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Inventory

9 Months Ended

Sep. 30, 2014

Note 2 – Inventory

Inventory principally consists of the cost of materials purchased and assembled during the nine months ended September 30, 2014 and the three months ended December 31, 2013 for the initial assembly of the EPN Scan which has received regulatory approval in Europe. The Company has recorded these costs as inventory because regulatory approval has been received and management has determined that a future benefit is probable. The cost of inventory also includes the costs of direct labor for the assembly and certain indirect costs incurred in connection with purchasing of parts and the assembly of products. Inventory is valued at the lower of cost or market value, with cost determined based on the first-in-first-out method. Inventory consists of the following at September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013

Raw materials	$	113,925	$	11,610
Work in progress		12,654		-
Finished goods		105,993		-

Total inventory	$	232,572	$	11,610

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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