C.	Inventories

Inventories are valued at the lower of cost or market value using the FIFO (first-in, first-out) method. The Company reduces the value of its inventories to market value when the market value is believed to be less than the cost of the item. The inventory reserve for obsolescence as of June 30, 2016 and December 31, 2015 was $3,129,000 and $3,016,000, respectively.

Inventories are comprised of the following (in thousands):

	June 30, 2016		December 31, 2015

Raw materials	$	1,253	$	1,418
Work in process		1,372		1,325
Finished goods		852		803
Total Inventories, net	$	3,477	$	3,546