C.	Inventories

Inventories are valued at the lower of cost or net realizable value using the FIFO (first-in, first-out) method. The Company reduces the value of its inventories to net realizable value when the net realizable value is believed to be less than the cost of the item. The inventory reserve for obsolescence as of September 30, 2017 and December 31, 2016 was $2,819,000 and $2,773,000, respectively.

Inventories are comprised of the following (in thousands):

	September 30, 2017		December 31, 2016
Raw materials	$	1,501	$	1,408
Work in process		1,568		1,306
Finished goods		838		924
Total Inventories, net	$	3,907	$	3,638