

~~Basis~~Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for ~~Opinion~~our opinion.

~~These financial~~Critical ~~statements~~Audit are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.Matters

~~We conducted~~Critical ~~our~~audit ~~audits~~matters inare ~~accordance~~matters ~~with~~arising ~~the~~from ~~standards of~~ the current-period ~~PCAOB. Those standards require that we plan and perform the~~ audit toof ~~obtain reasonable assurance about whether~~ the financial statements ~~are~~that ~~free~~were ofcommunicated ~~material misstatement, whether due to error~~ or ~~fraud. The Company is not~~ required to ~~have,~~be ~~nor~~communicated ~~were we engaged~~ to ~~perform,~~the an audit ofcommittee ~~its~~and ~~internal~~that (1) ~~control~~relate ~~over~~to ~~financial~~accounts ~~reporting.~~or Asdisclosures ~~part~~that ~~of our audits, we~~ are ~~required~~material to ~~obtain~~the anfinancial ~~understanding~~statements ofand ~~internal~~(2) ~~control~~involved ~~over~~our ~~financial~~especially ~~reporting~~challenging, ~~but not for the purpose of expressing an opinion~~subjective, onor ~~the~~complex ~~effectiveness~~judgments. ofWe ~~the~~determined ~~Company’s~~that ~~internal~~there ~~control~~are no ~~over~~critical ~~financial~~audit ~~reporting~~matters. ~~Accordingly, we express no such opinion.~~

~~Our audits~~Supplemental included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.Information

~~Critical~~The supplemental schedule of operating expenses for ~~Audit~~the ~~Matters~~years ended December 31, 2022 and 2021 (“the supplemental information”) has been subjected to audit procedures performed in conjunction with the audit of the Company’s financial statements. The supplemental information is the responsibility of the Company’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with accounting principles generally accepted in the United States of America. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

~~Critical audit~~/s/ ~~matters~~Assure are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challengingCPA, ~~subjective, or complex judgments~~LLC. ~~We determined that there are no critical audit matters.~~

~~Supplemental~~We have served as the Company’s auditor since ~~Information~~2012.

~~The supplemental schedule of operating expenses for the years ended December 31~~Spokane, 2021 and 2020 (“the supplemental information”) has been subjected to audit procedures performed in conjunction with the audit of the Company’s financial statements. The supplemental information is the responsibility of the Company’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with accounting principles generally accepted in the United States of America. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.Washington

~~/s/ Assure~~Firm ~~CPA,~~ID ~~LLC.~~is 444

~~We have~~March ~~served~~14, ~~as the Company’s auditor since 2012.~~2023

~~Spokane, Washington~~14

~~Firm~~ELECTRONIC IDSYSTEMS isTECHNOLOGY, ~~444~~INC. DBA ESTEEM WIRELESS MODEMS BALANCE SHEETS DECEMBER 31, 2022 AND 2021

March 2, 2022


	2022		2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	751,118	$	655,616
Certificates of deposit		251,699		400,000
Accounts receivable - net		141,394		166,303
Inventories - net		725,478		501,833
Prepaid expenses		42,627		24,387
Employee retention tax credit receivable (Note 10)		63,000		—
Accrued interest receivable		808		35

Total Current Assets		1,976,124		1,748,174

PROPERTY AND EQUIPMENT – NET		914		1,358

Right of use – asset, net of amortization (NOTE 8)		69,419		28,922

TOTAL ASSETS	$	2,046,457	$	1,778,454

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	138,996	$	71,645
Accrued wages		24,777		9,114
Operating lease liability – current (NOTE 8)		39,120		28,438
Accrued vacation payable		16,846		13,613
Other accrued liabilities		8,913		14,827

Total Current Liabilities		228,652		137,637

Operating lease liability (NOTE 8)		30,457		—

TOTAL LIABILITIES		259,109		137,637

STOCKHOLDERS’ EQUITY
Common stock - $.001 par value 50,000,000 shares authorized, 4,946,502 and 4,946,502 shares issued and outstanding, respectively		4,947		4,947
Additional paid-in capital		932,412		932,412
Retained earnings		849,989		703,458
TOTAL STOCKHOLDERS’ EQUITY		1,787,348		1,640,817
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,046,457	$	1,778,454

14See accompanying notes to the financial statements.

~~ELECTRONIC SYSTEMS TECHNOLOGY, INC. DBA ESTEEM WIRELESS MODEMS BALANCE SHEETS DECEMBER 31, 2021 AND 2020~~15

	2021		2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	655,616	$	308,110
Certificates of deposit		400,000		499,999
Accounts receivable - net		166,303		288,884
Inventories - net		501,833		631,707
Prepaid expenses		24,387		28,087
Accrued interest receivable		35		4,659
Total Current Assets		1,748,174		1,761,446
PROPERTY AND EQUIPMENT – NET		1,358		5,445
Right of use – asset, net of amortization (NOTE 8)		28,922		65,230
TOTAL ASSETS	$	1,778,454	$	1,832,121
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	71,645	$	21,113
Accrued wages		9,114		2,699
Operating lease liability – current (NOTE 8)		28,438		36,753
Accrued vacation payable		13,613		17,631
Other accrued liabilities		14,827		6,720
Total Current Liabilities		137,637		84,916
Long-term liabilities
CARES Act loan payable (NOTE 11)		-		171,712
Operating lease liability (NOTE 8)		-		28,635
Total Long-term Liabilities		-		200,347
TOTAL LIABILITIES		137,637		285,263
STOCKHOLDERS’ EQUITY
Common stock - $.001 par value 50,000,000 shares authorized, 4,946,502 and 4,946,502 shares issued and outstanding, respectively		4,947		4,947
Additional paid-in capital		932,412		931,442
Retained earnings		703,458		610,469
TOTAL STOCKHOLDERS’ EQUITY		1,640,817		1,546,858
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,778,454	$	1,832,121

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

DBA ESTEEM WIRELESS MODEMS

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

See Notes to Financial Statements.


	2022		2021

SALES – NET	$	1,910,061	$	1,512,028

COST OF SALES		881,409		744,246

GROSS PROFIT		1,028,652		767,782

OPERATING EXPENSES		950,338		957,654

OPERATING INCOME/(LOSS)		78,314		(189,872	)

OTHER INCOME:
Interest income		5,217		2,488
Gain on Employee Retention Credit (Note 10)		63,000		—
Gain on forgiveness of CARES Act loan (Note 10)		—		280,373
TOTAL OTHER INCOME		68,217		282,861

NET INCOME BEFORE INCOME TAXES		146,531		92,989

INCOME TAX PROVISION (BENEFIT)		—		—

NET INCOME AFTER INCOME TAXES	$	146,531	$	92,989

NET INCOME PER SHARE, BASIC AND DILUTED	$	0.03	$	0.02

WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED		4,946,502		4,946,502

15See accompanying notes to the financial statements.

~~ELECTRONIC SYSTEMS TECHNOLOGY, INC. DBA ESTEEM WIRELESS MODEMS STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020~~16

	2021			2020
SALES – NET	$	1,512,028		$	1,225,372
COST OF SALES		744,246			608,654
GROSS PROFIT		767,782			616,718
OPERATING EXPENSES		957,654			839,173
OPERATING LOSS		(189,872	)		(222,455	)
OTHER INCOME:
Interest income		2,488			10,736
Government grant income		-			9,000
Gain on forgiveness of CARES Act loan (Note 11)		280,373			-
TOTAL OTHER INCOME		282,861			19,736
NET INCOME ( LOSS) BEFORE INCOME TAXES		92,989			(202,719	)
INCOME TAX PROVISION (BENEFIT)		-			-
NET INCOME (LOSS) AFTER INCOME TAXES	$	92,989		$	(202,719	)
NET INCOME (LOSS) PER SHARE, BASIC AND DILUTED	$	0.02		$	(0.04	)
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED		4,946,502			4,946,502

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

DBA ESTEEM WIRELESS MODEMS

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

See Notes to Financial Statements.


					Additional
	Common Stock				Paid-In		Retained
	Shares		Amount		Capital		Earnings		Total

BALANCE AT DECEMBER 31, 2020		4,946,502	$	4,947	$	931,442	$	610,469	$	1,546,858

Net income		—		—		—		92,989		92,989

Share based compensation		—		—		970		—		970

BALANCE AT DECEMBER 31, 2021		4,946,502	$	4,947	$	932,412	$	703,458	$	1,640,817

Net income		—		—		—		146,531		146,531

BALANCE AT DECEMBER 31, 2022		4,946,502	$	4,947	$	932,412	$	849,989	$	1,787,348

16See accompanying notes to the financial statements.

~~ELECTRONIC SYSTEMS TECHNOLOGY, INC. DBA ESTEEM WIRELESS MODEMS STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020~~17

					Additional
	Common Stock				Paid-In		Retained
	Shares		Amount		Capital		Earnings			Total
BALANCE AT DECEMBER 31, 2019		4,946,502	$	4,947	$	929,159	$	813,188		$	1,747,294
Net loss		-		-		-		(202,719	)		(202,719	)
Share based compensation		-		-		2,283		-			2,283
BALANCE AT DECEMBER 31, 2020		4,946,502	$	4,947	$	931,442	$	610,469		$	1,546,858
Net income		-		-		-		92,989			92,989
Share based compensation		-		-		970		-			970
BALANCE AT DECEMBER 31, 2021		4,946,502	$	4,947	$	932,412	$	703,458		$	1,640,817

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

DBA ESTEEM WIRELESS MODEMS

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

See Notes to Financial Statements.


	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	146,531		$	92,989
Noncash expenses included in net income:
Depreciation and amortization		444			5,169
Share based compensation		—			970
Gain on forgiveness of CARES Act loan		—			(280,373	)
Gain on employee retention tax credit		(63,000	)		—
Changes in operating assets and liabilities:
Accounts receivable		24,909			122,581
Inventories		(223,645	)		129,873
Prepaid expenses		(18,241	)		3,702
Accrued interest receivable		(773	)		4,624
Accounts payable		67,351			49,572
Other accrued liabilities		21,581			2,865
Net Cash provided (used) by Operating Activities		(44,843	)		131,972

CASH FLOWS FROM INVESTING ACTIVITIES:
Certificates of deposits purchased		(1,002,283	)		(400,000	)
Certificates of deposits redeemed		1,150,584			499,999
Purchase of equipment		—			(1,082	)
Net Cash provided by Investing Activities		148,301			98,917

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on CARES Act loan payable (round 1)		(7,956	)		(13,638	)
Proceeds from CARES Act loan payable (rounds 1 and 2)		—			130,255
Net Cash provided (used) by Financing Activities		(7,956	)		116,617

NET INCREASE IN CASH AND CASH EQUIVALENTS		95,502			347,506

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		655,616			308,110

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	751,118		$	655,616

Non-cash investing and financing activities:
Recognition of operating lease liability and right of use asset	$	78,757		$	—

17See accompanying notes to the financial statements.

~~ELECTRONIC SYSTEMS TECHNOLOGY, INC. DBA ESTEEM WIRELESS MODEMS STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020~~18

	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	92,989		$	(202,719	)
Noncash expenses included in income (loss):
Depreciation and amortization		5,169			6,953
Share based compensation		970			2,283
Gain on forgiveness of CARES Act loan		(280,373	)		-
Changes in operating assets and liabilities:
Accounts receivable		122,581			(211,923	)
Inventories		129,873			191,112
Prepaid expenses		3,702			(7,179	)
Accrued interest receivable		4,624			1,881
Accounts payable		49,572			(80,435	)
Other accrued liabilities		2,865			11,488
Net Cash provided (used) by Operating Activities		131,972			(288,539	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Certificates of deposits purchased		(400,000	)		(1,049,999	)
Certificates of deposits redeemed		499,999			1,200,000
Purchase of equipment		(1,082	)		-
Net Cash provided by Investing Activities		98,917			150,001
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on CARES Act loan payable (round 1)		(13,638	)		-
Proceeds from CARES Act loan payable (rounds 1 and 2)		130,255			171,712
Net Cash provided by Financing Activities		116,617			171,712
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		347,506			33,174
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		308,110			274,936
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	655,616		$	308,110
Non-cash investing and financing activities:
Recognition of operating lease liability and right of use asset	$	-		$	74,005

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

~~See Notes~~NOTES toTO ~~Financial~~FINANCIAL ~~Statements.~~STATEMENTS

181. Organization and Summary of Significant Accounting Policies

~~ELECTRONIC SYSTEMS~~Business ~~TECHNOLOGY, INC.~~Organization

~~NOTES~~The Company was incorporated under the laws TOof ~~FINANCIAL~~the ~~STATEMENTS~~State of Washington on February 10, 1984, primarily to develop, produce, sell and distribute wireless modems that will allow communication between peripherals via radio frequency waves.

1.Effective ~~Organization~~September ~~and~~13, ~~Summary~~2007, the Company announced their establishment of ~~Significant~~a ~~Accounting~~“doing ~~Policies~~business as” or dba structure, based on the Company’s registered trade name of ESTeem® Wireless Modems.

~~Business~~Basis of Presentation and Accounting ~~Organization~~Estimates

The preparation of financial statements ~~Company~~are ~~was~~prepared ~~incorporated~~in ~~under~~conformity ~~the~~with ~~laws~~generally ofaccepted accounting principles in the ~~State~~United ofStates ~~Washington~~which onrequires ~~February~~management 10to make estimates and assumptions that affect the reported amounts of assets, ~~1984~~liabilities, ~~primarily~~revenues toand ~~develop~~expenses. Estimates used in the accompanying financial statements include the allowance for doubtful accounts receivable, ~~produce~~inventory obsolescence, ~~sell~~useful ~~and~~lives ~~distribute~~of depreciable assets, share-based ~~wireless~~compensation, ~~modems~~and ~~that~~deferred ~~will~~income ~~allow~~taxes. ~~communication~~Actual ~~between~~results ~~peripherals~~could ~~via~~differ ~~radio~~from ~~frequency~~those ~~waves~~estimates.

