Quarterly report pursuant to Section 13 or 15(d)

Inventory

Inventory

3 Months Ended

Mar. 31, 2015

All components of inventory are valued at the lower of cost (first-in, first-out) or market. We adjust inventory to market value when the net realizable value is lower than the carrying cost of the inventory. Market value is determined based on estimated sales activity and margins.

The components of inventory as of March 31, 2015 and December 31, 2014, net of reserves of $659,000 and $539,000, respectively, are as follows:



	March 31, 2015		December 31, 2014
	(unaudited)
Work-in-process	$	360,442	$	495,449
Finished goods	211,163		436,936
Total	$	571,605	$	932,385

During the three-month period ended March 31, 2015, we reserved an additional $120,000 of materials related to production issues. During the three-month periods ended March 31, 2015 and 2014, we wrote off $37,000 and $10,000, respectively, of previously capitalized Lymphoseek inventory due to the consumption of the Lymphoseek material for product testing and development purposes.

We estimate a reserve for obsolete inventory based on management’s judgment of probable future commercial use, which is based on an analysis of current inventory levels, estimated future sales and production rates, and estimated shelf lives.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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