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 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

 For the fiscal year ended: December 31, 2023

 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:

 (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 has filed a report on and
attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes o
No x

 If securities are registered pursuant to Section 12(b) of the Act, indicate
by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements. Yes o No x

 Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during
the relevant period pursuant to §240.10D-1(b). Yes o No x

 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 $ 764,151, based on the reported last sale price of Common Stock on June 30, 2023, 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 6, 2024: 4,946,502 shares.

 ELECTRONIC SYSTEMS TECHNOLOGY INC.

 FORM 10-K

 Item 1. Business.

 Item 1A. Risk Factors.

 Item 1B. Unresolved Staff Comments.

 Item 1C. Cybersecurity.

 Item 2. Properties.

 Item 3. Legal Proceedings.

 Item 4. Mine Safety Disclosure.

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Item 6.[Reserved].

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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

 Item 8. Financial Statements and Supplementary Data.

 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

 Item 9A. Controls and Procedures.

 Item 9B. Other Information.

 Item 10. Directors, Executive Officers and Corporate Governance.

 Item 11. Executive Compensation.

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

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

 Item 14. Principal Accounting Fees and Services.

 Item 15. Exhibits and Financial Statement Schedules.

 SIGNATURES

 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 ended December 31, 2023. 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 40 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 2023 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 Technology Partner 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 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

 64.8 Kbps

 Ethernet/RS-232

 195M

 Narrow Band Licensed

 150 to 174

 12.5 Kbps

 Ethernet/RS-232/422/485

 195C

 Narrow Band Licensed

 450 to 470

 12.5 Kbps

 Ethernet/RS-232/422/485

 195H

 Narrow Band Licensed

 217 to 220

 50 Kbps

 Ethernet/RS-232/422/485

 Horizon900

 Unlicensed

 72.2 Mbps

 Horizon2.4MIMO

 Unlicensed

 2400

.5 (Dual Stream)

 300 Mbps

 5-7

 Horizon4.9

 Licensed

 4900

 72.2 Mbps

 5-7

 Horizon5.8

 Unlicensed

 5800

.250 (Dual Stream)

 300 Mbps

 5-7

 Edge900

 Unlicensed

.25

 1 Mbps

 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 expenditures for
new product development and improvements of existing products for 2023 and 2022 were $121,896 and $163,189 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 2023 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 2023 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 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 $55,636.

 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.

 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.

 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 45% of the Company's inventory
at December 31, 2023, 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 submit 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, 2023, we employ 8 persons on a
full-time basis (5 in sales/marketing, 2 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.

 The market for our Common Stock is limited and
our shareholders may have difficulty reselling their shares when desired or at attractive market prices. Our stock price and our listing
may make it more difficult for our shareholders to resell shares when desired or at attractive prices. 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. Unresolved Staff Comments.

 None.

 Item 1C. Cybersecurity.

 The Company
employs several strategies for assessing, identifying, and managing material risks from cybersecurity threats. Components of this strategy
include the use of industry standard traffic monitoring tools, training users to detect, report, and prevent unusual behavior.

 We employ
continuous monitoring mechanisms to detect and respond to cybersecurity threats promptly. Regular reports are generated as needed for
management and the board, providing insights into our cybersecurity posture, incidents, and remediation efforts. We conduct regular
assessments and testing to ensure the effectiveness of these controls, especially those related to the protection of financial information.
The implementation and management of these processes are integrated with the Company's overall operational risk management processes
that seeks to limit our exposure to unnecessary risks across our operations.

 Our
cybersecurity program is overseen by the Chief Financial Officer (CFO), who reports directly to the Chief Executive Officer (CEO) and
updates the Board of Directors (BOD) on cyber security matters.

 Our employees
receive regular training on cybersecurity best practices, emphasizing the protection of financial information. We foster a culture of
cybersecurity awareness and responsibility throughout the organization.

 We maintain a comprehensive incident response
plan that outlines the steps to be taken in the event of a cybersecurity incident. This plan includes procedures for promptly reporting
material incidents to the SEC, as required, and for communicating with affected stakeholders. Upon discovery of a cybersecurity incident,
the identifying party immediately notifies the Company's CFO. The CFO activates the incident response plan to include the following:

 •
 Gather preliminary information about the cybersecurity incident.

 •
 CFO notifies the CEO and the Board of Directors of the cybersecurity threat.

 •
 The CFO allocates resources for disclosure if determined to be a material cybersecurity event.

 •
 The CFO consults with cybersecurity consultants and other involved parties to identify the undesirable
effects of the cybersecurity incident.

 •
 The CFO develops a recommendation for determination of materiality.

 •
 If disclosure is required, the material incident disclosure plan is executed by the CFO.

 Item 2. Properties.

 We do not own any real property, plants, mines, or
any other materially important physical 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, 2023, the total
monthly lease cost, including tax, is $3,925. The lease initially covered a period of two years, expiring September 2024.

 We also own miscellaneous assets, such as computer
equipment, laboratory equipment, and furnishings. We maintain insurance in such amounts and covering such losses, contingencies and occurrences
deemed adequate to protect our property. Insurance coverage includes a comprehensive liability policy covering legal liability for bodily
injury or death of persons, and for property owned by, or under 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 3. Legal Proceedings.

 EST is not a party to any material legal proceedings,
and, to management's knowledge, no such proceedings are threatened or contemplated.

 Item 4. Mine Safety Disclosure.

 Not Applicable

 Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.