~~Effective September~~Concentrations ~~13,~~and ~~2007,~~Credit ~~the Company announced their establishment of a “doing business as” or dba structure, based on the Company’s registered trade name of ESTeem® Wireless Modems.~~Risks

~~As a~~The ~~result of COVID-19, and governmental responses thereto, the~~ Company ~~has~~places ~~experienced some negative impacts to~~ its ~~business,~~cash ~~primarily as~~with athree ~~result of reductions in staffing by customers, and their customers, which is lengthened normal sales cycles. Many of customers also~~major ~~restricted~~financial ~~visits from vendors~~institutions. ~~All~~During ofthe ~~planned~~period, ~~trade shows and sales presentations were canceled or postponed as a result of~~ the ~~risks associated with face to face meetings. Management utilized various platforms to provide current customers and potential customers with presentations about products and services. The~~ Company ~~also~~had ~~experienced~~cash ~~and~~balances ~~continue~~that towere ~~experience delays~~ in ~~its~~excess ~~supply chain. While many~~ of ~~the~~federally ~~past~~insured negative impacts have lessened over time, if new outbreaks, or strains, of Covid-19 occur and/or if governments revert to more restrictive measures with respect to travel and business operations which require or result in our inability to effectively market and/or interact with customers (whether potential or actual), the Company could again experience negative impactslimits.

~~Basis~~The Company purchases certain key components necessary for the production of ~~Presentation~~its products from a limited number of suppliers. The components provided by the suppliers could be replaced or substituted by other products. It is possible that if this action became necessary, an interruption of production and/or ~~Accounting~~material ~~Estimates~~cost expenditures could take place.

~~The preparation~~Revenue of financial statements are prepared in conformity with generally accepted accounting principles in the United States which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Estimates used in the accompanying financial statements include the allowance for doubtful accounts receivable, inventory obsolescence, useful lives of depreciable assets, share-based compensation, and deferred income taxes. Actual results could differ from those estimates.Recognition

~~Concentrations~~The Company recognizes revenue when it has ~~and~~satisfied ~~Credit~~the ~~Risks~~performance obligation required under a contract with the customer. A performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Our contracts with customers contain a single performance obligation. A contract’s transaction price is recognized as revenue when, or as, the performance obligation is satisfied.

~~The Company~~Performance ~~places~~obligations ~~its~~for ~~cash~~product ~~with~~sales are ~~three~~satisfied ~~major~~as ~~financial~~of ~~institutions~~a point in time. ~~During~~Revenue is recognized when control of the ~~period~~product transfers to the customer, generally upon product shipment. Performance obligations for site support and engineering services are satisfied over-time if the ~~Company~~customer ~~had~~receives ~~cash~~the benefits ~~balances~~as ~~that~~we ~~were~~perform inwork ~~excess~~and we have a contractual right to payment. Revenue recognized on an over-time basis is based on costs incurred ofto ~~federally~~date ~~insured~~relative ~~limits~~to milestones and total estimated costs at completion to measure progress.

The Company ~~purchases~~considers ~~certain~~the ~~key~~contractual ~~components~~consideration payable ~~necessary~~by ~~for~~the customer when determining the ~~production~~transaction price of ~~its~~each ~~products~~contract. ~~from~~Revenue ais ~~limited~~recorded ~~number~~net of ~~suppliers.~~charges ~~The~~for certain sales incentives and discounts, and applicable state and local sales taxes, which represent components of the transaction price. Charges are ~~provided~~estimated by us upon shipment of the ~~suppliers~~product ~~could~~based beon ~~replaced~~contractual orterms, ~~substituted~~and byactual ~~other~~charges ~~products~~typically do not vary materially from our estimates. ItShipping isestimates ~~possible~~are ~~that~~determined ifby ~~this~~utilizing ~~action~~shipping ~~became~~costs ~~necessary,~~provided ~~an interruption~~by the various service providers websites based on number of ~~production~~packages, weight and~~/or~~ ~~material~~destination. Shipping costs are included in the cost ~~expenditures~~of ~~could~~goods ~~take~~sold ~~place~~as the revenue is captured in total sales.

~~Revenue Recognition~~19

~~The Company~~ELECTRONIC ~~recognizes~~SYSTEMS revenue when it has satisfied the performance obligation required under a contract with the customer. A performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Our contracts with customers contain a single performance obligation. A contract’s transaction price is recognized as revenue whenTECHNOLOGY, ~~or as, the performance obligation is satisfied~~INC.

~~Performance obligations~~NOTES ~~for~~TO ~~product~~FINANCIAL sales are satisfied as of a point in time. Revenue is recognized when control of the product transfers to the customer, generally upon product shipment. Performance obligations for site support and engineering services are satisfied over-time if the customer receives the benefits as we perform work and we have a contractual right to payment. Revenue recognized on an over-time basis is based on costs incurred to date relative to milestones and total estimated costs at completion to measure progress.STATEMENTS

The Company ~~considers~~receives ~~the~~payments ~~contractual~~from ~~consideration~~customers based ~~payable~~on by the ~~customer~~terms ~~when~~established ~~determining~~in ~~the~~our ~~transaction price of each contract~~contracts. ~~Revenue is~~When ~~recorded~~amounts ~~net~~are ofbilled ~~charges for certain sales incentives~~ and ~~discounts,~~collected ~~and~~before ~~applicable~~the ~~state~~services ~~and~~are ~~local sales taxes~~performed, ~~which~~they ~~represent~~are ~~components~~included ofin ~~the~~deferred ~~transaction price~~revenues. ~~Charges~~The ~~are~~Company ~~estimated~~does bynot usgenerally ~~upon~~sell ~~shipment~~its ofproducts with the ~~product~~right ~~based~~of onreturn. ~~contractual terms~~Therefore, ~~and~~returns ~~actual~~are ~~charges~~accounted ~~typically~~for dowhen ~~not~~they ~~vary~~occur ~~materially~~and ~~from~~are ~~our estimates~~accepted. ~~Shipping~~Products ~~estimates~~sold ~~are~~to ~~determined~~foreign bycustomers ~~utilizing~~are ~~shipping~~shipped ~~costs~~after ~~provided~~payment byis ~~the~~received ~~various~~in ~~service providers~~U.S. ~~websites~~funds, ~~based~~unless onan ~~number~~established distributor ofrelationship ~~packages~~exists, ~~weight~~or ~~and~~the ~~destination.~~customer ~~Shipping~~is ~~costs~~a ~~are~~foreign ~~included~~branch ~~in the cost~~ of ~~goods~~a ~~sold~~U.S. ~~as the revenue is captured in total sales~~company.

19The Company warrants its products as free of manufacturing defects and provides a refund of the purchase price, repair or replacement of the product for a period of one year from the date of installation by the first user/customer. No allowance for estimated warranty repairs or product returns has been recorded due to the Company’s historical experience of repairs and product returns.

~~ELECTRONIC SYSTEMS~~Financial ~~TECHNOLOGY, INC.~~Instruments

~~NOTES~~The Company’s financial instruments TOare ~~FINANCIAL~~cash, ~~STATEMENTS~~money market funds, and certificates of deposit. The recorded values of cash, money market funds and certificates of deposit approximate their fair values based on their short-term nature.

~~The Company~~Cash ~~receives payments from customers based on the terms established in our contracts. When amounts are billed~~ and ~~collected~~Cash before the services are performed, they are included in deferred revenues. The Company does not generally sell its products with the right of return. Therefore, returns are accounted for when they occur and are accepted. Products sold to foreign customers are shipped after payment is received in U.S. funds, unless an established distributor relationship exists, or the customer is a foreign branch of a U.S. company.Equivalents

~~The Company~~Cash ~~warrants~~and ~~its~~cash ~~products~~equivalents asare ~~free~~cash ~~of manufacturing defects~~ and ~~provides a refund of the purchase price, repair or replacement of~~money ~~the~~market ~~product~~funds ~~for~~purchased awith ~~period~~original ofmaturities ~~one year from the date~~ of ~~installation~~three bymonths ~~the first user/customer. No allowance for estimated warranty repairs~~ or ~~product returns has been recorded due to the Company’s historical experience of repairs and product returns~~less.

~~Financial Instruments~~Allowance for Uncollectible Accounts

The Company’s ~~financial~~uses ~~instruments~~the ~~are~~allowance ~~cash,~~method ~~money~~to account ~~market~~for ~~funds,~~estimated ~~and~~uncollectible ~~certificates~~accounts ~~of deposit~~receivable. ~~The~~Accounts ~~recorded~~receivable ~~values~~are presented net of ~~cash,~~an ~~money~~allowance ~~market~~for doubtful accounts. ~~funds~~As of December 31, 2022 and ~~certificates~~2021, the Company’s estimate of ~~deposit~~doubtful ~~approximate~~accounts ~~their~~was ~~fair~~zero. ~~values~~The Company’s policy for writing off past due accounts receivable is based on ~~their~~the ~~short-term~~time ~~nature~~past due and responses received from the subject customer.

~~Cash and Cash Equivalents~~Inventories

~~Cash and~~Inventories ~~cash~~are ~~equivalents~~stated ~~are~~at ~~cash~~lower ~~and~~of ~~money~~direct cost or market. ~~funds~~Cost ~~purchased~~is ~~with~~determined ~~original~~on ~~maturities~~an ofaverage ~~three~~cost ~~months~~basis orthat ~~less~~approximates the first-in, first-out (FIFO) method. Market is determined based on net realizable value and consideration is given to obsolescence.

~~Allowance for Uncollectible Accounts~~Reclassifications

~~The Company~~Certain ~~uses~~prior ~~the~~year ~~allowance~~amounts ~~method~~have tobeen ~~account~~ reclassified for ~~estimated~~consistency ~~uncollectible~~with ~~accounts~~the ~~receivable.~~current ~~Accounts~~year ~~receivable are presented net of an allowance for doubtful accounts~~presentation. AsReclassifications ofhad ~~December~~no ~~31,~~effect ~~2021~~on ~~and~~net ~~2020~~income), ~~the Company~~stockholders’s ~~estimate~~equity, ofor ~~doubtful accounts was zero. The~~cash ~~Company’s~~flows ~~policy~~as ~~for~~previously ~~writing off past due accounts receivable is based on the time past due and responses received from the subject customer~~reported.

~~Inventories~~Property and Equipment

~~Inventories~~ Property and equipment are ~~stated~~carried at ~~lower~~cost. Major ofbetterments ~~direct~~are ~~cost~~capitalized orand ~~market~~de minimis purchases are expensed. ~~Cost~~Depreciation is ~~determined~~computed onusing anthe ~~average~~straight-line ~~cost~~method ~~basis~~over the ~~that~~estimated ~~approximates~~useful lives of the ~~first-in,~~assets. ~~first-out~~The ~~(FIFO)~~useful life of property and equipment for purposes of computing depreciation is three to ~~method~~seven years. ~~Market~~When the Company sells or otherwise disposes of property and equipment a gain or loss is ~~determined~~recorded ~~based~~in onthe ~~net~~statement ~~realizable~~of ~~value~~operations. The cost of improvements that extend the life of property and ~~consideration~~equipment is ~~given~~capitalized. toThe ~~obsolescence~~Company periodically reviews its long-lived assets for impairment and, upon indication that the carrying value of such assets may not be recoverable, recognizes an impairment loss by a charge against current operations.

~~Reclassifications~~20

~~Certain prior~~ELECTRONIC ~~year~~SYSTEMS ~~amounts have been reclassified for consistency with the current year presentation. Reclassifications had no effect on net income (loss)~~TECHNOLOGY, ~~stockholders’ equity, or cash flows as previously reported~~INC.

~~Property and~~NOTES ~~Equipment~~TO FINANCIAL STATEMENTS

~~Property and~~Certificates ~~equipment is carried at cost. Major betterments are capitalized and de minimis purchases are expensed. Depreciation is computed using the straight-line method over the estimated useful lives~~ of the assets. The useful life of property and equipment for purposes of computing depreciation is three to seven years. When the Company sells or otherwise disposes of property and equipment a gain or loss is recorded in the statement of operations. The cost of improvements that extend the life of property and equipment is capitalized. The Company periodically reviews its long-lived assets for impairment and, upon indication that the carrying value of such assets may not be recoverable, recognizes an impairment loss by a charge against current operations.Deposit

Certificates of ~~Deposit~~deposit with original maturities ranging from one month to twelve months were $251,699 and $400,000 at December 31, 2022 and 2021, respectively.

~~Certificates of~~Software ~~deposit with original maturities ranging from one month to twelve months were 400,000 and $499,999 at December 31, 2021 and 2020, respectively.~~Costs

Software purchased and used by the Company ~~Costs~~is capitalized as property and equipment based on its cost, and amortized over its useful life, usually not exceeding five years.

~~Software~~The Company capitalizes the costs of creating ~~purchased~~a ~~and~~software ~~used~~product byto ~~the~~be ~~Company~~sold, isleased ~~capitalized~~or asotherwise ~~property~~marketed, ~~and~~for ~~equipment~~which ~~based~~technological feasibility has been established. Amortization of the software product, on ~~its~~a ~~cost~~product-by-product basis, ~~and~~begins ~~amortized~~on the date the product is available for distribution to customers and continues over ~~its~~the ~~useful~~estimated revenue-producing life, ~~usually~~ not ~~exceeding~~to exceed five years.

20Leases

~~ELECTRONIC~~Contracts that meet the definition of a ~~SYSTEMS~~lease ~~TECHNOLOGY~~are classified as operating or financing leases and are recorded on the balance sheet as both a right-of-use asset and lease liability, calculated ~~INC~~by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred.

