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INVENTORIES

6 Months Ended

Jun. 30, 2014

Notes to Financial Statements

NOTE 2. INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined principally on the average cost method. Inventories at June 30, 2014 and December 31, 2013 were as follows (in thousands):

		June 30, 2014				December 31, 2013
Raw materials		$	4,648			$	5,470
Work in process			1,660				882
Finished goods			1,853				2,455
Gross inventories			8,161				8,807
Less: reserve for obsolescence			(1,239	)			(392	)
Net inventories		$	6,922			$	8,415

For the period ended June 30, 2014, we recorded a charge of approximately $843,000 for excess and obsolete inventory, attributable to early stage manufacturing costs of J-Plasma, scrap associated with RoHS compliance mandates in the European Union, and other product line adjustments.

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- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6361739&loc=d3e7789-107766



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.5-02.6)

-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682



Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 6

-Subparagraph a, b, c

-Article 5

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