Quarterly report pursuant to Section 13 or 15(d)

Inventory

v3.3.0.814
Inventory
9 Months Ended
Sep. 30, 2015
Inventory Disclosure [Abstract]  
Inventory

5.

Inventory

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 September 30, 2015 and December 31, 2014, net of reserves of $352,000 and $539,000, respectively, are as follows:

 

 

 

September 30,

2015

 

 

December 31,

2014

 

 

 

(unaudited)

 

 

 

 

 

Materials

 

$

396,000

 

 

$

 

Work-in-process

 

 

236,422

 

 

 

1,034,476

 

Finished goods

 

 

596,450

 

 

 

436,936

 

Reserves

 

 

(351,689

)

 

 

(539,027

)

Total

 

$

877,183

 

 

$

932,385

 

 

During the nine-month period ended September 30, 2015, we capitalized $810,000 of inventory costs associated with our Lymphoseek product.  The Company capitalized no such costs during the same period in 2014.  During the nine-month period ended September 30, 2015, we wrote off $120,000 of materials related to production issues.  During the nine-month periods ended September 30, 2015 and 2014, we utilized $184,000 and $121,000, 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.