~~NOTES TO~~Income ~~FINANCIAL STATEMENTS~~Taxes

The provision (benefit) for income taxes ~~Company~~is ~~capitalizes~~computed on the ~~costs~~pretax ofincome ~~creating~~(loss) abased ~~software~~on ~~product~~the tocurrent betax ~~sold,~~law. ~~leased~~Deferred orincome ~~otherwise~~taxes ~~marketed,~~are recognized for ~~which~~the ~~technological~~tax ~~feasibility~~consequences in ~~has~~future ~~been~~years ~~established.~~of ~~Amortization~~differences ofbetween the ~~software~~tax ~~product,~~basis onof aassets ~~product-by-product~~and ~~basis,~~liabilities ~~begins~~and their financial reporting amounts at each year-end based on ~~the~~enacted ~~date~~tax ~~the~~laws ~~product~~and isstatutory ~~available~~tax rates. The Company evaluates positive and negative information when estimating the valuation allowance for ~~distribution~~deferred totax ~~customers~~assets. ~~and~~For ~~continues~~tax ~~over~~positions that meet the ~~estimated~~more ~~revenue-producing~~likely ~~life,~~than not torecognition ~~exceed~~threshold ~~five~~a ~~years~~deferred tax asset is recognized.

~~Leases~~Research and Development

~~Contracts that~~Research ~~meet~~and ~~the~~development ~~definition~~costs ~~of a lease~~ are ~~classified~~ recognized as operating orexpenses ~~financing~~when ~~leases~~incurred. Research and ~~are~~development ~~recorded~~expenditures onfor ~~the~~new ~~balance~~product ~~sheet~~development asand ~~both~~improvements ~~a right-~~of~~-use asset~~ ~~and~~existing ~~lease liability, calculated~~ products by ~~discounting fixed lease payments over~~ the ~~lease term at the rate implicit in the lease or the~~ Company’s ~~incremental~~for ~~borrowing~~2022 ~~rate. Lease liabilities are increased by interest~~ and ~~reduced~~2021 bywere ~~payments each period~~$163,189 and ~~the right-of-use asset is amortized over the lease term. For operating leases~~$212,397, ~~interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term~~respectively. ~~Variable lease expenses are recorded when incurred.~~

~~Income Taxes~~Advertising Costs

~~The provision~~Costs ~~(benefit)~~incurred for ~~income~~producing ~~taxes~~and iscommunicating advertising ~~computed~~are onrecognized ~~the~~as ~~pretax~~operating ~~income~~expenses ~~(loss)~~when ~~based on the current tax law~~incurred. ~~Deferred~~Advertising ~~income~~costs ~~taxes are recognized~~ for the ~~tax consequences in future~~ years ofended ~~differences~~December ~~between~~31, ~~the~~2022 ~~tax basis of assets~~ and ~~liabilities~~2021were ~~and their financial~~$8,895 ~~reporting amounts at each year-end based on enacted tax laws~~ and ~~statutory~~$7,979, ~~tax rates~~respectively. The Company evaluates positive and negative information when estimating the valuation allowance for deferred tax assets. For tax positions that meet the more likely than not recognition threshold a deferred tax asset is recognized.

~~Research and~~Earnings ~~Development~~Per Share

~~Research~~The Company is required to have dual presentation of basic earnings per share (“EPS”) and ~~development~~diluted ~~costs~~EPS. Basic ~~are~~EPS ~~recognized~~is computed as ~~operating~~net ~~expenses~~income ~~when~~(loss) ~~incurred.~~divided ~~Research~~by ~~and~~the ~~development~~weighted average ~~expenditures~~number of common shares outstanding for ~~new~~the ~~product~~period. ~~development and~~Diluted ~~improvements~~EPS is calculated based on the weighted average number of ~~existing~~common ~~products~~shares outstanding byduring the ~~Company~~period ~~for~~plus ~~2021~~the ~~and~~effect ~~2020~~of ~~were~~potentially ~~$212,397~~dilutive ~~and~~common ~~$200,024,~~stock ~~respectively~~equivalents.

~~Advertising~~Potentially dilutive common stock equivalents ~~Costs~~consist of 180,000 and 240,000 stock options outstanding as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the potentially dilutive stock options were not included in the calculation of the diluted weighted average number of shares outstanding or diluted EPS as their effect would have been anti-dilutive.

Costs incurred for producing and communicating advertising are recognized as operating expenses when incurred. Advertising costs for the years ended December 31, 2021 and 2020 were $7,979 and $6,351, respectively.21

~~Earnings Per~~ELECTRONIC ~~Share~~SYSTEMS TECHNOLOGY, INC.

~~The Company~~NOTES isTO ~~required~~FINANCIAL to have dual presentation of basic earnings per share (“EPS”) and diluted EPS. Basic EPS is computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents.STATEMENTS

Potentially dilutive common stock equivalents consist of 240,000 and 180,000 stock options outstanding as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the potentially dilutive stock options were not included in the calculation of the diluted weighted average number of shares outstanding or diluted EPS as their effect would have been antiShare-~~dilutive.~~Based Compensation

Share-~~Based~~based payments to employees, including ~~Compensation~~grants of employee stock options, are measured at fair value and expensed in the statement of operations over the vesting period. In addition to the recognition of expense in the financial statements, any excess tax benefits received upon exercise of options will be presented as a financing activity inflow rather than an adjustment of operating activity in the statement of cash flows.

~~Share-based payments~~Fair toValue employees, including grants of employee stock options, are measured at fair value and expensed in the statement of operations over the vesting period. In addition to the recognition of expense in the financial statements, any excess tax benefits received upon exercise of options will be presented as a financing activity inflow rather than an adjustment of operating activity in the statement of cash flows.Measurements

~~Fair~~When required to measure assets or liabilities ~~Value~~at ~~Measurements~~fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At December 31, 2022 and 2021, the Company has no assets or liabilities subject to fair value measurements on a recurring basis.

~~When required~~New toAccounting measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At December 31, 2021 and 2020, the Company has no assets or liabilities subject to fair value measurements on a recurring basis.Pronouncements

21Accounting standards issued by the Financial Accounting Standards Board that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

~~ELECTRONIC SYSTEMS TECHNOLOGY, INC~~2. Inventories

~~NOTES TO~~Inventories ~~FINANCIAL~~consist ~~STATEMENTS~~of the following:

New Accounting Pronouncements

Schedule of Inventories
	2022		2021
Parts	$	172,190	$	92,751
Work in progress		336,298		171,705
Finished goods		216,990		237,377
Total	$	725,478	$	501,833

~~Accounting standards~~Included ~~issued~~in by the ~~Financial~~above ~~Accounting~~amounts ~~Standards~~are ~~Board~~reserves for ~~that~~obsolete doinventories ~~not~~of ~~require~~$8,716 ~~adoption~~and ~~until~~$5,829 aat ~~future~~December ~~date~~31, ~~are~~2022 ~~not~~and ~~expected~~2021, ~~to have a material impact on the financial statements upon adoption~~respectively.

23. ~~Inventories~~Property and Equipment

~~Inventories~~ Property and equipment consist of the following:

Schedule of Inventories

Schedule of Property and Equipment
	2022			2021
Laboratory equipment	$	522,575		$	522,575
Software		35,028			35,028
Furniture and fixtures		16,344			16,344
Dies and molds		73,607			73,607
Property Plant and Equipment, Gross		647,554			647,554
Accumulated depreciation and amortization		(646,640	)		(646,196	)
Total Property Plant and Equipment, Net	$	914		$	1,358

	2021		2020
Parts	$	92,751	$	99,303
Work in progress		171,705		275,230
Finished goods		237,377		257,174
Total	$	501,833	$	631,707

~~Included in~~ELECTRONIC ~~the~~SYSTEMS ~~above amounts are reserves for obsolete inventories of $5~~TECHNOLOGY,~~829~~ ~~and $4,730 at December 31, 2021 and 2020, respectively~~INC.

3.NOTES ~~Property~~TO ~~and~~FINANCIAL ~~Equipment~~STATEMENTS

~~Property and~~4. ~~equipment~~Income ~~consist of the following:~~Taxes

~~Schedule~~For ofthe ~~Property~~years ended December 31, 2022 and 2021, ~~Equipment~~the Company did not have an income tax benefit nor provision because of continuing losses.

	2021			2020
Laboratory equipment	$	522,575		$	522,575
Software		35,028			35,028
Furniture and fixtures		16,344			15,262
Dies and molds		73,607			73,607
Property Plant and Equipment, Gross		647,554			646,472
Accumulated depreciation and amortization		(646,196	)		(641,027	)
Total Property Plant and Equipment, Net	$	1,358		$	5,445

The components of net deferred tax assets are as follows:

4. Income Taxes


	December 31,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	280,300		$	293,200
Accrued liabilities		3,500			2,900
Inventories		10,500			16,000
Other		1,200			1,400
Federal income tax credits		67,000			67,000
Total deferred tax assets		362,500			380,500

Less valuation allowance		(362,500	)		(380,500	)
Total deferred tax assets, net	$	—		$	—

~~For~~Realization of the ~~years~~deferred ~~ended~~tax ~~December~~asset ~~31,~~is ~~2021~~dependent ~~and~~on ~~2020,~~generating sufficient taxable income prior to expiration of the ~~Company~~loss ~~did~~carryforwards and the income tax carryforwards. Management determined that it does not ~~have~~believe anit ~~income~~is ~~tax~~more ~~benefit~~likely ~~nor~~than ~~provision~~not ~~because~~that all of ~~continuing~~the ~~losses~~net deferred tax assets will be realized. Therefore, a valuation allowance has been recorded for the full net deferred tax asset at December 31, 2022 and 2021.

At December 31, 2022, the Company had approximately $67,000 of research and development income tax credits available to reduce federal income taxes in future periods. The credits expire ~~components~~from 2036-2041. In addition, at December 31, 2022, the Company had approximately $1,335,000 of net ~~deferred~~operating ~~tax~~loss ~~assets~~carryforwards, ~~are~~$685,000 of aswhich ~~follows:~~will expire between 2035 and 2038. The remaining balance of $650,000 will never expire but whose utilization is limited to 80% of taxable income in any future year.

~~Schedule~~The ofdifferences ~~Deferred~~between ~~Tax~~the ~~Assets~~provision (benefit) for federal income taxes and ~~Liabilities~~federal income taxes computed using the U.S. statutory federal income tax rate of 21% were as follows:

	December 31,
Schedule of provision federal income taxes
	2021			2020
	2022			2021
Deferred tax assets:
Amount computed using the statutory rate	$	30,800		$	19,500
Net operating loss carryforwards	$	293,200		$	255,900
Non-deductible (taxable) items, net		(12,900	)		(58,500	)
Accrued liabilities		2,900			3,700
Change in estimates		200			(200	)
Inventories		16,000			15,500
Change in valuation allowance		18,000			39,200
Other		1,400			-
Provision (benefit) for federal income taxes	$	—		$	—
Federal income tax credits		67,000			67,000
Total deferred tax assets		380,500			342,100
Deferred tax liability:
Other		-			(800	)
Deferred tax assets, net		380,500			341,300
Less valuation allowance		(380,500	)		(341,300	)
Total deferred tax assets, net	$	-		$	-

~~Realization of~~Should the ~~deferred~~Company ~~tax~~have ~~asset~~future isaccrued ~~dependent~~interest expense onand ~~generating~~penalties ~~sufficient~~related ~~taxable income prior~~ to ~~expiration~~uncertain ~~of the loss carryforwards and the~~ income tax ~~carryforwards.~~positions, ~~Management~~they ~~determined that it does not believe it is more likely than not that all of the net deferred tax assets~~ will berecognize ~~realized.~~those ~~Therefore,~~expenses ain ~~valuation~~income ~~allowance has been recorded for the full net deferred~~ tax ~~asset at December 31, 2021 and 2020~~expense.

22The Company files federal income tax returns in the United States only. The Company is no longer subject to federal income tax examination by tax authorities for years before 2019. The Company has evaluated all tax positions for open years and has concluded that they have no material unrecognized tax benefits or penalties.

~~ELECTRONIC SYSTEMS~~5. ~~TECHNOLOGY,~~Profit ~~INC.~~Sharing Salary Deferral 401-K Plan

~~NOTES~~The Company sponsors a Profit-Sharing Plan TOand ~~FINANCIAL~~Salary ~~STATEMENTS~~Deferral 401-K Plan and Trust. All employees over the age of twenty-one are eligible. On January 1, 2006, the Company adopted a four percent salary matching provision. The Company contributed $20,886 and $16,660 to the plan for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2021, the Company had approximately $67,000 of research and development income tax credits available to reduce federal income taxes in future periods. The credits expire from 2035-2039. In addition, at December 31, 2021, the Company had approximately $1,400,000 of net operating loss carryforwards, $750,000 of which will expire between 2035 and 2038. The remaining balance of $650,000 will never expire but whose utilization is limited to 80% of taxable income in any future year.23

~~The differences~~ELECTRONIC ~~between~~SYSTEMS ~~the~~TECHNOLOGY, ~~provision (benefit) for federal income taxes and federal income taxes computed using the U~~INC.~~S. statutory federal income tax rate of 21% were as follows:~~

~~Schedule~~NOTES ofTO ~~Effective~~FINANCIAL ~~Income Tax Rate Reconcillation~~ STATEMENTS

	2021			2020
Amount computed using the statutory rate	$	19,500		$	(42,600	)
Non-deductible (taxable) items, net		(58,500	)		(1,800	)
Change in estimates		(200	)		(400	)
Change in valuation allowance		39,200			44,800
Provision (benefit) for federal income taxes	$	-		$	-

Employee Bonus Program

~~Should~~The Board of Directors establishes Sales and Net Income thresholds at the ~~Company~~start ~~have~~of ~~future~~each ~~accrued~~year ~~interest~~that ~~expense~~are ~~and~~used ~~penalties~~in ~~related~~calculating tothe ~~uncertain~~amount ~~income~~of ~~tax~~bonuses ~~positions~~that may be awarded. If these thresholds are not achieved, ~~they~~there will ~~recognize~~be ~~those~~no bonus issued. Bonus expenses of $17,719 inand ~~income~~0 ~~tax~~nil was ~~expense~~recognized during the years ended December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, accrued wages on the balance sheet includes $17,719 and 0 nil, respectively, for accrued bonus payable.

