INVENTORIES

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements

Note 5. INVENTORIES

Inventories consist of finished goods for the Company’s product lines.  Cost-of-goods sold are calculated using the average costing method.  Inventory costs include direct materials, direct labor and cost of freight.  The Company reviews its inventory periodically to determine net realizable value and considers product upgrades in its periodic review of realizability.  The Company writes down inventory, if required, based on forecasted demand and technological obsolescence.  These factors are impacted by market and economic conditions, technology changes and new product introductions and require estimates that may include uncertain elements.   Inventories consist of the following:

	September 30,		December 31,
	2012		2011
Finished Goods	$	277,332	$	515,014