in addition , the parties agreed to dismiss with prejudice the lawsuit commenced by got in january 2014. operating leases the company leases office facilities and office , lab and factory equipment under operating story_separator_special_tag introduction the following discussion should be read in conjunction with the financial statements and notes thereto . our fiscal year ends december 31. this document contains certain forward-looking statements including , among others , anticipated trends in our financial condition and results of operations and our business strategy . these forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties . ( see part i , item 1a , `` risk factors `` ) . actual results could differ materially from these forward-looking statements . important factors to consider in evaluating such forward-looking statements include ( i ) changes in external factors or in our internal budgeting process which might impact trends in our results of operations ; ( ii ) unanticipated working capital or other cash requirements ; ( iii ) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the industries in which we operate ; and ( iv ) various competitive market factors that may prevent us from competing successfully in the marketplace . overview we design , manufacture and supply miniature displays , which we refer to as oled-on-silicon-microdisplays , and microdisplay modules for virtual imaging , primarily for incorporation into the products of other manufacturers . microdisplays are typically smaller than many postage stamps , but when viewed through a magnifier they can contain all of the information appearing on a high-resolution personal computer screen . our microdisplays use organic light emitting diodes , or oleds , which emit light themselves when a current is passed through the device . our technology permits oleds to be coated onto silicon chips to produce high resolution oled-on-silicon microdisplays . we believe that our oled-on-silicon microdisplays offer a number of advantages in near to the eye applications over other current microdisplay technologies , including lower power requirements , less weight , fast video speed without flicker , and wider viewing angles . in addition , many computer and video electronic system functions can be built directly into the oled-on-silicon microdisplay , resulting in compact systems with lower expected overall system costs relative to alternate microdisplay technologies . we have devoted significant resources to the development and commercial launch of our oled microdisplay products into military , industrial and medical applications world-wide . first sales of our svga+ microdisplay began in may 2001 and we launched the svga-3d microdisplay in february 2002. in 2008 the sxga microdisplay became our first digital display , and in 2011 we introduced the vga oled-xl , our lowest powered microdisplay , and the wuxga oled-xl which exceeds 1080p hd resolution . as of january 31 , 2015 and 2014 , we had a backlog of approximately $ 8.5 and $ 13.4 mil lion , respectively , in products ordered for delivery through december 31 , 2015 and 2014 , respectively . this backlog consists of non-binding purchase orders and purchase agreements . these products are being applied or considered for near-eye and headset applications in products such as thermal imagers , night vision goggles , entertainment headsets , handheld internet and telecommunication appliances , viewfinders , and wearable computers to be manufactured by original equipment manufacturer ( oem ) customers . in addition to marketing oled-on-silicon microdisplays as components , we also offer microdisplays as an integrated package , which we call microviewer that includes a compact lens for viewing the microdisplay and electronic interfaces to convert the signal from our customer 's product into a viewable image on the microdisplay . we have also expanded our design and production activities to include display/optical subsystem assemblies for both military and commercial end-use products . we have developed a strong intellectual property portfolio that includes patents , manufacturing know-how and unique proprietary technologies to create high performance oled-on-silicon microdisplays and related optical systems . we believe our technology , intellectual property portfolio and position in the marketplace , gives us a leadership position in oled and oled-on-silicon microdisplay technology . we are one of only a few companies in the world to market and produce significant quantities of high resolution full-color small molecule oled-on-silicon microdisplays . in first quarter 2014 , emagin received a notification to stop shipments to three of its customers regarding a possible wire bonding problem in some of our microdisplays shipped to these