Inventory

The Company began capitalizing inventory as of March 31, 2016, when it was determined that the inventory had a probable future economic benefit. Inventory has been recorded at cost as of March 31, 2017 and December 31, 2016. Costs capitalized at March 31, 2017 and December 31, 2016 relate to HOTSHOT finished goods, as well as raw materials available to be used for future production runs.

The following table presents inventory:



	March 31, 2017		December 31, 2016
Raw materials	$	19,628	$	19,888
Finished goods	394,694		434,244
Total inventory	$	414,322	$	454,132

There were no inventory write-offs during the three months ended March 31, 2017. Write-offs totaled $185,298 for the three months ended March 31, 2016 and were included in cost of product revenue in the accompanying condensed consolidated statement of operations.

The cost of product revenue related to deferred revenue is capitalized and recorded as cost of product revenue at the time the revenue is recognized.