our design center conducts development services for us and for government and private customers and develops and sells printable inks and pastes , thermal management materials , and graphene foils and windows . our principal operating segments coincide with the types of products to be sold . the products from which revenues are derived are consistent with the reporting structure of the company 's internal organization . the company 's two reportable segments for the year ended december 31 , 2016 and for the 2015 period were ( i ) the product segment and ( ii ) the contract services segment . results of operations the following comparative analysis on results of operations was based primarily on the comparative consolidated financial statements , footnotes and related information for the periods identified below and should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this report . the results discussed below are for the years ended december 31 , 2016 and 2015. comparison of results of operations for the year ended december 31 , 2016 and 2015 revenues for the years ended december 31 , 2016 and 2015 , revenues consisted of the following : replace_table_token_2_th for the year ended december 31 , 2016 , sales from the product segment decreased by $ 808,201 or 10 % as compared to the year ended december 31 , 2015. this was primarily attributable to reduced sales volume of our optical cleaners and reduced volume of sales for anti-fog products to our traditional customers and delays in putting our products into other channels . for the year ended december 31 , 2016 , revenues of our contract services segment decreased by $ 761,214 or 43 % due primarily to a reduction in government and private service contracts . fewer government contracts results , in part , from our decision not to apply for contracts that require us to share a portion of the costs . cost of revenues cost of revenues includes inventory costs , materials and supplies costs , internal labor and related benefits , subcontractor costs , depreciation , overhead and shipping and handling costs incurred including costs related to government and private contracts in our contract services segment . 13 for the year ended december 31 , 2016 , cost of revenues decreased by $ 1,034,163 or 16 % reflecting the reduced revenues . these consisted of the following : replace_table_token_3_th gross profit and gross margin for the year ended december 31 , 2016 , gross profit amounted to $ 2,805,687 as compared to $ 3,340,939 for the year ended december 31 , 2015 , a decrease of $ 535,252 or 16 % . the decrease was due to reduced revenue at the top line . for the years ended december 31 , 2016 and 2015 , gross margins were 34.6 % and 34.5 % , respectively . gross profit and gross margin by segment and totals are as follows : replace_table_token_4_th * gross margin % based on respective segments sales . operating expenses for the year ended december 31 , 2016 , operating expenses amounted to $ 3,552,707 as compared to $ 5,104,862 for the year ended december 31 , 2015 , a decrease of $ 1,552,155 or 30 % . for the years ended december 31 , 2016 and 2015 , operating expenses consisted of the following : replace_table_token_5_th ● for the year ended december 31 , 2016 , selling and marketing expenses decreased by $ 60,144 or 21 % as compared to the year ended december 31 , 2015. the decrease was primarily attributable to reduced commission payments and reduced attendance at trade shows . ● for the year ended december 31 , 2016 , salaries , wages and related benefits decreased by $ 701,420 , or 32 % , as compared to the year ended december 31 , 2015 , reflecting rightsizing of operations to reflect the reduced revenues . ● for the year ended december 31 , 2016 , research and development costs decreased by $ 453,944 or 61 % , as compared to the year ended december 31 , 2015. the decrease during the period was attributable to the costs incurred in 2015 for development of the new surface cleaner and fortifier product as well as work done in 2015 for the development of gels , foamers and alcohol-free cleaners . 14 ● for the year ended december 31 , 2016 , professional fees decreased by $ 147,347 or 22 % , as compared to the year ended december 31 , 2015. the decrease reflects the costs incurred for tax return preparation in 2015 related to the business combination that closed in 2014 as well as the move of legal work to in-house counsel . ● for the year ended december 31 , 2016 , general and administrative expenses increased by $ 1,249 or 0.12 % as compared to the year ended december 31 , 2015 . ● in december 2015 , we recorded an impairment charge of $ 188,051 reducing our intangible assets to zero . loss from operations for the year ended december 31 , 2016 , loss from operations amounted to $ 747,020 as compared to a loss from operations of $ 1,763,923 for the year ended december 31 , 2015 , a decrease of $ 1,016,903 or 58 % . other income ( expense ) other income ( expense ) includes interest expense and other income , net . story_separator_special_tag impairment of long-lived assets in accordance with asc topic 360 , we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable , or at least annually . we recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset . the amount of impairment is measured as the difference between the asset 's estimated fair value and its book value . revenue recognition pursuant to the guidance of asc topic 605 , we recognize sales when persuasive evidence of an arrangement exists , delivery has occurred or services have been provided , the purchase price is fixed or determinable and collectability is reasonably assured . types of revenue : ● net product sales by our subsidiary nanofilm . ● reimbursements under agreements to perform contract services related to new products and product development