financial operations overview revenue to date , we have not generated any revenues . our ability to generate product revenues , which we do not expect will occur for many years , if ever , will depend heavily on the successful development and eventual commercialization of our product candidates . research and development expenses research and development expenses consist of costs associated with our research activities , including our drug discovery efforts , and the development of our therapeutic product candidates and companion diagnostics . our research and development expenses consist of : employee-related expenses , including salaries , benefits , travel and stock-based compensation expense ; 74 external research and development expenses incurred under arrangements with third parties , such as contract research organizations , or cros , manufacturing organizations and consultants , including our scientific advisory board ; license fees ; and facilities , depreciation and other allocated expenses , which include direct and allocated expenses for rent and maintenance of facilities , depreciation of leasehold improvements and equipment , and laboratory and other supplies . we expense research and development costs to operations as incurred . we account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received , rather than when the payment is made . we use our employee and infrastructure resources across multiple research and development projects . we do not allocate employee-related expenses or depreciation to any particular project . because all of our development projects are in preclinical development , we do not track research and development costs by project . the components of our research and development costs are described in more detail in `` results of operations . `` we anticipate that our research and development expenses will increase significantly in future periods as we increase the scope and rate of our drug discovery efforts and begin costlier development activities , including clinical trials for our current and additional product candidates in the future . the successful development of our product candidates is highly uncertain . at this time , we can not reasonably estimate or know the nature , timing and estimated costs of the efforts that will be necessary to complete development of our product candidates or the period , if any , in which material net cash inflows from our product candidates may commence . this is due to the numerous risks and uncertainties associated with developing drugs , including the uncertainty of : the scope , rate of progress and expense of our drug discovery efforts and other research and development activities ; the potential benefits of our product candidates over other therapies ; our ability to market , commercialize and achieve market acceptance for any of our product candidates that we are developing or may develop in the future ; clinical trial results ; the terms and timing of regulatory approvals ; and the expense of filing , prosecuting , defending and enforcing patent claims and other intellectual property rights . a change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate . for example , if the fda or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of a product candidate or if we experience significant delays in enrollment in any clinical trials , we could be required to expend significant additional financial resources and time on the completion of clinical development . 75 general and administrative expenses general and administrative expenses consist primarily of salaries and related costs for personnel , including stock-based compensation expense , in our executive , finance and business development functions . other general and administrative expenses include allocated facility costs and professional fees for legal , patent , investor and public relations , consulting , insurance premiums , and accounting services . interest income prior to september 30 , 2011 , our cash and cash equivalents were invested in non-interest-bearing accounts . as a result , we did n't earn interest income until the last three months of 2011. accretion of preferred stock prior to the conversion of our preferred stock into 11,740,794 shares of common stock upon the closing of our initial public offering in february 2012 , our preferred stock was redeemable beginning in 2016 at its original issue price plus any declared but unpaid dividends upon a specified vote of the preferred stockholders . accretion of preferred stock reflects the periodic accretion of issuance costs on our preferred stock to its redemption value . critical accounting policies and significant judgments and estimates our management 's discussion and analysis of our financial condition and results of operations is based on our financial statements , which we have prepared in accordance with u.s. generally accepted accounting principles . the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements . on an ongoing basis , we evaluate our estimates and judgments , including those related to accrued expenses and stock-based compensation described in greater detail below . we base our estimates on our limited historical experience , known trends and events and various other factors that we believe are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . story_separator_special_tag to the extent that we raise additional capital through the sale of equity or convertible debt securities , the ownership 82 interest of our existing stockholders will be diluted , and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders . debt financing , if available , may involve agreements that include covenants limiting or restricting our ability to take specific actions , such as incurring additional debt , making capital expenditures or declaring dividends . if we raise additional funds through collaborations , strategic alliances or licensing arrangements with third parties , we may have to relinquish valuable rights to our technologies , future revenue streams , research programs or product candidates or grant licenses on terms that may not be favorable to us . if we are unable to raise additional funds through equity or debt financings when needed , we may be required to delay , limit , reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves . contractual obligations and commitments the following table summarizes our contractual obligations at december 31 , 2012. replace_table_token_10_th ( 1 ) as discussed in note 11 to the financial statements appearing elsewhere in this annual report on form 10-k , we have executed several agreements to license intellectual property . the license agreements require us to pay upfront license fees and ongoing annual license maintenance fees , totaling a minimum of $ 150,000 per year beginning in 2013 up to a maximum amount of $ 480,000 per year beginning in 2017 , as well as reimburse certain patent costs incurred by the licensors , as applicable . we have not included maintenance fees in the table above since the minimum annual payments are perpetual and the agreements are cancelable by us at any time upon prior written notice to the licensor . in july 2012 , we entered into a license agreement with pfizer inc. , ( `` pfizer `` ) , under which