Inventory

6 Months Ended

Jun. 30, 2014

Notes to Financial Statements

Inventory

 Inventory, consisting of materials, labor and manufacturing overhead, is stated at the lower of cost (first-in, first-out) or market and consisted of the following at:

	June 30, 2014			December 31, 2013
Raw materials	$	3,098,000		$	3,098,000
Work-in-process		222,000			222,000
Finished goods		449,000			449,000
Reserve for obsolescence		(3,401,000	)		(3,342,000	)
	$	368,000		$	427,000

 The Company did not have production operations in the six months ended June 30, 2014. Inventory valuation adjustments for the three and six months ended June 30, 2014 and 2013 were $60,000 and $11,000, respectively.