for government agencies and others by our subsidiary , applied nanotech . we do not perform contracts that are contingent upon successful results . larger projects are sometimes broken down in phases to allow the customer to determine at the end of each phase if they wish to move to the next phase . the agreements with federal government agencies generally provide that , upon completion of a technology development program , the funding agency is granted a royalty-free license to use any technology developed under the program for its own purposes , but not any preexisting technology that we use in connection with the program . we retain all other rights to use , develop , and commercialize the technology . agreements with nongovernmental entities generally allow the entity the first opportunity to license the technology from us upon completion of the project . ● product sales and other miscellaneous revenues from our subsidiary , applied nanotech such as the sale of conductive inks , thermal management materials and graphene foils . 17 revenue recognition criteria : ● net product sales by our subsidiary nano , are recognized when the product is shipped to the customer and title is transferred . ● revenue from contract services performed under government contracts is recognized when it is earned pursuant to the terms of the contract . these projects are usually billed monthly based on costs , hours , or some other measure of activity during the month and revenue is recognized as services are provided . if there are substantive acceptance terms then revenue will not be recognized until acceptance occurs . the recognition of revenue may not correspond with the billings allowable under the contract . to the extent that billings exceed revenue earned , a portion of the revenue is deferred until it is earned . ● revenue from contract services performed under non-governmental contracts is recognized when it is earned pursuant to the terms of the contract . each contract is unique and tailored to the needs of the customer and goals of the project . some contracts may call for a monthly payment for a fixed time . other contracts may be for a fixed dollar amount with an unspecified time , although there is frequently a targeted completion date . these contracts generally involve some sort of up-front payment . some contracts may call for the delivery of samples , or may call for the transfer of equipment or other items developed during the project to the customer . these projects are usually billed monthly based on costs , hours , or some other measure of activity during the month and revenue is recognized as services are provided . if there are substantive acceptance terms then revenue will not be recognized until acceptance occurs . ● revenue from other product sales is recognized at the time the product shipped . our subsidiary applied nanotech 's primary business is contract services not the sale of products . product sales are generally insignificant in number . ● other miscellaneous revenue is recognized as deemed appropriate given the facts of the situation and is generally not material . research and development research and development costs incurred in the development of our products and under other company sponsored research and development projects are expensed as incurred . costs such as direct labor , direct costs , and other allocated costs incurred to perform contract services under government and private contracts are included in cost of sales . stock-based compensation stock-based compensation is accounted for based on the requirements of the share-based payment topic of asc 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award ( presumptively , the vesting period ) . the asc also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award . pursuant to asc topic 505-50 , for share-based payments to consultants and other third-parties , compensation expense is determined at the “ measurement date . ” the expense is recognized over the service period of the award . until the measurement date is reached , the total amount of compensation expense remains uncertain . we initially record compensation expense based on the fair value of the award at the reporting date . 18 segment reporting we use “ the management approach ” in determining reportable operating segments . the management approach considers the internal organization and reporting used by our chief operating decision maker for making operating decisions and assessing performance as the source for determining our reportable segments . our chief operating decision maker is the chairman and chief executive officer ( “ ceo ” ) of the company , who reviews operating results to make decisions about allocating resources and assessing performance for the

liquidity and capital resources liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements . we had a working capital deficit of $ ( 1,072,691 ) and $ 189,128 of cash as of december 31 , 2016 and working capital deficit of $ ( 889,657 ) and $ 262,519 of cash as of december 31 , 2015. the following table sets forth a summary of changes in our working capital from december 31 , 2015 to december 31 , 2016 : replace_table_token_6_th the decrease in working capital was primarily attributable to reductions in accounts receivable , prepaid expenses and cash . net cash provided by operating activities was $ 444,453 for the year ended december 31 , 2016 as compared to net cash used in operating activities of $ 804,208 for the year ended december 31 , 2015 , a positive change of $ 1,248,661 . 15 ● net cash provided by operating activities for the year ended december 31 , 2016 primarily reflected a net loss of $ 556,001 , partially offset by the add-back of non-cash items totaling $ 364,245 , and $ 636,209 provided by changes in operating assets and liabilities .