~~The Company files federal income tax returns in the United States only~~7. ~~The~~Share-Based Company is no longer subject to federal income tax examination by tax authorities for years before 2018. The Company has evaluated all tax positions for open years and has concluded that they have no material unrecognized tax benefits or penalties.Compensation

The Company grants stock options to individual employees and directors. After termination of employment, stock options may be exercised within ninety days, after which they are subject to forfeiture. On September 1, 2021, the Board of Directors granted 60,000 options to employees. The new options have an exercise price of $0.40, a term of 5 years, and vested immediately. ~~Profit~~The ~~Sharing~~fair ~~Salary~~value ~~Deferral~~of ~~401~~the options was determined using the Black-KScholes ~~Plan~~model using the following variables: stock price of $0.40, volatility of 107.69%, expected term of 5 years with a forfeiture rate of 95%, and a discount factor of 0.77%. Share based compensation of $970 was recognized in 2021.

~~The Company~~In ~~sponsors~~the ayears ~~Profit-Sharing~~ended ~~Plan~~December ~~and~~31, ~~Salary~~2022 ~~Deferral 401-K Plan~~ and 2021, ~~Trust. All employees over~~ the ~~age~~Company ofrecognized ~~twenty~~$-~~one~~ ~~are~~and ~~eligible. On~~$970 ~~January 1~~respectively, ~~2006,~~in ~~the~~share-based ~~Company~~compensation ~~adopted a four percent salary matching provision~~expense. ~~The~~No ~~Company~~non-vested ~~contributed~~share-based ~~$16,660~~compensation ~~and $15,659 to the~~arrangements ~~plan~~existed ~~for~~as ~~the~~of ~~years ended~~ December 31, ~~2021~~2022 and ~~2020, respectively~~2021.

6.A ~~Employee~~summary ~~Bonus~~of ~~Program~~option activity follows:

The Board of Directors establishes Sales and Net Income thresholds at the start of each year that are used in calculating the amount of bonuses that may be awarded. If these thresholds are not achieved, there will be no bonus issued. There was no accrual or expense recorded for 2021 or 2020.

Schedule of Stock Option Activity
	Number Outstanding			Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Term (Years)
Balance at December 31, 2020		180,000			0.40		4.2
Granted		60,000			0.40
Balance at December 31, 2021		240,000		$	0.40		3.6
Canceled		(60,000	)		0.40
Balance at December 31, 2022		180,000		$	0.40		2.5

Outstanding and Exercisable at December 31, 2022		180,000		$	0.40		2.5

7.The ~~Share-Based~~aggregate ~~Compensation~~intrinsic value of the options outstanding and exercisable at December 31, 2022 was nil.

The Company grants stock options to individual employees and directors with three years continuous tenure. After termination of employment, stock options may be exercised within ninety days, after which they are subject to forfeiture. On September 1, 2021 the Board of Directors granted 60,000 options to employess. The new options have an exercise price of $0.40, a term of 5 years, and vested immediately. The fair value of the options was determined using the Black-Scholes model using the following variables: stock price of $0.40, volatility of 107.69%, expected term of 5 years with a forfeiture rate of 95%, and a discount factor of 0.77%. Share based compensation of $970 was recognized in 2021.24

~~On March~~ ELECTRONIC ~~13,~~SYSTEMS ~~2020~~TECHNOLOGY, ~~the Board of Directors canceled all 120,000 outstanding stock options that were granted on August 7, 2017 and were due to expire on August 6, 2020~~INC. In addition, the Board of Directors granted 180,000 options to employees. The new options have an exercise price of $0.40, a term of 5 years, and vested immediately. The fair value of the options was determined using the Black-Scholes model using the following variables: stock price of $0.40, volatility of 79.27%, expected term of 5 years with a forfeiture rate of 95%, and a discount factor of 0.72%. Share based compensation of $2,283 was recognized in 2020.

~~In the~~NOTES ~~years~~TO ~~ended~~FINANCIAL December 31, 2021 and 2020, the Company recognized $970 and $2,283 respectively, in share-based compensation expense. No non-vested share-based compensation arrangements existed as of December 31, 2021 and 2020.STATEMENTS

238. Leases

~~ELECTRONIC~~On September 19, 2022, the Company signed ~~SYSTEMS~~a ~~TECHNOLOGY~~new two-year lease for its facilities. The base lease is $3,373 ~~INC~~and $3,478 per month for years one and two, respectively. There is a leasehold tax applied to the base lease at 12.84%. The Company has the right to terminate the lease with 90 days’ notice. There is no renewal clause contained in the current lease. Upon signing the lease, the Company recognized a lease liability and a right of use asset of $78,757 based on the two-year payment stream discounted using an estimated incremental borrowing rate of 4.125%. At December 31, 2022, the remaining lease term is twenty-one months.

~~NOTES~~Prior to the new lease in September 19, TO2022, ~~FINANCIAL~~the ~~STATEMENTS~~Company’s lease for its facilities was for $3,806 per month.

~~A summary~~As of ~~option~~December ~~activity~~31, 2022, total future lease payments are as follows:

Schedule of Stock Option Activity


For the 12 months ended
December 31, 2023	$	40,790
December 31, 2024		31,304
Total		72,094
Less imputed interest		(2,517	)
Net lease liability		69,577
Current portion		39,120
Long-term portion	$	30,457

	Number Outstanding			Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Term (Years)
Balance at December 31, 2019		120,000			0.40		1.6
Granted		180,000			0.40
Canceled		(120,000	)		0.40
Balance at December 31, 2020		180,000		$	0.40		4.2
Granted		60,000			0.40
Balance at December 31, 2021		240,000		$	0.40		3.6
Outstanding and Exercisable at December 31, 2021		240,000		$	0.40		3.6

For the years ended December 31, 2022 and 2021, costs relating to the operating lease were recognized in the statement of operations as follows:

The aggregate intrinsic value of the options outstanding and exercisable at December 31, 2021 was nil.


	2022						2021
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	23,002	$	18,104	$	41,106	$	21,587	$	16,989	$	38,576
Variable lease costs		2,976		2,342		5,319		2,749		2,164		4,913
Total lease costs	$	25,978	$	20,446	$	46,425	$	24,336	$	19,153	$	43,489

89. ~~Leases~~Revenue

~~On September~~The ~~23, 2020, the~~ Company ~~signed~~derives arevenues ~~new~~from ~~two-year~~the ~~lease~~sales of ~~for~~industrial ~~its~~wireless ~~facilities.~~products ~~The~~and ~~base~~accessories ~~lease~~such isas $3antennas,~~162~~ ~~and~~power ~~$3,267~~supplies ~~per month for years one~~ and ~~two,~~cable ~~respectively~~assemblies. ~~There is a leasehold tax applied to the base lease at 12.84%.~~ The Company ~~has~~also ~~the~~provides ~~right to terminate the lease~~direct ~~with~~site 90support ~~days’~~and ~~notice.~~engineering ~~There~~services isto nocustomers, ~~renewal~~such ~~clause~~as ~~contained~~repair inand ~~the~~upgrade ~~current~~of ~~lease~~its products. ~~Upon~~The ~~signing~~Company’s ~~the lease~~customers, ~~the~~to ~~Company recognized~~which atrade ~~lease~~credit ~~liability~~terms ~~and~~are ~~a right of use asset of $74~~extended,~~005~~ ~~based~~consist ~~on the two-year payment stream discounted using an estimated incremental borrowing rate~~ of ~~4.0%.~~United AtStates ~~December~~and ~~31,~~local ~~2021,~~governments ~~the~~and ~~remaining~~foreign ~~lease~~and ~~term~~domestic ~~is nine months~~companies.

Prior to the new lease in September 23, 2020, the Company’s lease for its facilities was for $5,639 per month.

Schedule of Revenue by Products
	For the years ending December 31,
	2022						2021
	Domestic Sales		Foreign Sales		Total Sales		Domestic Sales		Foreign Sales		Total Sales
Product Sales	$	1,668,861	$	212,800	$	1,881,661	$	1,287,587	$	170,741	$	1,458,328
Site Support Sales		28,400		-		28,400		53,700		-		53,700
Total Sales	$	1,697,261	$	212,800	$	1,910,061	$	1,341,287	$	170,741	$	1,512,028

~~As of~~For the year ended December 31, 2022 and 2021, ~~total~~sales ~~future~~to ~~lease~~customers ~~payments~~that are more than 10% of total revenue are as follows:

Schedule of Future Minimum Lease Payment

Schedule of Revenue by Customers
	2022 Sales		2022 % age of Total Sales			2021 Sales		2021 % age of Total Sales
Domestic customer A	$	397,671		20.8	%	$	242,451		16.0	%
Domestic customer B	$	201,459		10.5	%		160,385		10.6	%

For the 12 months ended December 31, 2022	$	28,922
Total		28,922
Less imputed interest		(484	)
Net lease liability		28,438
Current portion		28,438
Long-term portion	$	-

~~For the~~ELECTRONIC ~~years~~SYSTEMS ~~ended December 31~~TECHNOLOGY, ~~2021 and 2020, costs relating to the operating lease were recognized in the statement of operations as follows:~~INC.

~~Schedule~~NOTES ofTO ~~Cost~~FINANCIAL ~~Related to Operating Lease~~STATEMENTS

	2021						2020
	Cost of sales		Operating expenses		Total		Cost of sales		Operating expenses		Total
Base rent pursuant to lease agreement	$	21,587	$	16,989	$	38,576	$	14,393	$	40,411	$	54,804
Variable lease costs		2,749		2,164		4,913		1,836		5,156		6,992
Total lease costs	$	24,336	$	19,153	$	43,489	$	16,229	$	45,567	$	61,796

As of December 31, 2022 and 2021, accounts receivable from customers that are more than 10% of the total accounts receivable balance are as follows:

Schedule of accounts receivable
	December 31, 2022					December 31, 2021
	Accounts Receivable Balance		% age of Total Accounts Receivable			Accounts Receivable Balance		% age of Total Accounts Receivable
Domestic customer A	$	95,724		67.7	%	$	35,421		21.3	%
Domestic customer B	$	16,037		11.3	%	$	30,587		18.4	%

~~ELECTRONIC~~As of December 31, 2022 and 2021, the Company ~~SYSTEMS~~had ~~TECHNOLOGY~~a sales order backlog of $49,173 ~~INC~~and $81,293, respectively.

~~NOTES TO~~10. ~~FINANCIAL~~Cares ~~STATEMENTS~~Act Loan and Retention Credit

9.On ~~Revenue~~March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (the “CARES Act”) Act was signed into United States law.

~~The~~In April 2020, the Company ~~derives~~received ~~revenues~~a ~~from~~loan ~~the~~of ~~sales~~$171,712 ofpursuant ~~industrial~~to ~~wireless~~the Paycheck ~~products~~Protection ~~and~~Program (the “PPP”) ~~accessories~~under ~~such~~Division asA, ~~antennas~~Title I, ~~power~~Section ~~supplies~~1102 and ~~cable~~1106 ~~assemblies. The~~of ~~Company~~the ~~also~~CARES ~~provides~~Act. ~~direct~~In ~~site~~June ~~support~~2021, ~~and~~$150,118 of this ~~engineering~~loan ~~services~~was toforgiven ~~customers,~~and ~~such~~recognized as ~~repair~~a ~~and~~gain ~~upgrade~~on forgiveness of ~~its~~CARES ~~products~~Act loan in 2021. ~~The Company’s~~A ~~customers~~balance of $21,594 toremained after the forgiveness which ~~trade~~has ~~credit~~been ~~terms~~fully ~~are~~paid ~~extended~~as of December 31, ~~consist~~2022. In February 2021, the Company received a second loan of ~~United~~$130,255 pursuant to ~~States~~the ~~and~~PPP. ~~local~~The ~~governments~~second ~~and~~loan ~~foreign~~was forgiven and ~~domestic~~the Company recognized a gain on forgiveness of CARES Act loan of $130,255 during ~~companies~~2021.

~~Schedule~~As at December 31, 2022, the Company has an employee retention tax credit due for $63,000. The amount to be received is a refund of ~~Revenue~~qualified bypayroll ~~Products~~taxes the Company paid in connection with employee payroll during the COVID 19 pandemic. The Company expects to receive the credit in 2023.

