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7. INVENTORY

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventory as of June 30, 2014 and December 31, 2013 consists of the following:

		June 30, 2014				December 31, 2013
		(Unaudited)				(Audited)

Raw materials		$	103,436			$	94,681
Finished goods			1,819,785				1,028,037
Inventory in transit			-				221,728
Inventory reserve			(153,436	)			(90,725	)
Total		$	1,769,785			$	1,253,721

Raw materials relate to Phototron inventory, which is assembled into finished units that are shipped to the Company’s customers. Finished goods inventory relates Phototron inventory and product at the Company’s retail stores, which is product purchased from distributors, and in some cases directly from the manufacturer, and resold at our stores. Inventory in transit relates to product purchased by the Company but which had not been received as of June 30, 2014.

The Company reviews its inventory on a periodic basis to identify products that are slow moving and/or obsolete, and if such products are identified, the Company records the appropriate inventory impairment charge at such time.

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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