 The closing price for our Common Stock (ELST) on the
OTCQB was $0.28 on February 27 2024.

 There were 329 holders of record of our Common Stock
as of February 6, 2024.

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

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

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.

 Management's discussion and analysis is provided
as supplement to, and is intended to be read in conjunction with, the Company's audited financial statements and the accompanying
integral notes ("Notes") thereto. The following statements may be forward-looking in nature and actual results may differ
materially.

 RESULTS OF OPERATIONS

 GENERAL: We specialize in the manufacturing and development
of data radio products. The Company 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.

 FISCAL YEAR 2023 vs. FISCAL YEAR 2022

 GROSS REVENUES: Total revenues for the fiscal year
2023 were $1,544 821 reflecting a decrease of 19.1% from $1,910,061 in gross revenues for fiscal year 2022. During the year ended December
31, 2023, one customer's sales accounted for more than 10% of the total sales revenues. The decrease in total revenues is the result
of decreased product sales during 2023. Domestic Sales for the fiscal year were $1,488,685 compared to $1,697,261 in 2022. Sales to Foreign
Customers for the fiscal year were $56,137 compared to $212,800 in 2022. Product sales decreased to $1,517,921 in 2023, as compared to
2022 sales of $1,881,661, reflecting a decrease of 19.3%.

 Interest revenues during 2023 increased to $23,151
from 2022 level of $5,217 due to the increased interest rates for the certificates of deposit held by the Company held during 2023. Other
income was $0 for the current year compared to $63,000 in 2022 for the employee retention tax credit.

 As of December 31, 2023, the Company had sales backlog
of $55,636. The Company's customers generally place orders on an "as needed basis". Shipment of 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 designed equipment for specific customer applications.

 COST OF SALES: Cost of Sales, as a percentage of net
sales, was 48.5% and 46.1% respectively, for 2023 and 2022. 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.

 INVENTORY: The Company's year-end inventory
values for 2023 and 2022 were as follows:

 2023

 2022

 Parts

 $
 118,472

 $
 172,190

 Work in progress

 313,597

 336,298

 Finished goods

 290,388

 216,990

 TOTAL

 $
 722,457

 $
 725,478

 The Company's objective is to maintain inventory
levels as low as possible to provide maximum cash liquidity, while at the same time meet production and delivery requirements. Inventory
levels were increased during the year due to concerns with regards to supply chain issues with long-lead time items.

 OPERATING EXPENSES: Operating expenses increased to
$979,648 in 2023 from 2022 levels of $950,338. Significant changes in expenses are comprised of the following components: increases in
salaries and benefits $30,236, travel $13,116, and professional services $10,827, offset by decrease in services purchased ($45,875).

 LIQUIDITY AND CAPITAL RESOURCES

 The Company's revenues and expenses resulted
in a net loss of $160,783 for 2023, a decrease from net income of $146,531 for 2022. At December 31, 2023, the Company's working
capital was $1,578,705 compared with $1,747,472 at December 31, 2022. 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, 2023, is adequate for expected resource requirements for the next twelve months. During the twelve-month
period ending December 31, 2023, the Company had negative cash flow of ($264,866).

 The Company's current asset to current liability
ratio at December 31, 2023, was 16.2:1 compared to 8.6:1 at December 31, 2022. The increase in current asset ratio is the result of the
Company having decreased accounts payable for year-end 2023 when compared with year-end 2022. The Company's liquid resources at
December 31, 2023, including cash and cash equivalent and certificates of deposits, were $886,252, compared to $1,002,817 at December
31, 2022. The net loss in 2023 resulted in a decrease of liquid resources.. The Company's accounts receivable at December 31, 2023,
was $52,592, compared to $141,394 at December 31, 2022. Management believes that all Company accounts receivable as of December 31, 2023,
are collectible and does not have a reserve for uncollectable accounts.

 The Company believes the level of risk associated
with customer receipts on export sales is minimal. Foreign shipments are made only after payment has been received or on Net 30 day credit
terms to established foreign companies with which the Company has distributor relationships. Foreign orders are generally filled as soon
as they are received therefore; foreign exchange rate fluctuations do not impact the Company.

 Inventories at December 31, 2023, were $722,457, reflecting
a slight decrease from December 31, 2022, balance of $725,478.

 We had capital expenditures of $19,768 during 2023,
$18,245 of this amount was used to develop an eCommerce website. The Company intends on investing in additional capital equipment as deemed
necessary to support development and manufacture of current and future products.

 As of December 31, 2023, our current liabilities decreased
to $103,780 from $228,652 at December 31, 2022. The decrease in current liabilities was impacted by an decrease in accounts payable to
$37,355 from $138,996.

 We had no off-balance sheet arrangements for the year
ended December 31, 2023.

 Inflation had minimal adverse effect on the Company's
operations during 2023. Minimal adverse effect is anticipated during 2024.

 FORWARD LOOKING STATEMENTS: The above discussion may
contain forward-looking 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-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.

 Smaller reporting companies are not required to provide the information
required by this Item.

 Item 8. Financial Statements and Supplementary Data.

 FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

AND

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 Page

 Report of Independent Registered Public Accounting Firm

 Financial Statements:

 Balance Sheets

 Statements of Operations

 Statements of Changes in Stockholders' Equity

 Statements of Cash Flows

 Notes to Financial Statements

 19-27

 Supplemental Schedule

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Board of Directors and Stockholders

Electronic Systems Technology, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying balance sheets of
Electronic Systems Technology, Inc. ("the Company") as of December 31, 2023 and 2022, 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, 2023 and 2022, 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.