pfizer granted us worldwide , exclusive rights to research , develop , manufacture and commercialize products containing certain of pfizer 's inhibitors of focal adhesion kinase ( the `` products `` ) for all therapeutic , diagnostic and prophylactic uses in humans . we have the right to grant sublicenses under the foregoing licensed rights , subject to certain restrictions . we are solely responsible , at our own expense , for the clinical development of the products , which is to be conducted in accordance with an agreed-upon development plan . we are also responsible for all manufacturing and commercialization activities at our own expense . pfizer is required to provide us with an initial quantity of clinical supply of one of the products for an agreed upon price . we made a one-time cash payment to pfizer in the amount of $ 1.5 million and issued to pfizer 192,012 shares of our common stock . pfizer is also eligible to receive up to $ 2 million in developmental milestones and up to an additional $ 125 million based on the successful attainment of regulatory and commercial sales milestones . pfizer is also eligible to receive high single to mid double digit royalties on future net sales of products . our royalty obligations with respect to each product in each country begin on the date of first commercial sale of the product in that country , and end on the later of 10 years after the date of first commercial sale of the product in that country or the date of expiration or abandonment of the last claim contained in any issued patent or patent application licensed by pfizer to us that covers the product in that country . under our drug discovery platform license agreement , which we amended and restated in january 2012 , we also have agreed to make milestone payments to the whitehead institute upon achieving various development , regulatory and commercialization milestones . for each licensed product , we agreed to make milestone payments of up to an aggregate of $ 1,560,000 plus an additional amount for 83 each subsequent approval of additional indications for a maximum number of licensed products . for each identified product that is not a licensed product , we agreed to make milestone payments of up to an aggregate of $ 815,000 plus an additional amount for each subsequent approval of additional indications for a maximum number of identified products . each type of specified milestone payment is payable only for each of the maximum number of licensed products and the maximum number of identified products , as the case may be , to achieve the applicable milestone . in addition , a separate milestone payment is due upon the first commercial sale of each licensed product or identified product that is a diagnostic or prognostic test . a single additional milestone payment is due for the first issuance of licensed patent rights in the united states , the united kingdom , france , germany , spain or italy . in addition , we have agreed to pay the whitehead institute royalties as a percentage of net sales of licensed products . the royalty rate is in the low single digits as a percentage of net sales for licensed products that are therapeutics , the mid single digits for licensed products that are diagnostics or prognostics and less than one percent for identified products . under our license agreement with poniard pharmaceuticals , inc. , or poniard , that we entered into in november 2011 relating to vs-4718 and vs-5095 and other compounds covered by a licensed patent right under that agreement that have the inhibition of focal adhesion kinase as a primary mode of action , we paid an upfront license fee and agreed to pay poniard milestone payments of up to an

liquidity and capital resources sources of liquidity to date , we have not generated any revenues . we have financed our operations to date through private placements of our preferred stock and our initial public offering , which we completed in february 2012. as of december 31 , 2012 , we had received $ 68.1 million in net proceeds from the issuance of preferred stock and $ 56.8 million in net proceeds from our initial public offering in february 2012. as of december 31 , 2012 , we had $ 91.5 million in cash , cash equivalents , short-term investments and long-term investments . we primarily invest our cash , cash equivalents and investments in a u.s. treasury money market fund , u.s. agency notes and corporate bonds . 80 cash flows the following table sets forth the primary sources and uses of cash for each of the periods set forth below . replace_table_token_9_th operating activities . the use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and favorable changes in the components of working capital . the increase in cash used in operating activities for the year ended december 31 , 2012 compared to the year ended december 31 , 2011 is due to an increase in research and development expenses as we increased our research and development headcount and increased spending on external research and development costs . the significant increase in cash used in operating activities for the year ended december 31 , 2011 compared to the period from august 4 , 2010 ( inception ) to december 31 , 2010 is due to an increase in research and development expenses as we increased our research and development headcount , increased spending on external research and development costs and from increases in the balance of accounts payable , accrued expenses and deferred rent .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources sources of liquidity to date , we have not generated any revenues . we have financed our operations to date through private placements of our preferred stock and our initial public offering , which we completed in february 2012. as of december 31 , 2012 , we had received $ 68.1 million in net proceeds from the issuance of preferred stock and $ 56.8 million in net proceeds from our initial public offering in february 2012. as of december 31 , 2012 , we had $ 91.5 million in cash , cash equivalents , short-term investments and long-term investments . we primarily invest our cash , cash equivalents and investments in a u.s. treasury money market fund , u.s. agency notes and corporate bonds . 80 cash flows the following table sets forth the primary sources and uses of cash for each of the periods set forth below . replace_table_token_9_th operating activities . the use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and favorable changes in the components of working capital . the increase in cash used in operating activities for the year ended december 31 , 2012 compared to the year ended december 31 , 2011 is due to an increase in research and development expenses as we increased our research and development headcount and increased spending on external research and development costs . the significant increase in cash used in operating activities for the year ended december 31 , 2011 compared to the period from august 4 , 2010 ( inception ) to december 31 , 2010 is due to an increase in research and development expenses as we increased our research and development headcount , increased spending on external research and development costs and from increases in the balance of accounts payable , accrued expenses and deferred rent .
