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Inventory - Note 4

12 Months Ended

Dec. 31, 2014

Inventory Disclosure

Inventory - Note 4

4. Inventory

Inventory consists of the following:

						December 31,
						2014			2013
Raw materials					$	42,000		$	23,000
Finished goods						74,000			26,000
					$	116,000		$	49,000

The inventory at December 31, 2014 and 2013 consisted of raw materials and finished goods assemblies. Inventory is stated at the lower of cost or market. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. In addition, we reduce the value of our inventory to its estimated scrap value when management determines that it is not probable that the inventory will be consumed through the normal course of business during the next twelve months. In 2014 and 2013, we recorded inventory write-downs of $42,000 and $303,000, respectively. At December 31, 2014 and 2013, we have aggregate write-downs recorded of $6,927,000 and $7,964,000, respectively, offsetting inventory on hand deemed to be obsolete or scrap inventory.

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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