 Basis for Opinion

 These financial statements 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.

 We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal
control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.

 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 our opinion.

 Critical Audit Matters

 Critical audit matters 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 challenging, subjective,
or complex judgments. We determined that there are no critical audit matters.

 Supplemental Information

 The supplemental schedule of operating expenses for
the years ended December 31, 2023 and 2022 ("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.

 /s/ Assure CPA, LLC.

 We have served as the Company's auditor since
2012.

 Spokane, Washington

 Firm ID is 444

 March 8, 2024

 BALANCE SHEETS

 DECEMBER 31, 2023 AND 2022

 2023

 2022

 ASSETS

 CURRENT ASSETS

 Cash and cash equivalents

 $
 486,252

 $
 751,118

 Certificates of deposit

 400,000

 251,699

 Accounts receivable - net

 52,592

 141,394

 Inventories - net

 722,457

 725,478

 Prepaid expenses

 19,278

 42,627

 Employee retention tax credit receivable (Note 10)

 —

 63,000

 Accrued interest receivable

 1,906

 Total Current Assets

 1,682,485

 1,976,124

 PROPERTY AND EQUIPMENT – NET

 18,255

 Right of use – asset, net of amortization (NOTE 8)

 30,298

 69,419

 TOTAL ASSETS

 $
 1,731,038

 $
 2,046,457

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES

 Accounts payable

 $
 37,355

 $
 138,996

 Accrued wages

 4,188

 24,777

 Operating lease liability – current (NOTE 8)

 30,773

 39,120

 Accrued vacation payable

 21,243

 16,846

 Other accrued liabilities

 10,221

 8,913

 Total Current Liabilities

 103,780

 228,652

 Operating lease liability (NOTE 8)

 —

 30,457

 TOTAL LIABILITIES

 103,780

 259,109

 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

 933,105

 932,412

 Retained earnings

 689,206

 849,989

 TOTAL STOCKHOLDERS' EQUITY

 1,627,258

 1,787,348

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 1,731,038

 $
 2,046,457

 See accompanying notes to the financial statements.

 STATEMENTS OF OPERATIONS

 2023

 2022

 SALES – NET

 $
 1,544,821

 $
 1,910,061

 COST OF SALES

 749,107

 881,409

 GROSS PROFIT

 795,714

 1,028,652

 OPERATING EXPENSES

 979,648

 950,338

 OPERATING INCOME/(LOSS)

 ( 183,934
)

 78,314

 OTHER INCOME:

 Interest income

 23,151

 5,217

 Gain on Employee Retention Credit (Note 10)

 —

 63,000

 TOTAL OTHER INCOME

 23,151

 68,217

 NET INCOME/(LOSS) BEFORE INCOME TAXES

)

 INCOME TAX PROVISION (BENEFIT)

 —

 —

 NET INCOME/(LOSS) AFTER INCOME TAXES

 $
)

 $

 NET INCOME/(LOSS) PER SHARE, BASIC AND DILUTED

 $
 ( 0.03
)

 $
 0.03

 WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED

 See accompanying notes to the financial statements.

 STATEMENTS OF CHANGES IN STOCKHOLDERS'
 EQUITY

 Additional

 Common Stock

 Paid-In

 Retained

 Shares

 Amount

 Capital

 Earnings

 Total

 BALANCE AT DECEMBER 31, 2021

 $
 4,947

 $
 931,412

 $
 703,458

 $
 1,640,817

 Net income

 —

 —

 —

 BALANCE AT DECEMBER 31, 2022

 $
 4,947

 $
 932,412

 $
 849,989

 $
 1,787,348

 Net loss

 —

 —

 —

)

)

 Share based compensation

 —

 —

 —

 BALANCE AT DECEMBER 31, 2023

 $
 4,947

 $
 933,105

 $
 689,206

 $
 1,627,258

 See accompanying notes to the financial statements.

 ``

 STATEMENTS OF CASH FLOWS

 2023

 2022

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net income/(loss)

 $
)

 $

 Noncash expenses included in net income:

 Depreciation and amortization

 2,427

 Share based compensation

 —

 Changes in operating assets and liabilities:

 Accounts receivable

 88,802

 24,909

 Inventories - net

 3,021

 ( 223,645
)

 Prepaid expenses

 23,349

 ( 18,241
)

 Employee retention tax credit receivable

 63,000

 —

 Accrued interest receivable

 ( 1,098
)

 ( 773
)

 Accounts payable

 ( 101,641
)

 67,351

 Other accrued liabilities and wages

 ( 14,567
)

 21,581

 Net Cash used by Operating Activities

 ( 96,797
)

 ( 44,843
)

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Certificates of deposits purchased

 ( 1,550,000
)

 ( 1,002,283
)

 Certificates of deposits redeemed

 1,401,699

 1,150,584

 Purchase of equipment

 ( 19,768
)

 —

 Net Cash provided (used) by Investing Activities

 ( 168,069
)

 148,301

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Principal payments on CARES Act loan payable (round 1)

 —

 ( 7,956
)

 Net Cash used by Financing Activities

 —

 ( 7,956
)

 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

 ( 264,866
)

 95,502

 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

 751,118

 655,616

 CASH AND CASH EQUIVALENTS AT END OF YEAR

 $
 486,252

 $
 751,118

 Noncash investing and financing activities:

 Recognition of operating lease liability and right of use asset

 $
 —

 $
 78,757

 See accompanying notes to the financial statements.

