Replies to post #26055 on Intellipharmaceutics International Inc. (IPCI)

[Amigo Mike]

Angelo,

It is explained in the filing:

Inventory

Inventories comprise raw materials, work in process, and finished goods, which are valued at the lower of cost or market, on a first-in, first-out basis. Cost for work in process and finished goods inventories includes materials, direct labor, and an allocation of manufacturing overhead. Market for raw materials is replacement cost, and for work in process and finished goods is net realizable value. The Company evaluates the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand, the price the Company expects to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. As of February 28, 2017, the Company had pre-launch inventories of $402,974 relating to the anticipated launch by Mallinckrodt of our generic Seroquel XR® ANDA product candidate. Should the Company not secure final FDA approval for this product, or should the launch be delayed, inventory write-offs may occur to the extent the Company is unable to recover the full value of its inventory. The recoverability of the cost of pre-launch inventories with a limited shelf life is evaluated based on the specific facts and circumstances surrounding the timing of the anticipated product launch.

Amigo Mike