NOTE 3 – INVENTORIES

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

	September 30, 2016			December 31, 2015
Raw materials	$	1,324,915		$	690,824
Work-in-process		743,718			1,593,815
Finished goods		1,974,130			635,771
		4,042,763			2,920,410
Less: reserve for obsolete inventories		(1,064,035	)		(1,093,326	)
	$	2,978,728		$	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.