Note 3. Inventory

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

	September 30,			December 31,
	2017			2016
Raw materials	$	1,058,466		$	1,222,437
Work in process		376			1,762
Finished goods		378,396			557,161
Total gross inventory		1,437,238			1,781,360
Less inventory allowance		(186,475	)		(270,307	)
	$	1,250,763		$	1,511,053

For the three and nine months ended September 30, 2017, the Company recorded net decreases in the inventory reserve of $21,405 and $83,832, respectively, compared with net increases of $291,692 and $383,234, respectively, for the three and nine months ended September 30, 2016. For the three and nine months ended September 30, 2017, the Company recorded adjustments to provision for excess inventory of $58,059 and $302,085, respectively. For the three and nine months ended September 30, 2016, the Company recorded adjustments to provision for excess inventory of $288,130 and $437,893, respectively. Adjustments in these periods to the allowance for estimated shrinkage, obsolescence and excess inventory were recognized within cost of revenue in the condensed statements of operations.