NOTE 3 – INVENTORIES

At June 30, 2016 and December 31, 2015, inventories consisted of the following:

	June 30, 2016			December 31, 2015
Raw materials	$	1,293,112		$	690,824
Work-in-process		1,030,398			1,593,815
Finished goods		1,718,709			635,771
		4,042,219			2,920,410
Less: reserve for obsolete inventories		(1,068,196	)		(1,093,326	)
	$	2,974,023		$	1,827,084

The Company establishes a reserve to mark down its inventories for estimated unmarketable inventories equal to the difference between the cost of inventories and the estimated net realizable value based on assumptions about the usability of the inventories, future demand and market conditions.