	For the year ending December 31,
	2021						2020
	Domestic Sales		Foreign Sales		Total Sales		Domestic Sales		Foreign Sales		Total Sales
Product Sales	$	1,287,587	$	170,741	$	1,458,328	$	883,144	$	297,878	$	1,181,022
Site Support Sales		53,700		-		53,700		44,350		-		44,350
Total Sales	$	1,341,287	$	170,741	$	1,512,028	$	927,494	$	297,878	$	1,225,372

~~For the~~ELECTRONIC ~~12-month~~SYSTEMS ~~period ended December 31~~TECHNOLOGY, ~~2021, sales to two customers represented more than 10% of total revenue~~INC. ~~Two customers represented more than 10% of total revenue for the same period in 2020.~~

~~Schedule~~NOTES ofTO ~~Revenue~~FINANCIAL ~~by Customers~~STATEMENTS

	2021 Sales		2021 % age of Total Sales	2020 Sales		2020 % age of Total Sales
Foreign customer A	$	41,599	2.8%	$	180,331	14.7%
Domestic customer A	$	242,451	16.0%	$	158,483	12.9%
Domestic customer B	$	160,385	10.6%

Supplemental Information

~~As of~~ELECTRONIC ~~December~~SYSTEMS 31TECHNOLOGY, ~~2021~~INC. ~~and~~DBA ~~2020,~~ESTEEM ~~the~~WIRELESS ~~Company~~MODEMS ~~had~~SUPPLEMENTAL aSCHEDULE ~~sales~~OF ~~order~~OPERATING ~~backlog~~EXPENSES ofFOR ~~$81,293~~THE ~~and~~YEARS $0ENDED DECEMBER 31, ~~respectively.~~2022 AND 2021

10. Stock Repurchase


	2022			2021

Advertising	$	8,895		$	7,979
Dues and subscriptions		3,547			2,011
Depreciation		444			5,169
Insurance		13,485			13,242
Materials and supplies		10,370			12,668
Office and administration		4,890			4,097
Printing		2,658			3,318
Professional services		91,096			138,357
Services purchased in lieu of payroll		45,875			81,250
Rent and utilities		50,308			49,662
Repair and maintenance		4,259			8,096
Salaries and benefits		696,665			614,337
Taxes, licenses & health insurance		194,839			183,546
Telephone		5,372			5,968
Warranty expense		2,897			2,867
Trade shows		12,199			7,631
Travel expenses		15,984			18,955

		1,163,783			1,159,153

Expenses allocated to cost of sales		(213,445	)		(201,499	)

Total Operating Expenses	$	950,338		$	957,654

On January 13, 2016, the Company’s Board of Directors approved a resolution authorizing the repurchase of up to $100,000 of the Company’s common stock at the price of $0.38 per share. The Company’s share repurchase program does not obligate it to acquire any specific number of shares. On March 2, 2016, the Company’s Board of Director approved a resolution authorizing the repurchase of an additional $150,000 of the Company’s common stock at the price of $0.38 per share. Under the program (the “Stock Repurchase Plan”), shares may be repurchased in open market transactions. Shares repurchased are retired.27

~~During the~~Item ~~years ended December 31, 2020, the Company did not repurchase shares of its common stock~~9. AsChanges ofIn ~~December~~and ~~31,~~Disagreements ~~2021,~~with ~~the~~Accountants ~~Company~~on ~~has repurchased~~Accounting ~~a total of 212,165 shares for a total cost of $80,629~~ and aFinancial ~~balance of $169,371 remains of the original $250,000 approved by the board~~Disclosure. ~~On April 23, 2020, repurchases were suspended indefinitely.~~

~~11. Cares Act Loan Payable~~None

~~On March~~Item ~~27,~~9A. ~~2020,~~Controls ~~the Coronavirus Aid, Relief,~~ and ~~Economic Security (the “CARES Act”) Act was signed into United States law~~Procedures.

~~In April~~Disclosure ~~2020,~~Controls ~~the Company received a loan of $171,712 pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I, Section 1102~~ and ~~1106 of the CARES Act~~Procedures. The loan, which was in the form of a promissory note, originally had a maturity date of April 13, 2022 and an interest rate of 1% per annum. $150,118 of this loan was forgiven in June 2021 which was recognized as a gain on forgiveness of CARES Act loan in 2021. A balance of $21,594 remained after the forgiveness. As of December 31, 2021, the balance remaining was $7,956 and is included in other accrued liabilities. This balance will be paid in 2022.

25Under the supervision and with the participation of our Management, including the Chief Executive Officer and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as such terms are defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation our principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective at December 31, 2022.

~~ELECTRONIC~~Management’s Annual Report on Internal ~~SYSTEMS~~Control ~~TECHNOLOGY,~~over ~~INC~~Financial Reporting.

~~NOTES~~The Company’s management is responsible for TOestablishing ~~FINANCIAL~~and ~~STATEMENTS~~maintaining adequate internal control over financial reporting for the Company. The Company’s internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

~~In February~~As ~~2021,~~of ~~the~~December ~~Company~~31, ~~received~~2022, amanagement ~~second~~conducted ~~loan~~an assessment of ~~$130,255~~the ~~pursuant~~effectiveness toof the ~~PPP.~~Company’s ~~The~~internal ~~loan,~~control ~~which~~over ~~was~~financial inreporting based on the ~~form~~criteria offor aeffective ~~promissory~~internal ~~note,~~control ~~originally~~over ~~had~~financial areporting ~~maturity~~established ~~date~~in of“Internal ~~February~~Control 21— Integrated Framework,” ~~2023~~(2013) ~~and~~issued anby ~~interest~~the ~~rate~~Committee of Sponsoring 1%Organizations ~~per~~(COSO) ~~annum~~of the Treadway Commission. ~~The~~Management, ~~Note~~under ~~could~~the besupervision ~~prepaid~~and bywith the ~~Company~~participation atof the Company’s ~~any~~Chief ~~time~~Executive ~~prior~~Officer toand ~~maturity~~Principal ~~with~~Accounting noOfficer, ~~prepayment~~assessed ~~penalties.~~the ~~The~~effectiveness ~~second~~of ~~loan~~the ~~was~~Company’s ~~forgiven~~internal control over financial reporting as of December 31, 2022 and ~~the~~concluded ~~Company~~that ~~recognized~~we ~~gain~~have onmaintained ~~forgiveness~~effective internal control ofover ~~CARES~~financial ~~Act~~reporting ~~loan~~at ofDecember 31, ~~$130~~2022,~~255~~ ~~during~~based ~~2021~~on the COSO criteria.

~~Under the~~There ~~terms~~have ofbeen no ~~the~~changes ~~PPP,~~in ~~certain amounts of~~ the ~~loans~~company’s ~~may~~internal becontrol ~~forgiven~~over iffinancial ~~they~~reporting ~~are~~during ~~used~~the ~~for~~most ~~qualifying~~recently ~~expenses~~completed asquarter ~~described~~that inhave ~~the CARES~~materially ~~Act.~~affected ~~Qualifying~~or ~~expenses~~are ~~include~~reasonably ~~payroll~~likely ~~costs, costs used~~ to ~~continue~~materially ~~group health care benefits~~affect, ~~mortgage payments, rent, and utilities. As of December 31, 2021,~~ the Company’s ~~has~~internal ~~used~~control ~~funds~~over ~~from~~financial ~~the loans to pay qualifying expenses~~reporting.

~~During the~~Item ~~year ended December 31, 2020, the Company received $9,000 under Division A, Title I, Section 1110 of the CARES Act~~9B. ~~The~~Other ~~Company was not required to pay this amount back and recognized $9,000 as government grant income during 2020~~Information.

26None

~~ELECTRONIC SYSTEMS TECHNOLOGY, INC.~~28

~~DBA ESTEEM~~PART ~~WIRELESS MODEMS~~III

~~SUPPLEMENTAL SCHEDULE~~Item 10. Directors, Executive Officers and Corporate Governance.

~~ELECTRONIC~~IDENTIFICATION ~~SYSTEMS TECHNOLOGY, INC. DBA ESTEEM WIRELESS MODEMS SUPPLEMENTAL SCHEDULE~~ OF ~~OPERATING EXPENSES FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020~~DIRECTORS:

	2021			2020
Advertising	$	7,979		$	6,351
Dues and subscriptions		2,011			4,280
Depreciation		5,169			6,953
Insurance		13,242			12,386
Materials and supplies		12,668			17,630
Office and administration		4,097			5,473
Printing		3,318			1,753
Professional services		138,357			110,191
Services Purchased in lieu of payroll		81,250			-
Rent and utilities		49,662			68,760
Repair and maintenance		8,096			1,643
Salaries and benefits		614,337			611,880
Taxes, licenses & health insurance		183,546			165,232
Telephone		5,968			7,090
Warranty expense		2,867			929
Gain on disposal of assets		-			(785	)
Trade shows		7,631			7,300
Travel expenses		18,955			3,764
		1,159,153			1,030,830
Expenses allocated to cost of sales		(201,499	)		(191,657	)
Total Operating Expenses	$	957,654		$	839,173

The following table sets forth the names and ages of all directors of the Company as of December 31, 2022 as well as the term in office and principal occupation of each director.

Name of Director	Term in Office	Age		Principal Occupation
Daniel Tolley	04/03/2022 – 06/02/23		54	President of Electronic Systems Technology
Vern Kornelsen	06/05/20 – 06/02/23		90	General Partner of EDCO
Thomas Schaefer	06/01/21– 06/01/24		62	Vice President of Online Development Inc.
Donald Siecke	06/01/21 – 06/01/24		82	President of Kelmore Development Corp.
Michael W. Eller	06/07/2019-06/03/2022		62	Principle Accounting Officer of Electronic Systems Technology, Inc.

~~Item 9.~~Management ~~Changes~~believes Inthat ~~and~~there ~~Disagreements~~are ~~with~~no ~~Accountants~~agreements onor understanding ~~Accounting~~between the directors and ~~Financial~~suppliers ~~Disclosure~~or contractors of the Company.

~~None~~Audit Committee

The Audit Committee of the Board of Directors as of December 31, 2022 is comprised of Don Siecke (Chairman) and Tom Schaefer. The Audit Committee met on one occasion in 2022. The Board of Directors has determined that Mr. Siecke is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation 9AS-K promulgated by the SEC. ~~Controls~~The Board’s conclusions regarding the qualifications of Mr. Siecke as an audit committee financial expert were based on his experience as a certified public accountant and ~~Procedures~~his degree in accounting.

~~Disclosure~~The Board has also adopted a charter for the Audit ~~Controls~~Committee. The ~~and~~charter ~~Procedures~~for the audit committee is available on our website at www.esteem.com . The audit committee charter is also available in print to any shareholder who requests it.

~~Under the~~Compensation supervision and with the participation of our Management, including the Chief Executive Officer and Principal Accounting Officer, these positions are currently held by the same individual, we have evaluated the effectiveness of our disclosure controls and procedures (as such terms are defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Principal Accounting Officer have concluded that there was a material weakness affecting our internal control over financial reporting and, as a result of this weakness, our disclosure controls and procedures were not effective as of December 31, 2021.Committee

~~Management’s~~There is no Compensation Committee of the Board of ~~Annual~~Directors. ~~Report~~The onBoard ~~Internal~~of ~~Control~~Directors ~~over~~did ~~Financial~~establish ~~Reporting~~an Employee/Director Stock Option Committee consisting of all Directors. The committee existed for the sole purpose of recommending the recipients and amounts of the Company awarded stock options during 2022. There is no charter for the Employee/Director Stock Option Committee.

~~The Company’s~~Code management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. The Company’s internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.Ethics

~~As of~~On ~~December~~September 3122, ~~2021~~2020, ~~management conducted an assessment of~~ the ~~effectiveness of the~~ Company’s ~~internal~~Board ~~control over financial~~of ~~reporting~~Directors ~~based~~adopted ona ~~the~~Code ~~criteria~~of Ethics for ~~effective~~the ~~internal~~Company. ~~control~~The ~~over~~Codes ~~financial~~of ~~reporting~~Ethics, ~~established~~and inany ~~“Internal~~subsequent ~~Control~~amendments ~~— Integrated Framework~~thereto,” (~~2013)~~other ~~issued~~than bytechnical, administrative, ~~the~~or ~~Committee~~non-substantive ~~of Sponsoring Organizations (COSO~~amendments) ~~of the Treadway Commission. Management~~, ~~under~~ ~~the supervision~~ and ~~with~~any ~~the~~waivers ~~participation~~ of ~~the~~a ~~Company’s~~provision ~~Chief Executive Officer and Principal Accounting Officer, assessed the effectiveness~~ of the ~~Company’s~~Code ~~internal control over financial reporting as~~ of ~~December~~Ethics ~~31,~~for ~~2021~~directors ~~and~~or ~~concluded~~executive ~~that it is ineffective~~officers, ~~in assuring that the financial reports of the Company~~ are ~~free~~available ~~from~~on ~~material~~our ~~errors~~website orat ~~misstatements~~www. ~~The material weakness is as follows:~~esteem.com.

We did not maintain effective controls to ensure appropriate segregation of duties as the same officer and employee was responsible for the initiating and recording of transactions, thereby creating segregation of duties weaknesses. Due to the (1) significance of segregation of duties to the preparation of reliable financial statements, (2) the significance of potential misstatement that could have resulted due to the deficient controls and (3) the absence of sufficient other mitigating controls, we determined that this control deficiency resulted in more than a remote likelihood that a material misstatement or lack of disclosure within the annual or interim financial statements will not be prevented or detected.29

~~Management’s Remediation~~IDENTIFICATION ~~Initiatives~~OF EXECUTIVE OFFICERS

~~Management has~~The ~~evaluated~~following ~~and~~table ~~continues~~sets toforth ~~evaluate,~~the ~~avenues~~names ~~for~~and ~~mitigating our internal controls weaknesses, but mitigating controls have been deemed~~ages toof beall ~~impractical~~executive ~~and~~officers ~~cost prohibitive due to the size~~ of ~~our organization at~~ the ~~current~~Company ~~time.~~as ~~Management does not foresee implementing a cost effective method~~ of ~~mitigating~~December ~~our~~31, ~~internal~~2022; ~~control~~all ~~weaknesses~~positions inby ~~the~~such ~~near~~persons; term. ~~Because~~ of ~~the~~office ~~inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues~~ and ~~instances of fraud, if any, within~~ the ~~Company~~period ~~have been detected. These inherent limitations include the realities~~during ~~that~~which ~~judgments~~he inhas ~~decision~~served ~~making~~as ~~can~~such; ~~be faulty~~ and ~~that~~any ~~breakdowns~~arrangement ~~can occur because of simple error~~ or ~~mistake.~~understanding ~~The~~between ~~design~~him ~~of any system of controls is based in part on certain assumptions about the likelihood of future events,~~ and ~~there can be no assurance that~~ any ~~design will~~other ~~succeed~~person(s) inpursuant ~~achieving~~to ~~its~~which ~~stated~~he ~~goals~~was ~~under all potential future conditions. Projections of any evaluation of controls effectiveness~~elected toas ~~future~~an ~~periods are subject to risks.~~officer:

Changes in internal control over financial reporting.

