6. INVENTORY, NET

12 Months Ended

Dec. 31, 2014

Inventory Net

6. INVENTORY, NET

The following table sets forth the components of inventory:

	December 31,			December 31,
	2014			2013
Inventory, gross	$	8,230,741		$	355,636
Reserve for obsolesence		(1,579,531	)		(15,000	)
Inventory, net	$	6,651,210		$	340,636

Inventory, which consists of ready for sale disposable and rechargeable e-cigarettes, batteries, cartomizers and other accessories, is carried at the lower of cost or fair market value. Cost is determined using the first-in, first-out method. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. Inventory writedowns of $11.2 million and $0 were recorded in 2014 and 2013, respectively.