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June 29 Letter

ESTEEM

Wireless Modems

June 29, 2005

Ms. Angela Crane, Branch Chief

United States Securities and Exchange Commission

450 Fifth Street N.W.

Washington DC 20549

RE: Follow up comments for Electronic Systems Technology Inc Form 10KSB and 10QSB,
received

June 14, 2005.

Ms. Crane:

We have received and reviewed your additional comments to our response letter dated May
26, 2005, in regard to the Form 10KSB for December 31, 2004, and Form 10QSB for
March 31, 2005 for Electronic Systems Technology Inc. We appreciate and value your review
of our submitted material for improvement of our future filings and disclosures. Below
please find listed the original comments received and our responses as outlined:

Form 10-KSB for the year ended December 31, 2004

Financial Statements

Note 1. Organization and Summary of Significant Accounting Policies - Page 8

Revenue Recognition, page 9

  Please refer to prior comment 6. Provide us with an analysis that explains your revenue
    recognition practices and demonstrates that your policies are SAB 104 and SFAS 48
    compliant, as previously requested.

  RESPONSE: The Company recognizes revenue from product
  sales when the goods are shipped or delivered and title and risk of loss pass to the
  customer. Provision for certain sales incentives and discounts to customers are accounted
  for as reductions in sales in the period the related sales are recorded. 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.

  Revenues from site support and engineering services are recognized as
  the Company performs the services. Amounts billed and collected before the services are
  performed are included in deferred revenues. Occasionally, contracts will contain
  performance milestones or the Company will recognize revenue based on proportional
  performance. For these contracts, the Company may recognize revenue upon completion of a
  substantive milestone, or in proportion to costs incurred.

  Due to the specialized nature of the products sold, the Company does
  not generally sell its products with the right of return; therefore returns are reported
  when they occur.

  (EST GRAPHIC)

  Electronic Systems Technology Inc. 415 North Quay St. Kennewick WA 99336 Phone:
  (509)735-9092 Fax: (509)783-5475

  www.esteem.com

Ms. Angela Crane

Page 2

June 29, 2005

Form 10-QSB for the quarter period ended March 31, 2005

Statement of Income (Loss), page 3

  Please refer to prior comment 8. We note that your engineering services and support
    expenses relate to income and expenses derived from direct on-site engineering assistance
    to customers related to the products you sell. You classify these amounts as non-operating
    because the amounts have been relatively low and of a different nature than your product
    sales. We believe you should classify these amounts within income from operations since
    the amounts relate to your operating activities. You may state revenues and related costs
    of revenues related to services as a separate line item on the face of your statement of
    operations, if you prefer.

  Please provide us with a schedule showing the impact of the reclassification by fiscal
  year, including the impact on your gross margins. If you do not agree a reclassification
  is appropriate, please tell us in detail the basis for your conclusion. Refer to Rule 5-03
  of Regulation S-X in your response.

  RESPONSE: Future Company filings will classify the
  amounts of engineering services and support expenses within income from operations as
  noted in your comment letter.

  The impact of the reclassification for fiscal years ended December 31,
  2004, 2003, 2002, 2001 and 2000, including the impact on gross margins is attached to this
  letter as appendix A.

In responding to your comments, we acknowledge that:

The company is responsible for the adequacy and accuracy of the disclosure in the
company’s filings;

Staff comments or changes to disclosure in response to staff comments in the filings
reviewed by the staff do not foreclose the Commission from taking any action with respect
to the filing; and

The company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

We look forward to any input and follow up comments that the Commission may have
regarding our responses to your comments and requests. If you have any questions or need
additional information, please feel to contact us.

Sincerely,

  Sincerely,

  /s/ JON CORREIO

  /s/ T. L. KIRCHNER

  Jon Correio

  Tom L. Kirchner

  Vice President, Finance and Administration

  President, CEO

  Electronic Systems Technology Inc.

  Electronic Systems Technology Inc.

APPENDIX A – SCHEDULE REFLECTING IMPACT OF RECLASSIFICATION

    ELECTRONIC SYSTEMS TECHNOLOGY, INC.

    STATEMENTS
    OF INCOME (LOSS)

      FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, 2002, 2001, AND 2000

    2004

    2003

    2002

    2001

    2000

    Original
    Reclass
    Original
    Reclass
    Original
    Reclass
    Original
    Reclass
    Original
    Reclass

    SALES - NET
    $
    2,297,945
    $ 2,416,625
    $
    2,064,628
    $
    2,209,841
    $
    1,932,648
    $
    2,050,221
    $
    1,303,811
    $
    1,454,215
    $
    1,310,524
    $
    1,503,489

    COST OF SALES
    984,193

    1,083,848

    938,361

    1,051,397

    869,262

    973,628

    694,394

    821,040

    731,927

    884,360

    GROSS PROFIT
    1,313,752

    1,332,777

    1,126,267

    1,158,444

    1,063,386

    1,076,593

    609,417

    633,175

    578,597

    619,129

    OPERATING EXPENSES
    1,089,396

    1,089,396

    1,006,674

    1,006,674

    788,631

    788,631

    681,374

    681,374

    670,774

    670,774

    OPERATING INCOME (LOSS)
    224,356

    243,381

    119,593

    151,770

    274,755

    287,962

    (71,957)
    (48,199)
    (92,177)
    (51,645)

    OTHER INCOME

    Interest income
    23,508
    23,508
    34,206
    34,206
    41,233
    41,233
    54,970
    54,970
    79,144
    79,144

    Other income (expense)
    12,262
    (6,763)
    20,102
    (12,075)
    11,629
    (1,578)
    23,059
    (699)
    42,443
    1,911

    35,770
    16,745
    54,308
    22,131
    52,862
    39,655
    78,029
    54,271
    121,587
    81,055

    INCOME BEFORE INCOME TAXES
    260,126
    260,126
    173,901
    173,901
    327,617
    327,617
    6,072
    6,072
    29,410
    29,410

    PROVISION FOR FEDERAL INCOME TAXES
    (85,306)
    (85,306)
    (50,895)
    (50,895)
    (114,041)
    (114,041)
    (16,368)
    (16,368)
    (5,466)
    (5,466)

    NET INCOME (LOSS)
    $
    174,820
    $
    174,820
    $
    123,006
    $
    123,006
    $
    213,576
    $
    213,576
    $ (10,296)
    $
    (10,296)
    $
    23,944
    $
    23,944