Name of Officer	Age	Position	Term of Office	Period of Service
Daniel Tolley	54	President and CEO	Employed at will	3/3/2003-Present
Michael Eller	62	CFO/Principal Accounting Officer	Employed at will	9/7/12- Present

~~During the~~The ~~quarter~~following ~~ended~~is ~~December~~a ~~31,~~brief ~~2021,~~description ~~there~~of ~~were~~the nobusiness experience ~~changes~~during in the ~~Company’s~~last ~~internal~~five ~~control~~years ~~over~~of ~~financial~~each ~~reporting~~director ~~that have materially affected,~~ and/or ~~are~~executive ~~reasonably~~officer ~~likely~~of ~~to materially affect,~~ the Company~~’s internal control over financial reporting~~.

~~Item~~DANIEL M. TOLLEY. Mr. Tolley has been employed by 9Bthe company for more than 19 years. ~~Other~~Mr. ~~Information~~Tolley’s duties and responsibilities have increased over that time. Most recently he was the Director of Business Development.

~~None~~VERN D. KORNELSEN. Mr. Kornelsen is the General Partner of EDCO Partners LLLP. Mr. Kornelsen formerly practiced as a certified public accountant in Denver, CO for many years and is a financial consultant to several early stage companies. He was a director of Valleylab for 10 years and led an investor group that provided a portion of its initial funding. Mr. Kornelsen has been a director and participated in the capitalizing of a number of early stage companies, and is currently a director and audit-committee member of a publicly-held company, Encision Inc. of Boulder, CO. He is also the Chairman, Secretary, Director, and CFO of Lifeloc Technologies, Inc., a publicly-held company located in Wheat Ridge, CO.

28THOMAS J. SCHAEFER: Mr. Schaefer is Vice President of Online Development Inc. a division of Softing AG based in Munich, Germany. He is responsible for business development activities and the integration of new business acquisitions. Prior to his current position Tom was President of Phoenix Digital Corporation a privately held company based in Scottsdale, AZ that provides redundant mission critical networking technology for industrial automation systems. Mr. Schaefer also spent 30 years at Rockwell Automation. His last assignment, at Rockwell, was the Global Industry Manager for Rockwell’s Water Industry focus. During Mr. Schaefer’s tenure at Rockwell he held various positions that included P&L responsibility for the Service business unit, Sales and Marketing for Software/MES, and Sales and Application responsibility for the Drive Systems/Power Products group.

~~PART~~DONALD E. SIECKE. Mr. Siecke practiced as a certified ~~III~~public accountant in the state of Colorado from 1963 to 1976. He has been president of Kelmore Development Corp., a real estate development company, since 1981, and serves as the chairman of Redstone Bank, a Colorado bank of which he was a founding director. He is a director of several privately held companies, metropolitan districts, and charitable organizations. He received a BS degree in business administration from the University of Denver in 1961, having majored in accounting.

~~Item~~MICHAEL W. ELLER. Mr. Eller is the CFO and Principal 10Accounting Officer. ~~Directors~~During the last five years Mr. Eller has been a full-time employee of the Company. Until July 1, ~~Executive~~2022 ~~Officers~~Mr. Eller served as President and ~~Corporate~~CEO. ~~Governance~~Prior to joining EST Mr. Eller was employed at Macys Logistics and Operations where he was employed as the Vice President of Operations and Director of Finances. Mr. Eller does not serve as a director for any other company registered under the Securities Exchange Act.

~~IDENTIFICATION OF~~Family ~~DIRECTORS:~~Relationships

~~The following table sets forth the names and ages of all directors of the Company as of December 31, 2020 as well as the term in office and principal occupation of each director~~None.

Name of Director	Term in Office	Age	Principal Occupation
T.L. Kirchner	06/05/20 – 06/02/23	73	Former President of the Company
Vern Kornelsen	06/05/20 – 06/02/23	89	General Partner of EDCO
Thomas Schaefer	06/01/21– 06/01/24	61	Vice President of Online Development Inc.
Donald Siecke	06/01/21 – 06/01/24	81	President of Kelmore Development Corp.
Michael W. Eller	06/07/2019-06/03/2022	61	President of Electronic Systems Technology, Inc.

Section 16(A) Beneficial Ownership Reporting Compliance

~~Management~~During the year ended December 31, 2022 to the knowledge ~~believes~~of ~~that~~Management, there ~~are~~was no ~~agreements~~director, officer, or ~~understanding~~beneficial ~~between~~owner of more than 10% any class of equity securities of the ~~directors~~registrant ~~and~~who failed ~~suppliers~~to orfile ~~contractors~~on a timely basis the required disclosure form as required by Section 16(a) of the ~~Company~~Securities and Exchange Act of 1934.

~~Audit Committee~~30

The Audit Committee of the Board of Directors as of December 31, 2021 is comprised of Don Siecke (Chairman) and Tom Schaefer. The Audit Committee met on one occasion in 2021. The Board of Directors has determined that Mr. Siecke is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K promulgated by the SEC. The Board’s conclusions regarding the qualifications of Mr. Siecke as an audit committee financial expert were based on his experience as a certified public accountant and his degree in accounting. Indemnification

The Company’s By-Laws address indemnification ~~Board~~of ~~has~~Directors ~~also~~and ~~adopted~~Officers. aWashington ~~charter~~Law provides that Washington corporations may include within their Articles of Incorporation provisions eliminating or limiting the personal liability of their directors and officers in shareholder actions brought to obtain damages for alleged breaches of fiduciary duties, as long as the ~~Audit~~alleged ~~Committee~~acts or omissions did not involve intentional misconduct, fraud, a knowing violation of law or payment of dividends in violation of the Washington statutes. ~~The~~ ~~charter~~Washington ~~for~~law also allows Washington corporations to include in their Articles of Incorporation or Bylaws provisions to the ~~audit~~effect ~~committee~~that isexpenses ~~available~~of officers and directors incurred in defending a civil or criminal action must be paid by the corporation as they are incurred, subject to an undertaking on ~~our~~behalf ~~website~~of atthe ~~www.esteem.com~~officer or director .that ~~The~~he ~~audit~~or ~~committee~~she ~~charter~~will repay such expenses if it is ~~also~~ultimately ~~available~~determined by a court of competent jurisdiction that such officer or director is not entitled to be indemnified by the corporation because such officer or director did not act in ~~print~~good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation. The Company’s Articles of Incorporation provide that a director or officer is not personally liable to the Company or its shareholders for damages for any ~~shareholder~~breach ~~who~~of ~~requests~~fiduciary itduty as a director or officer, except for liability for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (ii) the payment of distribution in violation of Washington Business Corporation Act.

~~Compensation Committee~~Related Person Transactions Policy and Procedures

~~There is~~As noset ~~Compensation~~forth ~~Committee~~in the written charter of the ~~Board~~Audit ofCommittee, any ~~Directors.~~related ~~The~~person ~~Board~~transaction ofinvolving ~~Directors~~a ~~did~~Company ~~establish~~director anor ~~Employee/Director~~executive ~~Stock~~officer ~~Option~~must be reviewed and approved by the Audit Committee. ~~consisting~~Any member of ~~all~~the ~~Directors.~~Audit ~~The~~Committee ~~committee~~who ~~existed~~is ~~for~~a ~~the~~related ~~sole~~person ~~purpose~~with ofrespect ~~recommending~~to a transaction under review may not participate in the ~~recipients~~deliberations or ~~and~~vote ~~amounts~~on the approval or ratification of the ~~Company~~transaction. ~~awarded stock~~Related ~~options~~persons ~~during~~include ~~2021.~~any ~~There~~director isor noexecutive ~~charter~~officer, ~~for~~certain ~~the~~shareholders and ~~Employee/Director~~any ~~Stock~~of ~~Option~~their ~~Committee~~“immediate family members” (as defined by SEC regulations).

~~Code of~~Item ~~Ethics~~11. Executive Compensation.

~~On September~~The ~~22, 2020, the~~ Company’s ~~Board~~principal ofexecutive ~~Directors~~officer ~~adopted~~is Daniel ~~a Code of Ethics for the Company~~M. ~~The~~Tolley ~~Codes of Ethics,~~ and ~~any~~principal ~~subsequent amendments~~accounting ~~thereto,~~officer ~~(other~~is ~~than~~Michael ~~technical,~~W. ~~administrative, or non-substantive amendments), and any waivers of a provision of the Code of Ethics for directors or executive officers, are available on our website at www~~Eller.~~esteem.com.~~

~~IDENTIFICATION~~Information concerning the compensation of the Company’s OFprincipal ~~EXECUTIVE~~executive ~~OFFICERS~~officer and principal accounting officer, as well as any other compensated employees of the Registrant’s whose total compensation exceeded $100,000 during 2022 and 2021 is provided in the following Summary Compensation Table (collectively, the “Named Executive Officers” or “NEOs”):

The following table sets forth the names and ages of all executive officers of the Company as of December 31, 2021; 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:

SUMMARY COMPENSATION TABLE

Name and Principal Position (a)	Year (b)		Salary ($) (c)		Bonus ($)(1) (d)	Stock Awards ($) (e)	Option Awards ($)(2) (f)	Non-Equity Incentive Plan Compensation ($) (g)	Change in Pension Value and Non- qualified Deferred Compensation Earnings ($) (h)		All Other Compen- sation ($)(3) (i)		Total ($) (j)
Daniel Tolley	2022	$	117,851	$	4,430	—	—	—	—	$	17,186	$	139,467
President CEO 2021		$	94,450		—	—	—	—	—	$	19,272	$	113,772
Michael W. Eller	2022	$	99,650	$	4,405	—	—	—	—	$	18,827	$	122,882
CFO/Principal Accounting Officer 2021		$	123,500		—	—	—	—	—	$	27,074	$	150,574

Name of Officer	Age	Position	Term of Office	Period of Service
Michael Eller	61	President/CEO/Principal Accounting Officer	Employed at will	9/7/12- Present

(1)

Includes amounts paid under the Non-qualified Employee Profit Sharing Bonus.

29(2) Amount represents the dollar amount recognized for financial statement reporting purposes.

~~The following~~(3) isAll aOther ~~brief~~Compensation ~~description~~consists of ~~the~~Group ~~business~~Health ~~experience~~Insurance, ~~during~~Accrued ~~the~~Vacation ~~last~~Pay ~~five years of each director~~ and~~/or~~ ~~executive~~Company ~~officer~~paid of401(k) ~~the Company~~matching amounts.

~~T.L. KIRCHNER.~~The ~~Mr.~~information ~~Kirchner~~specified isconcerning ~~founder,~~the ~~Past~~stock ~~President~~options of ~~and~~the anamed ~~Director~~executive ofofficers during the ~~Company.~~fiscal ~~Mr.~~years ~~Kirchner~~ended ~~does~~December ~~not~~31, ~~serve~~2021 asand a2022 ~~director~~is ~~for~~provided ~~any~~in ~~other company~~the ~~registered~~following ~~under~~Option/SAR Grants in the ~~Securities~~Last ~~Exchange~~Fiscal ~~Act.~~Year Table:

VERN D. KORNELSEN. Mr. Kornelsen is the General Partner of EDCO Partners LLLP. Mr. Kornelsen formerly practiced as a certified public accountant in Denver, CO for many years and is a financial consultant to several early stage companies. He was a director of Valleylab for 10 years and led an investor group that provided a portion of its initial funding. Mr. Kornelsen has been a director and participated in the capitalizing of a number of early stage companies, and is currently a director and audit-committee member of a publicly-held company, Encision Inc. of Boulder, CO. He is also the Chairman, Secretary, Director, and CFO of Lifeloc Technologies, Inc., a publicly-held company located in Wheat Ridge, CO.

OPTION/SAR GRANTS IN 2022
Individual Grants (5)
(a)	(b)	(c)	(d)	(e)
Name	Number of Securities Underlying Options/SARs Granted # (5)	% of Total Options/SARs Granted to Employees in Fiscal Year	Exercise or base price ($/Share)	Expiration Date
Daniel Tolley	-0-	0%	$0.00	n/a
Michael W. Eller	-0-	0%	$0.00	n/a

~~THOMAS J.~~(5) ~~SCHAEFER:~~This ~~Mr.~~table ~~Schaefer~~does isnot ~~Vice~~include ~~President~~Stock ofOptions ~~Online~~granted ~~Development Inc~~previously. a division of Softing AG based in Munich, Germany. He is responsible for business development activities and the integration of new business acquisitions. Prior to his current position Tom was President of Phoenix Digital Corporation a privately held company based in Scottsdale, AZ that provides redundant mission critical networking technology for industrial automation systems. Mr. Schaefer also spent 30 years at Rockwell Automation. His last assignment, at Rockwell, was the Global Industry Manager for Rockwell’s Water Industry focus. During Mr. Schaefer’s tenure at Rockwell he held various positions that included P&L responsibility for the Service business unit, Sales and Marketing for Software/MES, and Sales and Application responsibility for the Drive Systems/Power Products group.

