Note 10 - Inventory

3 Months Ended

Mar. 31, 2013

10. Inventory

Inventories consisted of the following:

	March 31, 2013		December 31, 2012
Current Inventory
Work in process – net of allowances of $1,573,000 and $1,144,000, respectively	$	562,600	$	428,708
Raw materials – net of allowances of zero and $25,000, respectively		137,272		469,334

Total	$	699,872	$	898,042

Noncurrent Inventory
Raw Materials, net of allowances of $1,282,000 and $83,000, respectively	$	--	$	1,063,633

Total	$	699,872	$	1,063,633

As of March 31, 2013, the Company concluded that certain of its assets, primarily related to its Fortical business, are impaired as a result of recent events negatively impacting operations, including regulatory recommendations by an advisory committee to the FDA and the related impact on Fortical manufacturing revenues and royalties (see Note 5). This resulted in the write-off of substantially all of the Company’s inventories with the exception of materials to be provided to Nordic Bioscience pursuant to a joint venture (see Note 12) and laboratory materials. The corresponding charge of $1,635,818 is reflected within cost of goods sold for the three months ended March 31, 2013.

- 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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