customers . this issue resulted in a delay of shipments to these customers which impacted revenue for 2014. shipments to two of the three customers resumed in 2014. we are working with the third customer currently and expect to resume shipments to this customer in 2015. also in 2014 , emagin was awarded and began work on several new r & d contracts that will result in significant additional revenue beginning in 2014 and continuing in 2015 and 2016. the awards total over $ 7 million . there are three government programs : 1 ) to improve the backplane ; 2 ) to increase the brightness of the oled display and 3 ) the mantech program , which was awarded to increase the efficiency of the oled microdisplay manufacturing process . these r & d contracts are on schedule . initial design work was completed for the improved backplane project . preliminary tests to fabricate very low voltage , high brightness , oled devices show encouraging results . story_separator_special_tag accordingly , we increased our deferred tax asset to $ 8.8 million by recording a $ 0.7 million reduction of our deferred tax asset valuation allowance and recorded a corresponding tax benefit of $ 0.7 million . in 2013 , we had an operating loss and a projected cumulative loss through 2014 thus it was more likely than not that any of our deferred tax assets would be realized therefore , we recorded a full valuation allowance and income tax expense of $ 8.9 million . in 2014 , we incurred an operating loss and have a cumulative loss therefore it is more likely than not that none of our deferred tax assets will be realized and therefore , we maintained a full valuation allowance against our deferred tax assets . our effective income tax rate was an expense of 0 % and 171 % , respectively , in 2014 and 2013. the year over year change in our effective tax rate was primarily due to the recognition of a full valuation allowance on our deferred tax asset in 2013. results of operations the following table presents certain financial data as a percentage of total revenue for the periods indicated . our historical operating results are not necessarily indicative of the results for any future period . consolidated statements of operations data : replace_table_token_4_th year ended december 31 , 2014 compared to year ended december 31 , 2013 revenues replace_table_token_5_th revenues decreased approximately $ 2.3 million to a total of approximately $ 26.0 million for the year ended december 31 , 2014 from approximately $ 28.0 million for the year ended december 31 , 2013 , an 8 % decrease . in 2014 , product revenue decreased as there was an 18 % decrease in the number of displays sold offset by an 11 % increase in the average selling price as compared to 2013. contract revenue was relatively unchanged year over year . 24 cost of goods sold replace_table_token_6_th cost of goods sold is comprised of costs of product revenue and contract revenue . cost of product revenue includes materials , labor and manufacturing overhead related to our products . cost of contract revenue includes direct and allocated indirect costs associated with performance on contracts . cost of goods sold for the year ended december 31 , 2014 was approximately $ 18.3 million as compared to approximately $ 19.6 million for the year ended december 31 , 2013 , a decrease of approximately $ 1.2 million . cost of goods sold as a percentage of revenues was 71 % for the year ended december 31 , 2014 up from 70 % for the year ended december 31 , 2013 which is a result of a higher cost per display in 2014 , partially offset by a higher average selling price . depreciation increased $ 0.3 million due to the installation of new equipment . the following table outlines product , contract and total gross profit and related gross margins for the years ended december 31 , 2014 and 2013 ( dollars in thousands ) : replace_table_token_7_th in 2014 , total gross profit decreased approximately $ 1.0 million or 12 % . product revenue gross profit decreased approximately $ 1.1 million . gross margin was 29 % for the year ended december 31 , 2014 down slightly from 30 % for the year ended december 31 , 2013. product gross margin decreased from 29 % in 2013 to 28 % in 2014 due to a higher cost per display , partially offset by a higher average selling price in 2014. contract gross margin increased from 41 % in 2013 to 43 % in 2014. contract gross margin is dependent upon the mix of internal versus external third party costs , with the external third party costs causing a lower gross margin and reducing the contract gross profit . 