DONALD E. SIECKE. Mr. Siecke practiced as a certified public accountant in the state of Colorado from 1963 to 1976. He has been president of Kelmore Development Corp., a real estate development company, since 1981, and serves as the chairman of Redstone Bank, a Colorado bank of which he was a founding director. He is a director of several privately held companies, metropolitan districts, and charitable organizations. He received a BS degree in business administration from the University of Denver in 1961, having majored in accounting.31

~~MICHAEL W.~~The ~~ELLER.~~information ~~Mr.~~specified ~~Eller~~concerning is the ~~President~~stock ~~and Principal Accounting Officer. During the last five years Mr. Eller has been a full-time employee~~options of the ~~Company.~~named ~~Prior~~executive toofficers ~~joining~~during ~~EST~~the ~~Mr.~~fiscal ~~Eller~~year ~~was~~ended ~~employed~~December at31, ~~Macys~~2021 ~~Logistics~~is ~~and~~provided ~~Operations~~in ~~where~~the hefollowing ~~was~~Aggregated ~~employed~~Option/SAR asExercises in ~~the~~Last ~~Vice~~Fiscal ~~President of~~Year ~~Operations~~ and ~~Director~~Fiscal ofYear-End ~~Finances.~~Options/SAR ~~Mr.~~Values ~~Eller does not serve as a director for any other company registered under the Securities Exchange Act.~~Table:

Family Relationships

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Option Awards						Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)
Daniel Tolley	30,000	0	0	$0.40	3/13/25	0	0	0	0
Michael W. Eller	40,000	0	0	$0.40	3/13/25	0	0	0	0

~~None~~The Company does not currently have a Long-Term Incentive Plan (“LTIP”).

~~Section 16(A) Beneficial Ownership Reporting Compliance~~32

~~During the~~Compensation ~~year~~to ~~ended~~outside ~~December~~directors ~~31,~~is ~~2021~~limited to reimbursement of out-of-pocket expenses that are incurred in connection with the ~~knowledge~~directors’ duties associated with the Company’s business. The Board of ~~Management,~~Directors ~~there~~approved ~~was~~a nostipend ~~director,~~for ~~officer,~~members orthat ~~beneficial~~are ~~owner~~not ofemployed ~~more~~by ~~than~~the ~~10% any~~Company ~~class~~in the amount of ~~equity~~$375 ~~securities~~per quarter of service on the ~~registrant~~Board ~~who~~of ~~failed~~Directors. toThere ~~file~~is oncurrently ano ~~timely~~other ~~basis~~compensation arrangements for the ~~required~~Company’s ~~disclosure~~directors. ~~form~~(See as“Security Ownership ~~required~~of byCertain ~~Section 16(a~~Beneficial Owners and Management” for Stock Options granted in previous years.) The information specified concerning items of Director Compensation for the ~~Securities~~fiscal ~~and~~year ~~Exchange~~ended ~~Act~~December of31, ~~1934.~~2022 is provided in the following Director Compensation Table:

Indemnification

DIRECTOR COMPENSATION
Name (1)	Fees Earned or Paid in Cash ($)(2)	Stock Awards ($)	Option Awards ($)(3)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation ($)	All Other Compensation ($)(4)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
T.L. Kirchner	$625	$0	$0	$0	$0	$0	$625
Vern Kornelsen	$1,500	$0	$0	$0	$0	$0	$1,500
Thomas Schaefer	$1,500	$0	$0	$0	$0	$0	$1,500
Donald Siecke	$1,500	$0	$0	$0	$0	$0	$1,500
Michael W. Eller	$0	$0	$0	$0	$0	$0	$0
Daniel M. Tolley	$0	$0	$0	$0	$0	$0	$0

~~The Company’s~~(1) ~~By-Laws~~Compensation ~~address~~information indemnification of Directors and Officers. Washington Law provides that Washington corporations may include within their Articles of Incorporation provisions eliminating or limiting the personal liability of their directors and officers in shareholder actions brought to obtain damages for ~~alleged~~Dan ~~breaches of fiduciary duties~~Tolley, asPresident ~~long~~and asCEO ~~the~~and ~~alleged~~Michael ~~acts or omissions did not involve intentional misconduct~~Eller, ~~fraud,~~CFO a knowing violation of law or payment of dividends in violation of the Washington statutes. Washington law also allows Washington corporations to include in their Articles of Incorporation or Bylaws provisions to the effect that expenses of officers and ~~directors~~Principal ~~incurred~~Accounting inOfficer ~~defending a civil or criminal action must be paid by the corporation as they are incurred, subject to an undertaking on behalf of the officer or director that he or she will repay such expenses if it~~ is ~~ultimately~~contained ~~determined by a court of competent jurisdiction that such officer or director is not entitled to be indemnified by the corporation because such officer or director did not act~~ in ~~good faith and in a manner reasonably believed to be in or not opposed to~~ the ~~best~~Executive ~~interests~~Compensation ofSummary ~~the~~Compensation ~~corporation~~Table. The Company’s Articles of Incorporation provide that a director or officer is not personally liable to the Company or its shareholders for damages for any breach of fiduciary duty as a director or officer, except for liability for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (ii) the payment of distribution in violation of Washington Business Corporation Act.

30(2) Amount represents the Director Stipend paid in 2022.

~~Related Person~~(3) ~~Transactions~~Amount ~~Policy~~represents ~~and~~the ~~Procedures~~dollar amount recognized for financial statement reporting purposes. Assumptions made in the valuation of stock option awards are disclosed in Note 7 of the Notes to the Financial Statements in this Form 10-K.

~~As set~~(4) ~~forth~~Amounts inrepresent ~~the~~reimbursement ~~written charter~~ of ~~the Audit Committee, any related person transaction involving a Company director or executive officer must be reviewed and approved by the Audit Committee. Any member~~ out-of-pocket ~~the~~expenses ~~Audit Committee who is a~~ related ~~person with respect~~ to adirectors’ ~~transaction under~~duties ~~review~~associated ~~may~~with ~~not participate in~~ the ~~deliberations~~Company’s orbusiness ~~vote on the approval or ratification of the transaction~~(ie. ~~Related~~travel ~~persons~~expenses ~~include any~~for ~~director~~attending orCompany ~~executive~~Director’s ~~officer, certain shareholders and any of their “immediate family members” (as defined by SEC regulations~~Meetings).

~~Item~~The Company currently does not hold any Employment ~~11.~~Contracts ~~Executive~~or ~~Compensation~~Change of Control Arrangements with any parties.

~~The Company’s~~Option ~~principal~~Exercises ~~executive officer and principal accounting officer is Michael W. Eller.~~

~~Information concerning~~During ~~the~~our ~~compensation~~fiscal ofyear ~~the~~ended ~~Company’s~~December ~~principal executive officer and principal accounting officer~~31, ~~as well as any other compensated employees of the Registrant’s whose total compensation exceeded $100~~2022,~~000~~ ~~during~~there ~~2021~~were ~~and~~no ~~2020~~options ~~is provided in the following~~exercised ~~Summary~~by ~~Compensation~~our ~~Table~~executive ~~(collectively,~~officer ~~the “Named Executive Officers”~~ or ~~“NEOs”):~~Directors.

SUMMARY COMPENSATION TABLE
Name and Principal Position (a)	Year (b)	Salary ($) (c)	Bonus ($)(1) (d)	Stock Awards ($) (e)	Option Awards ($)(2) (f)	Non-Equity Incentive Plan Compensation ($) (g)	Change in Pension Value and Non- qualified Deferred Compensation Earnings ($) (h)	All Other Compen- sation ($)(3) (i)	Total ($) (j)
Michael W. Eller President CEO/Principal Accounting Officer	2021	$123,500	-	-	-	-	-	$27,074	$150,574
	2020	$121,700	-	-	-	-	-	$24,200	$145,900

Summary of Executive Employment Agreements

~~(1)~~There ~~Includes~~are ~~amounts~~no ~~paid~~executive ~~under~~employment ~~the~~agreements ~~Non-qualified~~with any ~~Employee Profit Sharing Bonus~~officer.

~~(2)~~Item ~~Amount~~12. ~~represents~~Security ~~the~~Ownership ~~dollar~~of ~~amount~~Certain ~~recognized~~Beneficial ~~for~~Owners ~~financial~~and ~~statement~~Management ~~reporting~~and ~~purposes~~Related Stockholder Matters.

~~(3)~~SECURITY ~~All~~OWNERSHIP ~~Other~~OF ~~Compensation~~CERTAIN ~~consists~~BENEFICIAL ~~of Group Health Insurance, Accrued Vacation Pay and Company paid 401(k) matching amounts.~~OWNERS

The ~~information~~ ~~specified~~following ~~concerning~~table ~~the~~sets ~~stock~~forth, ~~options~~as of December 31, 2022, the ~~named~~amount ~~executive~~and ~~officers~~percentage ~~during~~of the ~~fiscal~~Common ~~years~~Stock ~~ended~~of ~~December~~the 31Company, ~~2020~~which ~~and 2021~~according to information supplied by the Company, is ~~provided~~beneficially owned inby each person who, to the ~~following~~best ~~Option/SAR~~knowledge ~~Grants~~of inthe Company, is the ~~Last~~beneficial ~~Fiscal~~owner ~~Year~~(as ~~Table:~~defined below) of more than five (5%) of the outstanding common stock.

OPTION/SAR GRANTS IN 2020
Title of Class	Name & Address of Beneficial Owner (1)	Amount & Nature of Beneficial Ownership	Percent of Class
Individual Grants (5)
Common	EDCO Partners LLLP 4605 Denice Drive Englewood CO 80111	1,797,700	36.3%
(a)	(b)	(c)	(d)	(e)
Name	Number of Securities Underlying Options/SARs Granted # (5)	% of Total Options/SARs Granted to Employees in Fiscal Year	Exercise or base price ($/Share)	Expiration Date
Michael W. Eller	-0-	0%	$0.00	n/a

(51) ~~This~~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 ~~does~~gives ~~not~~effect ~~include~~to shares deemed beneficially owned under Rule 13d-3 based on the information supplied to the Company. To the knowledge of the Company, the persons named in the table have sole voting power and investment power with respect to all shares of Common Stock ~~Options~~beneficially ~~granted~~owned ~~previously~~by them.

3133

~~The information~~SECURITY ~~specified~~OWNERSHIP ~~concerning~~OF the stock options of the named executive officers during the fiscal year ended December 31, 2021 is provided in the following Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Options/SAR Values Table:MANAGEMENT

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Option Awards						Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)
Michael W. Eller	40,000	0	0	$0.40	3/13/25	0	0	0	0

The following table sets forth, as of February 13, 2023, 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.

The Company does not currently have a Long-Term Incentive Plan (“LTIP”).

Name/Address of Beneficial Owner (1)	Title of Class	Amount & Nature of Beneficial Ownership	Percent of Class
Daniel Tolley (Officer)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	32,200(3)	0.7%
Vern Kornelsen (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	1,797,700	36.3%
Thomas Schaefer (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	-	-
Donald Siecke (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	-(2)	-
Michael W. Eller (Officer)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	40,000 ⁽¹⁾	0.8%
All Officers and Directors as a group	Common	2,241,188	37.8%

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. The Board of Directors approved a stipend for members that are not employed by the Company in the amount of $375 per quarter of service on the Board of Directors. 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.~~1) ~~The~~Includes ~~information specified concerning items of Director Compensation for the fiscal year ended December 31~~40,000 ~~2021~~stock ~~is provided~~options inissued ~~the following Director Compensation Table:~~3/15/2020.

DIRECTOR COMPENSATION
Name (1)	Fees Earned or Paid in Cash ($)(2)	Stock Awards ($)	Option Awards ($)(3)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation ($)	All Other Compensation ($)(4)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
T.L. Kirchner	$1,500	$0	$0	$0	$0	$0	$1,500
Vern Kornelsen	$1,500	$0	$0	$0	$0	$0	$1,500
Thomas Schaefer	$1,500	$0	$0	$0	$0	$0	$1,500
Donald Siecke	$1,500	$0	$0	$0	$0	$0	$1,500
Michael W. Eller	$0	$0	$0	$0	$0	$0	$0

(2)

Mr. Siecke does not own any shares directly. However, EDCO Partners LLLC, of which Mr. Siecke is a limited partner, holds 498,916 shares on his behalf.

(1)3 ~~Compensation~~Includes ~~information for Michael Eller~~30,000 ~~President~~stock ~~and~~options ~~Principal~~issued ~~Accounting Officer is contained in the Executive Compensation Summary Compensation Table~~3/15/2020.

~~(2)~~On ~~Amount~~various ~~represents~~dates, the ~~Director~~Company’s ~~Stipend~~Board ~~paid~~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 ~~2021~~blocks of less than 5,000 shares. Options not exercised expire five years after approval date or 30 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 if one of the foregoing events occurs 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.

(3) Amount represents the dollar amount recognized for financial statement reporting purposes. Assumptions made in the valuation of stock option awards are disclosed in Note 7 of the Notes to the Financial Statements in this Form 10-K.34

~~(4)~~Recipients ~~Amounts represent reimbursement~~ of ~~out-of-pocket~~Stock ~~expenses~~Options ~~related~~currently tounexpired ~~directors’~~as of ~~duties~~December ~~associated~~31, ~~with~~2022 ~~the~~were ~~Company’s~~as ~~business (ie. travel expenses for attending Company Director’s Meetings).~~follows:

The Company currently does not hold any Employment Contracts or Change of Control Arrangements with any parties.

Name	Option Shares		Exercise Price Per Share ($)
Grant Date: 3-15-2020
Alan B. Cook		25,000		0.40
Neil Helfeldt		25,000		0.40
Eric P. Marske		30,000		0.40
Dan Tolley		30,000		0.40
Michael Eller		40,000		0.40
Total		150,000		0.40

Name	Option Shares		Exercise Price Per Share ($)
Grant Date: 9-1-2021
Peri M. Olson		30,000		0.40
Total		30,000		0.40

~~Option~~Stock options must be exercised within 90 days after ~~Exercises~~termination of employment/board membership. On September 1, 2021, the Board of Directors granted 60,000 options to employees. The new options have an exercise price of $0.40, a term of 5 years, and vested immediately.

