3.    Inventories

Inventories are comprised of unprocessed tissue, work-in-process, Avance® Nerve Graft, AxoGuard® Nerve Connector, AxoGuard® Nerve Protector, Avive® Soft Tissue Membrane, AcroVal® Neurosensory and Motor Testing System, AxoTouch® Two-Point Discriminator and supplies and are valued at the lower of cost (first-in, first-out) or net realizable value and consist of the following:

For the three months ended September 30, 2018 and 2017, the Company had inventory write-downs of $295,000 and $319,000, respectively, and for the nine months ended September 30, 2018 and 2017, the Company had inventory write-downs of $877,000 and $1.0 million, respectively, relating primarily to product obsolescence.