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 six months ended June 30, 2014 and 2013 were $59,000 and $200,000, respectively.