NOTE 7. INVENTORY

Inventory is stated at the lesser of cost or net realizable value, with cost determined on the first-in-first-out method. The allocation of production overhead to inventory costs is based on normal production capacity. Abnormal amounts of idle facility expense and spoilage are expensed as incurred, and not included in overhead subject to capitalization. The Company maintains provisions for excess and obsolete inventory based on management’s estimates of forecasted demand and, where applicable, product expiration. The components of inventories were as follows (in thousands):



	June 30,		December 31,
	2017		2016
Raw materials	$	2,768	$	—
Work in process	372		—
Finished goods	2,580		—
Inventory, net	$	5,720	$	—