4.  Inventory

The Company’s inventory consists of the following:

The Company’s classification of its inventory as either short or long-term inventory requires it to estimate the portion of on-hand inventory that will be realized over the next 12 months and does not include inventories which are not expected to be both purchased and realized in cost of sales over the next 12 months.  As the Company has purchase contracts as of September 30, 2018 to acquire sufficient inventory to fulfill their contract deliveries in the next 12 months, the inventory as of September 30, 2018 is considered long-term.

In conjunction with our lower of cost or net realizable value calculations, the Company reduced the inventory valuation by $268 for the nine months ended September 30, 2018.