25 operating expenses replace_table_token_8_th research and development expenses research and development expenses include salaries , development materials and other costs specifically allocated to the development of new microdisplay products , oled materials and subsystems . research and development expenses for the year ended december 31 , 2014 were approximately $ 4.5 million as compared to approximately $ 5.0 million for the year ended december 31 , 2013 , a decrease of approximately $ 0.5 million . the decrease in company-funded r & d expenses is due to expense being allocated to external funded contracts and lower non-cash compensation expense . selling , general and administrative expenses selling , general and administrative expenses consist principally of personnel costs , professional services fees , as well as other marketing , general corporate and administrative expenses . selling , general and administrative expenses for the years ended december 31 , 2014 were approximately $ 8.1 million as compared to approximately $ 8.6 million for the year ended december 31 , 2013 , a decrease of approximately $ 0.5 million . for the year ended december 31 , 2014 as compared to 2013 , there was a decrease in non-cash compensation and personnel costs offset by an increase in bad debt expense . other income ( expense ) other income ( expense ) , net consists primarily of interest income earned on investments , interest expense , and gain or loss on sale of assets . for the years ended december 31 , 2014 and 2013 , interest expense net of capitalization was $ 28 thousand and $ 31 thousand , respectively . we have no debt upon which we are incurring interest expense ; however , we pay fees to keep our line of credit available . other income for the years ended december 31 , 2014 and 2013 was $ 22 thousand and $ 50 thousand , respectively , with the majority of change related to a decrease in interest income earned on investments . income tax expense ( benefit ) for the years ended december 31 , 2014 and 2013 , income tax

liquidity and capital resources as of december 31 , 2014 , we had approximately $ 6.0 million of cash , cash equivalents , and investments as compared to $ 11.0 million at december 31 , 2013. as of december 31 , 2014 , we had approximately $ 5.3 million of cash and cash equivalents as compared to $ 4.0 million as of december 31 , 2013 , an increase of $ 1.3 million . the increase in cash was primarily due to cash provided by investing and financing activities of $ 6.0 million offset by cash used in operating activities of approximately $ 4.7 million . for the year ended december 31 , 2014 , operating activities used $ 4.7 million in cash , which was attributable to our net loss of approximately $ 5.3 million and the change in operating assets and liabilities of $ 2.4 million offset by approximately $ 3.0 million from the net non-cash expenses . for the year ended december 31 , 2013 , operating activities used $ 0.8 million in cash , which was attributable to our net loss of approximately $ 14.1 million offset by approximately $ 11.8 million from the net non-cash expenses and the change in operating assets and liabilities of $ 1.5 million . for the year ended december 31 , 2014 , investing activities provided approximately $ 4.6 million in cash of which approximately $ 6.3 million was from net investments maturing offset by approximately $ 1.5 million of equipment purchases primarily for upgrading our production line and $ 0.2 million to purchase intangible assets .


 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 as of december 31 , 2014 , we had approximately $ 6.0 million of cash , cash equivalents , and investments as compared to $ 11.0 million at december 31 , 2013. as of december 31 , 2014 , we had approximately $ 5.3 million of cash and cash equivalents as compared to $ 4.0 million as of december 31 , 2013 , an increase of $ 1.3 million . the increase in cash was primarily due to cash provided by investing and financing activities of $ 6.0 million offset by cash used in operating activities of approximately $ 4.7 million . for the year ended december 31 , 2014 , operating activities used $ 4.7 million in cash , which was attributable to our net loss of approximately $ 5.3 million and the change in operating assets and liabilities of $ 2.4 million offset by approximately $ 3.0 million from the net non-cash expenses . for the year ended december 31 , 2013 , operating activities used $ 0.8 million in cash , which was attributable to our net loss of approximately $ 14.1 million offset by approximately $ 11.8 million from the net non-cash expenses and the change in operating assets and liabilities of $ 1.5 million . for the year ended december 31 , 2014 , investing activities provided approximately $ 4.6 million in cash of which approximately $ 6.3 million was from net investments maturing offset by approximately $ 1.5 million of equipment purchases primarily for upgrading our production line and $ 0.2 million to purchase intangible assets .
