INVENTORY - Note 5

9 Months Ended

Sep. 30, 2015

Inventory Disclosure

Inventory - Note 5

5. INVENTORY

Inventory consisted of the following:

		September 30,		December 31,
(in thousands)		2015		2014
Raw materials	$	152	$	42
Finished goods		117		74
	$	269	$	116

The inventory at September 30, 2015 and December 31, 2014 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. As of September 30, 2015 and December 31, 2014, we had recorded aggregate write-downs of $7.2 million and $6.9 million, respectively, which primarily consisted of outdated product lines. From time to time, we may enter into arrangements to sell the obsolete or scrap inventory, or enter into consignment agreements with third parties to sell the units, resulting in a gain in the period such transactions are realized.