 1.

 Organization and Summary of Significant Accounting Policies

 Business Organization

 The Company was incorporated under the laws
of the 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.

 Effective September 13, 2007, 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.

 Basis of Presentation and Accounting
Estimates

 The preparation 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.

 Concentrations and Credit Risks

 The Company places its cash with three major
financial institutions. During the period, the Company had cash balances that were in excess of federally insured limits.

 The Company purchases certain key components
necessary for the production of 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 material cost
expenditures could take place.

 Revenue Recognition

 The Company recognizes 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 when, or as, the performance obligation is satisfied.

 Performance obligations for product 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.

 The Company considers the contractual consideration
payable by the customer when determining the transaction price of each contract. Revenue is recorded net of charges for certain sales
incentives and discounts, and applicable state and local sales taxes, which represent components of the transaction price. Charges are
estimated by us upon shipment of the product based on contractual terms, and actual charges typically do not vary materially from our
estimates. Shipping estimates are determined by utilizing shipping costs provided by the various service providers websites based on number
of packages, weight and destination. Shipping costs are included in the cost of goods sold as the revenue is captured in total sales.

 The Company receives payments from customers
based on the terms established in our contracts. When amounts are billed and collected 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.

 The 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.

 Financial Instruments

 The Company's financial instruments
are cash, cash equivalents, and certificates of deposit. The recorded values of cash, and certificates of deposit approximate their fair
values based on their short-term nature.

 Cash and Cash Equivalents

 Cash and cash equivalents are cash purchased
with original maturities of three months or less.

 Allowance for Uncollectible Accounts

 The Company uses the allowance method to
account for estimated uncollectible accounts receivable. Accounts receivable are presented net of an allowance for doubtful accounts.
As of December 31, 2023 and 2022, the Company's estimate of doubtful accounts was zero 0.
The Company's policy for writing off past due accounts receivable is based on the time past due and responses received from the
subject customer.

 Inventories

 Inventories are stated at lower of direct
cost or market. Cost is determined on an average cost basis that approximates the first-in, first-out (FIFO) method. Market is determined
based on net realizable value and consideration is given to obsolescence.

 Property and Equipment

 Property and equipment are 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.

 Certificates of Deposit

 Certificates of deposit with original maturities
ranging from one month to twelve months were $ 400,000 and $ 251,699 at December 31, 2023 and 2022, respectively.

 Leases

 Contracts that meet the definition of a
lease 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 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.

 Income Taxes

 The provision (benefit) for income taxes
is computed on the pretax income (loss) based on the current tax law. Deferred income taxes are recognized for the tax consequences in
future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based
on enacted tax laws and statutory tax rates. 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 Development

 Research and development costs are recognized
as operating expenses when incurred. Research and development expenditures for new product development and improvements of existing products
by the Company for 2023 and 2022 were $ 121,896 and $ 163,189, respectively.

 Advertising Costs

 Costs incurred for producing and communicating
advertising are recognized as operating expenses when incurred. Advertising costs for the years ended December 31, 2023 and 2022 were
$ 10,038 and $ 8,895, respectively.

 Earnings Per Share

 The Company is required 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.

 Potentially dilutive common stock equivalents
consist of 225,000 and 180,000 stock options outstanding as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022,
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.

 Share-Based Compensation

 Share-based payments to 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. The fair value of stock
options is determined using a Black-Scholes valuation model. Option pricing models require the input of subjective assumptions including
the length of time employees will retain their vested stock options before exercising them, expected share price volatility, and interest
rate. Changes in the input assumptions can materially affect the fair value estimate and the Company's net loss.

 Fair Value Measurements

 When required to 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,
2023 and 2022, the Company has no assets or liabilities subject to fair value measurements on a recurring basis.

 New Accounting Pronouncements

 In November 2023, the Financial Accounting
Standards Board ("FASB") issued Accounting Standards Update 2023-07 ("ASU 2023-07"), Segment Reporting (Topic
280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental
segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment
expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit
or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in
ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after
December 15, 2024, and are applied retrospectively. Early adoption is permitted. We are currently evaluating the impact of this update
on our financial statements and disclosures.

 In December 2023, the FASB issued Accounting
Standards Update 2023-09 ("ASU 2023-09"), Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income
tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective
for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the
amendments are permitted. We are currently evaluating the impact of this update on our financial statements and disclosures.

 Other accounting 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.

 2.

 Inventories

 Inventories consist of the following:

 Schedule of inventories

 2023

 2022

 Parts

 $
 118,472

 $
 172,190

 Work in progress

 313,597

 336,298

 Finished goods

 290,388

 216,990

 Total inventories

 $
 722,457

 $
 725,478

 Included in the above amounts are reserves
for obsolete inventories of $ 8,935 and $ 8,716 at December 31, 2023 and 2022, respectively.

 3.

 Property and Equipment

 Property and equipment consist of the following
at December 31, 2023 and 2022:

 Schedule of property and equipment

 2023

 2022

 Laboratory equipment

 $
 554,740

 $
 522,575

 Software

 18,245

 35,028

 Furniture and fixtures

 15,262

 16,344

 Dies and molds

 73,607

 73,607

 Property plant and equipment, gross

 661,854

 647,554

 Accumulated depreciation and amortization

 ( 643,599
)

 ( 646,640
)

 Total property plant and equipment, net

 $
 18,255

 $

 4.