~~During our~~On ~~fiscal~~March ~~year~~13, ~~ended~~2020, ~~December~~the 31Board of Directors canceled all 120,000 ~~2021~~outstanding stock options that were granted on August 7, ~~there~~2017 and were nodue ~~options~~to ~~exercised~~expire byon ~~our~~August ~~executive~~6, ~~officer~~2020. orIn addition, the Board of Directors granted 180,000 options to employees. The new options have an exercise price of $0.40, a term of 5 years, and vested immediately. At December 31, 2020, there were 180,000 options outstanding and exercisable.

~~Summary of~~Changes ~~Executive~~in ~~Employment~~Control: ~~Agreements~~

~~There are~~The Board of Directors is aware of no ~~executive~~circumstances ~~employment~~which ~~agreements~~may ~~with~~result ~~any~~in a ~~officer~~change of control of the Company.

~~Item 12. Security Ownership of~~ Certain ~~Beneficial~~Business ~~Owners and Management and Related Stockholder Matters.~~Relationships:

~~SECURITY~~There have been no unusual business relationships ~~OWNERSHIP~~during OFthe ~~CERTAIN~~last ~~BENEFICIAL~~fiscal ~~OWNERS~~year of the Registrant between the Company and affiliates as described in Item 404 (b) (1-6) of Regulation S-K.

~~The following~~Indebtedness ~~table sets forth, as~~ of December 31, 2021, 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.Management:

Title of Class	Name & Address of Beneficial Owner (1)	Amount & Nature of Beneficial Ownership	Percent of Class
Common	EDCO Partners LLLP 4605 Denice Drive Englewood CO 80111	1,797,700	36.3%
Common	T.L. Kirchner 415 N. Roosevelt St. Kennewick WA 99336	403,488	8.2%

No Director or executive officer or nominee for Director, or any member of the immediate family of such has been indebted to the Company during the past year.

~~SECURITY OWNERSHIP~~TRANSACTIONS OFWITH MANAGEMENT AND OTHERS

The following table sets forth, as of February 13, 2022, 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 CompanyNone.

Name/Address of Beneficial Owner (1)	Title of Class	Amount & Nature of Beneficial Ownership	Percent of Class
T.L. Kirchner (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	403,488	8.2%
Vern Kornelsen (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	1,797,700	36.3%
Thomas Schaefer (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	-	-
Donald Siecke (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	-(2)	-
Michael W. Eller (Officer)/415 N. Roosevelt St., STE B1 Kennewick, WA	Common	40,000 (1)	0.8%
All Officers and Directors as a group	Common	2,241,188	45.3%

~~(1)~~Item ~~Includes~~14. ~~40,000~~Principal ~~stock~~Accounting ~~options~~Fees ~~issued~~and ~~3/15/2020~~Services.

~~(2)~~AUDIT ~~Mr.~~AND ~~Siecke~~NON-AUDIT ~~does not own any shares directly. However, EDCO Partners LLLC, of which Mr. Siecke is a limited partner, holds 498,916 shares on his behalf.~~FEES

33The following table presents fees billed to us during December 31, 2022 and 2021 for professional services provided by Assure CPA.

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 five years after approval date or 30 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 if one of the foregoing events occurs 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.

Year Ended	December 31, 2022		December 31, 2021
Audit fees (1)	$	43,100	$	39,450
Audit-related fees (2)		—		—
Tax fees (3)		3,000		3,000
All other fees (4)		—		—
Total Fees	$	46,100	$	42,450

~~Recipients~~ (1) Audit fees consist of ~~Stock~~fees ~~Options~~billed ~~currently~~for ~~unexpired~~professional asservices provided in connection with the audit of ~~December~~the ~~31,~~Company’s ~~2021~~financial ~~were~~statements asand ~~follows:~~reviews of our quarterly financial statements.

Name	Option Shares	Exercise Price Per Share ($)
Grant Date: 3-15-2020
Alan B. Cook	25,000	0.40
Neil Helfeldt	25,000	0.40
Eric P. Marske	30,000	0.40
Dan Tolley	30,000	0.40
Ajay Nagadeep Muniyappa	30,000	0.40
Michael Eller	40,000	0.40
Total	180,000	0.40

(2)

Audit-related fees consist of assurance and related services that include, but are not limited to, internal control reviews, attest services not required by statute or regulation and consultation concerning financial accounting and reporting standards.

Name	Option Shares	Exercise Price Per Share ($)
Grant Date: 9-1-2021
Joel J. Austin	30,000	0.40
Peri M. Olson	30,000	0.40
Total	60,000	0.40

(3)

Tax fees consist of the aggregate fees billed for professional services for tax compliance, tax advice, and tax planning. These services include preparation of federal income tax returns.

~~Stock options~~(4) ~~must~~All beother ~~exercised~~fees ~~within~~consist 90of ~~days~~fees ~~after~~billed ~~termination~~for ofproducts ~~employment/board~~and ~~membership.~~services Onother ~~September~~than ~~1, 2021,~~ the ~~Board~~services ofreported ~~Directis granted 60,000 options to employees~~above. ~~The new options have an exercise price of $0.40, a term of 5 years, and vested immediately~~

~~On March~~Our ~~13,~~Audit ~~2020,~~Committee reviewed the ~~Board~~audit ofand ~~Directors~~tax ~~canceled~~services rendered ~~all~~by ~~120,000~~Assure ~~outstanding~~CPA ~~stock~~and ~~options~~concluded that such services were ~~granted~~compatible onwith ~~August~~maintaining 7,the ~~2017~~auditors’ ~~and~~independence. ~~were~~All ~~due~~audit, tonon-audit, ~~expire~~tax onservices, ~~August~~and 6,other ~~2020.~~services Inperformed ~~addition,~~by ~~the~~our ~~Board~~independent ofaccountants ~~Directors~~are ~~granted~~pre-approved ~~180,000~~by ~~options~~our Audit Committee to ~~employees~~assure that such services do not impair the auditors’ independence from us. ~~The~~We ~~new~~do ~~options~~not ~~have~~use anAssure ~~exercise price~~CPA offor $0financial information system design and implementation.40 These services, which include designing or implementing a ~~term~~system ofthat 5aggregates ~~years,~~source ~~and~~data ~~vested~~underlying ~~immediately.~~the Atfinancial statements ~~December~~or ~~31,~~generates ~~2020,~~information ~~there~~that ~~were~~is ~~180~~significant to our financial statements,~~000~~ ~~options~~are ~~outstanding~~provided ~~and~~internally. ~~exercisable~~We do not engage Assure CPA to provide compliance outsourcing services.

~~Changes in~~PART ~~Control:~~ IV

~~The Board~~Item of15. ~~Directors~~Exhibits isand ~~aware~~Financial ofStatement ~~no circumstances which may result in a change of control of the Company~~Schedules.

~~Certain~~Documents filed as part of this report on Form 10-K ~~Business~~or ~~Relationships~~incorporated by reference:

~~There have~~(1) ~~been~~Our nofinancial ~~unusual~~statements ~~business~~can ~~relationships~~be ~~during~~found ~~the last fiscal year of the Registrant between the Company and affiliates as described~~ in Item ~~404~~8 ~~(b) (1-6)~~ of ~~Regulation~~this ~~S-K~~report.

~~Indebtedness of~~(2) ~~Management:~~Financial Statement Schedules (omitted because they are either not required, are not applicable, or the required information is disclosed in the notes to the financial statements or related notes).

~~No Director~~The orfollowing ~~executive~~exhibits ~~officer~~are orfiled ~~nominee~~with ~~for~~this ~~Director,~~Annual Report oron ~~any~~Form 10-K. ~~member~~Certain ofexhibits ~~the~~have ~~immediate~~been ~~family~~previously offiled ~~such~~with ~~has~~the ~~been~~Securities ~~indebted~~and toExchange ~~the~~Commission ~~Company during~~and ~~the~~are ~~past~~incorporated by ~~year~~reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

EXHIBIT NUMBER	DESCRIPTION
3.1	Articles of Incorporation filed as Exhibit 2.1 to Form S-18, Registration Statement No. 2-92949-S, filed November 5, 1984 **
3.2	Amended Articles of Incorporation of the Registrant, filed as Exhibit (c) to Form 8-K, filed March 15, 1985 **
3.3	By-Laws filed as Exhibit 2.1 to Form S-18, Registration Statement No. 2-92949-S, filed November 5, 1984 **
3.4	Amendments to By-Laws filed as Exhibit (c) to Form 8-K, filed March 15, 1985 **
4	Instrument defining the rights of security holders including indentures. Exhibit II Form S-18 Registration Statement No. 2-92949-S is incorporated herein by reference. Form 8A Registration Statement, 000-27793, dated October 25, 1999 **
31.1	Section 302 Certification, CEO
31.2	Section 302 Certification, CFO
32.1	Section 906 Certification, CEO
32.2	Section 906 Certification, CFO
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

~~TRANSACTIONS WITH~~** ~~MANAGEMENT~~Incorporated ~~AND~~by ~~OTHERS~~reference

~~None.~~36

34SIGNATURES

~~Item~~In accordance with Section 13 or 15(d) of the Exchange ~~14.~~Act, ~~Principal~~the ~~Accounting~~Registrant ~~Fees~~has ~~and~~caused ~~Services~~this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~AUDIT AND~~ELECTRONIC ~~NON-AUDIT~~SYSTEMS ~~FEES~~TECHNOLOGY, INC.

~~The following~~By: ~~table~~/s/ ~~presents~~Daniel ~~fees~~M. ~~billed~~Tolley toDaniel usM. ~~during December 31~~Tolley, ~~2021~~President ~~and 2020 for professional services provided by Assure CPA~~ (~~formerly DeCoria~~Principal ~~Maichel~~Executive &Officer, ~~Teague~~Director).

Year Ended	December 31, 2021	December 31, 2020
Audit fees (1)	$39,450	$39,450
Audit-related fees (2)	-	-
Tax fees (3)	3,000	3,000
All other fees (4)	-	-
Total Fees	$42,450	$42,450

Date: March 15, 2023

~~(1)~~By: ~~Audit fees consist of fees billed for professional services provided in connection with the audit of the Company’~~/s/ ~~financial~~Michael ~~statements~~W. ~~and~~Eller ~~reviews~~Michael ofW. ~~our~~Eller, ~~quarterly~~President ~~financial~~(Principal ~~statements.~~Accounting Officer)

~~(2)~~Date: ~~Audit-related~~March ~~fees consist of assurance and related services that include~~15, ~~but are not limited to, internal control reviews, attest services not required by statute or regulation and consultation concerning financial accounting and reporting standards.~~2023

~~(3)~~In ~~Tax~~accordance ~~fees~~with ~~consist~~the ofExchange ~~the~~Act, ~~aggregate~~this ~~fees~~Report ~~billed~~has been ~~for~~signed ~~professional~~below ~~services~~by ~~for~~the ~~tax~~following ~~compliance,~~persons ~~tax~~on ~~advice,~~behalf ~~and~~of ~~tax~~the ~~planning.~~Registrant ~~These~~and ~~services~~in ~~include~~the ~~preparation~~capacities ofand ~~federal~~on ~~income~~the ~~tax~~dates ~~returns~~indicated.

(4) All other fees consist of fees billed for products and services other than the services reported above.

Signature	Title	Date

/s/ VERN KORNELSEN	Director	March 15, 2023
Vern D. Kornelsen

/s/ THOMAS SCHAEFER	Director	March 15, 2023
Thomas Schaefer

/s/ DONALD SIECKE	Director	March 15, 2023
Don Siecke

Our Audit Committee reviewed the audit and tax services rendered by Assure CPA and concluded that such services were compatible with maintaining the auditors’ independence. All audit, non-audit, tax services, and other services performed by our independent accountants are pre-approved by our Audit Committee to assure that such services do not impair the auditors’ independence from us. We do not use Assure CPA for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally. We do not engage Assure CPA to provide compliance outsourcing services.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

Documents filed as part of this report on Form 10-K or incorporated by reference:

(1) Our financial statements can be found in Item 8 of this report.

(2) Financial Statement Schedules (omitted because they are either not required, are not applicable, or the required information is disclosed in the notes to the financial statements or related notes).

The following exhibits are filed with this Annual Report on Form 10-K. Certain exhibits have been previously filed with the Securities and Exchange Commission and are incorporated by reference.

EXHIBIT NUMBER	DESCRIPTION
3.1	Articles of Incorporation filed as Exhibit 2.1 to Form S-18, Registration Statement No. 2-92949-S, filed November 5, 1984 **
3.2	Amended Articles of Incorporation of the Registrant, filed as Exhibit (c) to Form 8-K, filed March 15, 1985 **
3.3	By-Laws filed as Exhibit 2.1 to Form S-18, Registration Statement No. 2-92949-S, filed November 5, 1984 **
3.4	Amendments to By-Laws filed as Exhibit (c) to Form 8-K, filed March 15, 1985 **
4	Instrument defining the rights of security holders including indentures. Exhibit II Form S-18 Registration Statement No. 2-92949-S is incorporated herein by reference. Form 8A Registration Statement, 000-27793, dated October 25, 1999 **
31.1	Section 302 Certification, CEO
31.2	Section 302 Certification, CFO
32.1	Section 906 Certification, CEO
32.2	Section 906 Certification, CFO
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

** Incorporated by reference

SIGNATURES

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.

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

By: /s/ Michael W. Eller Michael W. Eller, President (Principal Executive Officer, Director)

Date: March 2, 2022

By: /s/ Michael W. Eller Michael W. Eller, President (Principal Accounting Officer)

Date: March 2, 2022

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.

Signature	Title	Date
/s/ VERN KORNELSEN	Director	March 2, 2022
Vern D. Kornelsen
/s/ THOMAS SCHAEFER	Director	March 2, 2022
Thomas Schaefer
/s/ DONALD SIECKE	Director	March 2, 2022
Don Siecke

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