 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 liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements . we had a working capital deficit of $ ( 1,072,691 ) and $ 189,128 of cash as of december 31 , 2016 and working capital deficit of $ ( 889,657 ) and $ 262,519 of cash as of december 31 , 2015. the following table sets forth a summary of changes in our working capital from december 31 , 2015 to december 31 , 2016 : replace_table_token_6_th the decrease in working capital was primarily attributable to reductions in accounts receivable , prepaid expenses and cash . net cash provided by operating activities was $ 444,453 for the year ended december 31 , 2016 as compared to net cash used in operating activities of $ 804,208 for the year ended december 31 , 2015 , a positive change of $ 1,248,661 . 15 ● net cash provided by operating activities for the year ended december 31 , 2016 primarily reflected a net loss of $ 556,001 , partially offset by the add-back of non-cash items totaling $ 364,245 , and $ 636,209 provided by changes in operating assets and liabilities .
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 Suspicious Activity Report : our design center conducts development services for us and for government and private customers and develops and sells printable inks and pastes , thermal management materials , and graphene foils and windows . our principal operating segments coincide with the types of products to be sold . the products from which revenues are derived are consistent with the reporting structure of the company 's internal organization . the company 's two reportable segments for the year ended december 31 , 2016 and for the 2015 period were ( i ) the product segment and ( ii ) the contract services segment . results of operations the following comparative analysis on results of operations was based primarily on the comparative consolidated financial statements , footnotes and related information for the periods identified below and should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this report . the results discussed below are for the years ended december 31 , 2016 and 2015. comparison of results of operations for the year ended december 31 , 2016 and 2015 revenues for the years ended december 31 , 2016 and 2015 , revenues consisted of the following : replace_table_token_2_th for the year ended december 31 , 2016 , sales from the product segment decreased by $ 808,201 or 10 % as compared to the year ended december 31 , 2015. this was primarily attributable to reduced sales volume of our optical cleaners and reduced volume of sales for anti-fog products to our traditional customers and delays in putting our products into other channels . for the year ended december 31 , 2016 , revenues of our contract services segment decreased by $ 761,214 or 43 % due primarily to a reduction in government and private service contracts . fewer government contracts results , in part , from our decision not to apply for contracts that require us to share a portion of the costs . cost of revenues cost of revenues includes inventory costs , materials and supplies costs , internal labor and related benefits , subcontractor costs , depreciation , overhead and shipping and handling costs incurred including costs related to government and private contracts in our contract services segment . 13 for the year ended december 31 , 2016 , cost of revenues decreased by $ 1,034,163 or 16 % reflecting the reduced revenues . these consisted of the following : replace_table_token_3_th gross profit and gross margin for the year ended december 31 , 2016 , gross profit amounted to $ 2,805,687 as compared to $ 3,340,939 for the year ended december 31 , 2015 , a decrease of $ 535,252 or 16 % . the decrease was due to reduced revenue at the top line . for the years ended december 31 , 2016 and 2015 , gross margins were 34.6 % and 34.5 % , respectively . gross profit and gross margin by segment and totals are as follows : replace_table_token_4_th * gross margin % based on respective segments sales . operating expenses for the year ended december 31 , 2016 , operating expenses amounted to $ 3,552,707 as compared to $ 5,104,862 for the year ended december 31 , 2015 , a decrease of $ 1,552,155 or 30 % . for the years ended december 31 , 2016 and 2015 , operating expenses consisted of the following : replace_table_token_5_th ● for the year ended december 31 , 2016 , selling and marketing expenses decreased by $ 60,144 or 21 % as compared to the year ended december 31 , 2015. the decrease was primarily attributable to reduced commission payments and reduced attendance at trade shows . ● for the year ended december 31 , 2016 , salaries , wages and related benefits decreased by $ 701,420 , or 32 % , as compared to the year ended december 31 , 2015 , reflecting rightsizing of operations to reflect the reduced revenues . ● for the year ended december 31 , 2016 , research and development costs decreased by $ 453,944 or 61 % , as compared to the year ended december 31 , 2015. the decrease during the period was attributable to the costs incurred in 2015 for development of the new surface cleaner and fortifier product as well as work done in 2015 for the development of gels , foamers and alcohol-free cleaners . 