 Income Taxes

 For the years ended December 31, 2023 and
2022, the Company did not have an income tax benefit nor provision because of continuing losses.

 The components of net deferred tax assets
are as follows:

 Schedule of deferred tax assets and liabilities

 December 31,

 2023

 2022

 Deferred tax assets:

 Net operating loss carryforwards

 $
 314,500

 $
 280,300

 Accrued liabilities

 4,300

 3,500

 Inventories

 11,600

 10,500

 Other

 1,100

 1,200

 Federal income tax credits

 67,000

 67,000

 Total deferred tax assets

 398,500

 362,500

 Less valuation allowance

 ( 396,000
)

 ( 362,500
)

 Total deferred tax assets, net

 2,500

 —

 Deferred tax liabilities:

 Property and equipment

 ( 2,500
)

 —

 Total deferred tax liabilities

 ( 2,500
)

 —

 Total deferred tax assets, net

 $
 —

 $
 —

 Realization
of the deferred tax asset is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards and the income
tax carryforwards. Management determined that it does not believe it is more likely than not that all of the net deferred tax assets will
be realized. Therefore, a valuation allowance has been recorded for the full net deferred tax asset at December 31, 2023 and 2022.

 At December 31, 2023, 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 2036-2041. In addition, at December 31, 2023, the Company had approximately $ 1,498,000 of net operating loss carryforwards, $585,000
of which will expire between 2035 and 2038. The remaining balance of $913,000 will never expire but whose utilization is limited to 80%
of taxable income in any future year.

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

 Schedule of
 provision for federal income taxes

 2023

 2022

 Amount computed using the statutory rate

 $
 ( 33,800
)

 $
 30,800

 Non-deductible (taxable) items, net

 ( 12,900
)

 Change in estimates

 ( 100
)

)

 Change in valuation allowance

 33,500

 18,000

 Provision (benefit) for federal income taxes

 $
 —

 $
 —

 Should the Company have future accrued interest
expense and penalties related to uncertain income tax positions, they will recognize those expenses in income tax expense.

 The 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 2020.
The Company has evaluated all tax positions for open years and has concluded that they have no material unrecognized tax benefits or penalties.

 5.

 Profit Sharing Salary Deferral 401-K Plan

 The Company sponsors a Profit-Sharing Plan
and Salary 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 $ 20,675 and $ 20,886 to the plan for the years ended December 31, 2023
and 2022, respectively.

 6.

 Employee Bonus Program

 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. Bonus expenses of nil 0
 and $ 17,719
 were recognized during the years ended December 31, 2023 and 2022, respectively. At December 31, 2023 and 2022, accrued wages
on the balance sheet includes nil 0
and $ 17,719, respectively, for accrued
bonus payable.

 7.

 Share-Based 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 June 9, 2023, the Board of Directors granted 45,000 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 $ 0.24, volatility of 104.1 %, expected term of 5 years with a forfeiture rate of 95 %, and a discount
factor of 3.92 %.

 In the years ended December 31, 2023 and
2022, the Company recognized $ 693 and
nil 0 respectively, in share-based
compensation expense. No non-vested share-based compensation arrangements existed as of December 31, 2023 and 2022.

 A summary of option activity follows:

 Schedule of stock option activity

 Outstanding

 Weighted
 Average
 Exercise Price
 Per Option

 Weighted
 Average
 Remaining
 Contractual
 Term (Years)

 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

 Granted

 45,000

 0.40

 Balance at December 31, 2023

 225,000

 $
 0.40

 1.7

 Outstanding and Exercisable at December 31, 2023

 225,000

 $
 0.40

 1.7

 The aggregate intrinsic value of the options
outstanding and exercisable at December 31, 2023 was nil.

 8.

 Leases

 On September 19, 2022, the Company signed
a new two-year lease for its facilities. The base lease is $ 3,373
 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, 2023, the remaining lease term is nine
 months.

 Prior to the new lease in September 19,
2022, the Company's lease for its facilities was for $ 3,806 per month.

 As of December 31, 2023, total future lease payments are as follows:

 Schedule of future minimum lease payment

 For the 12 months ended

 December 31, 2024

 31,304

 Less imputed interest

 ( 531
)

 Net lease liability

 30,773

 For the years ended December 31, 2023 and
2022, costs relating to the operating lease were recognized in the statement of operations as follows:

 Schedule of cost related to operating lease

 2023

 2022

 Cost of
 sales

 Operating
 expenses

 Total

 Cost of
 sales

 Operating
 expenses

 Total

 Base rent pursuant to lease agreement

 $

 23,002

 $
 18,104

 $

 41,106

 $

 23,002

 $
 18,104

 $

 41,106

 Variable lease costs

 2,931

 2,306

 5,237

 2,976

 2,342

 5,319

 Total lease costs

 $
 25,933

 $
 20,410

 $
 46,343

 $
 25,978

 $
 20,446

 $
 46,425

 9.

 Revenue

 The Company derives revenues from the sales
of industrial wireless products and accessories such as antennas, power supplies and cable assemblies. The Company also provides direct
site support and engineering services to customers, such as repair and upgrade of its products. The Company's customers, to which
trade credit terms are extended, consist of United States and local governments and foreign and domestic companies.

