Electronic Systems Technology Inc. Reports Decreased Revenue and Net Loss in Q3 2024

As of September 30, 2024, Electronic Systems Technology Inc. reported total assets of $1,450,814, a decrease from $1,731,038 at the end of the previous fiscal year. The company’s cash and cash equivalents significantly declined to $158,223 from $486,252 as of December 31, 2023. Total current assets also fell to $1,434,364, down from $1,682,485, while total current liabilities decreased to $47,431 from $103,780. Retained earnings were reported at $465,331, a reduction from $689,206.

For the third quarter of 2024, net sales were $293,936, reflecting a 14.2% decrease from $342,721 in Q3 2023. Year-to-date revenues for the nine months ended September 30, 2024, totaled $983,566, down 20.2% from $1,233,016 in the same period of the previous year. The decline in revenue has been attributed to reduced customer demand and increased costs associated with capital improvements. Domestic sales represented 84% of total sales in Q3 2024, down from 99% in Q3 2023, while export sales increased to 16% from 1%.

Gross profit for Q3 2024 was $148,507, compared to $164,286 in Q3 2023. The company reported an operating loss of $(72,923) for Q3 2024, worsening from $(50,880) in the prior year. The net loss before income tax for Q3 2024 was $(67,441), compared to $(42,505) in Q3 2023. For the nine-month period, the net loss increased to $(223,875) from $(75,759) in the previous year.

Cash used in operating activities for the nine months ended September 30, 2024, was $(326,725), an increase from $(161,555) in the same period of 2023. The net decrease in cash and cash equivalents for the nine months was $(328,029), slightly better than $(329,625) in the prior year. The company’s sales order backlog has significantly decreased to $5,109 from $124,125 year-over-year.

General and administrative expenses rose to $59,881 for Q3 2024, an increase of $4,052 compared to Q3 2023. Research and development expenses also increased to $28,236, while marketing and sales expenses rose to $133,313. Interest income for the nine-month period was reported at $16,545.

Management indicated that cash and cash equivalents, along with other working capital, are deemed sufficient for operations and capital expenditures through 2025. There were no significant off-balance sheet arrangements affecting the financial condition or operations, and disclosure controls were effective as of the reporting date.