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 Suspicious Activity Report : financial operations overview revenue to date , we have not generated any revenues . our ability to generate product revenues , which we do not expect will occur for many years , if ever , will depend heavily on the successful development and eventual commercialization of our product candidates . research and development expenses research and development expenses consist of costs associated with our research activities , including our drug discovery efforts , and the development of our therapeutic product candidates and companion diagnostics . our research and development expenses consist of : employee-related expenses , including salaries , benefits , travel and stock-based compensation expense ; 74 external research and development expenses incurred under arrangements with third parties , such as contract research organizations , or cros , manufacturing organizations and consultants , including our scientific advisory board ; license fees ; and facilities , depreciation and other allocated expenses , which include direct and allocated expenses for rent and maintenance of facilities , depreciation of leasehold improvements and equipment , and laboratory and other supplies . we expense research and development costs to operations as incurred . we account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received , rather than when the payment is made . we use our employee and infrastructure resources across multiple research and development projects . we do not allocate employee-related expenses or depreciation to any particular project . because all of our development projects are in preclinical development , we do not track research and development costs by project . the components of our research and development costs are described in more detail in `` results of operations . `` we anticipate that our research and development expenses will increase significantly in future periods as we increase the scope and rate of our drug discovery efforts and begin costlier development activities , including clinical trials for our current and additional product candidates in the future . the successful development of our product candidates is highly uncertain . at this time , we can not reasonably estimate or know the nature , timing and estimated costs of the efforts that will be necessary to complete development of our product candidates or the period , if any , in which material net cash inflows from our product candidates may commence . this is due to the numerous risks and uncertainties associated with developing drugs , including the uncertainty of : the scope , rate of progress and expense of our drug discovery efforts and other research and development activities ; the potential benefits of our product candidates over other therapies ; our ability to market , commercialize and achieve market acceptance for any of our product candidates that we are developing or may develop in the future ; clinical trial results ; the terms and timing of regulatory approvals ; and the expense of filing , prosecuting , defending and enforcing patent claims and other intellectual property rights . a change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate . for example , if the fda or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of a product candidate or if we experience significant delays in enrollment in any clinical trials , we could be required to expend significant additional financial resources and time on the completion of clinical development . 75 general and administrative expenses general and administrative expenses consist primarily of salaries and related costs for personnel , including stock-based compensation expense , in our executive , finance and business development functions . other general and administrative expenses include allocated facility costs and professional fees for legal , patent , investor and public relations , consulting , insurance premiums , and accounting services . interest income prior to september 30 , 2011 , our cash and cash equivalents were invested in non-interest-bearing accounts . as a result , we did n't earn interest income until the last three months of 2011. accretion of preferred stock prior to the conversion of our preferred stock into 11,740,794 shares of common stock upon the closing of our initial public offering in february 2012 , our preferred stock was redeemable beginning in 2016 at its original issue price plus any declared but unpaid dividends upon a specified vote of the preferred stockholders . accretion of preferred stock reflects the periodic accretion of issuance costs on our preferred stock to its redemption value . critical accounting policies and significant judgments and estimates our management 's discussion and analysis of our financial condition and results of operations is based on our financial statements , which we have prepared in accordance with u.s. generally accepted accounting principles . the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements . on an ongoing basis , we evaluate our estimates and judgments , including those related to accrued expenses and stock-based compensation described in greater detail below . we base our estimates on our limited historical experience , known trends and events and various other factors that we believe are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . story_separator_special_tag to the extent that we raise additional capital through the sale of equity or convertible