(4) Inventories, Property and Equipment, Intangible and Other Assets

Inventories consist of:


		September 30,		December 31,
		2012		2011

Raw materials	$	2,376,210	$	2,504,526
Work in process		34,138		25,331
Finished goods		992,596		746,711
	$	3,402,944	$	3,276,568

Property and equipment are stated at cost and include FORE-SIGHT cerebral oximetry monitors primarily located at customer sites within the United States. Such equipment is typically held under a no-cost program whereby customers purchase disposable sensors for use with the Company’s equipment. The Company retains title to the monitors shipped to its customers under this program. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets.

Intangible assets consist of patents issued, patents pending, trademarks, and purchased technology which are recorded at cost. Patents are amortized on a straight-line basis over 20 years. Capitalized costs are amortized over their estimated useful lives.

Intangible and other assets consist of the following:


		September 30,		December 31,
		2012		2011

Patents and other assets	$	714,260	$	682,321
Patents pending		311,962		315,935
Deferred financing costs		146,270		-
Purchased technology		46,026		46,026
		1,218,518		1,044,282
Accumulated amortization		(398,241)		(339,634)
	$	820,277	$	704,648

Amortization expense of intangible and other assets for the nine months ended September 30, 2012 was $58,607. Estimated amortization expense for the calendar year 2012 is $87,100. Expected amortization expense of intangible and other assets for the next five calendar years follows:



2013	$	102,600
2014		75,000
2015		44,300
2016		15,200
2017		15,200
	$	252,300

The Company reviews its intangibles and other assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For the nine months ended September 30, 2012, the Company wrote off $45,371 of capitalized patent costs related to certain abandoned patents. The Company believes that the carrying amounts of its remaining long-lived assets are fully recoverable.