 Schedule of revenue by products

 For the years ending December 31,

 2023

 2022

 Domestic Sales

 Foreign Sales

 Domestic Sales

 Foreign Sales

 Product Sales

 1,461,785

 56,136

 1,517,921

 1,668,861

 212,800

 1,881,661

 Site Support Sales

 26,900

 —

 26,900

 28,400

 —

 28,400

 1,488,685

 56,136

 1,544,821

 1,697,261

 212,800

 1,910,061

 For the year ended December 31, 2023 and
2022, sales to customers that are more than 10% of total revenue are as follows:

 Schedule of revenue by customers

 2023 Sales

 2023 % age of

 2022 Sales

 2022 % age of

 Domestic customer A

 $
 307,048

 19.9
 %

 $
 397,671

 20.8
 %

 Domestic customer B

 $
 —

 —

 201,459

 10.5
 %

 Revenue continued

 As of December 31, 2023 and 2022, accounts
receivable from customers that are more than 10% of the total accounts receivable balance are as follows:

 Schedule of accounts receivable from customers

 Accounts
 Receivable
 Balance

 % age of
 Total Accounts
 Receivable

 Accounts
 Receivable
 Balance

 % age of
 Total Accounts
 Receivable

 Domestic customer A

 $
 14,087

 26.8
 %

 $
 95,724

 67.7
 %

 Domestic customer B

 10,806

 20.5

 16,037

 11.3

 Domestic customer C

 6,478

 12.3

 —

 —

 Domestic customer D

 5,956

 11.3

 —

 —

 Domestic customer E

 5,265

 10.0

 —

 —

 As of December 31, 2023 and 2022, the Company
had a sales order backlog of $ 55,636 and $ 49,173, respectively.

 10.

 Employee Retention Credit

 The Company received $ 63,000 in 2023
that was a receivable at December 31, 2022, for the retention tax credit. The Company recognized the $ 63,000 as income for the year ended
December 31, 2022.

 Supplemental Information

 ELECTRONIC SYSTEMS TECHNOLOGY,
 INC.

 Supplemental
Information

SUPPLEMENTAL SCHEDULE OF OPERATING EXPENSES

 Supplemental schedule of operating expenses

 2023

 2022

 Advertising

 $
 10,038

 $
 8,895

 Dues and subscriptions

 3,772

 3,547

 Depreciation and amortization

 2,427

 Insurance

 14,632

 13,485

 Materials and supplies

 9,341

 10,370

 Office and administration

 7,008

 4,890

 Printing

 2,306

 2,658

 Professional services

 101,923

 91,096

 Services purchased in lieu of payroll

 —

 45,875

 Rent and utilities

 52,085

 50,308

 Repair and maintenance

 4,259

 Salaries and benefits

 715,863

 696,665

 Taxes, licenses & health insurance

 203,124

 194,839

 Telephone

 4,778

 5,372

 Warranty expense

 2,353

 2,897

 Trade shows

 15,505

 12,199

 Travel expenses

 29,100

 15,984

 Expenses before allocated to cost of sales

 1,174,678

 1,163,783

 Expenses allocated to cost of sales

 ( 195,030
)

 ( 213,445
)

 Total Operating Expenses

 $
 979,648

 $
 950,338

 Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure.

 None

 Item 9A. Controls and Procedures.

 Disclosure Controls and Procedures.

 Under 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 o ur principal executive officer
and principal financial officer concluded that the Company's disclosure controls and procedures were effective at December 31,
2023.

 Management's Annual Report on Internal
Control over Financial Reporting.

 The Company's 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.

 As of December 31, 2023, management conducted an assessment
of the effectiveness of the Company's internal control over financial reporting based on the criteria for effective internal control
over financial reporting established in "Internal Control — Integrated Framework," (2013) issued by the Committee of
Sponsoring Organizations (COSO) of the Treadway Commission. Management, under the supervision and with the participation of the Company's
Chief Executive Officer and Principal Accounting Officer, assessed the effectiveness of the Company's internal control over financial
reporting as of December 31, 2023 and concluded that we have maintained effective internal control
over financial reporting at December 31, 2023, based on the COSO criteria.

 There have been
no changes in the company's internal control over financial reporting during the most recently completed quarter that have materially
affected or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 Item 9B. Other Information.

 None

 Item 10. Directors, Executive Officers and Corporate Governance.

 IDENTIFICATION OF DIRECTORS:

 The following table sets forth the names and ages
of all Directors of the Company as of December 31, 2023, as well as the term in office and principal occupation of each Director.

 Name of Director

 Term in Office

 Age

 Principal Occupation

 06/02/23 – 06/02/26

 President of Electronic Systems Technology

 Vern Kornelsen

 06/02/23 – 06/02/26

 General Partner of EDCO

 Thomas Schaefer

 06/01/21– 06/01/24

 Vice President of Online Development Inc.

 Donald Siecke

 06/01/21 – 06/01/24

 President of Kelmore Development Corp.

 Michael W. Eller

 06/03/22 - 06/03/25

 Principle Accounting Officer of Electronic Systems Technology, Inc.

 Management believes that there are no agreements or
understanding between the Directors and suppliers or contractors of the Company.

 Audit Committee

 The Audit Committee of the Board of Directors as of
December 31, 2023, is comprised of Don Siecke (Chairman) and Tom Schaefer. The Audit Committee met on one occasion in 2023. 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.

 The Board has also adopted a charter for the Audit
Committee. The charter 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.

 Compensation Committee

 There is no Compensation Committee of the Board of
Directors. The Board of Directors did establish 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 2023. There is no
charter for the Employee/Director Stock Option Committee.

