Quarterly report pursuant to Section 13 or 15(d)

NOTE 2: INVENTORIES

NOTE 2: INVENTORIES

3 Months Ended

Mar. 31, 2014

NOTE 2: INVENTORIES

Inventories are stated at the lower of cost or market value. Cost is determined using the average cost method or the FIFO method. The Company periodically evaluates the quantities on hand relative to current and historical selling prices and historical and projected sales volume. Based on these evaluations, provisions are made in each period to write down inventory to its net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, and for market prices lower than cost. Inventories in continuing business segments decreased, from December 31, 2013, $174,000 in the Training and Simulation Division and $1.4 million in the Battery Division:

	March 31, 2014		December 31, 2013
	(Unaudited)
Raw and packaging materials	$	6,618,489	$	6,761,876
Work in progress		912,952		666,386
Finished products		1,000,898		2,646,504
Total:	$	8,532,339	$	10,074,766