Note 2 – Inventories:

The composition of the Company’s inventories at December 31, 2018 and 2017 are as follows:

	2018			2017
Raw materials	$	4,320,131		$	3,994,624
Finished goods		8,049,791			5,354,097
Inventories, gross		12,369,922			9,348,721
Inventory reserves		(284,109	)		(274,295	)
Inventories, net	$	12,085,813		$	9,074,426

The inventory reserves shown in the table above reflect slow moving and obsolete inventory.

The Company operates a vendor managed inventory program with one of its customers to improve the promotion of the Company’s products. The Company manages the inventory levels at this customer’s warehouses and recognizes revenue as the products are sold by the customer. The inventories managed at the customer’s warehouses, which are included in inventories, net, amounted to approximately $495,000 and $494,000 at December 31, 2018 and 2017, respectively.