debt securities , the ownership 82 interest of our existing stockholders will be diluted , and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders . debt financing , if available , may involve agreements that include covenants limiting or restricting our ability to take specific actions , such as incurring additional debt , making capital expenditures or declaring dividends . if we raise additional funds through collaborations , strategic alliances or licensing arrangements with third parties , we may have to relinquish valuable rights to our technologies , future revenue streams , research programs or product candidates or grant licenses on terms that may not be favorable to us . if we are unable to raise additional funds through equity or debt financings when needed , we may be required to delay , limit , reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves . contractual obligations and commitments the following table summarizes our contractual obligations at december 31 , 2012. replace_table_token_10_th ( 1 ) as discussed in note 11 to the financial statements appearing elsewhere in this annual report on form 10-k , we have executed several agreements to license intellectual property . the license agreements require us to pay upfront license fees and ongoing annual license maintenance fees , totaling a minimum of $ 150,000 per year beginning in 2013 up to a maximum amount of $ 480,000 per year beginning in 2017 , as well as reimburse certain patent costs incurred by the licensors , as applicable . we have not included maintenance fees in the table above since the minimum annual payments are perpetual and the agreements are cancelable by us at any time upon prior written notice to the licensor . in july 2012 , we entered into a license agreement with pfizer inc. , ( `` pfizer `` ) , under which pfizer granted us worldwide , exclusive rights to research , develop , manufacture and commercialize products containing certain of pfizer 's inhibitors of focal adhesion kinase ( the `` products `` ) for all therapeutic , diagnostic and prophylactic uses in humans . we have the right to grant sublicenses under the foregoing licensed rights , subject to certain restrictions . we are solely responsible , at our own expense , for the clinical development of the products , which is to be conducted in accordance with an agreed-upon development plan . we are also responsible for all manufacturing and commercialization activities at our own expense . pfizer is required to provide us with an initial quantity of clinical supply of one of the products for an agreed upon price . we made a one-time cash payment to pfizer in the amount of $ 1.5 million and issued to pfizer 192,012 shares of our common stock . pfizer is also eligible to receive up to $ 2 million in developmental milestones and up to an additional $ 125 million based on the successful attainment of regulatory and commercial sales milestones . pfizer is also eligible to receive high single to mid double digit royalties on future net sales of products . our royalty obligations with respect to each product in each country begin on the date of first commercial sale of the product in that country , and end on the later of 10 years after the date of first commercial sale of the product in that country or the date of expiration or abandonment of the last claim contained in any issued patent or patent application licensed by pfizer to us that covers the product in that country . under our drug discovery platform license agreement , which we amended and restated in january 2012 , we also have agreed to make milestone payments to the whitehead institute upon achieving various development , regulatory and commercialization milestones . for each licensed product , we agreed to make milestone payments of up to an aggregate of $ 1,560,000 plus an additional amount for 83 each subsequent approval of additional indications for a maximum number of licensed products . for each identified product that is not a licensed product , we agreed to make milestone payments of up to an aggregate of $ 815,000 plus an additional amount for each subsequent approval of additional indications for a maximum number of identified products . each type of specified milestone payment is payable only for each of the maximum number of licensed products and the maximum number of identified products , as the case may be , to achieve the applicable milestone . in addition , a separate milestone payment is due upon the first commercial sale of each licensed product or identified product that is a diagnostic or prognostic test . a single additional milestone payment is due for the first issuance of licensed patent rights in the united states , the united kingdom , france , germany , spain or italy . in addition , we have agreed to pay the whitehead institute royalties as a percentage of net sales of licensed products . the royalty rate is in the low single digits as a percentage of net sales for licensed products that are therapeutics , the mid single digits for licensed products that are diagnostics or prognostics and less than one percent for identified products . under our license agreement with poniard pharmaceuticals , inc. , or poniard , that we entered into in november 2011 relating to vs-4718 and vs-5095 and other compounds covered by a licensed patent right under that agreement that have the inhibition of focal adhesion kinase as a primary mode of action , we paid an upfront license fee and agreed to pay poniard milestone payments of up to an