 Code of Ethics

 On September 22, 2020, the Company's Board of
Directors adopted a Code of Ethics for the Company. The Codes of Ethics, and any subsequent amendments thereto, (other than technical,
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.esteem.com.

 IDENTIFICATION OF EXECUTIVE OFFICERS

 The following table sets forth the names and ages
of all executive officers of the Company as of December 31, 2023; 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:

 Name of Officer

 Age

 Position

 Term
 of Office

 Period
 of Service

 President and CEO

 Employed at will

 3/3/2003-Present

 Michael Eller

 CFO/Principal Accounting Officer

 Employed at will

 9/7/12- Present

 The following is a brief description of the business
experience during the last five years of each Director and/or executive officer of the Company.

 DANIEL M. TOLLEY. Mr. Tolley has been employed by
the Company for more than 20 years. Mr. Tolley's duties and responsibilities have increased over that time. Most recently he was
the Director of Business Development.

 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.

 THOMAS 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.

 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.

 MICHAEL W. ELLER. Mr. Eller is the CFO and Principal
Accounting Officer. During the last five years Mr. Eller has been a full-time employee of the Company. Until July 1, 2022 Mr. Eller served
as President and CEO. 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.

 Family Relationships

 None.

 Section 16(A) Beneficial Ownership Reporting Compliance

 During the year ended December 31, 2023, to the knowledge
of Management, there was no Director, officer, or beneficial owner of more than 10% any class of equity securities of the registrant who
failed to file on a timely basis the required disclosure form as required by Section 16(a) of the Securities and Exchange Act of 1934.

 Indemnification

 The Company's Bylaws address 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
breaches of fiduciary duties, as long as the alleged acts or omissions did not involve intentional misconduct, fraud, 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 incurred in 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 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 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 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.

 Related Person Transactions Policy and Procedures

 As set forth in the 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 of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations
or vote on the approval or ratification of the transaction. Related persons include any Director or executive officer, certain shareholders
and any of their "immediate family members" (as defined by SEC regulations).

 Item 11. Executive Compensation.

 The Company's principal executive officer is
Daniel M. Tolley, and principal accounting officer is Michael W. Eller.

 Information concerning the compensation of the Company's
principal executive officer and principal accounting officer, as well as any other compensated employees of the Registrant's whose
total compensation exceeded $100,000 during 2023 and 2022 is provided in the following Summary Compensation Table (collectively, the "Named
Executive Officers" or "NEOs"):

 SUMMARY
 COMPENSATION TABLE

 Name
 and

 Principal

 Position

 (a)

 Year

 (b)

 Salary

 ($)

 I

 Bonus

 ($)(1)

 (d)

 Stock

 ($)

 (e)

 ($)(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)

 President CEO

 2023

 $140,500

 -

 -

 -

 -

 $18,535

 $159,343

 2022

 $117,851

 $4,430

 -

 -

 -

 -

 $17,186

 $139,467

 Michael W. Eller

 CFO/Principal Accounting Officer

 2023

 $71,100

 -

 -

 -

 -

 -

 $23,861

 $94,961

 2022

 $99,650

 $4,405

 -

 -

 -

 -

 $18,827

 $122,882

 (1)

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

 (2)

 Amount represents the dollar amount recognized for financial statement reporting purposes.

 (3)

 All Other Compensation consists of Group Health Insurance, Accrued Vacation Pay and Company paid 401(k) matching amounts.

 The information specified concerning the stock options
of the named executive officers during the fiscal years ended December 31, 2023 and 2022, is provided in the following Option/SAR Grants
in the Last Fiscal Year Table:

 OPTION/SAR
 GRANTS IN 2023

 Individual
 Grants (5)

 (a)

 (b)

 (c)

 (d)

 (e)

 Name

 of Securities

 Underlying

 Options/SARs

 Granted # (5)

 %
 of Total

 Options/SARs Granted

 to Employees in
 Fiscal

 Year

 Exercise or base
 price

 ($/Share)

 Expiration Date

 20,000

 44%

 $0.40

 6/9/28

 Michael W. Eller

 -0-

 0%

 $0.00

 n/a

 (5)

 This table does not include Stock Options granted previously.

 The information specified concerning the stock options
of the named executive officers during the fiscal year ended December 31, 2023, is provided in the following Aggregated Option/SAR Exercises
in Last Fiscal Year and Fiscal Year-End Options/SAR Values Table:

 OUTSTANDING
 EQUITY AWARDS AT FISCAL YEAR-END

 Stock

 Name

 of

 Securities

 Underlying

 Unexercised

 Options (#)

 Exercisable

 of

 Securities

 Underlying

 Unexercised

 Options (#)

 Unexercisable

 Equity

 Incentive Plan

 Awards:

 Number of

 Securities

 Underlying

 Unexercised

 Unearned

 Options (#)

 Exercise

 Price ($)

 Expiration

 Date

 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)

 20,000

 $0.40

 3/13/25

 6/9/28

 Michael W.

