NOTE 5.

INVENTORY

As of March 31, 2016, our inventory was comprised of Altrazeal® finished goods, manufacturing costs incurred in the production of Altrazeal®, and raw materials. Inventories are stated at the lower of cost (first in, first out method) or market. We regularly review inventories on hand and write down the carrying value of our inventories for excess and potentially obsolete inventories based on historical usage and estimated future usage. In assessing the ultimate realization of our inventories, we are required to make judgments as to future demand requirements. As actual future demand or market conditions may vary from those projected by us, adjustment to inventories may be required.

The components of inventory, at the different stages of production, consisted of the following at March 31, 2016 and December 31, 2015:

Inventory		March 31, 2016	December 31, 2015
	Raw materials	$ 38,439	$ 38,037
	Work-in-progress	444,358	485,123
	Finished goods	54,567	8,261
	Total	$ 537,364	$ 531,421