14 ● for the year ended december 31 , 2016 , professional fees decreased by $ 147,347 or 22 % , as compared to the year ended december 31 , 2015. the decrease reflects the costs incurred for tax return preparation in 2015 related to the business combination that closed in 2014 as well as the move of legal work to in-house counsel . ● for the year ended december 31 , 2016 , general and administrative expenses increased by $ 1,249 or 0.12 % as compared to the year ended december 31 , 2015 . ● in december 2015 , we recorded an impairment charge of $ 188,051 reducing our intangible assets to zero . loss from operations for the year ended december 31 , 2016 , loss from operations amounted to $ 747,020 as compared to a loss from operations of $ 1,763,923 for the year ended december 31 , 2015 , a decrease of $ 1,016,903 or 58 % . other income ( expense ) other income ( expense ) includes interest expense and other income , net . story_separator_special_tag impairment of long-lived assets in accordance with asc topic 360 , we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable , or at least annually . we recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset . the amount of impairment is measured as the difference between the asset 's estimated fair value and its book value . revenue recognition pursuant to the guidance of asc topic 605 , we recognize sales when persuasive evidence of an arrangement exists , delivery has occurred or services have been provided , the purchase price is fixed or determinable and collectability is reasonably assured . types of revenue : ● net product sales by our subsidiary nanofilm . ● reimbursements under agreements to perform contract services related to new products and product development for government agencies and others by our subsidiary , applied nanotech . we do not perform contracts that are contingent upon successful results . larger projects are sometimes broken down in phases to allow the customer to determine at the end of each phase if they wish to move to the next phase . the agreements with federal government agencies generally provide that , upon completion of a technology development program , the funding agency is granted a royalty-free license to use any technology developed under the program for its own purposes , but not any preexisting technology that we use in connection with the program . we retain all other rights to use , develop , and commercialize the technology . agreements with nongovernmental entities generally allow the entity the first opportunity to license the technology from us upon completion of the project . ● product sales and other miscellaneous revenues from our subsidiary , applied nanotech such as the sale of conductive inks , thermal management materials and graphene foils . 17 revenue recognition criteria : ● net product sales by our subsidiary nano , are recognized when the product is shipped to the customer and title is transferred . ● revenue from contract services performed under government contracts is recognized when it is earned pursuant to the terms of the contract . these projects are usually billed monthly based on costs , hours , or some other measure of activity during the month and revenue is recognized as services are provided . if there are substantive acceptance terms then revenue will not be recognized until acceptance occurs . the recognition of revenue may not correspond with the billings allowable under the contract . to the extent that billings exceed revenue earned , a portion of the revenue is deferred until it is earned . ● revenue from contract services performed under non-governmental contracts is recognized when it is earned pursuant to the terms of the contract . each contract is unique and tailored to the needs of the customer and goals of the project . some contracts may call for a monthly payment for a fixed time . other contracts may be for a fixed dollar amount with an unspecified time , although there is frequently a targeted completion date . these contracts generally involve some sort of up-front payment . some contracts may call for the delivery of samples , or may call for the transfer of equipment or other items developed during the project to the customer . these projects are usually billed monthly based on costs , hours , or some other measure of activity during the month and revenue is recognized as services are provided . if there are substantive acceptance terms then revenue will not be recognized until acceptance occurs . ● revenue from other product sales is recognized at the time the product shipped . our subsidiary applied nanotech 's primary business is contract services not the sale of products . product sales are generally insignificant in number . ● other miscellaneous revenue is recognized as deemed appropriate given the facts of the situation and is generally not material . research and development research and development costs incurred in the development of our products and under other company sponsored research and development projects are expensed as incurred . costs such as direct labor , direct costs , and other allocated costs incurred to perform contract services under government and private contracts are included in cost of sales . stock-based compensation stock-based compensation is accounted for based on the requirements of the share-based payment topic of asc 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award ( presumptively , the vesting period ) . the asc also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award . pursuant to asc topic 505-50 , for share-based payments to consultants and other third-parties , compensation expense is determined at the “ measurement date . ” the expense is recognized over the service period of the award . until the measurement date is reached , the total amount of compensation expense remains uncertain . we initially record compensation expense based on the fair value of the award at the reporting date . 18 segment reporting we use “ the management approach ” in determining reportable operating segments . the management approach considers the internal organization and reporting used by our chief operating decision maker for making operating decisions and assessing performance as the source for determining our reportable segments . our chief operating decision maker is the chairman and chief executive officer ( “ ceo ” ) of the company , who reviews operating results to make decisions about allocating resources and assessing performance for the

