Note 4 – Inventories

Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based on the weighted-average principle, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, costs include an appropriate share of production overhead based on normal operating capacity.

Inventories consist of the following:

As of June 30, 2020, on account of the unfavorable factors existing within its rapid, point-of-care screening and testing products business, the Company determined that inventory would be written down to a net realizable value of $0. Accordingly, during the three and six months ended June 30, 2020, the Company recorded charges of $193,839 and $197,723, respectively, to adjust inventory to net realizable value. During the three and six months ended June 30, 2019, the Company recorded charges of $41,849 and $45,946, respectively, to adjust for obsolete inventory. These amounts were reflected within product cost of sales in the condensed consolidated statement of operations and comprehensive loss.