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Inventories

3 Months Ended

Mar. 31, 2012

Note 6 – Inventories

The following table sets forth the cost basis of each major class of inventory as of March 31, 2012 and December 31, 2011:

	March 31,		December 31,
	2012		2011
Raw material and subassemblies	$	1,411,000	$	1,710,000
Finished goods		11,316,000		11,447,000
	$	12,727,000	$	13,157,000

The Company recorded a provision for excess and obsolete inventory of $643,000 and $122,000 for the three months ended March 31, 2012 and 2011, respectively. The provisions were due to a number of factors, including (i) increased technological obsolescence, (ii) changes in forecasted demand, and (iii) ,in the case of the provision for the quarter ended March 31, 2012, customers ceasing orders for certain products.

- 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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