Note 9 – Inventories (restated)

Inventories consists of the following categories:

The Company has been actively marketing, on a global basis, the BreathScan Breath Alcohol products that were produced for and/or acquired as part of the ChubeWorkx settlement agreement in August 2016. Unfortunately, the Company has not been successful in securing buyers in sufficient volumes.   

An extensive analysis of the market opportunity has been performed and it was determined that the on-hand quantity of this group of products exceeded the expected near term demand for the product prior to its expiration. As such, the Company’s management elected to establish a reserve of $1,182,400 for the year ended December 31, 2017.

Obsolete inventory charged to cost of goods during the years ended December 31, 2017 and 2016 totaled $1,208,522 and $32,333.