 Eller

 40,000

 $0.40

 3/13/25

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

 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.) The information specified concerning
items of Director Compensation for the fiscal year ended December 31, 2023 is provided in the following Director Compensation Table:

 DIRECTOR
 COMPENSATION

 Name

 (1)

 Fees

 Earned

 or Paid

 in Cash

 ($)(2)

 Stock

 ($)

 ($)(3)

 Non-Equity

 Incentive Plan

 Compensation

 ($)

 Nonqualified

 Deferred

 Compensation

 ($)

 All
 Other

 Compensation

 ($)(4)

 Total
 ($)

 (a)

 (b)

 (c)

 (d)

 (e)

 (f)

 (g)

 (h)

 Vern Kornelsen

 $0

 $0

 $0

 $0

 $0

 Thomas Schaefer

 $0

 $0

 $0

 $0

 $0

 Donald Siecke

 $0

 $0

 $0

 $0

 $0

 Michael W. Eller

 $0

 $0

 $0

 $0

 $0

 $0

 $0

 Daniel M. Tolley

 $0

 $0

 $0

 $0

 $0

 $0

 $0

 (1)

 Compensation information for Dan Tolley, President and CEO and Michael Eller, CFO and Principal Accounting Officer is contained in the Executive Compensation Summary Compensation Table.

 (2)

 Amount represents the Director Stipend paid in 2023.

 (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.

 (4)

 Amounts represent reimbursement of out-of-pocket expenses related to Directors' duties associated with the Company's business (ie. travel expenses for attending Company Director's Meetings).

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

 Option Exercises

 During our fiscal year ended December 31, 2023, there were no options exercised
by our executive officer or Directors.

 Summary of Executive Employment Agreements

 There are no executive employment agreements with
any officer.

 Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

 The following table sets forth, as of December 31,
2023, 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.

 Title
 of Class

 Name
 & Address of

 Beneficial Owner
 (1)

 Amount
 & Nature of

 Beneficial Ownership

 Percent
 of Class

 EDCO Partners LLLP

 4605 Denice Drive

 Englewood CO 80111

 1,797,700

 36.3%

 (1)

 Under Rule 13d-3, issued by the Securities and Exchange Commission, a person is, in general, deemed to "Beneficially own" any shares if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (a) voting power, which includes the power to vote or to direct the voting of those shares and/or (b) investment power, which included the power to dispose, or to direct the disposition of those securities. The foregoing table gives effect to shares deemed beneficially owned under Rule 13d-3 based on the information supplied to the Company. 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 beneficially owned by them.

 SECURITY OWNERSHIP OF MANAGEMENT

 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.

 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

 52,200(3)

 1.1%

 Vern Kornelsen (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA

 1,797,700

 36.3%

 Thomas Schaefer (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA

 —

 —

 Donald Siecke (Director)/415 N. Roosevelt St., STE B1 Kennewick, WA

 — (2)

 —

 Michael W. Eller (Officer)/415 N. Roosevelt St., STE B1 Kennewick, WA

 40,000 (1)

 0.8%

 All Officers and Directors as a group

 1,889,900

 38.2%

 (1)

 Includes 40,000 stock options issued 3/15/2020.

 (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.

 (3)

 Includes
30,000 stock options issued 3/15/2020 and 20,000 stock options issued 6/9/23.

 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.

 Recipients of Stock Options currently unexpired as
of December 31, 2023, were as follows:

 Name

 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

 0.40

 Dan Tolley

 0.40

 Michael Eller

 40,000

 0.40

 Total

 150,000

 0.40

 Name

 Shares

 Exercise

 Price

 Per Share ($)

 Grant Date: 9-1-2021

 Peri M. Olson

 0.40

 Total

 0.40

 `

 Name

 Shares

 Exercise

 Price

 Per Share ($)

 Grant Date: 6-9-2023

 Dan Tolley

 20,000

 0.40

 Jay Chambers

 25,000

 0.40

 Total

 45,000

 0.40

 Stock options must be exercised within 90 days after
termination of employment/board membership. On June 9, 2023, the Board of Directors granted 45,000 options to employees. The new options
have an exercise price of $0.40, a term of 5 years, and vested immediately.

 Changes in Control:

 The Board of Directors is aware of no circumstances which may result in
a change of control of the Company.

 Certain Business Relationships:

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

 Indebtedness of Management:

 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.

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

 TRANSACTIONS WITH MANAGEMENT AND OTHERS

 None.

 Item 14. Principal Accounting Fees and Services.

 AUDIT AND NON-AUDIT FEES

 The following table presents fees billed to us during
December 31, 2023 and 2022, for professional services provided by Assure CPA.

 Year Ended

 December 31, 2023

 December 31, 2022

 Audit fees (1)

 $
 41,100

 $
 43,100

 Audit-related fees (2)

 —

 —

 Tax fees (3)

 7,398

 3,000

 All other fees (4)

 —

 Total Fees

 $
 49,047

 $
 46,100

 (1)

 Audit fees consist of fees billed for professional services provided in connection with the audit of the Company's financial statements and reviews of our quarterly financial statements.

 (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.

 (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.

 (4)

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

 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.

 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

 Bylaws filed as Exhibit 2.1 to Form S-18, Registration Statement No. 2-92949-S, filed November 5, 1984 **

 3.4

 Amendments to Bylaws filed as Exhibit (c) to Form 8-K, filed March 15, 1985 **

 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

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 **

 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.

 By:

 /s/ Daniel M. Tolley

 Daniel M. Tolley, President

 (Principal Executive Officer, Director)

 Date: March 8, 2024

 By:

 /s/ Michael W. Eller

 Michael W. Eller, President

 (Principal Accounting Officer)

 Date: March 8, 2024

 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 8, 2024

 Vern D. Kornelsen

 /s/ THOMAS SCHAEFER

 Director

 March 8, 2024

 Thomas Schaefer

 /s/ DONALD SIECKE

 Director

 March 8, 2024

 Don Siecke