Note 3. Inventory

Inventory, net of allowance, consisted of the following as of the date indicated:

	March 31,			December 31,
	2017			2016
Raw materials	$	1,101,821		$	1,222,437
Work in process		3,761			1,762
Finished goods		423,976			557,161
Total gross inventory		1,529,558			1,781,360
Less inventory allowance		(274,130	)		(270,307	)
	$	1,255,428		$	1,511,053

For the three months ended March 31, 2017 and 2016, the Company recorded net increases in the inventory reserve of $3,823 and $18,237, respectively, to adjust for estimated shrinkage and obsolescence. For the three months ended March 31, 2017 and 2016, increases to the inventory reserve of $192,427 and $30,542 have been included in the cost of revenue, respectively.