```    
 Suspicious Activity Report : in addition , the parties agreed to dismiss with prejudice the lawsuit commenced by got in january 2014. operating leases the company leases office facilities and office , lab and factory equipment under operating story_separator_special_tag introduction the following discussion should be read in conjunction with the financial statements and notes thereto . our fiscal year ends december 31. this document contains certain forward-looking statements including , among others , anticipated trends in our financial condition and results of operations and our business strategy . these forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties . ( see part i , item 1a , `` risk factors `` ) . actual results could differ materially from these forward-looking statements . important factors to consider in evaluating such forward-looking statements include ( i ) changes in external factors or in our internal budgeting process which might impact trends in our results of operations ; ( ii ) unanticipated working capital or other cash requirements ; ( iii ) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the industries in which we operate ; and ( iv ) various competitive market factors that may prevent us from competing successfully in the marketplace . overview we design , manufacture and supply miniature displays , which we refer to as oled-on-silicon-microdisplays , and microdisplay modules for virtual imaging , primarily for incorporation into the products of other manufacturers . microdisplays are typically smaller than many postage stamps , but when viewed through a magnifier they can contain all of the information appearing on a high-resolution personal computer screen . our microdisplays use organic light emitting diodes , or oleds , which emit light themselves when a current is passed through the device . our technology permits oleds to be coated onto silicon chips to produce high resolution oled-on-silicon microdisplays . we believe that our oled-on-silicon microdisplays offer a number of advantages in near to the eye applications over other current microdisplay technologies , including lower power requirements , less weight , fast video speed without flicker , and wider viewing angles . in addition , many computer and video electronic system functions can be built directly into the oled-on-silicon microdisplay , resulting in compact systems with lower expected overall system costs relative to alternate microdisplay technologies . we have devoted significant resources to the development and commercial launch of our oled microdisplay products into military , industrial and medical applications world-wide . first sales of our svga+ microdisplay began in may 2001 and we launched the svga-3d microdisplay in february 2002. in 2008 the sxga microdisplay became our first digital display , and in 2011 we introduced the vga oled-xl , our lowest powered microdisplay , and the wuxga oled-xl which exceeds 1080p hd resolution . as of january 31 , 2015 and 2014 , we had a backlog of approximately $ 8.5 and $ 13.4 mil lion , respectively , in products ordered for delivery through december 31 , 2015 and 2014 , respectively . this backlog consists of non-binding purchase orders and purchase agreements . these products are being applied or considered for near-eye and headset applications in products such as thermal imagers , night vision goggles , entertainment headsets , handheld internet and telecommunication appliances , viewfinders , and wearable computers to be manufactured by original equipment manufacturer ( oem ) customers . in addition to marketing oled-on-silicon microdisplays as components , we also offer microdisplays as an integrated package , which we call microviewer that includes a compact lens for viewing the microdisplay and electronic interfaces to convert the signal from our customer 's product into a viewable image on the microdisplay . we have also expanded our design and production activities to include display/optical subsystem assemblies for both military and commercial end-use products . we have developed a strong intellectual property portfolio that includes patents , manufacturing know-how and unique proprietary technologies to create high performance oled-on-silicon microdisplays and related optical systems . we believe our technology , intellectual property portfolio and position in the marketplace , gives us a leadership position in oled and oled-on-silicon microdisplay technology . we are one of only a few companies in the world to market and produce significant quantities of high resolution full-color small molecule oled-on-silicon microdisplays . in first quarter 2014 , emagin received a notification to stop shipments to three of its customers regarding a possible wire bonding problem in some of our microdisplays shipped to these customers . this issue resulted in a delay of shipments to these customers which impacted revenue for 2014. shipments to two of the three customers resumed in 2014. we are working with the third customer currently and expect to resume shipments to this customer in 2015. also in 2014 , emagin was awarded and began work on several new r & d contracts that will result in significant additional revenue beginning in 2014 and continuing in 2015 and 2016. the awards total over $ 7 million . there are three government programs : 1 ) to improve the backplane ; 2 ) to increase the brightness of the oled display and 3 ) the mantech program , which was awarded to increase the efficiency of the oled microdisplay manufacturing process . these r & d contracts are on schedule . initial design work was completed for the improved backplane project . preliminary tests to fabricate very low voltage , high