Note F - Inventory

6 Months Ended

Jun. 30, 2011

NOTE F – INVENTORY

Inventories consisted of the following as of June 30, 2011 and December 31, 2010:

	2011		2010
Current Inventory
Finished goods – net of allowances of $1,164,000 and $1,214,000, respectively	$	1,118,826		$	896,471
Raw materials – net of allowances of $57,000 and $63,000, respectively		803,696			521,462

Total	$	1,922,522		$	1,417,933

Noncurrent Inventory
Finished goods	$	1,026,607		$	1,442,520
Raw materials		1,292,703			1,439,460

Total	$	2,319,310		$	2,881,980

Typically, finished goods and work in process inventory, if any, are fully reserved except for the amounts deemed saleable by management based upon current or anticipated orders, primarily under contractual arrangements. Our reserves for finished goods and raw materials were $1,221,000 at June 30, 2011, a decrease of $56,000 from December 31, 2010. Based upon expected future orders, $1,027,000 of our finished goods inventory and $1,293,000 of our raw material inventory were classified as a noncurrent asset at June 30, 2011. We expect this inventory to be fully recoverable, therefore no reserve was established. In 2010, we temporarily ceased production of calcitonin and enzyme. This cessation of production has continued through the first half of 2011.

- 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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