Quarterly report pursuant to sections 13 or 15(d)

Inventories

Inventories

9 Months Ended

Sep. 30, 2012

3.	Inventories:

Inventories consist of the following:


	(Unaudited) September 30 2012			December 31, 2011
Raw materials	$	1,564,110		$	1,708,642
Finished goods		1,296,986			2,163,820

		2,861,096			3,872,462
Less: inventory reserve		(1,524,419	)		(895,415	)

Net inventories	$	1,336,677		$	2,977,047

As a result of deteriorating market conditions and aggressive pricing by competitors, the Company experienced a decrease in market price for certain products in its LED replacement lamps segment. For the nine months ended September 30, 2012, the Company recorded a write down of inventory of $387,196 due to this decrease in market price.

- 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.

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