brightness , oled devices show encouraging results . story_separator_special_tag accordingly , we increased our deferred tax asset to $ 8.8 million by recording a $ 0.7 million reduction of our deferred tax asset valuation allowance and recorded a corresponding tax benefit of $ 0.7 million . in 2013 , we had an operating loss and a projected cumulative loss through 2014 thus it was more likely than not that any of our deferred tax assets would be realized therefore , we recorded a full valuation allowance and income tax expense of $ 8.9 million . in 2014 , we incurred an operating loss and have a cumulative loss therefore it is more likely than not that none of our deferred tax assets will be realized and therefore , we maintained a full valuation allowance against our deferred tax assets . our effective income tax rate was an expense of 0 % and 171 % , respectively , in 2014 and 2013. the year over year change in our effective tax rate was primarily due to the recognition of a full valuation allowance on our deferred tax asset in 2013. results of operations the following table presents certain financial data as a percentage of total revenue for the periods indicated . our historical operating results are not necessarily indicative of the results for any future period . consolidated statements of operations data : replace_table_token_4_th year ended december 31 , 2014 compared to year ended december 31 , 2013 revenues replace_table_token_5_th revenues decreased approximately $ 2.3 million to a total of approximately $ 26.0 million for the year ended december 31 , 2014 from approximately $ 28.0 million for the year ended december 31 , 2013 , an 8 % decrease . in 2014 , product revenue decreased as there was an 18 % decrease in the number of displays sold offset by an 11 % increase in the average selling price as compared to 2013. contract revenue was relatively unchanged year over year . 24 cost of goods sold replace_table_token_6_th cost of goods sold is comprised of costs of product revenue and contract revenue . cost of product revenue includes materials , labor and manufacturing overhead related to our products . cost of contract revenue includes direct and allocated indirect costs associated with performance on contracts . cost of goods sold for the year ended december 31 , 2014 was approximately $ 18.3 million as compared to approximately $ 19.6 million for the year ended december 31 , 2013 , a decrease of approximately $ 1.2 million . cost of goods sold as a percentage of revenues was 71 % for the year ended december 31 , 2014 up from 70 % for the year ended december 31 , 2013 which is a result of a higher cost per display in 2014 , partially offset by a higher average selling price . depreciation increased $ 0.3 million due to the installation of new equipment . the following table outlines product , contract and total gross profit and related gross margins for the years ended december 31 , 2014 and 2013 ( dollars in thousands ) : replace_table_token_7_th in 2014 , total gross profit decreased approximately $ 1.0 million or 12 % . product revenue gross profit decreased approximately $ 1.1 million . gross margin was 29 % for the year ended december 31 , 2014 down slightly from 30 % for the year ended december 31 , 2013. product gross margin decreased from 29 % in 2013 to 28 % in 2014 due to a higher cost per display , partially offset by a higher average selling price in 2014. contract gross margin increased from 41 % in 2013 to 43 % in 2014. contract gross margin is dependent upon the mix of internal versus external third party costs , with the external third party costs causing a lower gross margin and reducing the contract gross profit . 25 operating expenses replace_table_token_8_th research and development expenses research and development expenses include salaries , development materials and other costs specifically allocated to the development of new microdisplay products , oled materials and subsystems . research and development expenses for the year ended december 31 , 2014 were approximately $ 4.5 million as compared to approximately $ 5.0 million for the year ended december 31 , 2013 , a decrease of approximately $ 0.5 million . the decrease in company-funded r & d expenses is due to expense being allocated to external funded contracts and lower non-cash compensation expense . selling , general and administrative expenses selling , general and administrative expenses consist principally of personnel costs , professional services fees , as well as other marketing , general corporate and administrative expenses . selling , general and administrative expenses for the years ended december 31 , 2014 were approximately $ 8.1 million as compared to approximately $ 8.6 million for the year ended december 31 , 2013 , a decrease of approximately $ 0.5 million . for the year ended december 31 , 2014 as compared to 2013 , there was a decrease in non-cash compensation and personnel costs offset by an increase in bad debt expense . other income ( expense ) other income ( expense ) , net consists primarily of interest income earned on investments , interest expense , and gain or loss on sale of assets . for the years ended december 31 , 2014 and 2013 , interest expense net of capitalization was $ 28 thousand and $ 31 thousand , respectively . we have no debt upon which we are incurring interest expense ; however , we pay fees to keep our line of credit available . other income for the years ended december 31 , 2014 and 2013 was $ 22 thousand and $ 50 thousand , respectively , with the majority of change related to a decrease in interest income earned on investments . income tax expense ( benefit ) for the years ended december 31 , 2014 and 2013 , income tax

